Is your procurement department overwhelmed? Automate your processes!
Being part of the procurement department often means feeling overwhelmed.
Procurement professionals everywhere struggle with:
Large numbers of RFPs or RFQs they have to launch;
Complicated scenarios that can’t be easily solved using Excel;
Demands from internal stakeholders who don’t follow internal processes, but find shortcuts and workarounds;
Dozens of questions from angry suppliers;
Overwork and burnout.
Half of these issues derive from using offline tools or complicated software that can’t handle all size events. Continuing to use these tools cost the procurement department time and money until tasks are automated.
The other half stems from using outdated software, or not using any tools at all. Yes, pen and paper are still used in today’s digital world.
As continuing using current processes is unprofitable, there comes a time in every organization’s life cycle when they have to consider procurement automation.
Why should your procurement department automate processes
Although there are many benefits to automating your procurement department’s processes, here are the most obvious ones:
1. Streamlined procurement processes
The first obvious benefit of procurement automation is process streamlining.
Filling out forms, sending requests to the right people, and urging stakeholders to complete their part, is a tiresome process that becomes completely hands-off with the right e-procurement tool.
No more forgotten requests, lost forms, or costly delays. Human intervention is minimized as professionals only complete the necessary tasks.
2. Reduced costs
Procurement automation reduces paperwork and manual efforts. Over time, this results in a significant reduction of organizational costs.
Redundancies are also eliminated. Because requests need approval, it gives managers the chance to ensure whether the expenditure is really necessary or not.
Process automation also provides easily accessible historical data about supplier spend, which can prove useful in negotiating lower purchasing costs.
Optimized cycle times allow procurement teams to take on more responsibilities. Also, low-value or non-core tasks can be taken off the team’s hands. This enables organizations to reallocate their resources to more critical activities.
3. Ensured compliance
Procurement automation promotes greater compliance with industry regulations. In-depth process performance reports can function as audit trails to demonstrate adherence to financial and legal requirements.
4. Increased visibility
Process automation leads to better overall process visibility.
Customizable dashboards allow you to check on multiple procurement processes at once to identify and resolve bottlenecks and errors in real-time.
Greater visibility minimizes human errors.
5. Increased control of expenditures
Manual processes make it harder to ensure every purchase order is approved by the right parties before a purchase is made.
When you automate this process, business rules can be added to ensure both the goods and the amount being spent are approved by the right people. It’s even possible to add levels of approval, such as a purchase order being sent to a second or third approver if the expenditure is over a certain dollar amount.
By automating procurement, you can better keep track of what money is being spent on what. This will help you stay in compliance and have the information you need to make the right purchasing decisions in the future.
Processes every procurement department should automate
1. Purchase requests
Often, purchase requests get stuck and consume a lot of time to move through the complex hierarchical structure. Procurement automation will not only cut down the time of approval but also remove unnecessary steps in the process and enable purchasing staff to do more in less time.
2. Invoice approval
Manual procurement practices drag the payment cycle, costing organizations early payment discount opportunities. With procurement automation, organizations can keep track of receipts, calculate shipping and taxes, and pay all invoices on or before the deadline with little manual intervention.
3. Vendor management & Sourcing
Without process transparency, organizations end up making a strain in their vendor relationships.
By automating procurement, teams can streamline vendor selection and pick the best vendor available. An automated vendor management process helps organizations quickly identify and resolve grievances, forming a better relationship with the vendor.
4. Contract approval
In manual contract management, all contracts are just dumped in the same filing cabinet or the local drive. As the process is disorganized and unstructured, finding deals, or even keeping tabs on them can be a real challenge.
A procurement automation tool organizes all contracts in a central repository that can be accessed in a single click. Additionally, it also ensures that all deals stay consistent and accurate.
The good thing is, you can lift the burden off your procurement department’s shoulders with Prokuria.
Prokuria is an online tool that keeps all your data in one place, helping you centralize and compare RFPs and easily implement Reverse Auctions. You are always connected and all the info is there when you need it, just like opening a well-organized drawer. What are you waiting for? Try it out now!