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The procurement department, although easily ignored, is an integral function for many businesses. The department’s core responsibility is to identify, triage, and reach agreements with the most appropriate vendors for different functions across the business. Through the procurement process, businesses ensure that their people and processes are supported and constantly enhanced by the introduction of new technologies, goods, and services. However, despite their integral role to support and propel the business forward, many organisations do not realise that procurement is actually one of the most inefficient departments, causing major impacts on the bottom line. It is common for procurement teams to still be managing processes through excel spreadsheets, manually generated documents, and emails. This means that instead of focusing on risk reduction, ethical supply chain management, and future planning, procurement teams are often spending time enforcing policy, chasing up contracts, doing double entries and manual paperwork.
With the implementation of automation becoming more prevalent, it becomes imperative for all departments, including procurement to move forward at the same speed as the entire business.
Access our pre-made procurement framework template and see how businesses similar to yours are automating their processes.
Key issues in the current procurement process
Procurement departments face five main problems:
1. The process of navigating complex procurement frameworks and policies is time-consuming and confusing.
This arguably is one of the most significant problems faced by the procurement team. The lack of guidelines in places means that the procurement process requires a re-invention each time. The process of finding and managing new vendors without standardised frameworks in place leads to unnecessary work, spend, and may cause companies to waste money on suppliers that are not right for the company. This not only affects the productivity of the team but the entire business.
2. The creation of procurement-related documents involves a lot of manual double entry.
Not only is this process extremely time consuming but highly prone to human error and can often lead to inefficiencies, unnecessary back and forth communications, and re-dos in the future. Human error in important procurement documents can also be cause for serious compliance breaches and therefore require a lot of attention to detail that can often be difficult to regulate when employees are managing several documents at once.
3. Document execution processes are hard to navigate, tedious, and lengthy with employees and clients having to download, sign and re-send their documents
Managing the timeline of document execution and ensuring clients sign as per requirement is a tedious process and requires a lot of manual management and attention to detail. Without automated processes in place, procurement managers are often tracking the status of contract execution from writing to signature manually and are often liaising about these contracts through poorly managed inboxes full of back-and-forth emails. This all over the place process can make it difficult to track the status of documents like contracts and therefore cause delays all around the business.
4. Existing off the shelf solutions cater to standard processes but cannot be customised to match unique business requirements and are rigid to ongoing process changes
Whilst there is existing technology that procurement teams use, they are designed to address problems in a pre-set and rigid way, which rarely meets the unique and changing needs of each organisation. Any changes require heavy, time-consuming and costly customisation, leading the procurement team to defer to DIY tools built on spreadsheets which still results in a highly manual process.
5. There is limited visibility into each procurement as they are often managed via email or offline spreadsheets, and when incidents occur, a lot of time is required to assemble an audit trail of the actions that occurred.
This can be detrimental to the business as limited visibility can lead to double-ups in purchases from the procurement team and individual departments. This is not only a waste of time but often leads to unnecessary resources being used. Furthermore, a lack of visibility particularly for upper management means several inefficiencies go unnoticed. With so many parts of the process untracked, it’s difficult to know where to begin an audit and hold anyone responsible in case something goes wrong.
See how automation resolves these 5 key issues here.
The Benefits of Procurement Automation
Here are 3 benefits when implementing a procurement automation software successfully:
Refocus Your Team
Reduce time spent by specialists in facilitating tedious manual processes so they can focus on higher value work
Improve Service Quality
Improve turn-around time for business users lodging various procurement requests via self-service tools
Manage and track your processes centrally, whilst use in-built checks, controls & audit trails
Frequently Asked Questions
How do you automate a procurement process?
1. Establish a set of guidelines that help navigate complex procurement frameworks and policies 2. Create procurement workflows that elimate manual double entry 3. Create a centralized portal where procurement managers can track the status of contract execution workflows 4. Automate workflows that are catered to the specific process that matches the unique business requirements
What is process automation?
Process automation is the use of technology to streamline complex business processes through automating manual tasks. It serves to remove the need for human input, which decreases errors, brings speed to service delivery and gives back time to employees organization-wide.