Procurement can be a slow and tedious process if it’s not automated. But here’s the good news: There are some new and innovative ways to automate many aspects of procurement and give your productivity a boost.
There is an enormous opportunity for task automation in the procurement process. A McKinsey & Company study found these staggering stats about the percentage of procurement tasks that can be automated:
But let's say you haven't introduced any automation at all into your procurement process. Where should you start? Here’s a look at the parts of procurement that can be automated quickly and easily.
1. Automatically Connect Expense Data
The first step is to invest in a digital procurement system that automates your expense tracking. After everything is input into the system, it keeps track of all dollar amounts down to the penny. Suddenly, you have a crystal-clear view of where your money is flowing.
Track your costs by contract, vendor, spending type, internal department, and much more. When you need to see exactly how much something costs, or when you need to evaluate a new vendor contract, it can all be handled right there in your procurement platform.
This allows tight control of expenditures and prevents overspending, whether intentional or unintentional. You could see an immediate savings of 3-5% of your total company spend simply through better expense tracking.
2. Placing New and Repeat Orders
Another aspect of procurement that can be automated is your routine ordering/purchasing process. Instead of coordinating everything by hand, use the automation of your procurement system to organize your orders and repeat buys according to the specs you’ve set.
We polled the participant of our recent webinar, Automating Procurement on ServiceNow, and found that 36% are still generating POs manually and another 36% are doing them at least partially manually. So, 72% still struggle with manual purchase order processes. Only 18% said they have already automated.
In some cases, your system may be able to integrate directly with your suppliers and make this process almost completely seamless. When it’s time to reorder, you can automatically source the right materials, from the right vendors, at prices you have pre-approved in the system.
This streamlining of the ordering process can make a big difference - especially if multiple people at multiple levels need to sign off on each order. Secure your approvals and place your orders without the slowdowns that typically happen in an old-fashioned approval process.
3. Add Centralized Communication Channels
Communication can also be automated as a part of speeding up the procurement process. Ordinarily, there can be days or weeks of lag time as your internal staff members discuss upcoming procurement activities. If one email goes unanswered, the process grinds to a halt.
However, a digital procurement system has built-in communication processes, reminders, and alerts that keep communication moving along smoothly. When someone has a question or concern, they can share it within the system and it can be addressed in moments.
This removes many of the roadblocks that typically create slowdowns in your procurement process. Plus, it reduces day-to-day misunderstandings. The procurement system works as a central vault of information that provides clarity in communication.
4. Procurement Compliance Activities
It can be a huge relief to automate compliance activities. Through automation, your company can minimize non-compliant activities, ensure your entire checklist of compliance tasks is always complete, and avoid missing details that put compliance in jeopardy.
A procurement system works as an end-to-end compliance tracking system. From the moment a new contract is entered into the system, its details are monitored and alerts ensure everything happens like clockwork.
Not only will your company remain compliant, but you can easily prove it. If a regulator or auditor requests proof of compliance, you can pull this information from the system quickly and resolve the inquiry with almost no interruption in your daily work.
Watch: Automating procurement on ServiceNow Webinar
Check out the blog write up of the webinar here.
Do you need to automate your procurement process and step up your company’s efficiency? If so, we invite you to explore ProcurementPath, the cloud-based productivity tool that streamlines procurement.