Most businesses battle the constant challenge of trying to scale efficiently. Sadly, they often end up overworking their employees, slowing down progress, and damaging future success. By replacing the human component in repetitive tasks with procurement automation software, organizations can free up time and resources to scale their business successfully.
Luckily, for businesses looking to drastically reduce costs and free up their employees’ time, there are several areas in procurement where automation can provide improvement. Specifically, if you want to see drastic improvement, you should focus on automating these 12 areas in your procurement process.
1. Data Entry
Everyone is familiar with manual data entry. Whether you’re copying details from one spreadsheet to another or transcribing information into reports, manual data entry is a time-consuming process. It can also be very costly. In fact, poor information can cost a business 20% – 25% in operating revenue.
There are simply too many ways for data entry errors to happen: transcription errors, incorrect data formatting, data misinterpretation, and more. It makes it nearly impossible to guarantee accuracy from manual data entry. That’s why 88% of spreadsheets have errors.
To automate this and eliminate the chance for human error, you need to connect disparate data systems. Integrated systems allow for data to move seamlessly between platforms, which means that data integrity remains intact.
2. End-to-End Procurement Management
Automating the management of your procurement process can give your organization a needed edge by maximizing savings and minimizing the time to delivery. With automated procurement, you’ll have clear insights into spend analysis, the ability to monitor vendor performance at a glance and reduced risk to your supply chain.
This allows you to transform your procurement process into a strategic asset.
With artificial intelligence, you can:
- Automatically check invoices against vendor contracts
- Validate spending and
- Approve purchases
This can give you more insight into the supply chain logistics while breaking down silos, creating a frictionless environment for intelligent procurement.
3. Vendor/Supplier Management
If your organization has multiple vendors and suppliers, managing those relationships manually can be a major challenge. With the proper vendor management software, you can assign specific duties to vendors, ensuring they aren’t overworked.
Plus, you can rapidly adapt to any sudden changes in your supply chain (something needed now more than ever.)
Sadly, more than half the businesses out there still rely on manual invoicing. On an average, it can cost up to $15 to process a single invoice manually: which quickly adds up.
If your business processes 500 invoices a month, that means you’re paying $7500 a month to process invoices manually. Automation can reduce that cost to $2 per invoice, saving you $6500 a month or $78,000 a year.
With multiple disparate systems and manual data entry, there is absolutely no way to have access to unified, real-time reporting. No matter how many people you have for data input, you still have to wait for that data to aggregate. That’s why most reporting is (at best) hours or (most likely) a few days old. It takes time to collect and process all that data.
Rather than manually process your reporting, you can automate the entire process. With integrations connecting disparate systems, you can completely change how your business collects and uses data.
Automation will give you real-time data from a single source, providing deeper and more accurate insights. Best of all, it opens the door for your organization to be more responsive and agile. You can see changes as they happen and build strategies that put your organization ahead.
6. Inventory Management
Automating inventory management can incredibly boost your order accuracy. As a result, you’ll move materials through your supply chain with less wastage or issues. Rather than having your employees mismanage SKUs and manual counts, inventory management software can track your entire inventory across multiple stores in real-time.
You can also reorder stock before it runs out and transfer items between your facilities with ease. And you can notify the right people at the right time with dispatch alerts, so your supply chain always stays intact without manual follow-ups.
7. Hiring Process
Automating the HR process can help you drastically reduce the time taken to hire candidates to fill your procurement roles. You can automatically filter out candidates who do not meet your key job performance indicators. This improves your chances of hiring better candidates. It can also make the experience better for the potential candidates, helping you attract better employees.
You can automate nearly the entire hiring process. You can post jobs, track applicants, schedule interviews, and follow up with candidates automatically. Additionally, after you hire new candidates, you can easily have them pass through background checks and employee onboarding seamlessly.
8. Digital Signatures
Speaking of collecting the proper documentation, automating digital signatures also eliminates the need to request a digital signature manually for approvals. By eliminating the need for manual processes, employees at all levels can automatically sign off on requests rapidly. This reduces the number of steps required to complete tasks.
9. Processing Paper Documents
Intelligent document processing (IDP) changes unstructured or semi-structured documents into usable data for your organization. Most data in business comes in the form of unstructured documents.
Rather than developing forms and processes for every unique document, you can simply scan a range of documents and collect the data automatically with IDP. This is particularly useful if you have vendors that insist on using paper documents.
10. Vendor Recertification
Automating vendor/supplier recertification is also crucial to avoiding compliance or legal issues that may bring your procurement department to a standstill. The food supply chain, for instance, requires vendors to meet certain specifications. By automating this process, you can ensure every supplier that supports your customers meets business and legal standards.
11. Self-Service Management
With automated self-service management, you can better empower your employees. In short, your team can rapidly request the goods and services they need to carry out their job without the long wait times.
As long as the item or service is within budget and essential to the task, it can be approved without constant requests and processing by the management team. Ultimately, this leads to greater job satisfaction, reduced maverick spending and more time for management to focus on other tasks.
12. RFP/Bid Processes
Hiring new vendors manually is not a quick or easy process. You need to draft a proposal, find vendors to target, conduct outreach and review responses. All this can take months. And it is a process that is repetitive for each vendor you need to hire.
By automating the RFP process, you can send out proposals quickly using templates and follow up with vendors with automated responses. Next, you can compare vendors side-by-side to see how their costs and performance line up. Finally, you can store your findings in a single, accessible database to review later on if you need to switch providers or evaluate your vendors.
How Automation Makes Procurement (And Your Life) Easier
Being a business owner or executive doesn’t mean you need to work endlessly. Still, 33% of business owners work more than 60 hours per week. And their employees aren’t far behind. But most of that work isn’t essential. In fact, a lot of that time is wasted on monotonous tasks that drain everyone involved.
People want to work on meaningful projects. They don’t like to have their days flooded with time-consuming, menial tasks.
Especially when they prevent them from focusing on the tasks that really matter. With more and more to do and less getting done, burnout and churn run high. That puts even more pressure on everyone else in the company.
Rather than get stuck in the cycle of increasing costs and employee dissatisfaction, you should look at which areas in your business could benefit from automation. Procurement is just one of the many workflows in your organization that can benefit from optimization.
If you’re ready to break free from your business, you should look for other areas in your organization that you can improve with automation.