Top Benefits That Automating Procurement Management Offers
— July 14, 2019
Procurement, or the process of purchasing and paying for goods and services an organization needs to carry out its business operations, is an essential component of virtually all businesses. Therefore, the efficiency of the procurement process has the potential to have a big impact on the organization as a whole. Attempting to manage your company’s procurement activities manually is possible, but more often than not, involves a lot of messy, paper-based processes and coordination of disparate people and tasks. The outcome is often inaccurate or incomplete, resulting in missing paperwork, long lead times, poor relations with suppliers, and sub-standard terms. Here are the top reasons why automation for procurement can benefit your business and save your team many headaches.
Automation can boost the speed and efficiency of your procurement processes
By automating some of the many routine components of the procure-to-pay sequence, you can speed up the process, potentially reducing supplier lead time and the purchase order cycle. In addition, it gives precious time back to employees to allow them to focus on more value-adding pieces of work. From an efficiency perspective, there is less likelihood of human error contributing to inaccuracies or delays that can cause real issues with receiving the required goods or services on time and at the desired quality.
Automation improves control and visibility within procurement management
E-procurement software allows managers to see an overview of the performance of the organization’s procurement process at the touch of a button. The software lets them identify problems or blockages in the system and note opportunities to improve current inefficiencies or poor supplier performance, providing real data to back it up.
Work in better partnership with your suppliers
Even small companies have a number of different suppliers they need to deal with to carry out their business operations. This means multiple sets of information and data to work with, from contractual agreements to differing payment terms and methods to product catalogues and many more. Trying to manage this via paper documents or spreadsheets can be unnecessarily complicated, whereas procurement software offers an opportunity to keep all the information in one easily accessible place.
Go paperless and digitize your documents
Procurement software is also a great mechanism for creating, storing, and sharing the important documents involved in the procurement process, including invoices, purchase orders, and contracts with suppliers. This is much easier than dealing with data storing across multiple systems, or even in hard copy. Not only is it quick and straightforward to create template documents within the software, but it is also easy to quickly categorize and save them so that they don’t go missing. Further, the documents can be sent to other members of the procurement chain to speed up the procure-to-pay cycle.
Make the most of the analytical reporting features
Since all information relating to suppliers, purchases, and products are in one digital space, measuring key metrics around lead times, costs, and quality can be quite simple. With access to multiple reports that can be tailored to your needs, you can keep your budgets under check, ensure adherence to deadlines, and monitor supplier performance with minimum effort on an ongoing basis. Being able to analyze such data regularly puts your business in a stronger position to review any issues or inconsistencies and take remedial action on a proactive basis, rather than waiting for serious problems within the supply chain to occur.
Make efficiency savings to inventory management
An e-procurement solution is also able to streamline your inventory management processes by automating the re-ordering of stock once it drops below a certain level. This takes away the possibility of human error in failing to correctly monitor stock levels. Therefore, it eliminates the danger of running out of stock, preventing potential loss of sales.
Improve your intra-company communication
There are many parties involved in the procurement process, and while some of them are suppliers and vendors, others are internal to the company and span different departments. Using a tool to automate procurement is, therefore, an effective way to ensure all parties can access consistent and accurate data and share information in real-time. This can be a great opportunity to improve visibility of procurement management across the wider business and potentially make savings and improvements to the process as a whole.
Take a closer look at how automation can improve your organization’s procurement
With so many opportunities to transform your tired, over-complicated, paper-heavy processes to efficient, intuitive, automated ones, it can be hard to find the best procurement management system. It is worth taking a look at the procurement software options on the market to work out which one has the potential to offer your own organization significant resources savings to the procurement process.