Top reasons for automating procurement
Money is tight and so what you probably don’t need is yet another person telling you how your business can buy new technologies to improve process efficiencies.
You’ve heard all about the cloud and how utility-based technology can help you save money through the purchasing of on-demand technology. But that’s a large-scale transformation project which requires much thought and buy-in. What about smaller technology investments that reduce process variability while cutting time-consuming and costly manual processes?
By automating your procure-to-pay (P2P) cycle, you can produce quick business benefits for a relatively small investment. You might not want to pay for a fully-automated procurement process, but you cannot afford to scrimp and save on P2P.
Automating P2P is inherently cost-effective, meaning justification fears around return on investment are reduced. Automating P2P will always produce benefits and help your organisation to remove time-consuming administration in a cost-conscious climate.
Automation means that the business impact of purchasing is reduced because goods and services can be procured quicker and therefore more cost effectively. Take Gloucester City Council, which has cut the time taken to procure an item by 75% – imagine what your business could do with such time savings!
Procurement automation also delivers greater control over spending by eliminating maverick purchasing. An automated record of orders, approvals and payments ensures financial visibility and errant activities can be monitored and stamped out quickly.
In addition, the electronic capture of information encourages smarter decision making and reduces costs. A sensible combination of electronic communication and automated procurement processing can produce as much as a 75% reduction in requisition processing costs and an 80% cut in central processing costs.
Cost savings can also be achieved as a result of rationalising suppliers down to one or two key suppliers of each main product/service, thereby taking advantage of greater efficiencies of scale. An automated approach is more able to identify key suppliers, bring about supplier rationalisation and ensure only approved suppliers are used across the organisation.
Finally, procurement automation can help your organisation deal with the increasing regulatory bind associated with corporate governance. Manual processes are inherently error-prone and open to abuse. Moving towards automation can ensure procurement is carefully managed and the risk of fraud is reduced.
So automation of procurement can produce big wins for the business. Moving to new automated processes is never an easy decision, especially when the cost of implementing new technology is hard to justify. However, the business benefits should reassure you that this is a move that would be worth every penny!
