Developing a procurement strategy and planning procurement activities requires many steps, such as aligning procurement goals with overall organizational objectives, conducting market research, identifying sourcing opportunities, and developing procurement plans. Procurement challenges may multiply depending on your industry. For example, if you’re in a federal agency, procurement and the entire acquisition planning process must adhere to strict regulatory demands.
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But some procurement challenges span industries. For starters, procurement activities need to be coordinated across multiple departments and stakeholders—such as business units, finance, legal, suppliers, customers, and regulatory agencies—which traditionally made procurement difficult to automate. Data is often fragmented among disparate systems, leading to duplicate data entry, manual processes, and lack of data transparency. The need to communicate using an external method such as email also frustrates the procurement process.
Like many other complex workflows, procurement can benefit from process automation. By automating the procurement process, you will:
- Reduce manual procurement tasks, freeing employees to concentrate on more strategic business operations.
- Achieve regulatory compliance.
- Improve supplier management and relationships.
- Facilitate smooth, timely handoff to the next stakeholder in the workflow.
- Receive needed goods and services faster due to a simplified workflow.
[ Learn how to successfully implement end-to-end process automation strategies. Get the Process Automation Guide. ]
6 ways procurement automation can streamline work.
Where exactly should you apply automation to speed up your procurement cycle and improve procurement outcomes? Consider these six key areas for optimization, and how they relate to your organization’s specific goals:
1. Purchase requisition and approval.
Reduce paperwork and speed up the procurement cycle by creating a standardized workflow for requesting goods and services that routes approval workflows based on predefined rules.
2. Supplier management.
Set up an automated workflow to collect and analyze supplier performance data in real time, such as delivery performance, quality metrics, and service level agreements (SLAs). To streamline the supplier qualification process, set up a portal for suppliers to submit their information, which can be automatically validated against predefined criteria and qualifications.
3. Purchase order (PO) processing.
Automate the creation, issuance, and processing of purchase orders by generating POs automatically from approved requisitions and electronically transmitting them to suppliers. You will reduce errors, improve accuracy, and expedite order placement, leading to faster order fulfillment and delivery.
4. Proposal management.
Ensure consistency, accuracy, and efficiency in selecting suppliers by automating the proposal process, including document creation, distribution to suppliers, collection, evaluation, and awards.
5. Contract management.
Improve contract visibility, reduce manual errors, and enhance compliance with contract terms and conditions by creating a single place for storing and managing contracts, tracking key contract milestones, and automating contract renewals, amendments, and notifications.
6. Invoice processing and payment.
Streamline the invoicing and payment process with an automated workflow that captures and validates invoice data, matches it with purchase orders and receipts, and routes invoices for approval and payment. You’ll reduce manual data entry errors, eliminate paper-based processing, and expedite payments, leading to better cash flow management and improved supplier relationships.
Benefits of procurement automation software.
By eliminating manual tasks, procurement automation software frees your employees for value-added work, speeds up time to procurement, and ensures you purchase the best products and services at the best price. What other benefits can it deliver?
- Applies business rules, keeping you compliant with organizational policies and external regulatory demands, even in highly-regulated industries.
- Gives your suppliers easy access to important information, allowing them to respond to bids more quickly, and collaborate better.
- Improves your data over time, enabling you to better assess supplier track records and identify pricing inconsistencies.
- Ensures timely and accurate payments, helping you maintain good supplier relationships and eliminating the risk of paying for goods or services that were not received.
Using a process automation platform has particular advantages for improving the efficiency and effectiveness of your procurement process. The Appian Platform connects all systems and data across your enterprise, providing transparency to all stakeholders and eliminating duplicate tasks and data entry. Its drag-and-drop low-code tools enable you to build agile, integrated workflows and update them in real time as requirements change.
Learn more about how you can improve the efficiency of your procurement process using business process automation software that unites people, systems, and data into simplified workflows.
