An Essential Guide to Procurement Automation

Every firm must go through the procurement process to acquire products and services that are necessary for daily operations. Businesses can achieve the best value, maintain quality, and optimize their supply chain by using efficient procurement management. Procurement automation is an important tool for modern businesses since it minimizes errors, saves expenses, and increases productivity.

Over the past ten years, there has been progress in the automation of procurement procedures and the implementation of digital procurement technologies. The next obvious step for businesses aiming to leverage digital technologies is to implement digital procurement.

What is Procurement Automation?

One of the best and most efficient methods of managing the procurement function is through procurement automation. Procurement automation software can be used to efficiently automate the low-value, repetitive processes that make up the procurement department. Procurement process automation reduces labor costs, eliminates errors, and speeds up the procure-to-pay cycle. The automation of labor-intensive, repetitive, and manual procurement tasks is the focus of procurement automation.

Benefits of Procurement Automation

Software for workflow automation greatly increases the procurement function’s efficiency. Here are five ways in which your business benefits from procurement automation:

Streamlines Spend Management

Transparency into past spending is made possible via procurement automation. Updates on previous purchases, contract statuses, order histories, and supplier quotations are all provided via the program. Automating procurement operations provides an integrated view of actual spending. This integrated view makes it easier to make data-driven management decisions.

Improves Overall Productivity

Repetitive and unnecessary tasks in the procurement pipeline are handled by automating procurement operations. Workers are relieved of these responsibilities so they can concentrate on strategic projects. Employees don’t need to navigate various systems to access information with ease. Automation of the procurement process gives total control over the cycle and boosts efficiency.

Accelerates the Approval Process

The approval of purchase requisitions (PR), purchase orders (PO), and invoices are typical points of delay in the procurement process. Orders can be placed more quickly and with shorter order cycle times when procurement operations are automated.

Promotes Trust and Reliability in Supplier Relationships

Long-term supplier partnerships need openness and unambiguous communication. By facilitating real-time communication between buyers and suppliers, automating procurement procedures facilitates easy tracking of order status, time and cost savings, and quick grievance resolution. Automated purchasing systems allow quick bidding and order placement. This increases response rates and matches buyers with the best quotes.

Provides a Centralized Data Repository

Contractual terms and conditions are uniform for many vendors. Centralized access to all contracts and essential data is made possible by automated procurement software. Uniform terms & conditions and rules are ensured throughout all contracts through centralized data access.

Top 6 Procurement Processes Every Company Must Automate

Vendor Management

Organizations risk straining their vendor relationships in the absence of clear disclosure and process openness. Automated procedures help procurement teams quickly select the best vendors. By automating the vendor management process and building stronger connections with vendors, organizations can swiftly detect and address complaints.

Invoice Management

Misplaced or improperly handled purchase orders, missing goods receipts, submission delays, uncontrolled (maverick) spending, complex spreadsheets, and a lack of transparency around spending culture are all common outcomes of manual invoice handling. Manual invoice administration frequently leads to noncompliance and late payments.

With features like touch-free auto-approval of common low-value invoices and expanded capability through integrations with finance and accounting platforms, procurement process automation streamlines invoice administration. Automation, for instance, can accelerate the acceptance of invoices by automating the three-way matching and simplifying the approval procedure. With a single click, you may compare individual invoices to available POs, goods receipts, and specified business rules.

Purchase Order

Despite having a formal purchase order system in place, roughly 43% of firms admitted to having immediate shortcomings in their PO procedures in a recent poll. Organizations can increase productivity and process efficiency while cutting costs by automating the whole purchase order cycle through procurement process automation.

Sourcing

Finding, assessing, and choosing suppliers to offer products or services that satisfy the unique needs of a company is known as sourcing. Traditionally, sourcing has been a labor-intensive, manual process that frequently involves several platforms and a great deal of back-and-forth communication, which can cause delays.

By leveraging a centralized platform for communication, bid comparison, and the storage of sourcing-related documentation, a procurement automation platform enables you to source suppliers in an automated and systematic manner. You can choose the best provider with ease thanks to product-driven insights based on price, delivery schedules, and more.

5. Contract Management

Manual contract management often results in people carelessly throwing all contracts into the same local drive or filing cabinet. This lack of order and disarray makes it very difficult to find contracts or keep track of them. You have quick access to a central repository of documents when managing contracts using a centralized automation platform; all the documents you require are only a few clicks away.

This allows for updates and notifications on contract expiration, providing enough time for parties to renegotiate and extend the agreement if necessary.

6. Purchase Requisition

Purchase requests frequently become blocked and take a long time to navigate the intricate hierarchical structure. Purchasing employees will be able to accomplish more tasks in less time by automating procurement procedures, which will help shorten the approval cycle.

Summary

Several challenges face the current procurement industry, including delays in purchase requisitions and purchase orders, mismanagement of invoices, and strained vendor relationships due to a lack of transparency and process inefficiency. These issues can significantly hinder the procurement function’s overall productivity and efficiency. Many automation software solutions are available to address these challenges.

For companies seeking a custom solution tailored to their specific needs, Robylon AI stands out as the go-to option, designed to address these pain points through advanced automation.

Robylon AI offers a flexible and customizable solution for enhancing procurement processes. By empowering users to build AI assistants that understand their specific needs, Robylon AI can guide, help, and take action using plain English. With features like Actions & Workflows, Usage Analytics, Triggers & Schedulers, and an Integrations Ecosystem, Robylon AI can help companies streamline procurement activities, execute cross-platform actions, and provide valuable insights, significantly improving efficiency and productivity in the procurement function.

Want to know more? Book a demo with us!

FAQs

What is procurement automation?

Procurement automation refers to using software to efficiently automate the low-value, repetitive processes that make up the procurement department, thereby reducing labor costs, eliminating errors, and speeding up the procure-to-pay cycle.

What are the key benefits of procurement automation?

Key benefits include accelerating approval processes, streamlining spend management, promoting trust and reliability with suppliers, providing a centralized data repository, and improving overall productivity.

Which processes can we automate in procurement?

Processes such as purchase orders, purchase requisitions, invoice management, vendor management, contract management, and sourcing are key procurement processes to automate.

How does procurement automation streamline spend management?

Procurement automation provides transparency into past spending, updates on purchases, contract statuses, order histories, and supplier quotes, enabling an integrated view of actual spending for data-driven management decisions.

How does procurement automation improve supplier relationships?

By facilitating real-time communication, easy order tracking, time/cost savings, and quick grievance resolution between buyers and suppliers.

What role does contract management play in procurement automation?

Automated contract management provides centralized access to all contracts, ensures uniform terms & conditions across contracts, sends notifications for expirations, and allows renegotiation promptly.

How can procurement automation enhance the sourcing process?

It enables a centralized platform for communication, bid comparison, and documentation storage, allowing you to source suppliers systematically and choose the best provider based on price, delivery schedules, and more.