Why you should be automating your procurement process

Procurement teams are facing the ever-increasing pressure to deliver strategic value and cost savings. But they are often trapped into low-value, time-consuming, repetitive tasks.

Manual processes are frequently the culprit – leading to inefficiencies, delays, and missed strategic opportunities. 

That’s where procurement process automation comes in – empowering you to work smarter, not harder.

What is procurement process automation?

It’s a  use of software to transform labour-intensive, basic and regular tasks that often feel like a burden, to create a more streamlined and efficient process. While this saves time, the real benefit is in the cost savings, achieved through the ability to ease tactical workload and elevate the procurement team’s focus to delivering strategic value.

It’s about embracing a digital transformation that standardizes and centralizes the processes for simplified management. 

Why is it important to automate your procurement process?

Whether the process is basic or complex, automation is adaptable to your business needs and can evolve with you as your business grows. Not only that, but the benefits of automation are seen throughout the entire procurement lifecycle.

Procurement sits at the core of the business, so when delays affect its process the impact ripples throughout the wider organization. For instance, delays often result in financial repercussions due to shortened timelines for negotiation or needing to resort to last-minute, more expensive, solutions. This can directly affect a businesses’ ability to achieve a competitive advantage.

To fully grasp the importance of automating your procurement processes, let’s evaluate the benefits of adopting automation, versus the risks of falling behind the market.

The benefits of procurement automation

Enhanced speed and reduced cycle times

Businesses can significantly and immediately improve their turnaround time and achieve faster time to value

Reduce human error

Manual processes are inherently subject to human error, whether in data entry, copy/paste errors or miscalculations. Automation mitigates these risks by completing the stages accurately and consistently, avoiding costly errors or rework down the line

Improved visibility and collaboration

Siloed workflows are avoided with visibility from a centralized platform and integrating your team processes.  Each stakeholder can access the required information, in their preferred platform, to inform decision-making and avoid bottlenecks.

Agility and scalability

To be competitive, businesses must be able to adapt quickly, and scale efficiently; automated workflows can be easily configured and adjusted to accommodate new requirements or processes, without a proportional increase in manual effort 

The power of data

Procurement automation platforms generate a wealth of data throughout the procurement lifecycle, so you can gain valuable insights and track KPIs, further optimizing your processes and delivering continued value to the strategic business objectives

The risks of not automating your procurement process:

Maverick spend 

When the procurement process is unclear or time-consuming, people tend to look elsewhere for quick solutions that stray outside of the approved channels. This uncontrolled spend ultimately leads to budget overspend, security risks, and weakened negotiating power

• Solution: Make the intake process easier – create a customized and intuitive intake form that employees can access from a tool they’re already using, such as Slack

Effect on vendor relationship management

Inefficient processes can result in delayed communication and errors in key documents such as POs. Don’t let a simple mistake damage vendor relationships and undermine future negotiating powers.

• Solution: Integrate your procurement platform with your ERP, and bring vendor communication into the platform for visibility and timely responses.

Impact on valuable strategic activities

Failing to automate the day-to-day tactical work means that procurement functions will struggle to focus on the strategic activities that deliver real business impact - such as implementing minimum negotiation time frames of 90+ days.

Shortened or missed negotiation windows for contract renewals could lock you into a contract that no longer fit your requirements

• Solution: Digitize your renewal pipeline and receive advance notifications so you’re prepared for negotiations ahead of the renewal date

Where to start the process:

Begin by mapping out your procurement process to identify areas which are often subject to delays and bottlenecks. These are areas in which you’ll see value delivered the fastest, and will inform how you can identify opportunities for automation. 

Key stages to look at are low-value tasks which are repetitive, subject to human error, and/or time-consuming. Such common areas are the intake process, approval workflows, and contract management.

Automating these will lessen the workload burden, meaning procurement has more time for the important tasks requiring strategic input, such as contract negotiation. 

Consider piloting procurement process automation with one or two high impact areas which promise quick results, such as SaaS renewals and SaaS purchasing. These areas are often inefficient and can easily demonstrate value proposition before rolling out across broader applications.

How to automate your procurement process:

More and more companies are strategically adopting software solutions to automate procurement processes. These platforms automatically trigger, route and track procurement requests, making them easy to manage and flexible when requirements are quickly changed.

Consider the following features when implementing procurement automation:

• Intake: Improve adoption by curating an intuitive intake form, and bringing this into a platform they’re already using, like Slack
• Smart-routing and approval workflows: Set up workflows using rule-based assignments and routing to ensure that every request automatically progresses down the required approval workflow
• Drag-and-drop workflow builder: Quickly and easily customize the process, ensuring that any changes are easily implemented without needing to adopt a new system
• Integrated systems: Connect teams and improve collaboration by integrating your procurement platform into existing processes, allowing you to centrally manage the entire procurement lifecycle from one platform. Automate PO creation through integrating with your Enterprise Resource Planning (ERP) system, avoiding manual effort and potential for errors when inputting key data
• Document scanning: Copying and pasting information from one system to another is a thing of the past – with document scanning features, procurement platforms automate this process so you can swiftly extract key information
• Procurement metrics dashboard: Real-time data insights key metrics for the procurement process, such as cycle time, realized savings and spend under management, providing clarity over efficiency metrics and ensuring you can deliver value against KPIs

Procurement process automation is strategic, so it’s important to evaluate a solution that truly supports your business needs, removes day-to-day frustrations and helps you to deliver continued value. With the right solution, you can transform bottlenecks into accelerated time to value.

Key takeaways

• Procurement is an essential business function, yet can easily be stalled by inefficiencies in manual processes
• Moving to a digitized and automated procurement process enhances speed, reduces errors, and improves visibility across the entire procurement lifecycle
• Automate your procurement process by leveraging software solutions, to enable you to elevate your focus away from low-value tasks to strategic contributions 
• Continue to improve your procurement function with access to valuable data insights for operational efficiency

Intelligent Workflows

Vertice’s Intelligent Workflows platform automates the procurement process, working alongside you to improve efficiency and drive value. With key features such as our drag-and-drop workflow builder, integration capabilities and real-time dashboard, we offer a scalable solution to transform your procurement process.

If you’d like to find out more about procurement process automation with Vertice – book a demo.