Going beyond cost savings and into building the necessary agility, flexibility, and resiliency
In the midst of a worldwide pandemic, we’re all relying on technology more than ever before —and sometimes in new and unfamiliar ways. Technology helps us all be more agile, flexible and resilient—characteristics in dire need currently. While digital automation technologies are not new, they have gained crucial importance in recent months as we all look for ways to keep our businesses operating efficiently in the face of unprecedented interruptions. In this post, I will focus on how procurement can help organizations go beyond cost savings and into building the necessary agility, flexibility and resiliency to not only respond to disruptions in day-to-day business but to accommodate a new normal.
Automation in procurement
Streamlining routine (and even complex) tasks is a promised goal of technology, and procurement is full of such tasks, making it an ideal candidate for automation technologies. A McKinsey & Company study found that almost 60% of the hundreds of individual tasks involved in the procure-to-pay (P2P) process have the potential to be fully or largely automated — using currently available technologies. Importantly, the study found significant automation potential not only in transactional activities, such as requisition routing and order and invoice processing, but also in much more strategic tasks, such as vendor selection and management.
Empowering a remote workforce
Cloud computing has been on an upward trajectory for several years and for multiple reasons. One of the reasons that makes cloud computing a relevant technology for procurement is its ability to extend the functionality of procurement automation software out of the office confines—out to employees working offsite, or from home in the current climate of social distancing. Remote employees can continue to work without disruption, remaining productive, connected and engaged.
Almost overnight, a majority of the country’s workforce left the office—in what for many may be a permanent change. Organizations that have the tools and technologies in place to empower a remote workforce have been best able to pivot and adapt to the change. Cloud-based procurement automation applications provide secure access to the tools employees need to continue their work. For example, the requisition to purchase order cycle, from requisition creation, to approval routing, vendor sourcing to purchase order creation can all be handled as expeditiously remotely as they can from the office.
Organizations should take the opportunity to quickly institute measures that can help them gain visibility into and control over procurement costs. Rogue or unmanaged spend must be identified and brought under management. Vendor contracts may need to be renegotiated as demand and pricing fluctuates. Indirect spending should be centralized, brought into the requisition and approval process, and routed through approved vendors with whom you’ve negotiated pricing. Budgets must be honored. The entire procure-to-pay cycle needs to gain efficiencies that save time and touchpoints. With innovative procurement management tools, best-in-class procurement departments can lower their procurement costs and gain necessary visibility into their organization’s spend. Curious about how much your organization can save with automation? User our procure-to-pay calculator to find out.
Procurement management solutions brings technologies together
A 2019 Levvel Research study found that nearly half of companies are using automated procurement software systems to automate at least certain portions of their procure-to-pay cycle. Procurement management solutions provides multiple benefits including centralized purchasing activity, visibility into that activity, resources to bring more spend under management, and the ability to dynamically analyze spend-related data. In addition, procurement systems deliver a collection of key automation tools, including:
Procurement automation is no longer just a best practice—in the face of work-from-home mandates, it’s become a necessity and driver of many strategic initiatives for the C-suite. By bringing together both established and emerging technologies that promote efficiency and productivity throughout, procurement management solutions provide procurement professionals and their teams with the tools they need to be agile and resilient for the duration of the current crisis, and well beyond.
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