Choosing suppliers. Finding the right products. Making requisitions. Getting the right amount of products at the right price. All of these are the challenges of working in procurement, necessitating an automated procurement system.
But procurement is one of the most integral parts of running an operation. Whether you’re servicing other businesses in a B2B capacity or serving the general public, you need to be able to procure the right types of items in the right quantities to be successful.
It can be a complicated and challenging process.
Fortunately, there are plenty of software Solutions out there to help streamline things and make it easier across the board. Using an automated system for procurement and procurement management is critical to succeeding in today’s business world.
Today, we’re covering automated procurement and how it can help your business in the future.
Understanding The Procurement Process
Before deciding whether you need to use an automated procurement process at your company, you need to understand the procurement process in general. It all begins with market research to determine what products or services your company needs. After that, a request for a proposal gets sent out to potential suppliers.
Then, the suppliers submit their bids and the company decides which one to hire. After the contract is signed, goods or services are delivered and payments are made. In the interim, requisitions, purchase orders, accounting, and receiving all work together to handle the finer details of the process.
What Is Automated Procurement?
As a procurement manager, you’re going to be responsible for the entire procurement process running smoothly. That’s why you need automated tools to help you get the job done effectively. Without them, it will be more difficult to manage spending, control budgeting, vet your suppliers, and do what you need to do to get the most out of your procurement process.
An automated procurement system essentially takes each aspect of this process and makes it easier through the use of technology. It doesn’t completely automate things, but it gives managers plenty of leeway and additional help for getting the job done effectively.
Using an Enterprise Procurement System has myriad benefits for helping to streamline—and vastly improve—the entity process from start to finish. High-quality procurement software can be used for everything from Inventory management to budgeting. It’s important to realize that it’s not a comprehensive solution to procurement but a tool to Aid with the extensive process.
Spend visibility is a pretty big deal when it comes to procurement or any type of invoicing management for that matter. Mostly, it can help you get an idea of where your spend is going, but it can also help you reduce costs and prevent fraud.
Automatic spend visibility checks can help you identify opportunities for cost savings but more importantly tell you where your money is going. It’s also good for comparing prices, working out contracts with other suppliers, and creating a path to better supplier relationships. Transparency is a good thing when it comes to spending visibility.
Another unexpected benefit of automation is better spend under management, which can help you keep an eye on touchy issues like fraud or potential problems down the line.
Real-time Spend Tracking
Going hand in hand with understanding visibility, real-time spend tracking is another integral part of automated procurement. Finding the right automated solution will provide you a great deal of accuracy and leverage when it comes to monitoring your real-time spending.
Monitoring real-time spending is good for fraud prevention and finding out where your money is going as it’s being spended. It can also help curtail rogue spending or maverick spending. Both of these can be major issues in procurement that you don’t want to have to mess with.
By monitoring spending as it happens, businesses can avoid overspending and stay on budget as well, which only leads to positive outcomes. Whether you’re trying to find areas where you can save money or cut costs, or you just want to get an idea of what type of spending you’re doing during the procurement process, using the features of an automation software can be beneficial to everyone who works in the procurement department.
Widespread Program Adoption
Another key aspect of any Enterprise procurement system is widespread adoption. Your suppliers, vendors, and other members of your company should be able to adopt your procurement system easily.
Why is this so important? The simple answer is to create value. Not only is creating value important, but realizing optimal value through widespread adoption of your system helps the business need its goals and improve its bottom line.
All these are integral parts of any business and it all starts with running your P2P processes properly and making sure everyone involved is consistent with adopting and using the same automated procurement system.