If there’s one term that summarizes the state of the world right now, it’s uncertainty. Everything has been knocked around and no one knows for sure what will happen next. In uncertain times, most businesses hunker down and try to keep to what they know. But the companies that are progressing amid a pandemic are the ones who were ready to move forward in their digital journey. In an uncertain time, the smartest thing to do is to double down on your digital procurement. Procurement is the centerpiece of every organization. It affects your supply chain, helps you manage vendors, and determines where most of your revenue gets spent.
According to data sourced by consulting giant McKinsey, digital procurement is estimated to deliver:
- 40% increase in annual cost savings
- 30-50% time savings on procurement tasks and processes
- 50% reduction in value leakage
The stakes are high, and at this point, digital procurement could be that one factor that determines your companies’ welfare post-pandemic. It will empower you to manage your supply chain more efficiently, and meet your customers’ needs without breaking the bank. Here are the top 5 reasons why you should automate your procurement process.
1. Improve efficiency
Procurement is riddled with a lot of steps.
Reach out to potential suppliers
Request for quotes
Request for proposals
Request for information
Authenticate invoices with three-way matching
Settle supplier invoices
Maintain supplier ratings
Running through all these tasks can quickly get out of hand, especially when you have a medium-sized team and you don’t have the scope to expand. This is most applicable now, given that the new normal has led to downsizing in accounts and procurement departments. Here’s where digital procurement comes in.
Powered by intelligent systems and processes, digital procurement tools empower businesses of all sizes to:
a. Put repeatable tasks on autopilot so procurement staff can focus on more interesting and involving work
b. Design and run process workflows with ease with digital procurement tools like Kissflow Procurement Cloud
c. Streamline operations so teams can stay on top of their procurement needs with ease
2. Improve visibility
Scattered data is one of the biggest downsides of manual procurement. Imagine a situation where your purchase requests are made in Excel, collected by the procurement team, and forwarded to suppliers via email. Once the supplies arrive, they’re received and recorded in yet another spreadsheet, with supporting data such as QC data and invoices collected and stored in yet another spreadsheet.
In one word, chaos.
Procurement is essentially a data-centric process and manual procurement scatters that data all over the place. On the other hand, digital procurement puts it all together so stakeholders and your entire team can work with maximum visibility into the data they need, with ease.
3. Transform supplier relationship management
Digital procurement effectively transforms supplier relationship management end-to-end, from:
- Sourcing new suppliers – quote and proposal requests
- Product ordering
- Product receipt and tracking
- Three-way matching from invoice authentication
Digital procurement creates a simpler and more intuitive background for the supplier relationship to function seamlessly.
4. Mitigate supplier risk
One other key concern in procurement management is the need to keep an eye on suppliers and ensure they deliver maximum quality. Digital easily solves this pain point. With integrated supplier management tools, it’s easier to keep track of the quality of supplies vendors deliver and determine where the customer-vendor relationship is headed in the future.
5. Accelerate growth
Before the rise of digital, procurement was regarded as a business support function. Unlike sales and marketing, procurement supported other departments but couldn’t have any dollar figure attached to the value it brought in. Now, the scenario has changed drastically. With initiatives like early payment discounts and reverse factoring, procurement reduces money out of the door, so you can spend less and still get the same, or even better outcomes. With digital procurement offering businesses up to a 40% boost in procurement cost savings, digital procurement acts as a direct revenue driver for businesses smart enough to adopt it.
Still not convinced about taking your procurement digital? Here’s a comprehensive video on why Digital procurement is more important now than ever!