Fortunately, this is where tools like automation can help. It can be used to manage the administrative side of the P2P cycle – such as RFQs, RFPs and invoicing – as well as the analytic side such as gathering data on spend, performance and key KPIs. I-Tel’s Melvin Gauci explains.
“Automation improves the speed and accuracy of administrative tasks. It means that execs are able to spend less time on labour-intensive paperwork and more time working on tasks on that create or add value to the business. This is especially true where data is used to inform buying strategy.”
The need for speed and time is prescient. In 2019, AIIM found that nearly 50% of organisations were operating 75% of procurement processes manually. It’s a statistic compounded by a genuine need for better insight into the way supply chains are performing.
From the start of 2020, around 36% of organisations have lost revenue because of supply shortages, while a further 11% have had brand damages directly from supplier issues. This is dovetailed by 41% needing to expedite shipping to keep critical lines moving and inventory levels at a healthy level. So what role could automation play?
Better data equals better buying
Insight generation and risk reduction can be equally as time consuming and labour intensive as administrative tasks. The ability to discern meaningful trends and identify insight from data is made very difficult by the volume and variety organisations generate each day. And, because data is most valuable to an organisation when it is well organised, integrated and enriched, it is increasingly falling under the purview of automation.
“Data is most commonly used in procurement to gain visibility and improve the accuracy and speed of decisions,” Mel explains. “So for example, your spend data and inventory data can automatically be harnessed to make recommendations about how to act in the market in the future.
“By evaluating stock levels, demand across categories and global availability, companies can buy what they need in the right quantities and ahead of time. This helps them to avoid costly shortages, or paying over the odds when demand outstrips supply.”
As market uncertainty and volatility continue, the ability to forecast and plan for fluctuations in demand and availability will be crucial, as will the time and money it saves organisations. Long-term, it helps organisations to create agile and sustainable supply chains that are able to flex with market conditions.
“Essentially, using automated data and reporting functions allows you to mitigate risk and control costs at the same time,” Mel adds. “While trading conditions remain difficult, there’s a real need for procurement to do that – it’s necessary to remain agile. If they can do so, then when conditions stabilise they’ll be in a very good position to optimise strategy – and of course, automation is a crucial part of that.”
