Driving innovation in document automation
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The term ‘digital transformation’ is often used loosely to refer to technological improvements in a company’s business processes. There is no shortage of emerging technologies that promise to increase efficiency and transform business processes through digitisation. Purchasing departments are facing increasing external forces that pressure companies to take an innovative approach and adopt these technologies. The challenge is to understand what digital transformation in purchasing means and where to start. This article explains how a successful digital transformation of purchasing relies on automation tools, such as the automated processing of documents and data.
Digital transformation can occur in any number of ways, from a retailer adopting an online store in response to Covid-19 to Amazon creating Amazon Web Services. Fundamentally, digital transformation involves leveraging emerging technologies to make positive changes in how a business is run. This includes processes, personnel and technology. These changes make enterprises more efficient, resilient and successful. The term ‘digital’, however, can allude to any number of things. For example, digital could mean paperless processes, moving data and processes to the cloud, AI solutions, data analytics, agile development, remote working, automation or even all the above together.
There are four types of digital transformation:
1) Business model transformation
2) Domain transformation
3) Organisational (or cultural) transformation
4) Business process transformation
Regardless of how people define ‘digital’, digital transformation is about more than just incorporating new technology into business processes. Tech solutions are tools that facilitate digital transformation, enabling businesses to make fundamental changes to a company’s culture and operations. When it comes to business process transformation, this means replacing established, often obsolete, tasks with cost-efficient solutions – this is particularly true for purchasing.
Purchasing departments process a high volume of transactional documents. B2B documents such as quotes, order confirmations and invoices need to be checked, compared and verified. Manual document processing is still common in many departments. However, processing data and documents manually is slow, error-prone and inefficient. Mistakes, delays, slow reaction times and deviations stifle smooth business processes, burden supplier relationships and lead to unnecessary costs. Further, unlike scalable automation tools, manual operations are limited in their ability to respond to an increase in the volume of documents. In a global digitised B2B world that struggles with supply bottlenecks and major supply chain disruptions, purchasing needs to be efficient, flexible and reliable. It is necessary to modernise and optimise purchasing processes to transform procurement into an agile and future-proof business partner.
The purchasing process is defined as a process used to purchase goods and services via a supply chain. A widespread synonym is the Procure-to-Pay (P2P) process. The steps along the P2P process always involve exchanging data and documents with business partners and approving them. That is why buyers must check, compare, and validate information before further processing. Business process transformation involves radically changing the elements of purchasing processes to meet new business goals. By transforming the P2P process, purchasing departments strive to modernise their workflows, incorporate new technology and save costs. AI applications, app technologies, cloud computing and other advanced technologies can help purchasing update or replace slow, error-prone, and expensive manual processes.
While some people equate automation with digital transformation or consider automation one aspect of digital transformation, digitisation should be seen as a first step towards automation in purchasing. Digitisation describes converting non-digital information, like a hard copy, into digital data. Today, digitisation also means the digital networking of processes and products in real-time with the growing size and complexity of data structures. Automation, on the other hand, improves processes that are already digital. It relies on a series of rules to accomplish tasks without human intervention. Automation through information technology or machines can replace repetitive processes and tasks while freeing humans to do other tasks. In purchasing, digitisation is often the first step towards automation as information needs to be available digitally to any automation technology before it can be automated. In the end, the digital exchange of data and B2B documents along the P2P process needs to work automatically to make purchasing more efficient and future-proof.
The Netfira Platform transforms operational processes by automating the transactional document exchange. The platform automatically extracts information from B2B documents such as shipping notices, invoices and order confirmations and exports it into any downstream systems. For documents without deviances, the Netfira Platform offers fully automated processing thus completely erasing the need for manual work. When a discrepancy is identified, the tool allows the buyer to edit the data and avoid disruption. That way, buyers can process a high volume of documents and data efficiently.
There are many benefits of a digital transformation in purchasing.
The Netfira Platform, which relies on AI and operates in the cloud, enhances workforce performance. The digital automation tool eliminates repetitive manual tasks, allowing employees to work more efficiently and effectively. Learn in our blog post how digital transformation tools future-proof the procurement manager’s role.
The automated processing of documents is the key to a successful digital transformation in purchasing. Automating transactional documents means efficient and smooth purchasing processes, transparent workflows, real-time information, short reaction times, seamless B2B communication, and more time for strategic tasks in purchasing. Business process transformation through digital automation solutions like the Netfira Platform not only eliminates manual tasks but also improves data quality, facilitates a cultural shift in the purchasing department to a modern and efficient work style and relieves employees.