Purchasing benefits from implementing automation solutions that use AI. Read more about the steps to take in order to choose an AI-based solution.
Procurement automation: Can you afford not to automate your business processes?
In purchasing, many people think that they cannot afford to automate their business processes. Due to heavy workload and supply bottlenecks, many buyers believe they lack time, money and resources to automate purchasing processes. Therefore, they often hesitate to implement a procurement automation solution for fear of long, expensive and exhaustive projects. But the real question is: Can you afford not to automate? Or is automation the key to remaining future-proof and competitive in the coming years? What are the benefits of procurement automation? What risks do companies run if they do not automate their purchasing processes? And how can you automate your operational processes quickly and cost-effectively?
What is a business process?
A business process is a collection of business tasks and activities that, when performed by people or systems in a structured course, produce an outcome that contributes to the business goals. There are many different business processes within one company. Moreover, each department has its unique business flows. The process must involve clearly defined inputs and a single output.
What does the purchasing process look like?
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 purchasing process can be considered a cycle following a well-established pattern of events. It usually includes the following steps:
- The company identifies a need for goods or services
- The procurement team sends purchase orders to suppliers
- Procurement reviews quotes from suppliers and selects the best option
- The supplier sends a purchase order confirmation
- Procurement compares the purchase order with the order confirmation and contacts the supplier in case of any deviances. Read here how the Netfira Platform automates this process.
- The supplier sends an advanced shipping notice to the purchasing department
- The supplier delivers the goods or services within the agreed-upon timeframe and sends an invoice
- Purchasing compares shipping documents with the original purchase order and the invoice issued by the supplier
- Successfully matched orders are approved for payment
The steps along the P2P process always involve exchanging data and documents and approving them. That is why buyers must check, compare, and validate information before further processing. These operational purchasing processes are often carried out manually, take a lot of time, and are prone to errors. However, since procurement sits at the heart of the value creation process for organisations, it is vital to make the Procure-to-Pay process flow quick and efficient. To achieve this, purchasing needs to automate its operational business processes.
Benefits of procurement automation with the Netfira Platform
The Netfira Platform is a secure cloud-based SaaS solution for automating the bidirectional exchange of B2B documents and data. The Netfira Platform increases operational efficiency in purchasing by providing a solution that automates all documents along the P2P process. The standalone solution makes manual data entry obsolete by automatically extracting relevant data, processing it intelligently and exporting it into any ERP system or downstream system.
Automatically exchanging B2B documents with Netfira increases purchasing’s efficiency significantly. As a result, purchasing departments can process important information quicker and have more time for strategic and other value-adding activities.
Automating the P2P process with the Netfira Platform helps shorten and speed up the procurement cycle. As a result, less money is caught up in lengthy reviews and evaluations.
No paperwork and less manual work
Traditionally, the procurement process is paper-based, manual and arduous. Buyers need to spend a lot of time comparing, validating and entering data manually into downstream systems. Managing massive volumes of paperwork can be a challenge for procurement teams. Thanks to the automatic document and data exchange with the Netfira Platform, buyers are relieved of manual workload, and mistakes and deviances due to human error are avoided.
Improved transparency and shorter reaction times
For a P2P process to be smooth and efficient, buyers need to have reliable information and to be able to react to discrepancies or unforeseen changes promptly. Automated document processing with the Netfira Platform leads to shorter reaction times and higher transparency. Buyers receive information and notifications at the push of a button. Real-time information accelerates purchasing processes and improves the supply chain’s digital connection.
Higher data quality
Any process that humans predominantly handle is prone to data inaccuracies and inconsistencies. However, reporting and analysis of procurement data provide key performance insights. Good data quality is a prerequisite for a successful purchasing department. Automating the business steps along the P2P process prevents data inconsistencies. Find out here how the Netfira Platform improves the quality of data through automation and process optimisation.
Problems of manual procurement processing
At the same time, the refusal to automate business processes in purchasing leads to a lot of problems. Relying on manual procurement processes exposes the business to multiple risks. For instance, the operational efficiency of the purchasing department is significantly limited. Without automated document processing software, buyers must deal with a high manual workload and voluminous paperwork, preventing them from focusing on more value-adding tasks. In addition, manual data entry slows down purchasing and leads to more errors. This results in poor data quality, slow reaction time to problems or discrepancies, and damages supplier relations. High process costs and unnecessary expenses occur as a result.
Conclusion: Why procurement automation pays off
Considering the points covered in this article, it is safe to say that businesses cannot afford not to automate their purchasing processes. The benefits of an automated P2P process outweigh the initial costs of implementing an automation solution to optimise business processes. A SaaS solution operated in the cloud, like the Netfira Platform, offers a quick, easy and cost-efficient procurement automation. With Netfira, companies can automate their operational processes in purchasing. These processes are essential, and their optimisation is crucial as they generate revenue. Manual operational workflows are not sufficient for purchasing to get an optimal return. Instead, to stay competitive and future-proof in a more and more globalised digital B2B world, purchasing must rely on speedy, transparent, accurate, consistent and manageable processes through procurement automation.