Hello Automated Procurement, Goodbye Tedium
Posted by Amenallah Reghimi, VP of Product Management, Intelligent Solutions in Autonomous Procurement on July 21, 2020
How much do you enjoy routine tasks such as updating dozens of price lists, generating purchase requests, and entering and reviewing information for multiple suppliers? Many tasks in procurement are repetitive, tedious, time-consuming and, when performed by humans, highly error prone. They absorb precious time – time that could be spent on more important strategic tasks that add value to the organization and make work more satisfying and rewarding for a procurement professional.
Automated procurement means that procurement professionals are released from tedium while organizations enhance their efficiency and release additional value. It also helps reduce risk, keep costs down and increase compliance.
Learn all about the steps to take in achieving autonomous procurement in our white paper, written by Michael Lamoureux of Spend Matters. Download it now.
JAGGAER takes a holistic view of the technology and applications that need to be in place to relieve procurement professionals of routine tasks: all spend under control, all processes automated, full data transparency and enhanced usability.
All Spend Under Control
Uncontrolled spend creates unnecessary administrative effort and wasted time for procurement and non-procurement employees as well as adding costs. By putting all categories of spend in spend catalogs that can be accessed easily online, the end buyers get a great shopping experience and the procurement function can be sure that purchases are made according to negotiated contracts. Procurement is in control, without needing to intervene in the process.
One leading international infrastructure group headquartered in the UK recently brought its purchasing under control by putting fixed catalogs and products in place with suppliers and partners, replacing the old system of purchasing cards (PCards). Under this old system the manager on a construction site who needed to order ten different items might need to ring ten separate suppliers and submit the PCard number over the phone. This frequently led to manual errors that had to be followed up and fixed. With purchasing now executed over a digital platform, the risk of off-contract (maverick) spend has been reduced. Moreover, the company’s managers have peace of mind that employees are buying the right products, for example from a health and safety perspective.
Many higher education institutions, such as Tulsa Community College now put 100% of their spend through the JAGGAER platform. The value of such a solution proved itself during the Covid-19 crisis, as demonstrated by Dayton University.
All Processes Automated
For today’s procurement professional, there are simply not enough hours in the day to cope with the whole gamut of relatively simple but time-consuming tasks that the job involves. With the JAGGAER ONE platform, it is now possible to automate all key procurement processes from source to pay and to integrate these processes seamlessly with third party systems such as ERPs.
Organizations usually start their process automation journey with the low-hanging fruit of procure to pay (P2P) processes. These can, however, deliver an immediate efficiency boost. For example, manually generated purchase requisitions often consume a lot of time in a complex hierarchical structure. Procurement process automation cuts down the time spent on the approval cycle and removes unnecessary steps in the process. Purchase order automation not only improves efficiency and reduces costs, but also improves control. And by automating the invoicing process, companies can cut the costs to a tenth and reduce payment cycles from days or weeks to real time, not only saving time but also allowing them to benefit from better payment terms.
However, companies will soon want to move onto more complex processes. For example, Swiss technology company Bühler AG has made great strides with automated procurement processes, notably with digital category management. Energy giant Masdar has similarly achieved great efficiencies and eliminated paper-based processes with automated eSourcing.
Full Data Transparency
Without full transparency of data and processes, it is virtually impossible for any large organization to control procurement. And without that control, it is impossible to secure benefits such as savings and excellent supplier performance. In addition to ensuring the automation and standardization of operational processes, transparency also leads to the documentation and archiving of business transactions related to invoices, which can be searched for and viewed in the system. The consistent and structured logging of business processes provided NürnbergMesse with more evaluation opportunities and a higher level of compliance with auditing standards since procurement and signature guidelines are followed exactly.
“Ease of use” is vitally important for the success of process automation. If systems are hard to use, then people will not use them. It’s that simple, and this principle extends to making things easier for suppliers as well as employees. The experience of leading manufacturer of sanitation products, GROHE, shows the benefits of improved usability in terms of getting suppliers to self-serve. Supplier registration via the new user interface to the GROHE portal is continuously expanded and the supplier profile is augmented with questions about new certificates, guidelines etc. Subjects that are important to GROHE, such as sustainability, are represented in this way. Since 2018, corporate social responsibility has featured as a fixed criterion on the questionnaire. The addition not only gives GROHE feedback from suppliers, it also creates greater awareness of relevant issues.
Robotic Process Automation
An important enabling technology that delivers an enhanced level of automation to procurement is robotic process automation (RPA). The term is a little confusing as it has nothing to do with the robots of the popular imagination. At its most basic, RPA automates a series of repetitive manual steps done by humans. At a more advanced level, RPA technology learns and adjusts behavior over time. A good example is EdgeVerve’s AssistEdge, a natural enhancement of the JAGGAER ONE SaaS cloud-based platform, delivering technology to automate any repetitive and rule-based human processes. This includes the automation of “high touch” processes through modeling rules into software robots that run non-intrusively on JAGGAER ONE.
Automation and Talent
Finally, it is worth mentioning that automation in procurement will play a decisive role in attracting talent into the profession in the future. Young talent and tedious, routine work do not mix well! As David McBride, Transformation & Strategy Director at real estate professional services company JLL put it, “Younger procurement professionals entering large organizations now expect to use cutting edge technology, so the implementation of JAGGAER has been an investment in our people to upskill them in new technologies.”