As we head further into the digital age, digitization of your company’s procurement processes is becoming not only more accessible, but increasingly necessary. Unfortunately, a lot of businesses have been slow to recognize the benefits of digitization. In the past it has been seen as unrealistic or an unnecessary cost – but implementing digital and automated solutions can actually improve a business’s efficiency and have a very high return.
Digital technologies and artificial intelligence can expedite a procurement process, make it more efficient and effective, and help a company keep pace with growing, increasingly digitized market.
Looking for more specifics? Here are seven realistic ways digitizing your procurement process is beneficial to your business.
7 Ways Digitizing Your Procurement Process Can Help Your Business
New digital technologies make sharing and accessing data in real time easy. With the right tools, procurement teams can collaborate and develop solutions faster and more efficiently, eliminating the confusion caused by miscommunication and human error. This in turn will improve internal coordination for the procurement team and speed up problem solving.
A digitized collaborative data platform will intuitively store and allow shared access to data like contracts, records and analytics. This makes collaboration on all levels of the procurement process simpler and smoother. It also makes it more visible – disagreements over data can be quickly solved with accurate, accessible data records.
2.A Better Customer Experience
In this day and age, a certain amount of digital efficiency is expected in any buying process. Catalog management and e-procurement software allow companies to digitally capture and process orders from customers, even across different buying systems. This improves the customer’s experience and removes some of the frustration of manual buying processes.
Punchout Catalog protocol is a great example of catalog management software that enhances a customer’s experience. For more information about the punchout system, levels 1 and 2, check out this helpful link.
Digital technologies and artificial intelligence can help to reduce or even eliminate errors in the procurement process. RPA (robotic process automation) tools, for example, can be used to resolve simple issues like blocked invoices, making the process more efficient and more traceable than manual resolutions.
Automating simple, repetitive tasks has been shown to make procurement processes not only faster, but more reliable, by lowering the risk for error and keeping accurate, traceable records of the process.
4.Improved Efficiency and Cost Effectiveness
Digitizing the procurement process can help procurement teams make better, smarter decisions, reducing cost and saving time and energy in the long run.
Technologies for digitized category management, forecasting or sourcing strategies provide improved data sets for procurement teams to work with. This in turn leads to smarter buying and better cost effectiveness. As a more specific example, digitization can take the guesswork out of buying parts for a prototype development by giving engineers access to a selection of pre-approved parts and keeping track of their purchases.
Digitization can make your procurement process more transparent, allowing for clearer oversight.
Procurement costs and records can all be tracked in real time with the right technologies. With the whole process more visible and more traceable than manual processes, there is less room for confusion or disagreement.
Advanced procurement solutions can also be acclimated to certain guidelines or rules, so there is no need to worry about poor compliance or corner-cutting.
Digital technologies, like a digital reporting tool, can improve the way a procurement team collects and analyzes data. In a manual procurement process data is spread across a variety of sources and databases, but a digitized system will coordinate data and ensure that it all matches up efficiently.
Digital data tools can also target and eliminate errors, making it easier to bring together data from various sources and ensuring accuracy.
7.High Return on Investment
A lot of companies have been slow to digitize their procurement process because it does not seem like as important of an investment as other modern tech solutions. Digitization may seem like an unnecessary cost for a limited return.
In reality, if digital solutions are properly implemented, digitization of the procurement process should result in a very high return on investment, meaning that digital technologies and automated solutions will be well worth the investment cost in the long run. Error reduction, increased speed and improved communications help to save money in the procurement process as well as adding to the overall efficiency of your business.
Return on investment will depend on a company’s location, market, and the technologies they invest in, but in general, you can expect a high return in a relatively short amount of time by investing in technologies to digitalize your business’s procurement process.
Digitization and digital transformation are popular phrases in the business world today, but a lot of companies still don’t understand how digitization really works, and how much it can benefit procurement processes.
Digitizing your company’s procurement process will help your business run faster and more efficiently.
These technologies are not as hard to implement as some people may think. They are constantly improving and modernizing with the aim to become more and more accessible.
We highly recommend digitizing your procurement process now, to give your business a necessary competitive edge.