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Business and Technology Insights

It's Time for Procurement Automation

 
September 29, 2016

Given their proximity to the market and to your suppliers, procurement managers are in a unique position to spot trends and relay them so that they can be used to make game-changing decisions. But this wont happen if theyre all too tied up with managing transactional issues and have no time to make observations and think about new opportunities. Nimble organizations, with entrepreneurial staff, automated processes, and flexible business models, succeed in carving out a niche for themselves and disrupting whole sectors.

As a business leader, youre always looking for different ways to give your company the winning advantage, and automating procurement will help you do just that.

Understanding what it takes.

The high stakes nature of the defense and healthcare sectors, and their ready access to financial resources, have allowed them to experiment with and adopt new technology. For decades, they have been at the forefront of bleeding-edge technology that revolutionized business in some way. In the past two decades, these two sectors have played with different forms of technology to automate procurement and with a lot of success. By doing so, companies in these sectors solved several problems for themselves, their suppliers, and other stakeholders. However, their success hasnt yet had a significant influence on other industries such as retail, manufacturing, and banking services. Its only now that companies in these industries are recognizing the potential of automating procurement and its contribution to controlling costs and improving business outcomes.

For instance, Bekaert, a global leader in metal transformation and coatings streamlined its procurement processes. As a result, it achieved 30% savings in rollout efforts by automating the process of user creation, and experienced a 25% reduction in development and testing efforts with the use of a process controlled workflow. Such examples help build a strong case for procurement automation.

Procurement process makeover: Its time to automate

The transformation journey isnt tough, but involving all relevant stakeholders early in the process is important. Understand the pain points by talking to your managers and suppliers, identify the automation opportunities, and work with your IT team to address technical integration, information security, and data privacy issues.

To know more about the pain points involved in the typical procurement process, and build a case for procurement automation within your organization, read our paper, Automated Procurement for Greater Efficiency and Transparency.

The city of Oakland, California, introduced automated procurement processes in an effort to modernize and better manage the citys contracts and purchases. To support its transition to new digital systems, it not only liaised with the press to effectively communicate with vendors across the city, but also equipped suppliers with the required technology through its Business Assistance Center.

Communicate early and well

As the City of Oakland example illustrates, procurement automation requires your system to communicate with those of your suppliers, so that essential if sensitive data can be shared. Automation will introduce more sophisticated systems, and your staff will need training to use those systems efficiently. Identify and communicate all necessary information to all stakeholders, as early as possible. Help them address those challenges, because the success of your project requires their whole-hearted support.

Procurement automation will enable your team to focus on innovation and put up a strong fight against existing and potential competitors.

Read TCS Whitepaper onAutomated Procurement for Greater Efficiency and Transparency to gain more insights about procurement automation.

 

Sandeep Shah is a Managing Partner within TCS Global Consultancy Practice focusing on Supply Chain and Procurement Transformation. Sandeep has over 30 years of experience in managing global supply chains and driving ERP led Supply Chain Transformation Programs in a range of companies. Sandeep's hands-on industry experience and pragmatic approach and solutions has realized benefits and savings in excess of $500m per annum for his clients. He has multi-cultural experience from working and living in NAFTA, EMEA and ASIA. He has a PhD in supply chain from Aston Business School earned from developing and successfully implementing leading edge thinking in several large industrial companies.