Digital transformation has been a buzzword in procurement for a long time, but now people are saying it’s not enough. Some level of digital transformation is now expected, and procurement automation as well. Procurement departments that have not found a way to automate mundane tasks are falling behind, and that trend will only continue as procurement continues to transform.
One reputable person singing the praises of procurement automation is Tomer Gamlielle-Druyan, VP of Global Supply Management for the end-to-end cybersecurity solution known as Cybereason. During a recent webinar covering best practices for implementing a technology-empowered procurement process, Gamlielle-Druyan, a webinar panelist, spoke with Spend Matters. He explained his faith in automation. “Nothing can be left to human error,” Gamlielle-Druyan said. “We have to have automation all the time. Automation works.”
And it’s true, it does. The errors found in procurement datasets can almost always be traced back to manual processes or human error. That doesn’t mean humans don’t have value in the end-to-end procurement process, it means that certain parts of the process are managed better when we task AI with the job.
So, what should AI be doing in 2022?
First off, let’s define some terms to start on the same page. When we speak of procurement automation, we refer to the steps taken to automate your procurement processes to maximize your operations’ efficiency in the most optimal, time-sensitive way.
Adopting procurement automation speeds up procurement operations, allowing your team members to shift their focus and energy away from repetitive and time-intensive tasks. Instead, they can focus on more business-critical activities that require a human mind, such as decision-making and strategizing.
This is the picture of the new era of operations: a technology-empowered procurement process, where we see digital technology revolutionizing procurement with an infusion of intelligent automation, advanced analytics, and other new technologies.
As we mentioned, modern technology has had a profound impact on how we do business. Digital transformation is among the most impactful, having rapidly transformed organizations by increasing efficiency, lowering costs, and helping them adapt to ever-challenging—and changing—customer expectations.
Here are some of the top procurement trends we are seeing in automation for 2022.
When we talk about tail spend, a simple and basic definition of the term is an organization’s spend split into the 80/20 rule. 80% of transactions take up 20% of their spend. It is often small purchases that go outside of processes laid out by procurement, like credit cards and catalogs. It can be impossible to regulate and see.
So, how can you automate it? A big part of automating tail spend involves creating and implementing a system that can automatically collect purchasing data. Today there are platforms that focus solely on locating and automating tail spend, bringing it back into procurement’s fold.
Automating the supplier selection process has been a trend for a while now. Automation can allow procurement teams to streamline their vendor selection process and pick the best vendor available. By automating your vendor management process, you can quickly identify and resolve any issues that may arise and compare RFPs much more quickly.
Automation helps with onboarding and ongoing supplier communications as well, thus forming—and maintaining—a healthy relationship with your vendors once they are onboarded.
Purchase order cycle time can be sped up—sometimes dramatically so—by automating parts of it. By incorporating procurement process automation, your organization can automate the entire purchase order cycle, which will improve your overall productivity and process efficiency and save you numerous costs.
As we move forward into a new frontier of procurement automation and digital transformation, each procurement function will adopt these changes—and face the challenges that come along with doing so—at its own pace. Procurement will do it because those who don’t will soon realize they will get left in the dust.
Are you ready to embrace digital transformation and start adopting and incorporating procurement automation in your own organization? We are here to help.
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