Streamlining Challenges: Solutions Provided by Automation for Five Persistent Issues
Laggard Leaders Be Warned:
Do you think your procurement processes are running smoothly? Think again! The majority of companies underestimate the hidden losses lurking within their familiar workflows. While employees are busy sending documents via email, haggling prices over Viber, and hunting for old agreements in dusty archives, your business is hemorrhaging money, time, and competitive edge.
Procurement automation isn't about poking fun at those who are already comfortable with their old ways. It's about exposing hidden problems, healing non-obvious wounds, and preventing future financial hemorrhages. In this post, we'll discuss five key issues that can be swiftly and effortlessly resolved through automation.
Routine Tasks Dragging Your Team Down
According to research from the Institute for Supply Management, roughly 30% of procurement employees' time is wasted on mundane tasks like order processing and document management. This leads to significant delays and inflates procurement cycle times. It's a drag on productivity, and many organizations can attest to it.
- A single order can take up to 47 minutes to process
- Document approval takes a whopping 3-5 days
- Finding suppliers requires 6-8 hours of productivity-zapping time
The Fix: Automated procurement management systems can slash order processing time by up to 50%. Companies that have taken the plunge report that their time spent on tedious tasks is reduced by 2-3 times. In some cases, the same tasks now require only 5 times less time.
Documentation Errors: The Hidden Time-Bombs
Documentation errors can lead to catastrophic financial losses. Research indicates that as many as 20% of all orders contain errors, with potential additional costs reaching up to $300,000 per year for large enterprises.
The Fix: Automation minimizes manual errors through built-in checks and templates. Companies using automated solutions have dramatically reduced their documentation error rates to just 5%, significantly saving resources and time.
Transparency: The Missing Piece of the Procurement Puzzle
Without clear insight into procurement processes, it's difficult to assess efficiency and find kinks. Approximately 70% of companies lack a comprehensive understanding of their procurement practices, making informed business decisions challenging.
The Fix: Automation systems provide a comprehensive bird's-eye view of processes, enabling real-time tracking of purchases and setting up a notification system for deviations from the norm. Such transparency helps identify potential savings opportunities, which, according to research, can reduce procurement costs by a substantial 10-15%.
Strategic Partnerships: The Other Half of the Battle
Many companies fixate on short-term gains, neglecting the development of strategic partnerships. Deloitte reports that 60% of organizations fail to leverage modern technologies to scrutinize supplier reputations, compromising their competitiveness. Sustained collaboration with suppliers is often overlooked as well.
The Fix: Automation tools enable a deeper analysis of supplier data and facilitate the growth of long-term relationships. Companies that have embraced automation have increased their number of strategic partnerships by a robust 30%, resulting in improved performance and cost savings through increased competition.
Miscommunication leads to Madness
Chaotic communication with suppliers through email, messengers, and phone calls can lead to calamitous consequences. Emails get lost, conversations become disorganized, messages can be deleted or edited, and phone calls lack any recordings of agreements. All this leads to wasted time searching for old agreements or discussing details, frustration, and supplier disputes.
- 30% of procurement professionals' time is spent searching for old agreements or clarifying conditions
- 15% of purchases are delayed due to missing commercial offers or technical specifications
- Conflicts with suppliers arise due to disagreements over conditions (“I remember it differently”)
The Fix: Implementing an automation program allows all negotiations to take place in one place - through the built-in supplier chat. The conversation history, attached commercial offers, technical specifications, and other agreements are stored, making communication swifter, more transparent, and significantly reducing the time spent preparing reports.
The Bottom Line
- Reduce operational costs
- Improve planning accuracy
- Enhance process control
- Strengthen partner relationships
To achieve the best results, take these steps:
- Perform a thorough analysis of your current procurement processes.
- Determine key performance indicators for assessing efficiency.
- Develop an action plan with clear timelines.
- Ensure employee training and support.
- Continuously monitor results and optimize processes.
Modern procurement automation systems have proven their effectiveness across a wide range of industries and can be customized to meet your business's unique needs. Hundreds of procurements take place daily through the Bidmart automation program, serving banks, manufacturing companies, IT, retail, telecom, and more.
- Automated procurement management systems can reduce time spent on mundane tasks by 2-3 times, slashing order processing time by up to 50%.
- Documentation errors can lead to financial losses of up to $300,000 per year for large enterprises, but automation can minimize these errors through built-in checks and templates.
- Lack of transparency in procurement processes makes it difficult to assess efficiency and find savings opportunities, but automation systems provide a comprehensive view and enable real-time tracking.
- Modern technologies are not being utilized by 60% of organizations to scrutinize supplier reputations, compromising competitiveness, but automation tools enable deeper analysis and growth of long-term relationships.
- Chaotic communication with suppliers through various channels can lead to delays, disputes, and wasted time, but implementing an automation program consolidates negotiations in one place, improving transparency and efficiency.
- To optimize procurement processes, perform a thorough analysis, set key performance indicators, develop an action plan, provide employee training, and continuously monitor results.
- Modern procurement automation systems have been effective across various industries and can be customized to meet specific business needs. Hundreds of procurements are facilitated daily through the Bidmart automation program, serving banks, manufacturing companies, IT, retail, telecom, and more.
