What Procurement Processes Should Be Automated?

The big push in Procurement Automation is typically the automation of invoice processing: automatic matching, verification, and when possible, payment because paper-based invoice processing in an average organization can cost $30 or more (with some estimates that paper-based invoice processing can cost an organization as much as $60). But when an organization switches to automated invoice matching, processing, and payment with a best-of-breed system that can automate processing the 85%+ of invoices that are problem free can reduce invoice processing costs to somewhere between $3 and $8 an invoice, depending on the system and the overhead costs.

And while this cost savings is great, it shouldn’t distract from the other cost savings opportunities that can come from automating other procurement processes, which eat up valuable time and resources. In this post we will discuss three other areas of Procurement that should be automated.

Requisition Approvals

Not every requisition needs a manual review. A requisition for a standard office supply reorder from the office manager, a requisition for a standard setup for a new hire, or a requisition for standard travel expenses for a pre-approved conference can all be automatically approved if the expenses are within the expected range and budgets are not exceeded. A requisition system that supports the definition of rules that can allow requisitions to be auto-approved can save the organization a lot of time and resource energy.

Automated MRO re-orders

A system that can support the definition of minimum stock levels, maximum stock levels, and perfect re-order levels can allow stock to be automatically re-ordered when a threshold is met. This negates the need for an MRO clerk to regularly check inventory levels and compute re-order levels.

Supplier Profile Maintenance

Supplier profiles need to be kept up to date to enable the organization to contact the right people, select the right locations, keep track of current products and services, and make payment. People change roles, and jobs, office locations move, products get discontinued, and so on. Keeping this information up to date takes a lot of time and effort – with a good portal, that reminds suppliers of their need to auto-update, suppliers can maintain their information, upload insurance certificates and certifications, and provide the organization with requested information on an as-needed basis.

Good Procurement systems automate the tactical and allow procurement professionals to focus on issues, not paper pushing.

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