Solving 6 Critical Procurement Challenges With Business Process Automation

Procurement requires precision, predictability, and the ability to problem-solve with agility and confidence. A resilient procurement process can help businesses adapt more quickly to changes in the market and disruptions to the supply chain. 

With the right tools, teams can achieve this and more.

Why business leaders are turning to BPA

A recent Pipefy survey found that while many business leaders still consider cost savings a key benefit of — and driver for — adopting business process automation technology, benefits like better decision-making, increasing competitive advantage, and becoming more efficient were also prominent among the reasons for adopting this technology.

Of the many drivers behind the adoption of process automation, almost 80% of executives and more than 70% of directors indicated that increasing efficiency was a primary objective. Improving productivity was a driver for 64% of C-suite executives and 77% of directors. More than half of responses from both groups indicated error reduction as a key driver.

Primary drivers behind the adoption of process automation software

Driver C-suiteDirectors
Increase efficiency
Improve productivity64%77%
Reduce errors59%52%
Create more time for employees to focus on value-creating work54%38%
Conserve IT resources52%45%
Cost savings46%56%
Need to scale processesor workflows34%35%
Source: Process & Workflow Automation Survey. Pipefy. 2023.

What this means for procurement 

This growing interest and investment in BPA software is good news for procurement teams. These tools help procurement teams improve their resilience by simplifying automation and making it easier for teams to modify and improve their procurement workflows. 

That means avoiding common pitfalls and risks related to manual invoice processing, data visibility, blind spots or bottlenecks, delayed payments, missed deadlines, or data entry errors. 

Primary benefits of adopting business process automation technology 

When asked about the benefits they received from adopting business process automation tools, two-thirds of executives and more than half of directors identified better data and decision making as key advantages. More than half of both groups said that BPA tools help them become more agile.

Better data and decision making66%52%
Improved agility55%51%
Better collaboration55%48%
Cost savings54%61%
Better ability to measureKPIs and metrics48%45%
More consistent process outcomes41%52%
Source: Process & Workflow Automation Survey. Pipefy. 2023. 

6 most common procurement pain points

No matter the scale of a business, procurement is a complex activity made up of people, processes, and systems. Because of this inherent complexity, procurement processes can be vulnerable to one (or more) of six well-known issues:

ChallengeRoot cause
1. Too much manual workBroken workflows, dependence on spreadsheets and emails
2. Process or workflow gapsLegacy systems, tech stack complexity
3. Failure to respond quickly to changeRapidly evolving workflows or processes
4. Not enough resourcesIT bandwidth and/or backlogs
5. Data or collaboration silosLack of visibility, lack of integration
6. Difficulty making informed decisions Obtaining accurate or relevant data is time consuming

How digital automation saves the day 

Procurement processes that aren’t optimized for efficiency and accuracy can have a devastating effect on overall business performance.

Here’s how procurement automation and digitalization can transform legacy systems and inefficient processes into a future-proofed procurement operation that delivers long-term business value. 

Reduces inefficiencies and errors from manual work

If the procurement process is broken, teams are likely compensating with unnecessary manual work. You can usually spot a broken procurement process by two tell-tale signs: the use of multiple spreadsheets and a reliance on endless email threads or decentralized communication channels.

Spreadsheet sprawl and overflowing inboxes are indicators of too much manual work happening behind the scenes. The spreadsheet/email method is prone to data silos, collaboration barriers, and broken handoffs.

Delays resulting from missing or incomplete information are rampant. And since emails and spreadsheets tend to rely on unstandardized and decentralized data, costly errors and expensive rework are common as items move from person to person in the workflow.

The time and energy procurement teams spend dealing with these problems is time taken from value-driving activities such as market analysis, price negotiation, vendor management, and quality control.

When the procurement process is digitized and centralized, it becomes easier to automate these manual tasks. As a result, lead times improve, errors are avoided, and procurement teams can spend more time on activities that contain costs and drive revenue.

Bridges process or workflow gaps

Gaps in workflows or processes — whether it’s communication or work handoffs — are often a result of choppy connections between the many parts, systems, or apps. Add into the mix the inefficiencies and additional disruptions created by legacy systems and it’s a recipe for missed deadlines, late approvals, and a lack of visibility and accountability.

While manual workarounds are possible, managing a complex tech stack is difficult and can even get in the way of finding a better way to work.

A recent Pipefy survey found that among the factors limiting implementation of process automation initiatives, tech stack complexity ranked among the leading obstacles, with 32% of directors and 27% of C-suite executives reporting this as a barrier for implementing process automation initiatives.

Rather than adding complexity to already complex tech stacks, no-code process automation streamlines, weaves, and reinforces the many moving parts, processes, and people without creating stiff and inflexible parameters that can’t keep up with business changes. This creates a more cohesive, organized, connected, and responsive flow of work and information — no gaps, interruptions, delays, or complexity.

Simplifies change management

Like everything else in business, processes change and evolve. Sometimes they change because someone discovers a better way of doing something. Other times change is necessary because new apps and systems get added to the tech stack, or because legacy components get customized.

Processes also evolve in response to business strategy and shifts in the market. And, of course, processes have to be adapted when the team size or structure changes.

Procurement processes are especially sensitive to these kinds of external factors. Since procurement ensures that the business has the goods and services required to operate, it is crucial that teams are able to respond swiftly and effectively.

Nimble is the watchword for procurement teams, and digital procurement gives them the ability to respond to changes quickly and easily. This is especially true for procurement tools built on a no-code framework. Rather than waiting for drawn-out and expensive customizations, many workflow changes and automations can be implemented on the business side by the team that knows the process the best.

Addresses resource scarcity

When it comes to managing ever-evolving procurement processes, procurement teams aren’t the only ones impacted. IT teams and developers also feel the pressure of constant customizations. They may find themselves being redirected from other business priorities to fix or modify the procurement process each time the procurement team’s needs evolve or supply chains are disrupted.

Automating manual work and updating processes consumes precious developer resources, adds to the growing IT backlog, and exacerbates the shortage of developer bandwidth — the most relevant barrier to the adoption of emerging technologies, according to 64% of IT executives.

When developed and managed with no-code automation, digital processes help IT and business teams collaborate and implement solutions quickly and securely using an IT-sanctioned toolbox. With complete IT oversight, business teams can make some modifications themselves and respond more quickly to market changes, new opportunities, competitor activity, and customer feedback.

For their part, IT teams can manage complex procurement processes without adding to the  headcount or resorting to continual and expensive customization of existing stack components. Digital processes are easier to standardize, which simplifies the enforcement of security and compliance, and reduces the likelihood of shadow IT or manual workarounds that introduce errors and increase risk.

Dissolves data and collaboration silos

When a team with limited bandwidth is left to manage a tech stack composed of countless apps, systems, spreadsheets, and databases, data fragmentation and communication silos are bound to occur. In addition to the daily headache associated with manually processing and managing countless requests, the risk of errors, delays, interruptions, and excessive and unchecked spending grows.

Procurement automation solves this by creating seamless connections between people, processes, and tools. By weaving together the many moving parts into a single effortless and digitalized system, digital automation software makes it easier to connect, view, and control procurement operations; information can then automatically flow between people and tools. 

Improves decision making 

The difference between a company that keeps up with the pack and a company that sets the pace for competitors is the ability to move with speed and focus. At the core of that difference is the ability to make decisions accurately and efficiently. 

Complete data analytics quickly, spot trends, uncover root causes, and detect issues or anomalies faster than ever before. With generative AI, procurement teams gain instant access to KPIs and other metrics and step up their role into that of reliable strategic partners and orchestrators of value

What the future holds

A recent Gartner study found that less than 25% of procurement teams have a long-term digital strategy in place. While this number indicates that the vast majority of procurement teams are not prepared for the next great disruption, it also highlights missed opportunities to contain costs, conserve resources, and improve efficiency.

Unprecedented change can arrive at any time. Businesses that embrace digital procurement will find themselves positioned to seize new opportunities and adapt more easily to market changes, now and later. 

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