Managers need to keep in mind the importance of maintaining most of the operational load automatized in purchasing processes
I have heard innumerous times that there isn’t space for technology within the purchasing processes of the companies. This because the sectors are used to operating always in the same form and the idea of change makes them tremble. To have an idea, approximately 60% of the activities in these areas are controlled by spreadsheets or – innumerous – exchanging of emails between the company and their suppliers. Can you imagine? On the one hand, a lot of processes, audits and rules for a corporation to maintain their core business. In compensation, on the other hand the action of the purchasing sector and supply still circulate in “loose” documents in the collaborators equipment’s.
The fact of maintaining information in hardware reminds me of an occasion when the director of a big company dismissed one of their employees. Until there, it happens. But what is surprising in this story is that, alongside the collaborator, three years of purchasing processes went with. All the history of negotiation, quotation, requisitions and, including contracts, relating to the supplying sector of the company simply cease to exist. Thinking rationally, nowadays it is possible to recover all data. However, in the same way that the information was intentionally erased, the problem is to attest the truth of the recovered information. And if there was any modification in the comparative map, the quotation and delivery deadline. Is it really possible to rely on that recovered data?
Big companies, and not so big, search for agility in purchasing processes, cost reduction, collaboration with suppliers and governance. But, many time important structural questions are left aside such as never letting a data base on the computer of an employee, which sometimes does not offer the necessary attention for such an important matter.
Thinking about the elaboration of contracts or catalogues, the buyers search for the reduction of costs through long negotiations, acquisitions with quantities and defined deadlines. But, if the agreement does not become a reality internally and, for some reason, the information of the requests where not up-to-date, they will continue to be sent to suppliers with outdated values.
Imagine now a big negotiation with a cellphone operator of your company, and only two months later, you realize that the value charged is still the old one. When you verify, you discover that the buyer forgot to update the data in the system. That is proof that any manual process susceptible of human error.
A lot of organizations loose huge amounts simply because they are dedicated to the negotiation and forgot to update the system as agreed. Without mentioning the problem of governance. It is necessary to manage the purchasing process since with the information stored you will have a greater negotiation process. Remember that all pain is real. And from real companies.
In the end, we need to keep in mind the importance of maintaining most of the operational load automatized. It is fundamental to avoid, human error or data inconsistency. To help in that sense, there are innumerous solutions in the market. One of those is the use of an e-procurement platform. This allows the quotation and negotiation 100% electronic and, after the deals are closed, the data is transformed in internal catalogue items – which ensure that all product requisitions are made and approved automatically.
Already for the creation of a contract draft, the buyer can route the document via CLM (Contract Lifecycle Management) solution. In this case, all clause modifications are controlled and approved until digitally signed. This procedure confers even more agility and control of purchasing process, since all alterations and versions of the contracts, and other documents, stay centralized in one ambient. The use of a tool such as this one eases, including even the search for information for the management of contracts in an effective manner.
Automatizing the purchase processes allows the company to maintain all information under control. And the best: in accordance with the rules. Besides more agility and collaboration between the purchasing and supply sectors and their suppliers, initiatives like these bring more gains to acquisition costs. How about thinking about all this and restructuring the sector in your sector?