Here’s How To Define and Solve Procurement Problems While Using Business Process Automation Software
If you’re having troubles with procurement, you have to define the problem before you can work toward a solution. Procurement issues can take many forms. In some cases the problems are obvious. In others, your procurement might work pretty well now but wouldn’t in the near future. Defining current problems and identifying potential future problems will help you improve your procurement management.
Earlier this year, The Hackett Group presented a study where 95% of respondents said they believe procurement is going to change dramatically in the next 2-3 years because of digitization. If your company isn’t ready for these changes, you’re going to find yourself falling behind the competition. The good news is that in many cases, digitizing your procurement will solve a the majority of your procurement problems.
Automation and digitization are the keys to finding solutions for procurement problems within your company. They’re going to give you the tools you need to fix what’s wrong and improve every aspect of procurement. Here’s how to make that happen.
Clearly Define The Problem
This is the one step that automation can’t help with. Identifying problems in your procurement is going to take some good old-fashioned information collection and analysis. This is the step where you put a magnifying glass to your current procurement system, decide what works and what doesn’t, and come up with goals for improvement and change.
Where To Start
A good place to start is making sure that you’re not making any of the 10 most costly procurement mistakes:
- Not Negotiating
- Ignoring Your Suppliers
- Going Over Budget
- Making Snap Decisions
- Isolating Major Decisions
- Being Too Rigid
- Failing to Establish Policy
- Not Sharing Your Policy
- Refusing Technology
- Not Using Technology Well
We have a whole article on these problems (and how to avoid them) that you can read by clicking here. You can also click here to read our article on 3 Deadly Purchasing Pitfalls To Avoid.
Meeting With Your Team
Identify people involved in the purchasing process who you want to be on the team in charge of implementing solutions. Then, get these people together in a room. Have them document how the procurement process actually works, ask for their thoughts on what needs to change and how, and then listen to what they have to say.
Make sure to maintain an open discussion, be objective instead of defensive, and consider all feedback and ideas. It often works well to have silent brainstorming time when each participant writes their ideas on sticky notes. Then, you’ll put all the notes on a wall and work together to group the ideas on the notes by theme. You should start to see specific areas for improvement emerge as this exercise progresses.
By the end of this meeting, you should have a problem statement that identifies the problem(s) you want to solve. You won’t need to worry about solutions yet. The goal is to articulate exactly what problems you’re facing in procurement.
Further Reading: 4 Signs It’s Time To Automate Your Business Processes
Come Up With And Implement Solutions
Once you’ve defined the problems, it’s time to solve them. Implementing a new automated solution (or using one you already have more effectively) is key to fixing most common problems. It’s generally a good idea to define how you want your improved procurement system to work before implementing automation. That will give you more control during the implementation process and act as a guide for customizing the new system’s features.
Let’s look at an example. Suppose you’re having trouble with employees making purchases outside your purchasing system. This usually happens if the purchasing system seems too complicated or time-consuming. The solution is to find a way to make purchasing in the system just as easy as purchasing outside it. A punch-out catalog will let employees shop online as-usual from within your system, and it automatically generates purchase orders. Here at NextProcess, we include this feature in our automation system.
For another example, your company might have a problem with maverick spending and/or duplicate purchases. The solution is to implement better controls governing purchases. You’d also need a solution that tracks completed purchases from a central location so other employees can see when a purchase has been made. Automation will take care of these issues by giving you more control over spending as well as tracking all purchases from one program. With NextProcess, you can give as many employees access to this program as you like with no extra charge for user licenses.
Develop A Timeline
In some cases, you can fix your procurement problems and implement automation all at the same time. But for procurement departments that need extensive restructuring or departments in large organizations, you might need to implement your solution in stages.
Maybe you need to solve your biggest problems first, then roll-out the rest of your solutions over the next few months. Or maybe you test out the new automated purchasing system by giving your most influential users access first. That’ll let you make sure everything is working the way you want before implementing the system company-wide.
The Best Purchasing System
You’re not going to find a better procurement automation system than NextProcess’ Purchase Order Module. This system is highly customizable, very easy to learn how to use, and includes all the features you’ll need to solve your procurement problems.
You can also rest assured that NextProcess will help you through every step of the implementation process. Our implementation rate is near 100% (compared to industry-standard 33%). We have a very responsive customer service team and we’ll work with you throughout the entire implementation process. This typically lasts about 6 months, though you’ll be able to start using the program early on in that time frame. Contact us today and we’ll schedule a free demo so you can see first-hand how our software will work in your company before you decide to purchase it.