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Improve Procurement Visibility ASAP: 5 Must-Follow Steps
5 Steps to Improve Procurement Visibility (And Why You Need To Right Now)
How is your company’s procurement visibility?
If it’s like 69% of companies surveyed in a 2017 study, then you don’t have total visibility into your supply chain (GEODIS, cited by Finances Online). Of the companies responding to that survey, only 6% said they had total visibility.
Companies struggling with visibility in procurement are far more common than those with full visibility. In procurement, low visibility means a lack of transparency regarding procurement operations. It’s difficult to optimize or control the procurement process because it’s hard to get a good view of how purchasing in the company works.
In contrast, high visibility means it’s easy to see how the procurement process works and where the money goes. When there’s visibility in procurement, you can easily get a high-level view of the whole procurement process.
Five Steps to Increase Visibility
Increasing visibility into procurement operations is an achievable goal. That’s especially true with the help of Business Process Automation (BPA) software. This type of software makes it much easier to centralize procurement, adhere to best practices, and keep the whole process visible.
1) Outline Ideal Process and Key Performance Indicators
An important step in achieving procurement visibility is knowing what you want the process to look like. Take the time to analyze your current process and outline procedures that already exist or you’d like to implement.
Having a procedure outline for steps including purchasing requests, PO generation, communication with suppliers, and receiving makes it easier to check on the status of specific purchasing requests. At the same time, you’ll also want to identify Key Performance Indicators (KPIs). Tracking KPIs like order frequency, invoice and PO accuracy, and cycle time gives you important insight into whether your procurement process is functioning the way you want it to.
2) Automate As Much as Possible
The more you can automate your procurement process, the better visibility you’ll have. This is primarily because good procurement automation software is going to centralize the process, streamline procurement, and automatically collect accurate data. Going with a software-as-a-service (SaaS) supplier will make the whole implementation process very easy.
Additionally, automation frees up time for employees on the procurement team. With tasks like PO generation and purchasing compliance automated, they’ll have a lot more time to devote to other tasks. Optimizing procurement, analyzing data, and tracking KPIs are just a few of the tasks they’ll have more time to focus on.
3) Centralize Processing and Record Keeping
Getting the whole procurement process onto a centralized platform makes it much easier to improve procurement visibility. With an automated software system, you can manage the whole procurement process in one place from the very start with supplier selection all the way through to receiving and payment. With everything in the same place, it’s easy to make the whole process transparent.
One of the great things about NextProcess is that all the software modules work together. Implementing both the Accounts Payment and Procurement modules streamlines the whole procure-to-pay process in a centralized digital platform. The system automatically collects records and generates purchase orders. Everyone at the company makes purchases through the same system, and the procurement team can follow the process in real time.
4) Improve Communication and Collaboration
When you centralize the procurement process, you also make it much easier to communicate and collaborate. Everyone has access to the same software program (with no cost for adding additional users if you go with NextProcess). Centralizing all records and making the process accessible to your whole team fixes a lot of communication problems. You’ll also be able to communicate and collaborate within the software.
A good procurement automation software system will also make it easier to communicate with your suppliers. You can set up a supplier self-service portal that lets your suppliers log in to check the status of orders and invoices or submit any missing information. This also helps improve visibility by centralizing supplier management.
5) Collect and Use Better Data
Good data gives your company clarity about the procurement process. Automation software logs all the records related to each purchasing request in a way that’s easy to access later. You can pull up information about specific transactions or generate reports from the collected data.
Access to accurate, up-to-date data not only increases visibility into procurement but can also support the strategic goals of a company. The procurement team can analyze data more effectively and provide robust data to support company goals for sustainability, budgeting, and more.
The Benefits of Increased Visibility
When you implement procurement automation software and use it to improve visibility, your company will enjoy immediate and long-term benefits.
The whole procurement process will be much more streamlined. Once implementation is complete, you’ll immediately have visibility over all the steps involved in procurement requests from start to finish.
Getting procurement on a central platform will save time and make communication much easier. If suppliers have a question or the procurement team needs to contact them for missing files, those communications are assisted by the software. Internally, everyone in your company working on procurement workflows can easily access related documents. Centralizing record keeping means no one is left in the dark, and no one accidentally does duplicate work because they didn’t realize someone else was already handling it.
Long-term, greater visibility means more robust, accurate, and timely data. Your company will enjoy greater insight into budgets and cash flow. And with this information available in real-time, your company can make data-informed decisions more quickly and easily.
Get NextProcess Working for You
If you implement procurement automation using Software-as-a-Service, the whole process is very simple. The SaaS supplier will handle implementation, hosting, and ongoing software updates. This provides a centralized automation software platform with no hassle for your IT department. You’ll gain increased visibility immediately, and have the tools needed to continue improving visibility in procurement.
NextProcess offers a true end-to-end automation solution that covers budgeting, project management, purchasing, accounts payable, and payments. You can automate using just the procurement module, or enjoy even more benefits and functionality by using the software suite to manage end-to-end financial processes. Our modules work separately or together, and integrate seamlessly with all major ERPs, to provide real financial management solutions for mid-market and larger businesses. Contact us today for a free demo to see how our software can help enhance visibility in your procurement process.