Any Previous Definition Of Digital Procurement Is Challenged Into 2021 As Businesses Become Fully Digital
Digital procurement in 2021 should be an easy win, as every business has improved its digital capacity, enabling fully digital processes, no matter the size of the organization.
This new revelation exposes numerous changes, aside from the obvious enablement of remote working.
Real-Time Spend Data
Covid-19 has accelerated the adoption of sending invoices via email as a PDF because we all want to get paid – paper invoices do not work in lockdown.
This alone is driving the change to digital procurement in 2021.
The first change is the ability to capture & collate every invoice & line-item detail for every invoice processed, thanks to advanced digital invoice processing technologies.
Suppliers are automatically allocated a primary category, delivering the instant ability to review spend by category, then drill down to the suppliers within it, & then right down to every line item of spend.
This single step breaks the back of every procurement project – all the data can be held within a procurement application, updated in real-time.
The application & tools simplify the processing of detailed categorization, generating the collated & itemized spend data for tendering in a fraction of the time.
Even the tender process is digital, making it easy for potential suppliers to compete for your business.
It is now easy to ensure your business gets the best value for everything it buys – helping cash flow & profitability.
The second change is the capability to drive preferred supplier adoption by enabling the whole business to buy online at the preferred pricing to deliver the anticipated savings.
Covid-19 has also accelerated the personal adoption of buying almost everything online, so we all understand the benefits.
Businesses can now take full advantage of that same great experience whilst making the entire purchase-to-pay process faster, easier, & more convenient for everyone involved, inside & outside the finance department.
Visibility & Control
For finance & procurement, integrating online buying makes sense as part of a purchase-to-pay automation project.
This delivers 100% visibility, & control over all spend before the order is placed & then fully automates the digital invoice capture, order match process, associated approval processes, & then posts the end-to-end audited transaction into your existing ERP / accounting software.
For the people buying, they will thank you for it.
They can also see the exact status of every purchase request, confirm receipt, & approve the invoices, whilst also having instant access to everything they bought historically – from every device, including smartphones.
Buying from online suppliers is almost always cheaper.
Out of curiosity, we used our technologies to undertake a detailed analysis of spend from 5 of our customers & validated the prices they would have paid for the same or equivalent goods from the suppliers on Amazon Business.
The average savings available, purchasing only from Amazon Business, were 32%.
Why? Simply because multiple suppliers compete for everything you buy. See the detailed report HERE.
But the savings potential applies to everything you buy.
Once it becomes easy to capture the spend data, undertake the analysis, create & execute the tender, the savings become significant & cumulative, year on year…
Procurement as a Service
For those organizations that do not have the time or resources to do the procurement work, that’s OK.
We work with multiple procurement specialists who are very happy to do the initial work speculatively to share the savings identified.
From their perspective, starting the process with all the spend data ensures they can easily find the greatest area of savings & then ensure you achieve them.
Time for change: Digital Procurement in 2021
As we enter 2021, we all recognize that Covid-19 has fundamentally changed the world.
There is light at the end of the tunnel as we apply ourselves to the task of global vaccination, but the new corporate world we are emerging into has already redefined how we will work, where we work & for some when we work.
Purchasing & accounts payable management must be digital to perform in this highly competitive new world order.
When looking at the challenges we all face today, it can be easily argued that purchasing is not that important!
The counterargument is if purchasing really is not that important, why does your business continue to waste so much of everyone’s time & valuable cash flow by keeping your manual processes?