Digital procurement in 2021 should be an easy win, as every business has improved their digital capacity, enabling fully digital processes, no matter the size of the organisation.
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 and collate every invoice and 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, and 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 and tools simplify the processing of detailed categorisation, generating the collated and itemised 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 best value for everything it buys – helping cashflow and 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, and more convenient for everyone involved, inside and outside of the finance department.
Visibility and Control
For finance and procurement, integrating online buying makes sense as part of a purchase to pay automation project.
This delivers 100% visibility and control over all spend before the order is placed and then fully automates the digital invoice capture, order match process, associated approval processes, and 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, and approve the invoices, whilst also having instant access to everything they bought historically – from every device, including smart phones.
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 and 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 and execute the tender, the savings become significant and cumulative, year on year…
Procurement as a Service
For those organisations that do not have the time or resources to do the procurement work, that’s OK.
We work with multiple procurement specialists that are very happy to do the initial work speculatively for a share of the savings identified.
From their perspective, starting the process with all the spend data ensures they can find the greatest area of savings easily and then ensure you achieve them.
Time for change: Digital Procurement in 2021
As we enter 2021, we all recognise that the world has been fundamentally changed by Covid-19.
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 and for some, when we work.
Purchasing and 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 simply not that important!
The counter argument is if purchasing really is not that important, why does your business continue to waste so much of everyone’s time and valuable cashflow by keeping your manual processes?