How to manage Procurement Process efficiently to reduce costs and risks

Procurement management

Is your procurement process slowing things down?

Are you using traditional ways to manage your procurement process? If your answer is yes then, it is time to boost your buying steps.

The digital revolution has started to disrupt procurement processes in the last couple of years like many other business processes. 85% of executives believe that digital transformation will alter the very fabric of their purchase process, yet only 32% have a digital strategy in place.

In the past, the process of procurement only took care of the nuts and bolts of resourcing, but latest process management technologies and automation have made it a profit-pushing strategy that empowers C-suit decision-makers. 

Procurement process managed effectively can create market visibility, minimise supply chain risks, and deliver substantial cost savings.


What Does Procurement Process Mean?

procurement system

In the simplest terms, it’s the buying of goods and services, but it includes all processes from purchase planning to value analysis and even disposals. The procurement management must achieve a profit on resale, and to do so, it must source finance cheaply and negotiate intelligently.

The old incarnation of procurement management could succeed simply by operating more cheaply than the average business, but today’s standards are higher. While world-class procurement departments operate 20% more economically and employ 27% fewer employees, that’s no longer enough.

What does procurement mean in the modern era? Sometimes, intelligent spend management; often supplier sourcing; but always digital strategy.

What are the steps in Procurement Process Flow?

Procurement process flow can be broken down into: procurement process, systems, people, and paperwork. Overall procurement process entails broader tasks like ordering, payment fulfillment, and receiving.

Procurement Process flow includes eight purchasing process steps:

      1. Requesting for a service or product

      2. Procurement Analysis to evaluate request

      3. Forward a request for proposal to suppliers

      4. Supplier Selection

      5. Procurement Manager evaluation and approval

      6. Approving the request with a purchase order

      7. Sending the purchase order to the supplier

      8. Receiving the product and confirming the delivery of services or goods (Three-way matching)

      9. Approve the invoice and forward it to payment processing

      10. Recording the transaction for the company’s records

Procurement Process Flow
Kianda – Procurement Process Flow

Why Automate Your Process of Procurement?

Excel spreadsheets and emails belong in the old age with paper procurement documents. Automated workflows that a procurement software can provide allow organisations to automate everyday tasks without human intervention. Repetitive events in software procurement can be scaled up automatically.

The procurement cycle can, and should, be digitised, not only to help you refine your strategy, but to automate it and generate a set of analytics to assess its efficiency.

Procurement software can include all the steps you’ve always used in your purchasing process. It cuts the risk of human error by automating repeatable tasks. There is no difference in procurement meaning whether you’re using digital or manual processes. Only its efficiency and transparency changes.

It can cut steps out of procurement process flow and speed up real-time interactions, but you remain the brain behind your strategy. You make the rules, editing your workflow according to your decisions.

Another important reason why to automate your procurement is to gain visibility of your procurement process. It can help to track the way your buying department manages their part of the process.

As a result of digital procurement in business, the procurement meaning has evolved to include intelligent spend management, which is more transparent than ever before thanks to digital workflows. Collaboration with suppliers is as important as ever, automation can make certain steps that they should be involved accessible to them.

This way, everyone from the procurement team to suppliers can give you input on a single platform, helping to give you full visibility of process progress easily.

Using a digital procurement system contributes to your paperless office, keeping your documents in one place. Procurement documents define contractual relationships, and automation helps to prevent important losses, keeping all your contracts in the digital sphere.

Procurement Software and Tail Spend

Small purchases tend to go unmanaged thanks to the resource-heavy manual work required. To fix the problem, the procurement process must engage suppliers, amplify transparency, and optimise inventory.

Monitoring key performance indicators, risks can be identified and procurement process strategies can be refined.

The procurement management system should monitor:

      1. Compliance rates that increase spend and lead to invoice disputes.

      2. Supplier defect rates, which cause unreliability.

      3. Supplier lead time, which improves delivery time

      4. Purchase order cycle time

      5. Purchase to pay time

      6. Cost per invoice and purchase order, which tends to suffer when there are invoice disputes

      7. Spend under procurement management

      8. Procurement procedure return on investment

What to look for when comparing Procurement Software options

Digital procurement process can be efficiently achieved with a process automation software. Digital process automation is the obvious driver of improved metrics, but the analytics themselves are still a crucial ingredient. They can be used to forecast future crises and optimise vendor evaluation. They can also improve invoicing procedures and predict demand.

Process automation software gives you full flexibility in terms of tailoring process according to your organisations unique needs.

Regardless of whether you’re handling the procurement of services or product procurement, there are several features you should be looking for when comparing procurement software options to help you improve your procurement process.

Procurement software benefits
Procurement software

Here is a list of what to look for when comparing procurement software:

      1. User-friendly customisation and scalability

      2. Accessible data and analytics

      3. Easy reporting

      4. Available in multi-devices

      5. Automated reminders and notifications

      6. Easy, multi-layered approvals

      7. Budget control

      8. Providing suppliers instant access for their input

      9. Data integration with existing systems

The modern process of procurement no longer fears risks – it predicts them.

Procurement is a constantly evolving organism, and metrics help it to advance. Procurement software de-clutters your purchasing process steps and improves its transparency, giving you control over the entire procurement lifecycle.

As a result of using digital procurement systems like Kianda, the procurement business definition has transformed from a transactional task to a transformational one.

Procurement in business has become more complex, but that’s a boon rather than a bane. Procurement procedure has never been this scalable or innovative thanks to digitalisation, and it’s put CTOs on the map.


Procurement Process Dashboard
Kianda – Procurement Process Dashboard

 

Are you looking to boost your procurement process?

Why not start a Kianda free trial and discover how you can reduce risks and bring efficiency to your purchasing. Kianda Procurement Process App is designed with our experience and best practices in mind.

Good news is that you can tailor all the pieces of the app to fit what your organisation needs. And remember you do not need to hire developers to manage the app. Anyone with or without programming skills can create business process apps with Kianda.

Get the Procurement Process App

About Author:
Osvaldo Sousa – Digital process automation expert with almost two decades of experience in information technologies. He is the CEO/Co-founder of Kianda Technologies.
 
 
 
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Purchase Order Process

Per Diem Approval

Per-Diem-Request-Dashboard

Per Diem Approval workflow includes employees providing the travel plan and the manager either approving or rejecting the travel expense which is based on a simple calculation of per diem amount multiplied by a number of days.

With this simple workflow template you can set per diem allowance rates based on the location in a standard way. When an employee starts a request form,  rates can easily be calculated and submitted avoiding any errors or misunderstandings.

In this sample template employee has option to request only Per Diem, Travel or both. Procedure starts with the employee initiating the process by entering personal information and travel details.

The system automatically calculates rates based on the location and number of days. Once the employee submits the request, Manager approves or rejects. Then the flow continues with Travel team or Payroll team.

This template comes with with Per Diem request Dashboard for reporting. Alternatively with Kianda, a single dashboard for all their approval tasks can be configured for managers to overview. They can easily monitor what is waiting for their approval, what has been approved with full visibility of the progress of each request.

Streamline your organisation’s per diem management and eliminate the errors and achieve consistency.

Don’t forget to explore Kianda template store when you sign up and check out all other templates designed to help you get started.

Get started with this template now!

Get the template

How to optimise Per Diem Management for Aviation

Aviation per diem management
Aviation per diem management

What is Per Diem anyway?

Per Diem means Per Day. It is also referred as daily allowance.

It is a particular measure of money an organisation provides for an individual, frequently a representative of the organisation, to cover everyday costs when travelling for work. A per diem can incorporate part or the majority of the costs acquired. Most companies pay the government rate, which is based on the cost of living in the location being visited.

In aviation, it is usually available to a pilot, flight attendant, crew member or office staff who are travelling for business. It is the reimbursement for his or her meals and incidental expenses. Every airline pays differently per diem rates.

Read – How an aviation company streamlined their HR and Finance processes

One method is employees request the actual cost of meals, lodging, and incidental travel costs may be deducted, subject to certain limitations, providing the invoices and receipts. The other method is the allowance method, which employee is only required to be able to prove where they were, and that they were travelling as a requirement of their work. Generally, in the aviation industry, most employees and independent contractors use the allowance.

How to optimise per diem management

A per diem request workflow designed with a process automation platform like Kianda Forms provides a single platform for flight personnel or office staff to make a request before or after they travel.

This automated process empowers personnel to do their per diem calculations and request as quickly and easily as possible. It is presented as a simple digital form where employees can consult what is available to them.

They can submit their request even when they are off-line during a flight.

Employees can easily reach the information they need and submit their requests without any delays or unnecessary email communications. Information related to the submissions can be stored in the company’s existing data systems so that this all can be tracked ensuring regulations and compliances.

If you are planning to streamline your organisation’s per diem management and eliminate the errors to bring consistency then talk to us.

Discover how Kianda Forms can allow you to achieve great results and take your operations to the next level within Aviation industry.

4 good reasons to automate your travel and expense management

mobile expense management system
mobile expense management system

If you are one of the organisations who is still managing Employee Travel and Expenses manually, with paper receipts, spreadsheets and emails, then you must consider not only time and money you are wasting but also inconsistency and error-prone results your business might be exposed to.

An automation software can help eliminate issues like these and let you focus on productivity without worrying about the typical difficulties of manual processes. With an automated expense solution, submission, approvals, and auditing can be a lot easier. Continue reading “4 good reasons to automate your travel and expense management”