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.
 
 
 
Other articles you might be interested:
 

Purchase Order Process

Digital incident reporting in construction can save lives

Digital construction

Digital construction

Digital advances in the construction industry

Digital construction is becoming far more ingrained in the built environment, with business process automation at the forefront of streamlined processes. QHSE workflows and management approval processes are utilised in many departments, including procurement teams issuing purchase orders, design teams automating the steps to approve drawings and quality control teams managing inspection and test procedures.

Health and safety naturally lends itself to automated business processes, with incident reporting and near miss, good catch practice forms being significantly improved through automation.

Safety and the construction industry

Construction is a high-risk industry. Busy construction sites are full of potential hazards. Over the past two decades, there have been vast improvements in the safety performance of construction companies. This has come from legislation, improvements in construction methods and an increase in internal health and safety management systems.

Implementing digital QHSE workflows

With more and more companies going digital, it is imperative to introduce automated systems and workflow software into your business processes to demonstrate current safety practices and keep up with competition.

Incident reporting guidelines and procedure

Traditionally, incident reporting was reactive and tended to use only prior incidents as the basis for review. The incidents may have only been recorded through phone calls or meetings and a note in the accident book, without any real health and safety quality control.

Standard industry guidance for managing health and safety sets out incident reporting guidelines to those implementing arrangements in their organisation. One of the common features of industry guidance is to ‘Plan, Do, Check, Act’ . This can be implemented through an automated construction incident reporting process.

Construction incident reporting tools

A standard incident reporting procedure will normally involve specific incident reporting tools such as a form to fill in and a process to follow to escalate the incident to management, depending on the severity. A digital workflow and process automation result in reduced process failure, as there is less reliance on employees to take positive action, such as making phone calls and sending emails.

Legislation and incident reporting

Legislation can vary from country to country, but generally places a duty of care upon those working in construction to manage their own health and safety and the health and safety of those around them so far as it is reasonable. More information on this can be found on the relevant government website for your region.

There are numerous regulations that you must be aware of, which include things such as lifting operations, personal protective equipment, control of hazardous substances and incident reporting guidelines. Compliance with legislation can be automated through online forms and QHSE workflows.

Forward-thinking companies use business process automation for effective audits of construction sites for compliance with laws, regulations and good industry practice. This can identify strengths and opportunities for improvement, which can improve overall health, safety and quality on construction sites. It can also highlight areas for immediate concern and expedite corrective action.

Why is your safety incident reporting procedure important?

Incident reporting workflow and procedure is incredibly important to any construction business from an ethical, statutory and profit point of view. Accidents are bad for business and most clients will ask for accident history when tendering for any work.

If there is no incident reporting system, it becomes difficult to learn from past mistakes and implement changes to avoid recurrence. This would be viewed adversely in any accident investigations or prosecutions.

incident reporting system
Incident reporting system

Identifying Trends

The ‘Check’ stage is recommended when managing health and safety which requires measuring of performance and investigating accidents, incidents and near misses. Therefore, an incident reporting workflow needs to be in place for incidents to be reported, which captures the required details for escalation to the appropriate level of management.

The procedure must also be able to identify trends. For example, minor hand injuries may not require serious escalation, but a large number of reported minor hand injuries could signal a worrying trend and require investigation to understand if there is a pattern emerging.

What could happen if your safety incident reporting procedure isn’t working?

Many countries have strict rules on the reporting of incidents. For example, the U.K. has Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013, Ireland has Safety, Health and Welfare at Work (Reporting of Accidents and Dangerous Occurrences) Regulations 2016 and the U.S. has the Occupational Safety and Health Act of 1970 where reporting is detailed in Section 8.

Where regulations set out minimum reporting timelines for specified injuries, dangerous occurrences and occupational diseases, an effective safety reporting process is critical to ensure that these issues are captured and reported in the statutory timescales.

Kianda software is easily tailored to meet specific laws and regulations, and readily adaptable to any changes in legislation as they occur.

An example of an incident report required by these regulations would be if a scaffolding collapsed in Ireland, which must be reported to the Health and Safety Authority in ten days, or risk prosecution. In the U.K., an incident such as this would need to be reported immediately.

Penalties

If you don’t report a reportable occurrence to the appropriate health and safety enforcement agency, there can often be a custodial prison sentence for the responsible person, or persons and a large fine for the business.

Learning from incidents reduces the risk of recurrence (and the severity if they do reoccur) and is key to keeping workers safe and incident free. This in turn contributes to keeping a business profitable and successful.

incident reporting software
Incident reporting software

Why use digital workflows to manage incident reporting?

Digital workflow software can be used to implement incident reporting forms. An online form is used to simplify the reporting of incidents, provide visibility of incidents to management and provide key metrics related to the number of near misses and incidents.

It should also collect information about why incidents may have happened and suggested actions on how to prevent recurrence.

Effective use of an incident reporting form can reduce the time it takes for people to report incidents, reduce additional paperwork and track actions that have been identified to prevent incidents recurring.

It also allows for a high standard of quality control by setting mandatory fields for data input.

Management information and monitoring

Management can view weekly, monthly and yearly overviews of performance via dashboards. This means that decisions can be targeted at reducing the risk of future incidents.

There is also a track record of the steps that have been taken, to help demonstrate a company’s commitment and efforts to improve their health and safety record.

By reviewing health and safety performance, lessons can be learned and shared through several mediums, such as additional training, toolbox talks, changes to construction methodology, purchase of new equipment, or a review of approved sub-contractors.

Implementing effective construction incident systems

The end users of the system must be considered when implementing the systems, as well as those in the management chain. Barriers to reporting should be minimised, so employees should be trained and able to submit forms online or offline and capture data from the incident easily (such as pictures from a smart phone or tablet).

Software for construction processes
Software for construction processes

Good practices

Effective incident reporting systems also have a focus on near miss reporting and good practices. Near misses are useful for looking at close calls where someone has been lucky and putting steps in place to ensure that luck does not play a part in people’s future safety.

An example of an incident report that involves pro-active management is good practices. Good practices look at what is going well and provide feedback to the teams to improve morale and belief in health and safety, whilst also allowing for these good practices to be distributed to other teams.

Kianda is a software platform that allows companies like yours to automate and streamline business processes such as incident reporting via easily built online forms and workflows.

Start your free trial today at www.kianda.com

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.

RELATED ARTICLES:

https://www.kianda.com/blog/2019/06/19/digital-employee-onboarding-induction-for-construction/

https://www.kianda.com/blog/2018/11/06/benefits-of-digital-process-automation-in-construction/

https://www.kianda.com/blog/2019/05/29/according-to-forrester-report-22-of-companies-havent-begun-their-digital-transformation-are-you-one-of-them/

According to Forrester report 22% of companies haven’t begun their digital transformation. Are you one of them?

Osvaldo Sousa - Kianda Technologies
Osvaldo Sousa – Kianda Technologies

A recent Forrester report shows that 22% of companies haven’t begun their digital transformation journey.

These organisations still use traditional methods to meet their business goals. As a result, they face many challenges and they get average results in their operations.

If you are one of them, not to worry. There are simple and small steps you can take to start your journey slowly but steadily.

Organisations who have realised the importance of digital business have started to embrace digital transformation. They’ve invested in business technologies that create value for customers and transform their businesses. They take different approaches to accomplish their digital transformation goals.

Some struggle and some succeed during their journey… However there are two important things I can’t highlight enough from my years of experience. These are:

1) Success ratio is a lot higher when companies start their digital journey with SMALL STEPS

2) It will be a waste of time and money if people don’t EMBRACE THE CHANGE

New technologies that are agile, easy to use and that can adapt to companies changing needs are the ones to look for. Digital Process Automation technologies are what I will be talking about. This is one of the core concepts of Digital Transformation.

But what is digital process automation? Why are we so interested in this?

Well, to find that out all the ins and outs of it, let’s start with the basic concept of it.

What is Digital Process Automation?

In easy words, transforming a business process into its optimised digital version is called Digital Process Automation.

As an example, take a simple approval process.  To handle this, perhaps you use papers in folders that are kept in the shelves or perhaps you do manual entries into an excel spreadsheets when someone approves via email.

Digital version of this is a business application that is made of forms where users can access from anywhere to interact and consult information. The approval flow happens on a single place. It is managed via end-to-end automation with reminder notifications and reporting dashboards.

The difference between two versions of the same process is that digital one brings efficiency and most importantly consistency to the process. It gives easy insights to the data, eliminates the errors. Overall it provides better user experience with online forms, automated reminders and so on.

Some of the digital transformation initiatives that digital process automation covers are: using technology to solve existing business challenges,  integration of new technology into company processes and transitioning from a non-digital business into a digital one.

In other words, this is an evolution of business process management (BPM). While managing business processes introducing integrated automation to optimize and digitalise processes from start to end.

Digital process automation solutions generally provide software platforms under the concept of integrated automation that not only focuses on Technology but also People and Process.

Workflow management
Process management

Most employees waste a lot of time searching for data. Sometimes to answer a simple query, they have to  consult multiple systems.  They are not given any other option rather than using emails to manage basic customer queries.

All of these can easily cause bad reputation, data loss and long resolution times. This drags down the productivity and companies miss out on valuable business opportunities.

A digital process automation technology helps companies to transition into Digital Workplace by helping teams collaborate in a single place. It centralises the data for internal and external processes. Frees employees’ time to do more valuable work by simply removing repetitive boring tasks.

Some of you might be concerned about the investment you might have already done for your IT systems up until today. The good thing is that you don’t have to give up everything you have invested to start improving things.

There are ways to make legacy technology agile to make it easier to adapt to the coming changes. Most of the new technologies can integrate to your IT systems so that you can syncronise your existing users and data.

In addition, there are low-code and no-code platforms that you can opt for. They are here to lower the costs and enable faster application delivery.

Low-code or no-code concept is not only considered for cost reduction. It is for empowering users and accelerating digital transformation journey.

What are the core features of Digital Process Automation?

In today’s digital world, customers are forcing businesses to become more mobile and agile. Businesses must rapidly experiment new technologies to meet consumer demand and stay ahead of competition. With these trends, features below have become central features of digital businesses:

– Restructuring process workflows

– Automating and streamlining existing business processes

– Focus on data-driven processes

– Focus on the customer experience

Where to use Digital Process Automation?

This is something that I have been asked many times. Where can I use a process automation technology?

Well you can use it in several places. It can be for delivering any business applications that require interaction of people, systems and processes.

Examples of digital business processes are:

HR processes to manage onboarding, appraisals, holiday approvals, employee requests;

IT processes such as helpdesk tickets, asset requests, change management;

Quality processes for incident management, corrective action plans, inspections, document generation;

Finance processes such as budget approvals, project approvals and so on…

The important thing here is to define one area that needs your immediate attention due to the challenges you might be facing. Start with that to experiment new technologies… Map out how it is done currently. How you would like it to improve.

Digital Process Automation ReasonsChart
Source: Forrester’s Q1 2018 Digital Process Automation Survey

Two main reasons behind companies process improvement efforts are firstly cost reduction and secondly improve worker productivity according to a Forrester survey.

It is important to highlight here again that user friendly process development platforms that don’t require extensive technical knowledge can bring you a lot more benefits than the ones that require outsourcing of developers.

They can help you reduce costs significantly by fast delivering applications. Also engaging your team, keeping knowledge in-house to maintain your business applications will help improve workforce productivity.

It is also worth telling that digital business can always help grow a business. The marketplace is constantly evolving and the competition is getting harder and harder. Many businesses cannot expand just because they lack digital initiatives.

If you haven’t started your digital journey yet or have started but not satisfied, it is time to start looking at new technologies to help you boost your business.

Digital Process Automation
Award Winning Digital Process Automation Platform

AUTHOR: Osvaldo Sousa CEO of Kianda Technologies
Digital business process expert  & No-code Platform Innovator

ABOUT KIANDA: 5* rated, award winning, digital process automation and business application delivery platform for a greater control and agility. 10 times faster implementation with NO-CODE  automation software.

START YOUR FREE KIANDA TRIAL TODAY!

 

Kianda – Digital Process Automation Platform – sponsored in the European SharePoint Conference in Copenhagen

Workflow automation
Workflow automation

We had great time sponsoring in the European SharePoint Conference this year in Copenhagen. We met our customers, partners and had interesting talks about how empowering no-code solutions can be with many people from around Europe.

Thank you all who stopped by our stand and showed interest in Kianda – digital process automation and application delivery platform.

If you would like to know more about nocode process workflow automation and applications with Kianda contact us at info@kianda.com for a quick one-to-one demo.

See how automated workflow can help your organisation to improve workplace productivity

Kianda
Kianda process and workflow automation software

Repetitive tasks are the biggest motivation killers in workplaces. Who likes to do the same daily task, over and over again?

Motivation is the important element in ensuring productivity. When we are dealing with monotonous routines, we easily get bored and lose our enthusiasm to complete challenging tasks.

One effective way of motivating staff is through engagement. For better engagement and contribution their time needs to be freed to let them do more valuable work.

How do we free up time to do more valuable work?

A workflow automation solution can bring productivity and efficiency to a workplace. It eliminates repetitive, manual and paper-based tasks. It transforms manual operations into automated digital forms and workflows, cutting down the human error and increasing productivity.

Helping businesses to compete in this increasingly digital world is one of the key focus of workflow automation. From simple to complex workflows can be automated with a few clicks.

This will allow staff to get more valuable work done and reduce the amount of time and money spent on unnecessary tasks.

Where you can benefit from workflow automation

Human Resources

If your HR department is dealing with paper-based documents, unnecessary phone calls and emails when a new hire starts, then it is a good time to start looking for a workflow automation solution to eliminate unnecessary paperwork and repetitive tasks performed for each hire.

In a way, this will allow you to cut down these manual tasks, let HR do their work and new hire be more welcomed when everything is well organised before they start.

Customer Services Solution

Customer Services

Take Customer Service department, agents spend more time on trying to access IT systems and ringing departments for resolutions than the time they spend on a call to help solve a customer problem.

This is a common scenario that causes long waiting times. One of the most important aspects of customer services is time. Information must be easily accessible to agents so that they can answer customer queries in a rapid way.

An automation solution like Kianda can improve customer service operations by delivering one single platform to allow users to access information from multiple IT systems rapidly and log customer queries into the system while reducing waiting times.

With a streamlined process for handling customer queries and complaints, call centre staff can be more effective and productivity can be increases.

Marketing and Sales

Scenario for Marketing and Sales department is not too different. Workflow automation can improve the efficiency of marketing and sales teams. Marketing teams commonly use different applications to access the information needed to do their jobs for lead management, trade show materials, advertisements, website content approvals and more.

All of these tasks can be centralised on a single platform to enable full visibility and rapid outcomes, while making marketing sales operations move faster and easier.

It doesn’t matter whether you are a small business or a big one, if your employees are happy with their jobs, their productivity will increase, and that’s exactly what you need to help your business grow.

Automated workflows diminish busywork, leaving the employee to tackle work that is most important to the job.

When it comes to achieving digital workplace goals, for the best results, sometimes the hardest thing is not choosing the right workflow automation solution, it is getting the solution to do what your business uniquely needs.

A process workflow automation solution like Kianda can adjust to your needs, giving you control over your IT solutions.

It can bring productivity to a workplace while eliminating repetitive, and paper-based tasks. With Kianda’s NO-CODE workflow development approach, anyone in your organisation can easily develop IT solutions without technical expertise.

If you would like to learn more about Kianda, request your demo today.