The Procurement Automation Playbook 2024
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The document outlines a comprehensive roadmap for successful procurement automation, emphasizing the importance of a solid digital strategy, stakeholder engagement, and training to drive adoption. It highlights the benefits of automation, such as reduced errors and improved supplier relationships, while also identifying potential pitfalls to avoid. Key success factors include identifying a champion for the initiative, creating a business case, and measuring performance improvements post-implementation.
The Procurement Automation Playbook 2024
- 1. A Roadmap for a Successful P2P Automation Journey
- 2. What is Procurement Automation? Procurement automation refers to the use of software to streamline and automate your purchasing process of goods and services within your organization Digitize ● Single source of truth for all procurement related processes ● Integrated system that listens and talks to other systems ● Spend visibility, risk reduction & analytics Automate ● Transition from operational excellence to strategic excellence ● Better adherence to compliance (e.g. contracts, supplier, etc.) ● Reduced errors, increased TAT & decreased costs Contextualize ● Open-up purchasing for all ● Transition from buyer related UX to requester & supplier related UX ● Paradigm shift - reduce the role of buyer
- 3. Procurement Visibility Every transaction is tracked and reported Supplier Relationship Collaborate and build strong supplier relationships Consolidated Invoicing Reduced workload and better payment terms Supplier Base Optimization Optimize supply base with performance data Time to fill cycle times No manual effort, pre-defined approval flows Increased Productivity Easy order and invoice processing with PO-Flip and 3-way matching Spend Optimization With all purchasing data make smart purchasing decisions Risk Mitigation Mitigate risks with better supplier visibility Benefits of Digital Procurement
- 4. Pitfalls to avoid 01 One-size fits all approach 02 Weak digital strategy 03 Stakeholders Buy-in 04 Poor Change Management 05 Unrealistic expectations
- 5. Secret Sauce of a Successful Automation Journey Build a Solid Digital Strategy 2 Educate Benefits 3 Create a Business Case 1 Identify Internal Champion 4 Kick-Off Pilot 5 Train the Workforce 6 Monitor and Measure Success 7 Org-wide rollout With initial success and adoption, do a phased roll out
- 6. Helps to get conviction and clarity to drive stakeholders buy-in ● Understand the executive management’s goals for the company ● Define the current problem and need for solution ● Set clear goals and objectives - to lower costs or improve strategic supplier relationships ● Define how you plan to measure business objectives, costs, and risks ● Complete an ROI analysis to present overall cost and anticipated savings Business Case Digital Strategy Educate Benefits Identify Champion Kick-Off Pilot Train End-Users Review and Scale
- 7. ● Identify the key stakeholders to understand their expectations from the transformation ● Evaluate your current process to find any gaps and understand your process needs ● List down the pain points you are looking to solve with automation ● Involve IT to understand the current software system ecosystem and the need for integration ● Select a champion (tech savvy) to drive the initiative and collaborate with stakeholders Knowing the What, Why, and the How can enable the executive team to invest in the initiative Business Case Digital Strategy Educate Benefits Identify Champion Kick-Off Pilot Train End-Users Review and Scale
- 8. Communicating goals, benefits, and values can help overcome change resistance Business Case Digital Strategy Educate Benefits Identify Champion Kick-Off Pilot Train End-Users Review and Scale ● Create a synergy across procurement, AP finance, and IT ● Understand the goals, problems, and challenges of the stakeholders ● Map out stakeholder-specific benefits and outcomes from automation ● Do a roadshow to communicate the goals, benefits, and value of transformation ● Have an open channel to receive feedbacks and concerns
- 9. Benefits by Department Business Users ● Assisted Buying ● No Manual Data Entry ● Easy to Track Requests ● No Approval follow-up Finance ● Budget Control ● Multi-Level Approvals ● Spend Insights ● Avoid Overspending ● Cost Savings Procurement ● Complete Transparency ● Enforce Policy Compliance ● No off-contract purchases ● No Manual Work ● Focus on strategic initiatives Accounting ● Touchless Invoice Processing ● Auto 3-Way Matching ● Avoid Duplicate Payments ● No Manual Work ● Timely Payments
- 10. Having a champion will ensure your automation initiative is making progress Business Case Digital Strategy Educate Benefits Identify Champion Kick-Off Pilot Train End-Users Review and Scale ● Select a champion (tech savvy) to drive the initiative ● Identify the needs and requirements through analysis and interviews with key stakeholders ● Do market research to identify and understand the available solution providers ● Qualify and evaluate the selected software providers to identify the best fit ● Collaborate with internal and external stakeholders to deliver the proof of concept
- 11. Adapt to industry best implementation frameworks and practices Business Case Digital Strategy Educate Benefits Identify Champion Kick-Off Pilot Train End-Users Review and Scale ● Analyze the current processes to identify the candidate for pilot run ● Identify group of users and suppliers who can be part of the test run ● Share business requirements with the solution provider ● Work with the IT team and the selected solution provider to set up the infrastructure ● Configure, test, and go live with the built solution
- 12. Process to Automate: Requisition to Order Employee initiates purchase request Manager approves PR Buyer validates and chooses the supplier Buyer places the order Supplier receives and acknowledges the order
- 13. Process to Automate: Invoice to Payment Supplier delivers goods Employee / Buyer receives goods 3-way Match: Order + Receipt + Invoice Supplier sends invoice Payments are done through the Accounting system On successful match, sends the Invoice to Accounting System
- 14. Leverage user adoption tools like QRG and training videos as needed Business Case Digital Strategy Educate Benefits Identify Champion Kick-Off Pilot Train End-Users Review and Scale ● Plan and create training materials and videos for different user segment ● Conduct training drives to ensure every user gets familiar with the platform ● Enable and encourage users to report issues and challenges ● Follow through the reported challenges to instil confidence among the users ● Create a self help guide and make it accessible to everyone who uses the system ● Make the platform training mandate for any new hires as part of onboarding
- 15. Avail dedicated customer success managers to ensure scaling and value percolation Business Case Digital Strategy Educate Benefits Identify Champion Kick-Off Pilot Train End-Users Review and Scale ● Track and measure the performance improvements ● Monitor how quickly reported issues were resolved ● Compare the post implementation performance against the goals ● Close the gap between expected and actual performance levels ● Do a phased roll out for the rest of the organization and for additional processes
- 16. Involvement of internal stakeholders Adaptation of existing processes to the digital solution Change management Investment Review of best practice to modify existing processes Vendor selection Integrator / Project management support selection 51% 41% 40% 30% 67% 34% Key success factors Business Transformation Technical aspects Source: PwC
- 17. Thank you!