Procurement and Purchasing
5 min read
Manual procurement can be a headache for any business. It can cost you time, resources, and efficiency, while exposing you to errors, delays, and compounding compliance effectsâall while giving your procurement and accounting teams headaches when trying to close the books at the end of the month.
Fortunately for us, there is now an AI-powered solution to all of these problems!
Procurement automation is the strategy of using software to streamline and simplify procurement tasks across various teams. Research conducted by The Hackett Group shows that a fully automated end-to-end procurement function could help reduce the cycle time of key procurement processes by 30%, and generate 75% more savings via associated cost reductions.
In this guide, we will explain what procurement automation is, how it can benefit your business, and how to implement automation successfully. We will also show you some examples of procurement processes that can be easily automated with Zip, the worldâs leading intake-to-procure solution.
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Procurement automation is the strategic use of software to streamline and simplify procurement tasks across organizations. It can help your teams reduce manual work, optimize efficiency, and increase visibility, so everyone is on the same page and is fully aware of where an order stands within the purchasing process.
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A procurement automation software platform can help you overcome these challenges by automating the repetitive and tedious tasks in the procurement cycle. It can also integrate with your existing systems and applications, such as ERP, accounting, inventory, and CRM, to enable a complete Procurement Orchestration workflow.
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An end-to-end procurement automation platform can bring many benefits to your business.Â
By automating the procurement process, you can reduce the operational costs and overheads associated with manual work. You can also leverage data and analytics to identify and eliminate unnecessary or wasteful spending, negotiate better prices and terms with suppliers, and optimize your inventory and cash flow.
A fully-automated procurement intake flow can eliminate manual errors and delays, improving the speed and quality of your procurement process. You can also standardize and streamline your workflows, reduce the number of touchpoints and approvals, and increase the productivity and performance of your teams.
When all procurement processes are centralized in one location, youâll gain clear and timely visibility into your spend across categories, departments, locations, and suppliers. This way, you can track and monitor your budget, contracts, orders, invoices, and payments in real-time, and generate reports and dashboards to measure and improve your spend performance.
You will finally have a single source of truth for your procurement data. A fully integrated system will sync your data with other systems and applications, such as ERP, accounting, inventory, and CRM, creating a holistic view of your business operations and performance.
With all of this data in one place, comprehensive analytics will allow for more informed and strategic decisions. You can even use tools like Zip AI to automate legal and risk reviews, instantly parse key data from any document or contract, and act on aggregated AI-powered insights across your entire vendor portfolio.
Leveraging the power of a fully integrated platform, youâll be able to reduce the number of approvals and signatures required for each purchase. Set up rules and workflows to automate the approval process based on predefined criteria, and scale existing workflows to meet the demands of your business.
Integrate your procurement platform with your existing apps and systems, such as ERP, accounting, inventory, and CRM, to create a seamless and connected workflow.Â
Modern procurement platforms like Zip have robust access to APIs that connect with other third-party tools and platforms such as Workday, SAP Ariba, Slack, and more, to enhance your functionality and user experience.
The risks of fraud, manual errors, and issues of non-compliance can be seriously reduced by implementing an automated procurement flow. Since your company policies and procedures are built-in to the automation flow, and checked against supplier credentials, your compliance teams will be able to manage risk at a glance.
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To implement procurement automation successfully, you will need to take a systematic and structured approach. Here is a roadmap to help guide you through the process:
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Automation is one of many steps you can take to modernize your procurement process. One of the most common and important procurement process automations is the purchase requisition, approval, and order creation process.Â
Hereâs how it often plays out in the real world.
Here are some other procurement processes that can be automated with Zip.
Supplier relationship management
Zip helps you manage your supplier relationships by providing a centralized database of your suppliers, their profiles, ratings, contracts, orders, invoices, and payments. You can use Zip to communicate and collaborate with your suppliers, send and receive feedback, and monitor and evaluate vendor performance and compliance.Â
Invoice management
Zip helps you automate your invoice management process by capturing and processing your invoices from various sources, such as email, PDF, or scanned documents. You can also use Zip to match your invoices with your purchase orders and receipts, verify and validate your invoices, and route them for approval and payment. Â
Vendor payments
Zip helps you automate your vendor payments process by integrating with your accounting and banking systems, and enabling you to pay your vendors via various methods, such as ACH, wire transfer, or credit card. You can also use Zip to schedule and track your payments, capture and apply discounts, and reconcile your accounts.
Contract management
Zip helps you automate your contract management process by providing you with a secure and searchable repository of your contracts, their terms, conditions, and expiration dates. You can also use Zip to create and negotiate contracts with your suppliers, sign and store contracts electronically, and monitor and enforce contract compliance.
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While procurement automation can bring many benefits to your business, it can also pose some challenges when adopting and integrating a new system.Â
One of the biggest challenges when adopting a new procurement automation system is getting your stakeholdersâemployees, managers, suppliers, and customersâto adopt and use new tech. Some may be resistant to change, unfamiliar with the new system, or lack the skills or training to use it effectively.
To overcome this challenge, youâll need to communicate the value and benefits of the new system to your stakeholders, and ideally involve them in the planning and implementation process.Â
As Alan Holland at SpendMatters points out, âby automating tactical activities, executives can free their team to think creatively, innovate, and force strong relationships with key partners.â Inspire your employees by empowering them with the ability to focus on the things that really matter.
Another challenge when adopting procurement automation is the cost of time involved in the investment. You may need to allocate resources to install, configure, and maintain the new system. You may also need to spend time and effort to integrate the new system with your existing systems and applications, and to migrate your data and workflows.  Â
Fortunately, Zip does the hard work for you, with a user experience and robust integrations that make it incredibly easy to onboard and work with the tech stack you already use.Â
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âAll we did was send an email the day before going live and adoption took off. There was no change management needed. Zero.â - Joe Frederick, Sr. Director, Procurement & Sourcing, Snowflake
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Zip is the worldâs leading intake-to-procure solution. Providing a single platform for any employee to initiate a purchase or vendor request, Zip helps businesses gain clear and timely visibility across all purchases, while dramatically improving the employee experience.
Zip can help your procurement team by:
Zip enables you to automate and optimize your procurement process, from purchase requisition to payment. You can use Zip to create and submit purchase requests, approve and track orders, manage invoices and payments, and monitor and report on your spend.
Zip provides you with real-time and granular visibility into your spend across categories, departments, locations, and suppliers. You can use Zip to set and enforce budgets, policies, and approvals, and to identify and eliminate rogue or maverick spending.
Zip helps you manage your supplier relationships by providing you with a comprehensive and up-to-date database of your suppliers, their profiles, ratings, contracts, orders, invoices, and payments. You can use Zip to communicate and collaborate with your suppliers, send and receive feedback, and monitor and evaluate their performance and compliance.
Zip helps you improve your data quality and analysis by providing you with a single source of truth for your procurement data. You can use Zip to integrate your data with your other systems and applications, such as ERP, accounting, inventory, and CRM, and to generate and access reports and dashboards that show your key metrics and insights.
Zip helps you boost your employee engagement and satisfaction by providing them with a simple and convenient way to initiate and complete their purchases. You can use Zipâs web or mobile app to create and submit purchase requests, approve and track orders, manage invoices and payments, and access support and help.
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If you are looking for a procurement automation software that can help you modernize your spend controls, Zip is the perfect solution for you. Zip is easy to use, scalable, secure, and works with your entire tech stack.Â
Zip can help you save time and money, improve efficiency and accuracy, increase visibility and compliance, and enhance supplier and employee relationships.
To learn more about how Zip automations can help your procurement team, request a demo today.