When it comes to buying goods and services, most businesses are flying blind.
Sixty-five percent of procurement leaders have little or no visibility beyond their tier 1 suppliers, per Deloitte’s The Global Chief Procurement Officer Survey 2018. Deloitte surveyed more than 500 procurement leaders from 39 countries representing organizations with a combined annual turnover of $5.5 trillion. Only 6 percent of procurement leaders have transparency across their supply chain.
Poor visibility across the purchase-to-pay process creates six big challenges for businesses:
- Supply chain issues: Poor visibility into purchase-to-pay information makes it extremely difficult for businesses to quickly identify and address inefficiencies and problems. Letting purchase-to-pay issues fester increases the chances of higher costs for goods and services purchased, purchasing mistakes, delivery delays, and major supply chain disruptions.
- Operational inefficiencies: It is difficult for procurement to effectively track its operational performance or anticipate and meet future needs without strong visibility into their purchase-to-pay information. Left unchecked, procurement will have a hard time staying on top of daily tasks or keeping pace with changes in the economy or in the regulatory environment. Seventy-eight percent of procurement leaders surveyed for Deloitte’s The Global Chief Procurement Officer Survey 2018 say that reducing costs is among their top priorities.
- Wasted employee time: In a manual or semi-automated purchase-to-pay environment, stakeholders across different departments working on the same project or grant cannot readily access the vital information they need on supplier contracts, purchase requisitions, purchase orders, invoices and proof-of-delivery receipts. As a result, staff waste a lot of time hunting down data, making photocopies of documents, and rekeying and cutting and pasting data.
- Out-of-budget spending: Out-of-budget spending a big problem for purchase-to-pay departments that operate in a manual or semi-automated environment. Purchasers can never be sure that there is enough budget to cover the goods and services that they are buying. What’s more, fragmented systems and the lack of visibility into purchase-to-pay processes makes it difficult for managers to quickly identify “maverick” or unapproved spending.
- Poor collaboration with stakeholders: The role of procurement is evolving from a tactical back-office function into a strategic sourcing advisor to departments across the enterprise. Procurement’s expanded role requires it to have ready access to information about the organization’s entire purchase-to-pay process (i.e. inventory) to help guide the purchasing decisions of departments and avoid errors, delivery issues and poor supplier relationships.
- Contract issues: Inadequate visibility into the purchase-to-pay process makes it hard for businesses to ensure that goods and services are bought from preferred suppliers at the negotiated terms or to tightly manage supplier contracts. In most businesses, purchasers cannot easily access contract details or monitor purchases made against a supplier contract. Fifty-four percent of procurement leaders surveyed for Deloitte’s The Global Chief Procurement Officer Survey 2018 say that better managing risks is among their top priorities.
The root of these problems is that only one-third of purchase-to-pay departments are using advanced digital technologies, per Deloitte’s The Global Chief Procurement Officer Survey 2018. As a result of relying on manual and semi-automated purchase-to-pay processes, key procurement information is not captured, data is incomplete or inaccurate, information is not timely, systems are fragmented, and procurement leaders cannot readily access the variables they need to make informed decisions.
How RPA with cognitive automation improves transparency
Robotic process automation (RPA) with cognitive automation address these challenges.
RPA solutions with cognitive capabilities have built-in domain expertise to find unique, process-specific data that is required for highly specialized processes, such as purchase-to-pay. A combination of computer vision, optical character recognition (OCR) technology and fuzzy logic automatically extracts and enriches data while machine learning helps improve the accuracy of captured data. Cognitive automation helps make sure that all the unstructured data is extracted.
Once the data from documents has been captured and deciphered, it can be used by RPA bots for rule-based automation, eliminating the need for human to perform simple, repetitive tasks.
While RPA with cognitive automation excels at document-centric processes, the technology also can comprehend and process e-mail and messaging requests, such as invoice-status inquiries.
And what’s especially attractive about RPA with cognitive automation is that the technology learns over time. As the cognitive automation solution receives new data, it makes more connections and learns how to process the information. This means that RPA with cognitive automation can move from mainly automating basic tasks, such as invoice data capture, to taking over complex processes in compliance, audit and reporting. Having software bots do more of the “heavy lifting” enables humans to begin to step out of the purchase-to-pay processes to focus on value-added activities.
RPA with cognitive automation improves supply chain transparency through descriptive analytics, predictive analytics, real-time analytics, data visualization and dashboards with business insights.
Procurement can play a big role in helping the business maximize opportunities and stand out from the competition as the global economy continues to improve. But none of this will be possible for businesses that rely on manual and semi-automated processes for purchasing goods and services.
The transparency facilitated by RPA with cognitive automation empowers procurement leaders to achieve better business outcomes, deliver greater value, and avoid potentially significant risks.
Is your business ready to unlock the value of its purchase-to-pay information?