Procurement as a service worldwide has gained a huge market value of USD 5.78 billion in 2020 and promises to grow at a CAGR of 8.2% from 2021 to 2028.
As businesses grapple with the impact of the pandemic, the world is quickly opting for alternative services that mitigate supply risks, optimize cash flow and working capital while maintaining profitability.
As uncertainties rule this era, Robotic Process Automation (RPA) and Artificial Intelligence (AI) will boost the growth of the procurement market over the forecast period and beyond.
Procurement as a function is confined due to time-consuming, error-prone manual operations that are well-suited for bots, powered by RPA. Plus, the function currently entails high-volume and high-transactional operations that, once again, necessitate an investment of both time and money.
In the procurement world, the urge to automate and eliminate all time-consuming procedures has always been predominantly prevalent.
All pioneering procurement leaders are anxious about AI and intelligent automation to be their ideal roadmap to transcend from the legacy operational methods to completely automated procurement processes.
Smoothening the Road to Procurement Digitization
By adopting RPA, the procurement giants can increase productivity, lower operational expenses, and free up specialists to focus on higher-value tasks like category administration and analysis.
Furthermore, when used in conjunction with IA, i.e., intelligent automation, procurement professionals can become better business partners by gaining access to more strategic data.
Both structured and unstructured data can be handled (i.e., gathered, extracted, and analyzed) using robotic process automation and artificial intelligence.
Because requisitions can be automatically prepared and routed to approvers, purchasers, and suppliers, processes can speed up.
The need for adopting RPA shoots up further considering the problems like informational silos, inadequate data storage, or enormous volumes of paper, which can make it challenging to follow purchase orders, monitor spend, detect fraudulent behavior, and limit the ability to foresee future needs.
So, if we need to deep-dive further, let’s ponder the reasons why procurement functionalities need to invest in intelligent automation or RPA?
Before we go into the reasons, do you know that AutomationEdge has launched industry’s first TRUE consumption-based pricing. So now, you can start small without long term commitment for free within minutes. Know More
The answer is – process visibility is improved, and information is shared in real-time with RPA at play.
In terms of figures, RPA adoption in any knowledge or service industry translates to a 600-800 % increase in the return on investment in robotic technologies. And, for the procurement function, the benefits are beyond imagination.
Overall, automation is producing a fundamental shift in how procurement businesses are preparing for the digital future.
Because of factors like the ones specific to the procurement industry described above, RPA adoption and popularity have grown globally.
According to a KPMG report published in 2020, the global robotics market and AI are predicted to reach $157.2 billion. This aligns with it becoming a top-five investment priority for a third of all CIOs worldwide.
As a result, we feel that CPOs should be aware of some real-world use cases for robotic process automation in procurement. So, let’s explore them!
RPA Use Cases Across the Procurement Process
In procurement, RPA is especially useful for jobs that are performed on a job-by-job basis. A list of application areas should support the claim.
In reality, any procurement procedure can be automated as long as it is carried out recursively, using the same repeating procedures.
Purchase Orders to Purchase Requests: Manually processing procurement requests and producing purchase orders frequently results in delays and a low accuracy rating. Software robots speed up the process by streamlining it and completing it in less time.
Contract Management: RPA helps to install elaborate performance tracking mechanisms for contract usage to identify and collect all possible rebates, discounts, tiered pricing along with penalties and remuneration changes to SLA issues.
Through real-time tracking, businesses can manage supplier queries and disputes better or issue notifications for quicker resolution.
Supplier Relationship Management: The foundation of supplier relationship management is based on real time communication and issue resolutions. And, RPA allows to effectively scan emails and highlight all escalations and interactions that need urgent attention.
With intelligent automation and RPA at play, the procurement staff can determine and question if the resolution processes are inline with the estimated TAT. Hence, RPA has turned out to be a game-changer for the procurement functionalities globally.
Supply and Demand Forecasting: Using robotic process automation in procurement can also help with demand and supply planning from beginning to end.
The reasoning is that RPA bots can assist in removing inter-departmental silos (e.g., managing procurement, shipping, warehousing, and inventory) and centralizing their management. It helps to conduct supplier due diligence spanning across a number of risk-prone categories associated with reviewing, processing, and scoring supplier data of all risk indicators promptly.
This is predominantly important to increase efficiency and reduce the turnaround time.
Inventory Control is Essential: This is critical for all businesses, regardless of industry, because it is required to determine whether inventory levels can meet client needs. RPA automates the meticulous monitoring of inventory levels.
Intelligent Document Processing (IDP) helps to track the product availability in the industry and raise real-time alerts to the concerned people or inform production units when the inventory falls under the prescribed threshold.
Management of Work Orders: Employees may find it difficult to keep track of clients’ needs and incomplete work orders, resulting in frequent income loss.
Software robots make the process more manageable and so help to reduce losses by creating a detailed list of all the basic requirements necessary to create a finished product.
The list is made in the simplest manner with required breakdowns in a hierarchical manner to effectively manage all on-going and re-current development.
Procure to Pay: Businesses are swimming in the pressure of quickly resolving overdue invoices, resulting in upset vendors and unending tension between coworkers. But, procure-to-pay automation assures light at the end of this tunnel.
P2P automation leverages technology to assist you in automating, organizing, and controlling the litany of associated tasks.
Conclusion: The RPA Dominated Era
Finally, as a result, the first step in your RPA journey should be to determine which jobs might profit from it and which RPA you choose. After doing a cost-benefit analysis to support the business case and researching potential RPA providers and their successful case studies, you’ll be ready to create a pilot project with future-oriented scalability in mind.
In the future, we may picture a scenario in which we have robots acting as both the buyer and the seller in the procurement discussions!
RPA could appear to be yet another disruptive technology. It is, however, the most effective approach to prepare your company for AI.
Adopting RPA should be the first step on the digital roadmap for many procurement businesses, as it will allow them to sustain more complicated efforts in the future.
Start small with AutomationEdge Hyperautomation platform for FREE but dream big. Know More.