Robotic process automation in procurement is fit for repetitive tasks that follow well-set-out rules requiring little human intervention. When well set out in a procurement department, staff can concentrate on higher-value tasks such as strategic planning and innovation. RPA projects can deliver up to 300% return on investment within 12 months of implementation.

However, these projects do not always go as planned. According to APQC, 37% of RPA processes in organizations are not properly optimized. Only 21% of organizations have RPA aided procurement processes that are well optimized. RPA automation only works optimally when an organization is clear about its end-to-end processes. With this visibility, the organization can pick processes for which RPA is appropriate. It’s also important to ensure proper logic and input data is used for RPA processes because mistakes can be costly. For instance, if RPA is used to automate orders, a mistake in input data could lead to erroneous orders being made, which is costly to the business.

Here are a few examples of RPA delivering real value to procurement.

Raising Purchase Orders from Purchase Requisitions

RPA integration into the ordering process can speed up operations. When a purchase requisition is raised, RPA bots can check whether the requisition is within set out limits including budgets. The organization can also automate the approval process by sending the requisition to the appropriate parties to have them signed off. Robotics can be sophisticated enough so that the organization’s structure is mapped onto the system. This way, items will always be sent to the relevant parties for authorization. Once a requisition is approved, a purchase order can then be automatically generated and sent over to the correct vendor.

Better Demand and Supply Planning

Proper interaction between the various departments in an enterprise is crucial for procurement functions. The sales, warehouse, logistics, purchasing teams must be in communication to share information on changing business conditions. Through robotics, this interaction can be automated for faster and more accurate decision-making. For instance, if a spike in demand is anticipated, communication can be sent over to the requisition team to make proper adjustments in orders. The warehouse team would need to prepare to hold more inventory and ensure they have enough buffer stock. Such centralization ultimately delivers greater value for the entire organization.

Better Inventory Department Operations

The operations of the warehouse department of big organizations can be extremely tedious for employees when handled manually. The competitive nature of most operations, though, provides great opportunities for the application of RPA. One way to do this would be to keep track of inventory levels. Through automation, an organization can always know the stock levels of each item it carries. When re-order levels are reached, the ordering process again can be automated through RPA. When orders from customers come through, the process of packing and shipping can be aided through RPA.

Work Order Management through Robotic Process Automation

Organizations often lose revenue due to inefficient handling of work orders. When a work order is manually created, it’s easy to lose track of it and fail to update the client of its progress. The client ends up frustrated and moves on. Yet, with RPA, the process can be automated such that a work order is automatically created when the client makes a request. The work order gets sent to the correct party for execution. The workflow can be set up so that the client gets notified at every crucial turn, giving them reassurance that their order is being handled. Once an order is shipped and received by the client, the work order can be closed.

Invoice Processing

Invoice processing can take as many as a dozen steps depending on the nature of an organization’s operations. The need to ensure that invoices match purchase orders and delivery notes are crucial in curbing unintended errors and fraud attempts. When done manually, the process can take weeks leading to dissatisfaction from suppliers.

Through RPA, the organization can speed up the process while reducing the error rate. Through optical recognition technology, businesses can automate the extraction of hand-written information from source documents for faster processing of invoices. Bots could also check for missing information on the invoice such as a name field or quantity.  If information from invoices matches the purchase orders and delivery notes, the invoice is automatically queued for payments. Similarly, if there is a discrepancy between the documents, that invoice is flagged and sent to the appropriate party for investigation.

Supplier Contract Negotiation and Management

Optical recognition technology can also be applied in contract management. Normally, an organization will have contracts with hundreds of clauses from different suppliers. Bots can be used to crawl these contracts and populate P2P systems. Using bots to crawl huge volumes of information is beneficial when negotiating with suppliers by being able to spot unfavorable clauses by comparing contracts with templates.

Organizations can also use RPA to track a contract over its lifetime. This includes making adjustments to prices as agreed or charging penalties when clauses are breached. It’s also possible to set up notifications or automatically raise tickets when certain events happen. In advanced use cases, RPA and AI technology can be applied to issue scorecards for suppliers based on large volumes of qualitative and quantitative data. These scorecards can form the basis of discussions to renew, cancel, or renegotiate contracts with suppliers. For instance, based on the volume of email interactions with suppliers, it’s possible to quantify the cost of working with every supplier in man-hours.

Delivering Real Value through RPA

The areas of application and benefits of RPA are quite numerous in every organization. The challenge lies in implementing, evaluating the impact, and improving upon attained progress. There are different ways to quantify the benefits made. For instance, an organization may look at resources that have been redeployed to other tasks after automation. They can also consider the number of internal cycles that have been shortened. The reduction of error rates in the processing of invoices is also valuable.

Every organization’s business case for RPA is unique. If your organization wants to implement RPA, it’s advisable to engage an experienced vendor to help identify the best use cases for robotics. ProcurePort is the world’s leading supplier of e-procurement software. Reach out to us for a discussion on how RPA can help streamline your operations and deliver real value on your investment. 

Become an expert in procurement with the help of our new website!

Learn More