As companies around the globe look to incorporate mature business technologies, automation is no longer just a competitive edge. It is an essential ingredient in the recipe for survival. Once you understand the long list of procurement automation benefits, it becomes clear that every organization must integrate automated purchase orders into their supply chain.
Business owners may assume that procurement is “just” the process of buying goods and services to operate their supply chains in a profitable and ethical manner. Unfortunately, many companies underestimate the hidden costs of manual procurement inefficiencies and are consequently unable to unlock their potential. Automation is the key to improving supply chains and putting the company back on track.
Manual Procurement Inefficiencies: A Multi-Billion Dollar Problem
Supply chain inefficiencies are a costly problem for organizations across all industries, with $20 billion lost annually at the supplier discovery stage alone. Outdated practices are one of the driving forces behind those losses with manual procurement standing out as one of the chief culprits.
Manual procurement processes are both time-consuming and costly, but many organizations continue to overlook this part of their operations. However, bringing procurement processes into the modern age through automation can transform a company’s future.
IBM reported saving $100 million annually by automating its procurement processes, highlighting the significant cost savings and efficiency improvements achievable through automation. While the figures will be smaller for SMBs, the impact on their operational efficiency and profit margins are equally huge, underlining why they cannot afford to persist with outdated processes.
Manual procurement inefficiencies don’t only cost businesses from a financial perspective. Manual systems often lead to errors and delays. Companies will be attracted to the fact that procurement offices can see reductions of 45% by implementing comprehensive digital transformations. However, they should be equally responsive to the fact that procurement automation benefits extend to the concept that “fewer handoffs mean fewer mistakes”.
Procurement processes involve a lot of repetitive admin tasks. When human employees are expected to do this, mental fatigue can cause errors and slowed productivity. Worse still, fatigued worker productivity losses cost employers up to $3,100 per employee each year. Moreover, tracking changes and amendments manually may place further strain on the company while increased human error may expose the company to security threats.
Persisting with manual procurement also leaves the company open to issues like maverick buying, in which people outside of the procurement department may purchase goods without understanding the firm’s purchasing policies and procedures.
At a time when procurement performance is a priority for 65% of procurement experts, the days of accepting manual procurement efficiencies must now end.
Restoring Efficiency With Procurement Automation Benefits
Research shows that 74% of employees across all job roles say that using automation helps them work faster and smarter. Procurement departments certainly benefit from replacing inefficient manual processes with automated solutions.
Whether looking for cost savings in procurement, reduced error rates, or heightened satisfaction across your teams doesn’t matter. Adopting procurement automation tools is the key to streamlining procurement processes to yield substantial savings and improvements.
For example, automating the requisition process can save 40% to 70% over the costs associated with manual systems. It reduces manual labor costs while also reducing staffing needs. Therefore, organizations may also see other indirect benefits including; savings gained by operating from smaller work premises, reduced onboarding and staff turnover costs, fewer staff absences, and a streamlined management process.
Further savings of time and money can be seen across a host of related tasks. Teams can see procurement automation benefits in;
- Supplier relationship management,
- Purchase order creation,
- Vendor management,
- Auditing,
- Matching requests to receipts.
All communication and documentation may be automated, thus saving time and money for procurement teams while simultaneously maintaining reliable communication with suppliers.
Productivity, performance, and company reputations are all supported by the adoption of automated tools. Likewise, data-driven decisions ensure that procurement reflects real-time and relevant data. With the procurement software market set to reach $9.5 Billion in value by 2028, it is clear that now is the opportune moment for organizations to modernize their supply chains with automated purchase orders.
Automate Procurement With eParts Advantage
Procurement automation benefits range from cost savings in procurement to reduced errors and optimal time efficiency. Moreover, it delivers the peace of mind that all supply chain managers and business owners deserve while also ensuring that the company is ready for the future.
While there are many tools available, eParts offers a comprehensive procurement automation solution that integrates seamlessly with existing systems, ensuring a smooth transition from manual to automated processes. With tailored packages for companies of all sizes, it is the perfect choice for 2025 and beyond.
Discover how eParts can transform your procurement process and deliver significant cost savings – Request a Demo today!