What is automated procurement technology?
Automated Procurement Technology (also known as e-procurement) takes procurement workflows and processes and automates them through a single software platform. Software products in this category are generally web-based SaaS platforms and are provided on a subscription basis.
Procurement technology or RFP (request for proposal) software in this category offer different features and benefits, but at its core, automated procurement technology will improve the bottom-line of a company and increase the productivity of procurement teams. So it’s no wonder sourcing and supply-chain professionals are talking about automated procurement technology and e-procurement technology now.
New research conducted by WBR Digital found that approximately 47 percent of senior procurement officers are focusing on the implementation of automated procurement systems. The industry shift towards this technology and the new process is dramatic.
Ever feel sorry for Blockbuster Video? When you were in high school it seemed like working at a Blockbuster was the coolest job ever and was made easier by technology when DVDs came around. However, the technological advancements that saved us from the drudgery of rewinding would eventually be the downfall of Blockbuster altogether.
Technology has changed the way we do business for the better, yet procurement suffers from a range of out-of-date practices. From paper-based RFPs, paragraph-style questions and answers, to limited access to vendors, there are a host of processes that can be instantly improved by automated procurement technology.
Sure, there are time and dollars savings on offer, but automated procurement technology goes further than that. It can assist with better quality contracts; and a more efficient, worthwhile procurement culture for your entire organization. Let’s take a look at what the new-school RFP looks like.
What are the advantages of automated procurement technology?
Any process that is mainly paper-based must have a more efficient, online option by now, right? In the case of procurement, it certainly does. Automated procurement technology like e-procurement software and RFP portals provide a range of benefits, including:
- eliminating redundant and time-consuming manual tasks
- automating the response and comparison of bids
- team collaboration and communication
- analytics and reporting
- complete visibility for auditing
- accessibility and control by multiple team members
Doing away with paper is not only great for the environment but more efficient from an organizational point of view. Procurement projects often involve numerous team members and stakeholders, so a single pane view via procurement software means everyone can access information from anywhere, anytime.
In addition, because you are not relying on people to read through and make subjective decisions on responses, results are instantaneous and review times are slashed. No more printing off pages and pages from vendor proposals.
Involvement of different sourcing stakeholders
Streamlined communication is a critical element of any successful RFP process. Automated procurement technology creates ease of inclusion for team members and stakeholders. Messaging, reviewing, assigning tasks, and sending alerts through a single application means that teams can stay on track and meet deadlines to roll out RFPs.
Another bonus of automated procurement technology is that the communication between buyer and vendors is trackable and fair— providing a defined and equal platform for communication ensures there is no perception of bias. This also ensures anyone bidding on your RFP is contacted for any updates.
By using an automated procurement technology, you can also have visibility into who is bidding on your project, and how far they have in the completion of the RFP. And in the case that there are any issues or questions about responses, communication can be made within the application.
The growing importance of audit trails
Businesses need to keep up with advancements in technology and new innovations to ensure they are protected, by providing more stringent reporting for audit and compliance.
Automated procurement systems can improve efficiency for highly regulated industries, publicly traded companies, and sectors such as medical, finance, and government.
Avoiding situations such as D.C.’s Department of General Services, where a procurement officer was forced to resign due to a recalibration in how the DGS evaluated bids. The increased scrutiny on purchases in these sectors means that software can help to provide an audit trail as well as ensure contracts are awarded subjectively.
The Benefits of simpler RFP processes
Automated procurement technology can help make an otherwise long and tedious task into a streamlined and efficient one, leaving time for your procurement team to focus on more important work. By utilizing an online question library that stores information from previous RFPs you can create new RFPs quicker, and reuse previous RFPs when it’s time to renegotiate a contract. Up to 90 percent of the RFP can be automated reducing creation time by 60 percent. The question library helps to:
- save time
- ensure that a standard level of questioning and information gathering can apply
- grow and improve with each new RFP
- free your team from data entry tasks
In a similar vein, broad answers and open-ended questioning make the review and bidding process of an RFP much harder. Measurable responses, such as multiple choice answers and direct questioning, ensure that responses are succinct for easier comparability.
People are resistant to change. They like systems and processes they know and understand, and fear that learning something new (especially when it comes to technology) may be far too complex. However, the more you step back and embrace complexity the better chance you have of finding simple answers.
Innovative automated procurement technology already exists
RFP software ensures the removal of manual, time-consuming tasks, allowing your procurement team to focus on providing value. Automated procurement technology exists to make the lives of procurement officers easier while adding value to procurement and sourcing departments.
An RFP automation software like DirectRFP® provides all the automation you need to modernize your procurement process. It won’t create the RFP for you, but it will trim hours and days off your RFP process. The benefits of an automated procurement process with a fully automated procurement software tool are far too significant to ignore. Start saving time and money while finding the best available vendors by contacting DirectRFP® today.