Jeremy Ferrer
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Optimize your C-Class purchases and boost your results.
January
The era we are living in is one of the digital revolution for business. Faced with the various crises that follow one another, the digitization of purchases is the only alternative for her to get out of it. No sector or entity is exempt. This change is visible at the heart of businesses and institutions. Everything is working to succeed in its digital transformation, because why go against the tide when the benefits of such change are considerable? eProcurement is one of the inevitable transformations that every company must face. But at what price? What are the challenges? What are the real benefits of this new procurement management model? In this article, discover everything you need to know about the digitalization of procurement processes.
It is useless to recall the strong evolution of the digital world in recent years. Corporate jobs are no exception, especially that of purchasing. We can define The digitalization of the purchasing function as all digital technologies applied to the digital revolution in the procurement process within a company. It is therefore a question of taking advantage of these new technologies in order to best manage this process considered to have low added value in a society, which is nevertheless essential.
However, digital transformation is not a solution that can curb some of the risks associated with this process. On the other hand, it contributes to improving the way it is managed, whether in terms of finding suppliers, administrative procedures or distribution.
This new model thus includes big data, social networks, cloud management, mobile applications... These are tools that make it possible to dematerialize this long process in order to automate it, but also to allow the company to focus on its core business.
Whatever the size of your business, e-Procurement has numerous advantages at all levels.
The process of digitizing procurement processes easily reveals hidden costs in the company in a global way. It makes it possible to reduce them while increasing the performance and efficiency of the various functions within society. Cost optimization is a major advantage that can be derived from the digitalization of procurement. It makes it possible to manage cost centers more effectively and to optimize them quickly.
The digitization and dematerialization of the various departments within the company make it possible to automate tasks for better productivity. Before the arrival of e-procurement, procurement and procurement departments focused more on operational tasks than strategic ones, which slowed results. By adopting the digitalization of the procurement function, they have saved time to focus on their core business.
Overall, the technologies used to automate the procurement process make it possible to carry out predictive analyses that aim to anticipate risks related to procurement functions, but also prices and possible market opportunities.
THEE-Procurement also has the advantage of improving the relationship between suppliers and the company as well as the fluidity of communication between the two parties. Thanks to the various technologies used, such as RPA (Robotic Process Automation), the process becomes automated and is easier to manage. The reduction of transaction costs through Procure to Pay solutions is becoming obvious. The fact that even the payment system has become automated improves the relationship with suppliers.
Thanks to predictive analysis technologies, for example, the company can make sharper decisions that contribute to improved management of these decisions.
The digitalization of the procurement function also establishes a unique and effective communication channel between the procurement department team and suppliers. This facilitates exchanges with them and saves time, whether in terms of managing disputes or responding to requests from suppliers. Regulatory compliance risks are also reduced as the system regularly updates the legal documents required for the procurement process.
Practically, it is the Procure-to-procurementPay (P2P) dematerialization technology that allows this kind of automation.
Managing invoicing in a company is one of the most tedious tasks in the purchasing and procurement process. Thanks to the P2P or Procure to Pay system, this task can be optimized in order to make management more efficient. The tool provides suppliers and the company with a portal specific to them so that they can manage invoicing while saving time. Attachments are automatically transformed into a digital invoice. As mentioned above, the tool also manages financial transactions.
Once created, invoices are sent to the right people in the company and then archived for secure backup.
Tenders are also part of the tasks that procurement departments must take care of. The tendering process can be better managed thanks to the digitalization of the procurement function and supplying. Digitization solutions in this specific case are more flexible in that they allow the automation of many tasks such as modeling offers or even accelerating candidate analyses.
The integration of the company on marketplaces specializing in tenders is a common practice nowadays. These platforms are inexhaustible sources of service providers and suppliers. They allow better management of the entire process, thus reducing operational costs.
Data management is sometimes a tedious task within a company while it has very low added value. Digitalization plays a key role in the optimal use of data. It allows data to be stored and then analyzed for better control.
Mobile devices are defining the era in which we live. Everyone seems to have adopted them for one reason or another. In the case of a company, mobile terminals can be used for the digitization of procurement, through procurement software, an information system dedicated to purchases, mobile applications to manage buyers or suppliers for better forecasting. Many service providers are currently developing e-Procurement apps that allow any business to start the digitalization of procurement processes.
Digital transformation, which can also be called “spend”, includes two components in the purchasing life cycle, namely:
- The Source-to-contract which is involved in the management of procurement in advance. It makes it possible to evaluate suppliers by carrying out effective supplier sourcing, and then to manage contracts. This process starts from the moment when the company expresses its needs, goes through arbitration to choose between internalization oroutsourcing the procurement process, then comes the choice of suppliers.
- The Procure to Pay which intervenes downstream of purchases. It describes the buying process from the orders to the payment of the suppliers.
The scope of “spend” actions is very broad, as is its scope of expenditure, given that it concerns many businesses in the purchasing department. We will then talk about technological investments, outsourcing expenses or even logistics.
It is true that the digitization of administrative tasks and the procurement function has many advantages for the company. However, it should not be forgotten that these are also regulatory obligations to which it must comply. Note that since the 1Er In January 2020, invoices intended for the public sector must be sent in electronic format. The 2020 Finance Law as well as the ordinance of September 15, 2021 determine the generalization of electronic invoices between companies subject to VAT.
The Clearing is the invoice control system set up by the State in relation to these obligations. To ensure that they complete them correctly, businesses can use the public billing portal or use private platforms specializing in invoicing.
Implementing digital transformation is a long-term task. After integration, the people concerned still need to get used to the various changes. Here are the steps to follow to successfully set up a solution for digitizing procurement.
The digital transformation of your procurement functions requires a total reorganization within the department concerned. Before starting, it is important to take stock of the usual practices of the company and the mode of organization that has already been put in place. This form of inventory will give you a global overview of what you need to do and what to reorder. For example, ask yourself these questions:
- What are the current order procedures?
- How do you recruit suppliers?
- Through what system is their payment made?
- How long does it take to process an order form?
- How many people are involved in this whole process?
The digitization of procurement is taking place on all fronts. Nobody escapes it. The implementation of such a process must be done as a team and not only by the head of the department. Involving your employees from the very beginning of the implementation not only reduces your workloads, but also allows you to receive new ideas from them. For example, organize inter-department seminars in order to jointly determine the goals to be achieved. Inform your employees about the progress of the project and train them on everything there is to know about this new information system dedicated to purchases.
Referencing your suppliers allows you to better know those who are the most committed to satisfying you. You will need them to support you in this long process, as setting up such a system does not happen overnight. It can destabilize your society. Think of these providers as “drivers” and incorporate them into the process right away. Later, you will have time to look for others.
In addition, it is also necessary to ensure the traceability and archiving of orders placed with your suppliers so that you can better control the new tool.
The purpose of deploying procurement software is to automate the purchasing process from the expression of needs to the payment of invoices. Throughout this process, it is essential that the people who validate orders and invoices are well defined since the scanned documents will be automatically sent to them. Redefining this validation process allows you to better optimize it and save time.
When you decide to start digitizing the procurement function, do it all the way. Everything must be homogeneous in order to avoid process confusion. For example, your purchase orders are dematerialized while the invoices are not yet dematerialized. This error will surely cause a lack of efficiency in the whole process. There should also be no duplication in operations. Setting up a supplier portal is an excellent solution to better manage this homogenization. Thanks to it, it is possible to share data in order to be able to process them harmoniously with the supplier. This will save you from wasting unnecessary time.
If your employees have difficulty using digitization tools, they should be trained to avoid misunderstandings and the lack of homogeneity in the process.
In certain situations and for certain tasks, it may be interesting to strengthen the internal team by external service providers so that the process can be carried out optimally. Since in any case, you have already taken the plunge of digital transformation, do not hesitate to recruit service providers who are part of this system, such as auto-entrepreneurs or freelancers. Additional skills are always beneficial for a business, even if you are going to opt for outsourcing.
Throughout the process, there will always be operational flaws as well as unexpected events. Optimizing the purchasing process is an essential lever for the economic recovery of a company. It should not be taken lightly. Different indicators should guide you, namely costs, deadlines, number of disputes... in order to give you ideas on how to improve and adjust the system. The fact that you measure your results on a regular basis will give you an overview of the effectiveness of the procurement software you have set up.
Implement the digitization of procurement does not only mean using digital or digitizing solutions. Change within the company is inevitable and it must be managed so that everyone can integrate. Each employee should play a role in the process. Training and follow-up throughout the implementation of the system must be put in place.
It is an application that allows you to manage the supplier relationship. It gives the entire team involved in the procurement process a better vision of all the procedures and related operations. This tool makes it possible to manage tenders, to reference suppliers, to monitor and evaluate the process, and to control risks. The entire process is visible on a dashboard accessible to stakeholders so that they can synchronize their actions.
Managing expenses and related figures are real obstacles to a company's responsiveness. Grouping these in the same place, centralizing them in order to better control them is the objective of “spend analysis”, a tool dedicated to this type of operation. This digitization tool makes it possible to follow the purchases made, thus to monitor the expenses related to them as well as their evolution. In addition, this tool also processes information using its artificial intelligence in order to give the company a global overview of the evolution of prices on the market or even of the evolution of expenses related to the purchase during a well-defined period.
The electronic signature is a truly revolutionary online tool that contributes to the performance of a company. Thanks to it, we save a lot of time. Gone are the days when you had to sign a ton of paperwork endlessly. The electronic signature extends the company's space-time for better continuity of its activities.
It is also called Contract Lifecycle Management, a revolutionary tool that makes it easier and more effective to manage all your contracts. He takes care of everything from the drafting of the contract to the renewal of it. The tool is obviously accessible for each person whose role is to sign and process contracts within a company.
Specially dedicated to purchasing functions, the ERP provides an overview of all purchasing-related operations. It is also possible to communicate via this tool, which allows for better exchanges and better understandings of everyone's needs. It is an essential management software for good procurement management.
Automating your expenses through the use of AI, you will thus be able to better control your budgets and manage your supplier catalogs. BME Consulting accompanies you throughout your procurement digitalization project from an integrated Source-to Pay suite. It allows both the centralization of your class C purchases and the accurate monitoring of your purchases on your online dashboard.
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