Manual process disadvantages
Despite today’s new technological solutions for automating the procurement process, many companies are still using the traditional manual paperwork method, this method has a lot w disadvantages that will impact different company aspects.
Nine Reasons why manual procurement is inefficient for a company?
1. Repetitive tasks
The manual procurement contains a lot of tasks that are repeated for each procurement event, contains but not limited to, internal procurement documents approval, negotiation phone calls with the supplier, creating similar documents multiple times and so on.
2. Time Consuming
All the previously mentioned repetitive tasks will be time consuming for the procurement department. Going for the same approvers over and over again during the day, depending on their availability, spending not less than 5 minutes on the call with only one supplier, handling errors which are not flexible to fix on paper and having to repeat the approval process.
3. Process Delay
Urgent purchasing is not easily performed in manual procurement companies. Time consumed, different department dependency and the slowness of the approvers/suppliers responses will block the urgent requirement for a while.
4. Costly process
The time spent on the manual processes can increase the number of required resources in the procurement department, delayed process can affect different departments’ business processes that are awaiting for the purchase to be done.
Since many groups are involved in the procurement process such as, end users, procurement departments, approvers, finance department and suppliers; this will lead to a loss of control and less visibility on overall process.
6. Reporting Difficulties
In manual procurement all reports will also be created manually, when it is a huge challenge to do the data entry for all performed processes, and to handle it in all the different ways to produce the required outcome.
Who contacted who, and who is responsible for what, which employee is the contact with which supplier, these things can make a huge burden in a company’s procurement process disagreements and loss of information.
8. Document Control
Paper procurement process needs a huge effort to control the documents and keep track of the archived ones, older documents are usually lost, and following up currently open ones is harder that it looks like.
9. Error Handling
Normally day to day work can yield some errors made by any party involved in the process. These errors are not easily handled in the manual procurement, mostly the process should start all over, or in best cases it will starts from where the actual mistakes was done which could be anywhere.
To evade all these difficulties, a company can switch to E-procurement solution, where a single platform can consolidate all information for all authorized parties.
In this platform the processing time will be much less because no actual paper is moving from one department to another, everyone can receive a notifications for their tasks while sitting on their desks. Lost documents and process delay will vanish, fixing errors, visibility and communication will be much faster and accurate in the automated procurement tool.
All these enhanced aspects will of course reflect on the main concerns for any company which are time and cost, when the procurement process is more streamlined, time will be enormously affected in a positive way, and in today’s world “Time is Money” concept, the cost will drop in a very noticeable amount.