How AI can help avoid the costliest procurement mistakes
Your procurement system has a massive effect on your companies purchasing abilities. If your system is inefficient it can lead to a whole host of common purchasing and procurement issues. Fortunately, the majority of these mistakes have simple solutions that can be identified by procurement analytical tools – though the human touch is still required to action the savings
Here are some of the most common procurement mistakes you may encounter, along with steps you can take to avoid or correct them.
1. Poor Negotiation
People assume prices are set in stone. With good planning, market knowledge and the right data, prices can be negotiated to improve the price point for the buyer, the bottom line and the organisation financial performance.
2. Going Over Budget
Managing to a budget is a core activity for businesses large and small, it’s the financial compass that helps businesses keep on track with its commitments. It is also an opportunity for procurement teams to review business change / trends and support cost controls to help meet or beat the budget. Having the right data analytics is critical in supporting this procurement activity.
3. Making Snap Decisions
If you don’t plan your buying activities, you will leave money on the table through buying at a higher price point than necessary. It pays to shop around for the best deals, to do this effectively, using a platform like Robobai allows you to access accurate granular levels of data that will give you all of the required information you need to make the best decision for the business.
4. Refusing Technology
Companies not investing in procurement technology to improve and support the strategic procurement process will lag behind their competitors and be disadvantaged. In contrast, companies that do implement analytics platforms improve the procurement contribution to the bottom line delivering 10 times plus ROI. This means reducing maverick spending, improve compliance and increase their spend under management.
These are the most common mistake however the list certainly doesn’t stop there….
Nowadays, companies are starting to understand that the problems that reside within the supply chain are just too complex, dispersed and fast paced for purchasing teams to identify and understand. The is a movement from companies looking for support from technology – specifically spend analytics software platforms. Robobai is quickly becoming the market leader in this domain, using AI insights to classify spend data and identify savings opportunities. It is the only platform that can accurately classify spend data to above 90% within weeks and provide actionable savings opportunities. Companies embracing such technology are implementing millions of dollars worth of savings whilst optimising their supply chain.