Every business has the desire to grow and succeed and they are leaning on procurement teams to make spend analysis decisions to drive savings within the supply chain. It is natural to encounter many roadblocks along this journey and procurement is seen as an important area as it can both block or support growth. We have recently surveyed 250 procurement specialists and asked them what their pain points are within a growing organization. We then established the 6 biggest pain points from their perspectives.
The companies had outgrown their supplier base: 79% of the people we spoke to said that their businesses were not driving innovation in supplier relationships. The common theme being their existing suppliers weren’t adapt enough to support their growth model and that they did not have the correct systems in place to evaluate potential new supply partners in an efficient and fast manner.
Their current systems were inadequate: 85% of our survey said that they overall procurement process was to complex and resource heavy. The existing systems and processes simply aren’t up to the job and as a result Account Payable are constantly battling to keep on top of the processing and payments of invoices.
Poorly equipped for investment or acquisitions: According to our results, 76% of procurement specialists said that with their current systems and processes, they would not be able to provide the relevant due diligence to any potential investors. This is a massive barrier to a company that is looking to expand in anyway.
Managing rising costs: 81% of companies admitted that they don’t challenge suppliers enough on cost or performance. The truth is, they are struggling with rising costs against income which is effecting profits, but they have inefficient systems in place that don’t allow them to manage their supplier contracts properly in these areas.
Ineffective supplier management: 44% of our specialists said that they need to manage their suppliers more effectively. They basically don’t have access to enough good quality data on suppliers to allow them to effectively challenge and negotiate the best deal for them.
Not enough control over spending: In our research 40% of respondents said that they need to improve their budgeting controls. There are compliance issues surrounding using approved suppliers, and to fix this change is required to both their systems and culture to give the required visibility of spend.
For optimum results, you need optimised data
The benefits of good data are no secret. You will constantly see things written and hear conversations about how powerful data can be with regards to driving efficiency, reduce costs and even keeping customers within any business. But, in the world of procurement it is a must have. Why? Because with the right data you can massively improve your return on purchasing goods and services.
High quality, cleansed data helps to drive a more strategic view of procurement. It enables teams to make informed decisions, earlier in the procurement lifecycle. If you don’t have it, then sure you can view total spend, but in a very inadequate way doesn’t allow you to understand the size of the cost saving opportunities that exist. These opportunities may include variance in pricing, contract terms, consolidation, payment discounts or duration. You need cleansed, granular data to be able to provide good insights to make the right purchasing decisions. You simply can’t do this efficiently without having access to a platform that provides this quality of data in a timely manner. Often, one of the biggest challenges in an organisation sits in the realms of data. Without good quality data cleansing and data classification you will never have genuine spend visibility.
Savings through changing purchasing culture
It’s widely acknowledged now that technology is changing the way businesses operate. The evolving world of data science and artificial intelligence has changed the game, and as a result has impacted the culture within businesses. There have been significant changes across all major business functions that impact the way decisions are taken, then how plans are made and executed. This makes it critical that you have a good understanding of how developing technology impacts specific functions, to allow you to maximise returns by embracing change and adapting your culture.
Procurement teams are on the cusp of implementing new methodologies that are focused around Artificial Intelligence and analytics. Businesses are changing/ evolving at a tremendous pace right now, leaving it not a matter of choice for practitioners to adopt these emerging technologies. In short, if you don’t make room for change you will get left behind.
We hear a lot about the different benefits that using AI in a Procurement environment can offer. Financial benefits, the opportunities that can be identified to deliver bottom line impact, and the way it can be utilised to drive better efficiency by speeding up processes and freeing up resource, but what we don’t hear enough of is, the way that using a good AI platform like Robobai can have a direct, positive impact on the overall culture within a business.
The cultural benefits of investing in an AI platform are the least understood, but also by far the most profound of its offerings. Using AI positions procurement into a prominent, strategic role that empowers them to have a direct impact on driving business decisions. As many old-school procurement specialists, know only too well, historically procurement has always been considered to be important, but seen as a support function, not a strategic driver. As more and more procurement organizations are adopting a data focused approach, change is manifesting in two key ways:
Changing conversations with internal stakeholders
It allows procurement professionals to engage in business transformations on equal footings with other departments. In the past, procurement initiatives have been seen as unviable, but having a robust spend analytics solution provides all the relevant data to enter a conversation armed with all the relevant facts and figures. This evidenced data cannot more ignored and therefore empowers its owner.
Easier negotiations with external suppliers
The above benefit has also transferred across to supplier conversations. Previously, supplier relationships and
bargaining approaches were required for negotiation, but now taking good quality data into a supplier meeting allows us to provide price comparisons with alternative suppliers which is tremendously powerful when seeking the best deal for your business.
Here at Robobai we have designed a platform that uses Intelligent data to do all the hard work for you. It
classifies all of your data quickly and accurately, providing insights for your procurement teams that lead to
savings and benefit opportunities. Here are some of the areas that our revolutionary system provides intelligence for across your supply chain.
Payment Terms – Our technology will help you identify early payments as they come in, measure the impact on any potential extended payment terms and compare system AP payment terms to the contract.
Catalogue Opportunities – Our bots will help you identify cataloguing opportunities by giving a you a much greater spend visibility.
Supplier Relationship Management – you can acquire real-time information to keep track of if your contracts are keeping compliant, plus you have quick access to data to actively keep tabs on if your relationships remain efficient, add value to your business and ensure that they continue performing well.
Category Competitiveness – You can confirm if you suppliers are the most efficient option within their category by comparing with competition, and establishing if their prices are above, the same or below the market average
Rapid Source – Our platform gives you the option to identify suppliers that are suitable for rapid sourcing, they will provide insights to help you reduce costs and negotiate directly with suppliers.
Supplier Reduction – Robobai will help you effectively identify supplier reduction potential by vendor and by category, giving you the option to move you spend to preferred suppliers.
Budget – AI will help you identify negative budget variances. It helps support your budget management by making you aware of prices changes which could lead to potential overspend whilst providing insights for potential savings.
Price Reduction – We can quickly identify how much spend you have that’s not under contract, allowing you to focus on increasing your managed spend, therefor giving you more control over your overall cost.
Consolidation – Consolidating all of your data helps to provide insights that would not be otherwise available to you without using Robobai.
Freight – Our robots quickly help you to eliminate unnecessary freight spend by using high quality data to establish the most cost effective freight companies globally.
Master data cleanse – Our intensive data cleanse helps you standardise your data whilst removing any duplicates within your catalogue, whilst highlighting any compliance issues.
THE IMPACT OF ROBOBAI
Find and Track Savings – Saving you millions
Just to recap quickly, in this newsletter, we have discussed the pain points faced by procurement professionals, then we moved on to talk about the harsh reality your business may face without good quality data. We moved on to look at the way technology is changing world and how AI can directly impact the overall culture and change within a business. The last article gave you an overview of how the Robobai platform has developed its technology specifically to provide insights into driving efficiency across your whole supply chain.
So, what impact does applying Robobai have on your business and what are the benefits?
Robobai streamlines all of your Supply Chain decision making by processing data from your company’s existing procurement systems. It uses the latest advanced AI and deep learning technology from an easy to use software platform, analyses your data then advises you of your best spending options and provides insights into where savings can be made.
Actionable Spend Analysis
Our platform will analyse spend data, detecting trends, patterns and variance then quickly creates actions that are easy to read and understand. It then provides insights on how to make improvements on your procurement procedures, helping you reduce your number of suppliers down to a few of the most cost effective available options. It will even ensure that your keeping compliant with your contracts by performing ongoing analysis, therefore catching any potential issues at the earliest opportunity.
The artificial intelligence provided by Robobai is over 90% accurate on average. This is down to deep learning technology, which will actively get smarter over time as it gets more exposure to your procurement data. This level of accuracy is exclusive to Robobai, giving our our clients peace of mind, knowing that they have the best market data available to base their procurement decisions on.
Procurement is no longer just about supplier negotiation. Times have changed and data analysis and categorization are leading the way. If carried out by a human, this is resource heavy and inaccurate. This is where Robobai steps in and does the job for you quickly and efficiently, giving your business the best possible opportunities. The end result of this is more time available for your team to focus on other important areas of the business, that could have potentially been neglected without the guidance of out platform.
Amid a backgrop of global uncertainty, and a mounting focus on ESG, one corporate commandment has become increasingly indisputable: investing in ethical procurement is not only a feel-good opportunity, but it can also mitigate critical business risk.
With increased transparency and obligations around payment times and practices of large businesses, it is critical that eligible entities have a thorough understanding of the requirements of the Payment Times Reporting Scheme (PTRS) to ensure they are meeting the reporting requirements on time!