RPA in Procurement — The Ultimate Guide of 2022

RPA in procurement is an important tool to optimize processes and data collection in procurement. However, this tool needs to be applied carefully in order to work effectively. Additionally, not many of us are familiar with RPA which makes it more difficult to integrate. 

In this article, we will discuss what RPA in procurement is. We will explore how RPA helps the procurement process of a company and the challenges it faces today. 

Once you finish reading this article, you will gain a deeper insight and knowledge of the role of RPA in procurement. This will allow you to use it in your profession or business which will help you streamline the procurement process

What is RPA?

RPA or robotic process automation is a software technology that makes it easy to manage, deploy, and build software robots. These software robots are able to emulate human actions which interact with digital systems and software. 

Software robots can understand what is on a screen, complete the right keystrokes, identify and extract data, and navigate systems. Even if people can do this, software robots are more consistent and fast in doing these activities.

Robotic process automation can help businesses to streamline workflows that make them more flexible, responsive, and profitable. 

What is RPA in procurement?

Many organizations are concerned with their procurement team spending most of their time on administrative tasks. Due to this, organizations started adopting RPA to free the procurement team from spending too much time on administrative tasks. 

Thus, the procurement department or team can focus more on other important responsibilities and tasks. 

RPA in procurement serves to automate the procurement process which leaves little to no room for errors and anomalies. 

RPA in procurement plays an important role in automating transactional procedures like the procure-to-pay process. 

Additionally, it can also execute bidding transactions by leveraging systematic controls and precise business rules. Due to this, the company can gain significant cost and efficiency benefits that will allow its further development.

Editor's note:

Hi there! My name is Marijn Overvest, I'm the founder of Procurement Tactics.
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How Does RPA Make a Difference in Procurement?

RPA in procurement can be used to completely automate the procure-to-pay process. Procure-to-pay is highly transactional and it needs a great amount of investment of time and resources in order to streamline. 

The implementation of RPA in procurement helps organizations to save significant amounts of time and money. Additionally, it can automate most of the procurement tasks by reducing human interaction within its processes. 

How does it start? 

The first step in the implementation of RPA in procurement is to check what procurement functions will likely benefit from it. The next step will involve the creation of a business case and an investigation of the top RPA vendors and their case studies. ‘’

When RPA is correctly implemented, it can automate multiple procurement processes. This will give the company more profits, free-up time, and make employees focus more on important responsibilities. 

Uses of RPA in Procurement

1. Purchase request to purchase order

In the past, the procurement department or team had to process the purchase request and create a purchase order manually. This led to delays and errors in making a purchasing order. 

The integration of RPA in the procurement process will shorten the amount of time in processing purchase requests and creating purchase orders. Software robots can streamline the processes that will make them fast and easy. 

The software robots can automatically implement the steps in your workflow once you receive a purchase request. This will allow the business to process more purchase requests that are beneficial for its profitability. 

2. Inventory management

Inventory is important for every company as it needs to be carefully monitored to accurately match the demand of customers. 

RPA helps the procurement department to monitor inventory levels and notify when the supplies get low. This will allow the procurement department to order products immediately to meet the demands of customers. 

Additionally, it helps the procurement department to see a real-time report on the inventory levels at any time. This allows the company to identify the current needs and forecast future demands. 

3. Planning demand and supply

RPA in procurement helps the end-to-end management of demand and supply planning. The software robots can help to centralize the processes by taking out the division of the different departments in the organization. 

4. Work order management

Work order is usually a task assigned to the procurement department for the convenience of customers. 

RPA ensures that the procurement team is able to monitor the request of customers. When the procurement team is not able to finish the complete order, it will lead to a revenue loss.

Companies adopt RPA in their work order management to get notified when work orders are created. This allows the procurement team to know when it will pick up the work order for execution. 

Once the work order is completed, the RPA closes it and notifies the client of the status. 

Advantages and Disadvantages of RPA

Advantages
RPA reduces errors in the procurement process of the organization. Additionally, it can complete tasks more quickly than humans.
RPA enables the organization to easily accommodate changes in business processes.
RPA handles the mundane and repetitive tasks of the procurement team. Thus, employees can shift their time to more important activities.
Disadvantages
Although RPA does not intend to replace humans, there is a possibility. Some companies do not hire an additional workforce because RPA can handle the increasing workloads all by itself.
RPA may create layers upon layers of software that add complexity to the processes.
RPA must be carefully reviewed and optimized before automating it. If the organization fails to do so, then it will create a problematic process.

Frequently Asked Questions

1. What is RPA in procurement?

RPA in procurement is a software that can greatly streamline transactional activities in the procurement process. 

2. Where can I completely use RPA in procurement?

RPA in procurement can be completely used to automate your procure-to-pay process.

3. Do I need RPA? 

If you have an allocated budget for RPA, then we highly recommend you to have one. RPA will greatly help streamline every transactional activity in your procurement processes.

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