Procurement is a critical function in any business, responsible for sourcing and managing the goods and services necessary for an organization to operate effectively. As businesses continue to look for ways to improve efficiency and reduce costs, many are turning to automation to streamline procurement structures. However, while automation can certainly provide benefits, it’s essential not to overlook the importance of the human aspect in procurement.
Automation can bring a range of benefits to procurement processes, such as increased efficiency, cost savings and reduced errors. By automating routine tasks, such as purchase order creation and invoice processing, procurement teams can free up time to focus on more strategic activities, such as supplier relationship management and data analysis. However, automation can only take procurement so far. There are certain areas where the human touch is essential, such as negotiation, decision-making and relationship-building.
Procurement structures where humans excel
While automation can streamline certain processes, it’s important to recognize that there are limitations to what it can do. As Gozde Yenihayat, Chief Procurement Officer at second-hand car company Kavak Türkiye, notes, “The interactions with the customer success team helped us build a procurement structure in a new market in shorter than two months.” Yenihayat points out that there will always be a need for human expertise in areas such as onboarding and implementation.
This is because procurement involves a range of complex tasks that require judgment, creativity and communication skills, areas where humans excel. For example, negotiating contracts requires an understanding of complex legal language and the ability to build rapport with suppliers. Similarly, managing risk in the supply chain requires human expertise to assess potential risks and develop contingency plans.
The ongoing automation of procurement structures can also impact procurement professionals, with some tasks becoming automated and others becoming more strategic. As procurement processes become more automated, procurement professionals will need to adapt and develop new skills to stay relevant. However, this can also provide an opportunity for procurement professionals to focus on more strategic tasks and build closer relationships with suppliers.
For example, rather than spending time on manual data entry, procurement professionals can focus on analyzing data to identify opportunities for cost savings and supplier performance improvement. Additionally, automation can provide procurement professionals with more data and insights, allowing them to make better decisions and improve the overall effectiveness of procurement processes.
However, it’s important to note that while automation can provide many benefits, it’s not a one-size-fits-all solution.
Striking the right automation/human balance
Procurement processes vary widely between industries and organizations, and it’s important to tailor automation solutions to meet the specific needs of each business. Procurement professionals should take the time to evaluate which processes can be automated and which require human expertise and to ensure that automation is being used in a way that supports their overall procurement strategy.
While automation can provide benefits to procurement structures, it’s essential to find the right balance between automation and human expertise. While automation can certainly provide benefits, such as increased efficiency and cost savings, it’s important not to overlook the importance of negotiation, decision-making and relationship-building in procurement. By leveraging the benefits of automation while also recognizing the value of human expertise, procurement teams can ensure that they are operating at their most efficient.
In conclusion, the ongoing automation of procurement structures can bring significant benefits to businesses. However, it’s essential not to overlook the importance of the human aspect in procurement. By recognizing the areas where human expertise is essential and finding the right balance between automation and human expertise, businesses can ensure that their procurement processes are operating most effectively.