Unsurprisingly, as more African businesses and supply chains advance or gain global recognition, they are increasingly automating their procurement process. Make no mistake; more operations and procurement will continue to be automated.
And there are many reasons why.
Chief among them is the vital nature of the process to the success of their operations. As far as supply chains are concerned, procurement is the focus point of the operation. To a large extent, its success depends on the success of the procurement. Therefore, automating it is a no-brainer.
So why are more African businesses and supply chains automating their procurement process?
It used to be that African businesses and supply chains were known for favouring the traditional method in their operations, including procurement. However, they are increasingly switching this strategy. Here is why.
1. Cost savings
The primary procurement assignment is cost reduction, but it can be difficult to manage using the traditional method. The reason is because supply chains are doing more than ever. They thereby require more. And in Africa, they require more than most.
It can be challenging to manage all these traditionally. However, automating procurement makes the entire operation more visible and simplified for the procurement team. It makes them more efficient, leading to better cost-saving practices.
2. Data accuracy
Data is critical to the success of the procurement team. It is what informs the supplier selection, sourcing, and negotiation. It also informs contractual terms and approaches to vendor management. However, gathering data traditionally can be very cumbersome.
The process can also be slow and prone to errors, and with automation, African businesses can manage this better. Their data collection and analysis become more effective and relevant to procurement operations.
3. Auditing purposes
Have you ever tried auditing traditionally? You will definitely not enjoy it, especially considering the technology available to us. Auditing in procurement becomes sloppy and is prone to errors when done traditionally. With automation, the process becomes much more effective.
Automating the procurement makes it easier to properly audit suppliers and find flaws, corruption, and areas of improvement in the operation. It also helps create trails and analyze the reports, which helps the auditing team be more efficient.
4. Adherence to best practices
There are best practices and industry standards that help ensure procurement operations are being optimized. Many of these practices will struggle to integrate with the operation if not automated.
Automating the procurement makes configuring these best practices as seamless as possible. It also helps keep global standards, which makes the business more attractive to global businesses. They also help your business maintain a competitive edge.
5. Scalability
Automating the procurement process for an organization makes it more capable of adapting to the market’s growing demands. It also makes the procurement more flexible to the needs of the supply chain. These are what make the entire operation scalable and able to meet the needs of the business.
Supply chain operations will only increase as the capacity and customers of African businesses continue to grow. However, a scalable procurement system is what will keep it all intact. Automating the system guarantees this.
6. Time efficiency
As much as the procurement is all about cost savings and empowering the supply chain to do more, it depends on time. Lead times are critical for many supply chains and businesses, but they begin with procurement.
Automating the procurement enables more African businesses to save time and enhance the efficiency of the entire process.
Factors African businesses must consider when automating the procurement process
Automating the procurement process will be challenging if some factors are not considered. To a great extent, they determine the success of the automation process or operation.
𝟭. 𝗖𝗼𝘀𝘁 𝗯𝗲𝗻𝗲𝗳𝗶𝘁 𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀: Though necessary, automating the procurement can be expensive, especially for small businesses across Africa. These businesses need to conduct a cost-benefit analysis on the level of automation and the cost implications. There is always something fitting to the budget.
𝟮. 𝗜𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗶𝗼𝗻 𝘄𝗶𝘁𝗵 𝗲𝘅𝗶𝘀𝘁𝗶𝗻𝗴 𝘀𝘆𝘀𝘁𝗲𝗺𝘀: As much as automation is ideal, businesses across Africa must ensure they can sync or integrate with current systems. This will ensure the process is seamless and more beneficial for the supply chain.
𝟯. 𝗨𝘀𝗲𝗿-𝗳𝗿𝗶𝗲𝗻𝗱𝗹𝘆: Businesses shouldn’t automate the procurement system without analyzing these critical factors. It will determine the success of the operation. Because as much as automation is great, humans will still handle it. If they cannot use the automation system, the system will be limited in its impact on the business.
𝟰. 𝗣𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁 𝗴𝗼𝗮𝗹𝘀 𝗮𝗻𝗱 𝗼𝗯𝗷𝗲𝗰𝘁𝗶𝘃𝗲𝘀: This is also important, mainly because it directs the process. When the procurement goal is known, then the type of automation becomes easier to determine. Procurement goals must also align with the business and supply chain goals.
𝟱. 𝗦𝘆𝘀𝘁𝗲𝗺 𝗼𝗿 𝗽𝗹𝗮𝘁𝗳𝗼𝗿𝗺 𝗳𝗹𝗲𝘅𝗶𝗯𝗶𝗹𝗶𝘁𝘆: Today many procurement teams work from home or on different devices. Whatever the procurement automation software is, it must be able to work on several platforms to ensure convenience for all users.
Challenges that could make automating the procurement process difficult for African businesses
Although automation is necessary, potential challenges can derail the entire process for many African businesses.
𝟭. 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆: Automation makes procurement prone to new enemies or dangers such as that of cyber security. Therefore, it is also important to protect the system from potential security issues when automating.
𝟮. 𝗥𝗲𝘀𝗶𝘀𝘁𝗮𝗻𝗰𝗲 𝘁𝗼 𝗰𝗵𝗮𝗻𝗴𝗲: Most African businesses or supply chains are used to traditional methods, and so are their staff and suppliers. Switching over to automation could potentially elicit resistance from them.
𝟯. 𝗖𝗼𝘀𝘁: As mentioned earlier, automating the procurement process can be expensive for African businesses. These can limit the extent of automation and its impact on the business or supply chain.
𝟰. 𝗟𝗮𝗰𝗸 𝗼𝗳 𝗲𝘅𝗽𝗲𝗿𝘁𝘀: Businesses often lack the experts to operate the automated procurement systems. To get these skilled labourers, businesses must train or employ new staff. Either way, it could mean more cost and time for these businesses.
What questions to ask when automating the procurement processes?
There is no one-size-fits-all approach to automating the procurement system. However, there are questions to ask to guide you in the process.
- What is the business benefiting from these?
- Is the cost within budget?
- What role does the human element play in these, and how can I get them on board?
- What is the goal for the procurement, and how does it align with that of the business?
- What are the potential risks associated with automating the procurement process?
FAQs on why more African businesses are automating their procurement processes?
𝗤𝟭: 𝗜𝘀 𝗮𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗼𝗻 𝗯𝗲𝘀𝘁 𝘀𝘂𝗶𝘁𝗲𝗱 𝗳𝗼𝗿 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗼𝗳 𝗮𝗹𝗹 𝘀𝗶𝘇𝗲𝘀 𝗶𝗻 𝗔𝗳𝗿𝗶𝗰𝗮, 𝗼𝗿 𝗱𝗼𝗲𝘀 𝗶𝘁 𝘄𝗼𝗿𝗸 𝗯𝗲𝘀𝘁 𝗳𝗼𝗿 𝗯𝗶𝗴𝗴𝗲𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀?
Businesses of all sizes in Africa can benefit from automating their procurement process. Smaller businesses can gain from automation by increasing overall efficiency, decreasing manual labour, and simplifying processes, even though larger corporations may have more complex procurement demands.
𝗤𝟮: 𝗖𝗮𝗻 𝗽𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁 𝗮𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗼𝗻 𝗮𝘀𝘀𝗶𝘀𝘁 𝗔𝗳𝗿𝗶𝗰𝗮𝗻 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗶𝗻 𝗮𝗱𝗵𝗲𝗿𝗶𝗻𝗴 𝘁𝗼 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀?
Automated procurement systems can enforce adherence to internal policy and regulatory requirements. They facilitate conformity to legal and industry standards by generating reports, keeping track of changes, and providing audit trails.
𝗤𝟯: 𝗪𝗵𝗮𝘁 𝗿𝗼𝗹𝗲 𝗱𝗼𝗲𝘀 𝗮𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗼𝗻 𝗽𝗹𝗮𝘆 𝗶𝗻 𝗽𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻-𝗺𝗮𝗸𝗶𝗻𝗴?
Businesses can make data-driven decisions thanks to the real-time analytics and reporting that automated procurement platforms offer. This entails locating cost-saving options, strategically acquiring products, and enhancing procurement procedures for sustained success.
Conclusion
Traditional procurement has long outlived its usefulness, which is why more African businesses are automating the process now. However, it is not an overnight process. It will take time, especially for small businesses. The benefits are enormous, as mentioned in the article, and it opens up more opportunities.
Obinabo Tochukwu Tabansi is an ex-supply chain professional turned ghostwriter with a decade of experience working in different facets of the supply chain. Today, he lives his passion for writing on all things supply chain and helping clients from across the globe communicate their thoughts and solutions seamlessly. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the continent’s complexities.
