1. The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency.
2. The second is that automation applied to an inefficient operation will magnify the inefficiency.
Though there are certainly a few Luddites left in Procurement, it's hard to imagine anyone disputing the first of these statements. It's clear that Supply Management is gearing up for a digital transformation and it's equally clear that Robotic Process Automation will provide many organizations with their first steps toward this transformation. SAP's 2018 CPO survey found that 19% of organizations are already leveraging RPA and an additional 20% plan to invest before the year is up.
It's not surprising that Procurement appears dedicated to embracing RPA. In the past, the function's strategic impact has been stifled by a number of tactical and time-consuming processes. Maintaining vendor databases, manually resolving price discrepancies, and filling out purchase orders have long monopolized Procurement's time and contributed to the misguided idea that the function is an inherently low-value one.
Genpact estimates that a staggering 70% of an organization's manual processes can be automated. By outsourcing its share of these processes to a robot, Procurement can presumably commit itself to accepting a more high-value workload and a more essential role within organizations. The promise of so much free time is undeniably enticing. So enticing, in fact, that it often leads Procurement to expect too much of its tools and ask too little of itself.
To look at many Procurement groups, you might assume they'd only read the first of Gates' rules. Eager to stand on the cutting-edge of their industry, Procurement often seeks out automation for automation's sake. In their haste, they develop outsized expectations and fall victim to wild speculation. Discussing Procurement's digital transformation in a recent whitepaper, JAGGAER's Kristian O'Meara notes, "Any and all buzzwords can be stumbling blocks." RPA, he suggests, is a particularly dangerous and particularly pervasive one.
Thanks to science fiction and the endless hype machine, automation has some fairly misleading connotations. Inspired by images of hands-off operations and heightened efficiency, many Procurement teams pursue automation without doing their due diligence. They forget that realizing the benefit of RPA comes down to far more than selecting a tool and implementing it. Even the best tool won't perform to its potential when it's slapped like bandage onto a poorly designed Procurement apparatus. Before attempting to introduce a tool, Procurement must optimize its processes to accept automation, train its people accordingly, and develop a clear roadmap for introducing the tool and tracking its performance.
Procurement teams wouldn't present a new hire with dirty data and disorganized processes. At least, they wouldn't do so and expect that hire to succeed. They shouldn't treat their technologies any differently. A multi-step on-boarding process with clear milestones and regular performance reviews will ensure Procurement identifies roadblocks and avoids the pitfalls of ineffective automation.
Robotic Process Automation cannot drive Procurement's future on its own. Rather, these tools must function as one component of a broader change management strategy. That means Procurement teams must cease to view Digital Transformation as something to be gained through a one-off initiative. Like the evolution Procurement has seen over the last decade, the move toward digitized processes and operations will require consistent efforts and present Procurement with a number of setbacks. Those Procurement teams that will successfully transform their operations in the coming years are the same ones who have refined their manual operations and developed sustainable governance structures in years past.
Source One's Procurement Technology advisers can help ensure Procurement's people and processes are equipped to introduce automation and reap the considerable benefit. We'll also help you navigate the provider landscape and select the tool best suited to your unique goals and objectives. Reach out today to take your first steps into Procurement's next era.