How procurement can join the RPA and IoT movement

Organisational departments, from sales and customer service to HR, are reducing their reliance on human intervention and instead turning to IT systems to carry out basic low-level tasks. According online training company Pavan, a typical rules-based process carried out by an employee can be automated by as much as 70-80%. So rather than waste time on repetitive tasks it makes sense, both commercially and from a people perspective, to automate these processes. We’re already witnessing some big brands utilising technology in this way. Mobile operator O2 uses robotic process automation (RPA) for some of its work, including its SIM card swaps and customer migrations to new deals. As a result, it has reduced the cost of back office operations and reduced reliance on offshore recruitment, which was used to fulfil these tasks previously. By Pete Kinder, CTO at Wax Digital.

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Fri 10/12/2018 8:56 AM

The Internet of Things (IoT) can perform a similar role, by connecting devices to make certain business processes more efficient. Indian power producer Atria uses IoT to capture and analyse environmental information from its wind and solar technology. That information then informs the business how much energy it can produce over the next 24 hours, allowing employees to accurately forecast how much energy it can provide to utilities and how much it needs to store.

Procurement is among the processes that could see a shift towards automation as RPA and IoT become more prevalent. And it’s consumer trends that could lead the way for businesses. The Amazon Dash Button, which allows people to order products quickly, simply by pressing a button on a small electronic device connected to the internet webstore, is a good example of a consumer trend that has a B2B application. There’s potential for businesses to roll this technology out by placing ‘buy’ buttons on shelves in offices or warehouses next to where each item is stored. The buttons would be connected to the organisation’s procurement system, which keeps records of purchases, and will pre-determine the suppliers and quantity. This means that employees can order items that run out quickly at the press of a button, instead of going through complex processes.

On an even greater scale, the IoT could mean completely eliminating human involvement in procurement processes, not just simplifying it. Organisations looking to roll out a truly automated procurement function should consider a system demonstrated by several manufacturing firms. This involves items across the organisation’s premises being connected to the procurement system so each one can automatically order new items when there is a need for it. In a manufacturing context, parts in machinery can be connected to the procurement system, which recognises when an item is worn out or broken and orders a replacement. The system also books a time with an engineer to come and install it. It’s not just manufacturing processes that have scope to implement this approach to procurement. The same method could be used to track when stock is running low and when an order should be placed. For more complex items that may require support, such as technology, the system could also arrange for a person to set it up and train staff.

Given that the procurement process often includes manual tasks, there’s huge potential for RPA software to use Artificial Intelligence (AI) to speed up activity. Businesses might feel that RPA is too complex for them to introduce, but the truth is that it doesn’t require writing a code and therefore little technical support is needed. Instead, RPA involves using various ‘building’ blocks, all of which represent a well-defined task. When put together, the blocks perform a job role from start to finish. Provided a business can invest in RPA software, it can easily automate manual processes and remove administrative tasks from the procurement team’s list of responsibilities. Raising purchase orders and sending them to suppliers is often a time-consuming yet unavoidable task for the procurement department. But using RPA, the business can automate the whole process and remove the need for human involvement, giving the procurement team more time to carry out strategic activity.

Supplier on-boarding is another time-consuming aspect of a procurement professional’s role that businesses can make less time-consuming if they put it in the hands of RPA. Traditionally, taking on a new supplier has required research, reporting it to credit reference agencies and reviewing the feedback they provide. That information is used to determine whether the supplier is safe and credible enough for the business to buy from. But if businesses roll out RPA, the system can carry out each part of the process and approve or decline a supplier having analysed the data.

The Hackett Group says that 84% of procurement organisations believe that digital transformation will fundamentally change the way they deliver their services over the next three to five years. They’re looking for new technology to enable a different approach to procurement, which RPA and IoT can lead the way on. But despite this, only 32% have a plan to achieve this. Automating aspects of the procurement professional’s role means that the department can focus its time and effort on tasks that will contribute to overall business success, such as negotiating better supplier deals. RPA and IoT isn’t just a gimmick that businesses offer as part of their service to customers; it can be an approach to making processes behind the scenes quicker and more efficient.