In mid-sized companies, there is hardly any department facing greater digitalization pressure than procurement. While 10 to 15 years ago it was often sufficient to manage procurement processes operationally and record them in the ERP system, strategic sourcing and supplier management have now become indispensable in mid-market procurement.

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Procurement managers must rise to this new responsibility. However, an increasingly stressful day-to-day business makes it difficult to adequately engage with digital topics. Who has the time to become a digitalization expert on top of everything else?

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Below you will find four recommendations to consider when automating operational tasks in procurement.

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#1 Conduct a Potential Analysis and Identify Weak Points

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Through a targeted, multi-dimensional analysis, it can be determined in just a few steps where potential exists in your procurement department and which processes can be digitalized.

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A good potential analysis breaks down, 

1. Where efficiency improvements are possible 
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2. Whether the possible measure is economically feasible to implement.

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The economic feasibility analysis of the measures should be given top priority. No action makes sense if it is not economically viable. 

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The possibilities for analysis are diverse and differ depending on the use case.

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Further information can be found in our download resource.

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#2 Integrating Suppliers into the Digitalization Process

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Rarely have partnerships with suppliers been as important as they are today. Raw material shortages and supply bottlenecks are currently making it very clear who has nurtured their supplier relationships in recent years and is now being supported by them even in difficult times.

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On the other hand, the daily work with suppliers involves several recurring tasks that can be automated. The use of an intelligent SRM tool (digital supplier data management system) makes sense in many cases. Among other things, it enables

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• Supplier self-assessments and other onboarding documents to be automatically sent and evaluated

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• Legally required documents such as the Supply Chain Due Diligence Act (LkSG) or REACH declarations to be collected and automated

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• Operational processes to be simplified: incoming order confirmations are automatically evaluated and matched with purchase orders. In the next step, these can also be automatically transferred to the target system.

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In the industrial mid-market, many of these processes are still carried out manually. Many of the existing programs are either too expensive for SMEs or are not properly used or even outright rejected by suppliers due to their complexity.

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Therefore, any rollout of new systems should always be carefully coordinated with the supplier. Do not present your suppliers with a fait accompli - this usually only creates resentment and suspicion. It is more sensible to inform your suppliers about the new way of working in advance and gradually introduce them to the planned digitalization steps.

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Or even better: when the use of the new systems changes nothing on the supplier side and the conventional communication channels remain in place. For example, with Tacto's SRM tool, nothing changes in the standard communication with suppliers.

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The decisive innovation: emails to the supplier will no longer be sent and evaluated by an employee in the future, but will be automatically generated by the system.

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The responsible contact person on the supplier side is redirected via a link to a webpage where they enter the required information. This allows your procurement professional to access the data directly in the software without having to manually enter it into the ERP system.

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Supplier management with Tacto!

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#3 Don't Neglect Your Employees

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Even the most beautiful tool adds no value to your procurement department if the buyers who are supposed to work with it cannot use the program - or worse: don't want to.

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Especially in mid-sized procurement departments, processes often haven't changed in years and the workflows within the team are more or less established. As a result, not everyone in your department may see the same need for action and optimization potential as you do.

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Continuously questioning outdated processes is fundamentally the right approach and demonstrates a modern mindset. However, no improvement adds value if it is not embraced and understood by the employees in your department. Therefore, it is essential to bring all professionals along on the journey to a more digital procurement department and show them the improvements that the changes will bring.

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There are several ways to do this. What definitely makes sense in every case is to offer training or onboarding before introducing a new tool or process workflow. Additionally, it is wise to consistently give employees the feeling that you are open to criticism and suggestions about the new way of working.

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Perhaps the new process workflow has weak points somewhere or cannot be integrated into existing processes as optimally as you thought? Don't set your goals too high at the beginning and take enough time for the changes.

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#4 Keep It Simple: Reduce Complexity

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Life is complicated enough, and in procurement this applies double or triple. Problems in day-to-day operations, poor master data quality, or skills shortages make the daily life of a procurement professional hard enough already.

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Therefore, every implemented measure should be checked to see whether it truly contributes to more efficient work in your department. Every procurement department is different, and not every case warrants the introduction of the same tools and programs. Get an overview of the available offerings and possibilities.

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The following questions should be at the forefront:

• Where exactly do I see problems in the workflows of my department?

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• How well is our procurement equipped with tools and systems?

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• Are my employees ready to engage with onboarding for a new tool?

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In this context, it should also be noted that existing IT resources must be evaluated and assessed before any implementation. Especially in mid-sized companies, these are often not available in sufficient capacity.

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Fortunately, automating work steps does not always require the IT department: many programs designed for mid-sized companies can usually be integrated into processes without the IT department. A good example is Tacto's software, which can be integrated into existing processes without extensive IT resources.

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Furthermore, it cannot be expected that every measure will show immediate value from day one. The potential analysis mentioned at the beginning provides initial indicators of possible savings in costs and time.

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Don't rely exclusively on data in your analysis. Talk regularly with your employees and evaluate after a few weeks whether the tool has a positive impact on your department's way of working and whether complexity is truly being reduced.

In mid-sized companies, there is hardly any department facing greater digitalization pressure than procurement. While 10 to 15 years ago it was often sufficient to manage procurement processes operationally and record them in the ERP system, strategic sourcing and supplier management have now become indispensable in mid-market procurement. Below you will find four recommendations to consider when automating operational tasks in procurement.