Digitalization in Purchasing: a New Strategy for Success
Put an end to analog process management. Professional digitalization enables you to flexibly integrate a wide variety of supplier types in purchasing. Modern e-procurement services optimize supply chains, enable measurable time and cost savings, and provide reliable planning security in purchasing. To ensure order processing runs smoothly with all suppliers, companies are recommended to implement digital solutions that can easily connect any number of suppliers, regardless of size or type.
The Switch to Digital Purchasing
Purchasing is generally defined as the process by which companies acquire goods or services. As a subset of the procure-to-pay (P2P) process, purchasing is also closely linked to accounting and receiving of goods. In summary, purchasing represents the operational and strategic activities of procurement. In day-to-day purchasing, companies work with numerous suppliers that differ in size and type. These interactions produce large volumes of purchase orders, order confirmations, delivery notices, and invoices that are received by the buyer. Not to mention, they all differ by type of data media. To process their information automatically in ERP, SCM, or backend systems, larger suppliers usually use EDI.
Smaller or only sporadic suppliers often lack the necessary technical or economic capabilities to do so. As a result, invoices and order confirmations may arrive by email, fax, or letter. For each medium, the buyer usually needs its own capture process. To ensure efficient order processing with all suppliers, companies are therefore recommended to implement end-to-end digitalization for purchasing that allows any number of suppliers to be easily connected, regardless of size or type. The appropriate solutions — such as Retarus Intelligent Document Processing or WebConnect for Suppliers — allow suppliers to be digitally connected to a large company on one side, regardless of their own capabilities.
Advantages in Strategic and Operational Purchasing
Digitalized purchasing is nowadays the absolute standard for large and medium-sized companies — which is hardly surprising given the enormous competitive advantage that digitalization provides. The benefits of e-procurement when it comes to automating processes are many and varied.
Cost reduction thanks to digitalization
The lack of digitalization in purchasing means that orders are often printed and sent by regular mail or fax if not sent by email. At the other end, the suppliers have to manually merge the different media into their supplier system. Automating these processes results in significant cost savings for both sides. In particular, the savings in personnel costs that would normally be incurred for each transaction add up to a significant return on investment. The freed-up capacity can be used elsewhere, for example, in customer service. At the same time, suppliers increasingly offer discounts for end-to-end standardized information flows.
Time savings thanks to digitalization
By eliminating manual tasks, transmission errors are avoided, resulting in superior data quality. Furthermore, a fast, standardized system ensures there are no more inventory errors. As a result, decisions can be made immediately without requiring additional processing time. This saves time that can be invested in maintaining existing supplier relationships and creating new ones.
Accelerated order processes and a faster cash flow
In the context of digitalization in purchasing, systems that manage more than just procurement processes tend to be standardized as well. After all, companies benefit not only from accelerated order processes, but also from automated invoicing. This generates a faster cash flow while goods are also shipped more quickly. This means that shipments for orders with contractually agreed time windows are on time more often than not.
Structuring Information Digitally Using High-End Technology
To transform the entire paper-based procurement system into a largely automated process, various e-procurement technologies are required.
EDI Integration
Electronic Data Interchange (EDI) is the digital exchange of business documents. This includes, for example, purchase orders, delivery notes, and invoices. These documents are exchanged between business partners in the form of structured data without the need for manual intervention.
Intelligent Document Recognition
Intelligent Document Recognition initially prepares and recognizes the data using OCR engines (optical character recognition). Next, the data is classified, segmented, and extracted using machine learning and artificial intelligence. Subsequently, the data is post-processed and validated. With the optional human-in-the-loop feature, this system achieves particularly high data quality with recognition rates of up to 100 percent.
Intelligent Document Recognition provides numerous benefits:
- Efficient and seamless integration without any technical interruption
- Sixty percent cost reduction through order entry automation
- Accelerated processes thanks to the automation of repetitive tasks
- Increased efficiency through recognition accuracy of up to 98Â percent
- Reduction of error handling costs
Digitize Order Forms and Automate Processing
With the help of Retarus Intelligent Document Processing, incoming orders can be digitized and highly automated.
E-Invoicing — Digitize Invoicing Processes Intelligently
Use Retarus Integration and Automation to send and receive invoices internationally and in compliance with legal requirements.
Digitalization as a Success Factor Is Attractive for All Companies
The Retarus Integration and Automation Platform enables all companies to establish digital processes, regardless of their technical capabilities. E-procurement enables you to automatically send and receive invoices, order confirmations, purchase orders, and delivery notices. To prepare for implementation, all suppliers are analyzed and clustered. Manual tasks are also identified and quantified.
What Makes Retarus Stand Out
WebConnect for Suppliers
Since not every supplier uses EDI, automated document exchange often fails before the first step is taken. Retarus offers a unique solution for precisely this purpose: WebConnect for Suppliers sends orders as interactive emails that provide access to the WebConnect portal without a single login and with just one click. There, the supplier can simply confirm, edit, or reject the order without having to log in or register. Optionally, static PDF attachments can be added to the email if the supplier prefers. This can significantly increase the number of automated order confirmations. WebConnect for Suppliers can be connected to any ERP application, irrespective of the company’s existing EDI system.
Digitalizing All Areas of Communication
Retarus’ services ensure much more than just automated order processes. Optional reports identify overdue order confirmations. Automated reminder notifications help to keep additional manual tasks to a minimum. Incoming documents are automatically checked for accuracy and completeness. In case of errors, document validation will trigger a separate process.
Integrating Small Analog Suppliers
It is precisely small specialized suppliers that often still use paper- or fax-based processes. With Retarus Intelligent Document Processing, even these suppliers no longer pose a problem. The AI-supported process captures all incoming documents, digitizes and categorizes them, and then transfers them to internal workflows. This is how purchasing can save time by up to 85 percent compared to manual capture. Suppliers don’t have to change their processes and can continue working as before.
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