What are procurement reports? As well as how can Celonis even be implemented within that? Or better yet, what is Celonis? These are some of the questions being answered in the blog below.
What are they?Procurement Reports
Procurement reports are a way for an organisation to view and demonstrate how its procurement process is efficient, both in a cost wise and time wise scenario. The ‘procurement process’ is essentially the process of finding goods or services. It defines the steps taken towards finding and negotiating terms, acquiring goods and services or works from external sources such as suppliers. These steps can include but are not limited to:
- Identify goods or services needed.
- Put together a list of suppliers.
- Negotiate contract terms and prices with selected suppliers.
- Finalise the purchase order.
- Delivery and audit of the order.
- Maintain record of invoices.
What the procurement report does is that it shows the procurement process steps YOU as a company are taking and how effective/efficient they are, in terms of value for money and time.
Example ScenarioReal-World Application
Let’s take a real-life scenario- a manufacturing company requiring raw materials to make their products. First they’ll identify the raw material needed (timber, plastic etc), then find a list of suppliers within their specifications. They will then possibly meet with each supplier and negotiate the terms/pricing or to just find out more information (quality, quotes, policies etc). Once a single supplier is finalised, they will then officially discuss T&Cs and cost, then finalise the order and have it delivered.
Each step is important- if the price is too high per unit, then the company will not be able to afford it, thus maybe introducing a debt risk. Or if the quality is poor, then many finished products may be defective, forcing the company to throw them away, resulting in loss of goods and money, not to mention the time invested into making that one product.
Celonis
Now, onto Celonis. Celonis is a data processing company that produces and sells Software as a Service (SaaS) with the intention of improving business processes for your company. Their title of being the leader in the EMS should be testament enough to their quality of work. EMS (Execution Management System) is a system that allows businesses to extract their full potential out of every process and everyday tasks.
This is done majorly by process mining (which they are the market leader in). Process mining works by ‘picking up the breadcrumbs’ an employee has left behind whilst making a path to their objectives. These breadcrumbs are picked up and rearranged in chronological order to show the exact same steps/path the user made to reach the objective. With this path laid out, you can identify any causes of inefficiencies such as slow processes, late cases, overloaded resources, allowing you to see the mistakes and exactly where. The system then shows the most efficient and preferred path against your own path, allowing you to see even more red flags and how improvements can be made. This can then be utilised and applied in the work almost instantly, allowing you to see changes to efficiency happening near instantaneously. This will obviously boost your work efficiency not only on an individual basis, but also on a company wide basis.
Implementing Celonis’ process mining technology in the procurement process will greatly improve the steps taken, resulting in better efficiency and choices made.
Moving back to the manufacturing company- implementing process mining in their process will allow them to review each step in the process, from identification of the raw material to filing the invoices. For instance, process mining may seek out and identify late sources of delivery of their raw materials, allowing for possible faster deliveries. It may also even help the company find better suppliers and deals, saving them a lot of time, money and hassle. It can identify moments where a machine (automation) can be used instead, saving up time and energy of employees. Invoice files accessibility may be made easier and quicker, as well as editing them. Due to the system analysing every single step, it may even catch out maverick buying(when something is ordered without the involvement of the procurement team whatsoever).