Get Started on Robotics in Procurement

The use of robotic process automation (RPA) in procurement is nascent but the best place to start is with repetitive, time-consuming, lower-value processes.

Sarah, head of procurement at a global oil company, has the proof she needs that RPA can pay dividends in sourcing/contracting, buying and payables. Her team has identified 24 potential use cases with low, medium and high levels of opportunity — and areas of high opportunity offer 30% to 60% automation potential. For those in procurement who have yet to prove the concept, the first step is to figure out where to start — and where to go from there.

RPA applications free up procurement to partner with the business

One major financial services company is creating a searchable and easy-to-audit contract repository. The initiative will pair optical character recognition (OCR) technology with RPA — initially to digitize 8,000 contracts and add them to the contract life cycle management system. Procurement then plans a proof of concept for RPA technology to expedite auditing and contract review.

“RPA applications potentially save time and money — and free up procurement to partner with the business, collaborate and innovate with suppliers, surface emerging risks, or other value-added activities,” says Gartner practice leader Ben Federlein.

Lessons learned from shared services

Right now, procurement departments are at a very early stage in understanding how robotics solutions can help automate internal processes. In fact, just 3% of procurement teams are using RPA — and 73% still have no plans to adopt RPA at all.

In other words, procurement leaders are where shared services management was just a few years ago — interested in the idea, but generally lacking the expertise and proof of concept required to implement.

Shared services moved on swiftly. In April 2015, 70% of shared services centers hadn’t done any work on robotics, but by the start of 2017, that number had fallen to just 17%. About half (48%) of shared services organizations are now going beyond RPA and considering cognitive computing solutions.

Procurement leaders can — and should — draw lessons from that function’s experience to help pursue robotic software use.

Read more: Long-Term Digital Investments for Procurement Leaders

Don’t Survive. Exceed Expectations.
Gartner Supply Chain Executive Conference 2019
Learn More

Where to begin

In theory, robotics can be used for any process or activity that is well-defined by rules. Most procurement executives who have tested RPA start with redundant manual tasks across multiple systems — typically tasks that have involved human interaction with an IT system. General recommendations based on early RPA pilots include:

  • Begin with time-consuming, repetitive, lower-value processes.
  • Consider how new processes fit into larger procurement workflows.
  • Determine the type of data that will be necessary to train the robot.
  • Use a proof of concept to build support for adopting robotics.

One notable use of RPA in shared services is customer payment processing. At one company, the bot was able to mimic the manual process of one person copying and pasting data from one source to another. Implementation reduced processing time from 24 hours to 1 hour, and improved accuracy from 97% to 100%. Over 2,500 payments are now processed this way daily.

Other functions outside of shared services also leverage robotics. For example, one firm gathered sales lead-generation data from numerous sources across varying formats to create a regular report for those who needed it. This was a labor-intensive process that required employees to access 50 different information sources. Automating the retrieval of 29 out of the 50 information sources through RPA reduced the required time by 300 hours per month, which resulted in nearly $150,000 in savings.

Find a good candidate

To determine a good candidate for robotics in procurement, ask these questions:

  1. Can the human activity be mapped as a repetitive process and therefore be programmed into a robot?
  2. If the activity requires human judgment, can the rules on how to judge be defined to cover all possibilities?
  3. Does the activity pull (and put) data from and into the same place every time (i.e., the same field name, same location of the field on a particular screen of an IT system)?

At a high level, what separates robotics software from other forms of automation is that it is flexible (not designed solely for any one process or activity) and can be taught nearly any standard rule-based process or activity. Procurement just needs to pick human interactions with IT systems to mimic.

Read more: Quarterly Journal for Finance, Risk and Strategy (Fi|r|st).

This article has been updated from two posts originally from CEB, now Gartner – one published on February 23, 2018 and written by Peter Young and Jessica Kranish; the other published February 18, 2018 and written by Colin Lacy. 

Members of the CEB Procurement Leadership Council can learn how to get started with the CEB Ignition™ Guide to Selecting a Robotics Solution.

Get Smarter

Follow #GartnerSCC

Learn more at the Gartner Supply Chain Executive Conference.

Explore Gartner Events