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Automated document processing in procurement v. manual document processing

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Automated document processing in procurement v. manual document processing

With each transaction in purchasing, several documents need to be processed. But what exactly is document processing? And how does manual document processing differ from automated document processing? This blog article compares manual document processing with automated document processing throughout the four main stages of document processing including document receipt, data extraction, data validation and data export.

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What is document processing?

In this context, document processing is the activity of receiving a document, understanding the information and inputting that information into downstream systems. In most companies, documents are processed manually. Traditionally, documents have existed in physical paper form. Environmental and cost pressures encourage companies to process documents as PDFs but, even in this digital form, the differences between manual and automatic processing remain the same. Document processing is necessary in most business operations.

Along the Procure to Pay (P2P) process (ordering, purchasing, payments) document processing is a core activity. The P2P process is a series of transactions that each require some form of document processing. In purchasing, B2B documents that need to be processed include quotes, purchase orders, purchase order confirmations, advance shipping notices, and invoices.

What is automated document processing?

Automated document processing means that the data contained in these documents does not have to be processed by an employee but is instead processed automatically through technology such as the Netfira Platform. The purpose of automated document processing is to process large volumes of information quickly and efficiently with minimal human interaction.

In procurement departments, automated document processing is vital for a smooth and reliable P2P process. With the help of automation tools, the exchange of data and documents along the process steps is automated, thus relieving the procurement team of tedious manual activities.

The connection between automated document processing and intelligent document processing

Automatic document processing also entails intelligent document processing. Intelligent document processing means that unstructured data is turned into structured data which is then processed automatically.

In purchasing, this mostly applies to B2B documents like purchase order confirmations. Unlike invoices or purchase orders, which are semi-structured or structured documents and therefore processed quite easily, either manually or automatically, purchase order confirmations are unstructured documents which pose a challenge for procurement teams. Read here how the Netfira Platform automates unstructured transactional documents through intelligent document processing.

The 4 stages of document processing

In the following comparison, the 4 stages of document processing will be exemplified by means of processing a purchase order confirmation (POC). In doing that, manual document processing and automated document processing with the Netfira Platform will be compared.

1. Document receipt

Purchasing departments receive paper and digital documents via a lot of different channels including e-mail, fax, and post with e-mail being the most common case.

Manual document processing:

If a procurement department works completely manually, the buyer must open the e-mail from the business partner and then open the POC which is attached as a PDF file.

Automated document processing with the Netfira Platform:

The document receipt process is automated. The POC is sent to a specified mailbox and the platform collects the document from the e-mail and initiates the next stage.

2. Data extraction

Data capture can be the most expensive, time-consuming, and resource-intensive step of document processing.

Manual document processing:

After receiving and opening the POC, the buyer needs to manually enter the data into the ERP system.

Automated document processing with the Netfira Platform:

The platform automatically extracts data from the POC with a data accuracy of close to 100%. The Netfira Platform uses intelligent data extraction based on AI that turns unstructured data into structured data.

3. Data comparison and validation

Data comparison and/or validation is crucial as documents that do not match perfectly represent different expectations for buyer and supplier and expose both to the risk of litigation.

Manual document processing:

The buyer needs to open the order in the ERP system and compare it with the order confirmation. If the two transactional documents deviate from each other, the buyer must decide whether they accept the deviation and adapt information like price, quantity or delivery date. If the buyer cannot accept the deviation, they must contact the supplier.

Automated document processing with the Netfira Platform:

If the confirmation matches the order, the information is entered in the buyer’s ERP system automatically. The Netfira Platform allows companies to achieve nearly 100% automatic processing of order confirmations where there is no deviation.

Deviations, on the other hand, can be identified quickly and easily. The platform directs the buyer directly to parameters that need to be checked. For checking and clarifying the deviations, the system provides the buyer with a variety of processing options. These are based on the logic of data conversion, the definition of tolerances and data enrichment. The structured and standardised process for handling deviations saves the purchasing department time and reduces stress in the approval process.

Intelligent data extraction alone can help businesses digitise their processes. Automation, however, requires the software to not only extract but also understand, compare and validate the data. The Netfira Platform intelligently compares the extracted data from the POC with the order.

4. Data export

Manual document processing:

As a last step, the buyer manually exports the POC in a downstream system, like an ERP system, and archives it there.

Automated document processing with the Netfira Platform:

The Netfira Platform automatically exports the order confirmation in any downstream system.

Why automated document processing in procurement is the future

The comparison above clearly highlights the advantages of automated document processing. The time saved through the automation of order confirmations is significant. Manual checks and comparisons of documents and items are no longer necessary, which significantly reduces the workload for employees. Moreover, automated order confirmations make purchasing more efficient by increasing productivity, reducing mistakes, and eliminating manual data entry. As a result, the procurement department has more time to concentrate on more essential and value-adding tasks.

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September 15, 2022
Digital transformation in purchasing
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Digital transformation in purchasing

The term ‘digital transformation’ is often used loosely to refer to technological improvements in a company’s business processes. There is no shortage of emerging technologies that promise to increase efficiency and transform business processes through digitisation. Purchasing departments are facing increasing external forces that pressure companies to take an innovative approach and adopt these technologies. The challenge is to understand what digital transformation in purchasing means and where to start. This article explains how a successful digital transformation of purchasing relies on automation tools, such as the automated processing of documents and data.

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What digital transformation means

Digital transformation can occur in any number of ways, from a retailer adopting an online store in response to Covid-19 to Amazon creating Amazon Web Services. Fundamentally, digital transformation involves leveraging emerging technologies to make positive changes in how a business is run. This includes processes, personnel and technology. These changes make enterprises more efficient, resilient and successful. The term ‘digital’, however, can allude to any number of things. For example, digital could mean paperless processes, moving data and processes to the cloud, AI solutions, data analytics, agile development, remote working, automation or even all the above together.

The 4 types of digital transformation

There are four types of digital transformation:

1) Business model transformation
- A radical change to the way a product or service is delivered to the consumer. A common example is how Netflix introduced streaming services, a very different business model to the traditional video rental store.
2) Domain transformation
- This form of digital transformation describes an extension of an existing offering. For example, a restaurant creating an online ordering and delivery service allows them to compete in both the dine in and delivery food markets.
3) Organisational (or cultural) transformation
- Refers to the implementation of digital tools within a workplace to empower employees and improve a company’s operations. Video conferencing, online project management and collaboration tools are examples of technologies that lead to organisational transformation.
4) Business process transformation
- Means replacing inefficient business processes with digital tools that make them more efficient. Netfira’s document automation platform is an example of business process automation as it provides increased efficiency by replacing manual, repetitive work.
Regardless of how people define ‘digital’, digital transformation is about more than just incorporating new technology into business processes. Tech solutions are tools that facilitate digital transformation, enabling businesses to make fundamental changes to a company’s culture and operations. When it comes to business process transformation, this means replacing established, often obsolete, tasks with cost-efficient solutions – this is particularly true for purchasing.

Why purchasing processes need to be transformed

Purchasing departments process a high volume of transactional documents. B2B documents such as quotes, order confirmations and invoices need to be checked, compared and verified. Manual document processing is still common in many departments. However, processing data and documents manually is slow, error-prone and inefficient. Mistakes, delays, slow reaction times and deviations stifle smooth business processes, burden supplier relationships and lead to unnecessary costs. Further, unlike scalable automation tools, manual operations are limited in their ability to respond to an increase in the volume of documents. In a global digitised B2B world that struggles with supply bottlenecks and major supply chain disruptions, purchasing needs to be efficient, flexible and reliable. It is necessary to modernise and optimise purchasing processes to transform procurement into an agile and future-proof business partner.

Business process transformation in purchasing

The purchasing process is defined as a process used to purchase goods and services via a supply chain. A widespread synonym is the Procure-to-Pay (P2P) process.  The steps along the P2P process always involve exchanging data and documents with business partners and approving them. That is why buyers must check, compare, and validate information before further processing. Business process transformation involves radically changing the elements of purchasing processes to meet new business goals. By transforming the P2P process, purchasing departments strive to modernise their workflows, incorporate new technology and save costs. AI applications, app technologies, cloud computing and other advanced technologies can help purchasing update or replace slow, error-prone, and expensive manual processes.

Why the digital transformation of the P2P process relies on automation

While some people equate automation with digital transformation or consider automation one aspect of digital transformation, digitisation should be seen as a first step towards automation in purchasing. Digitisation describes converting non-digital information, like a hard copy, into digital data. Today, digitisation also means the digital networking of processes and products in real-time with the growing size and complexity of data structures.  Automation, on the other hand, improves processes that are already digital. It relies on a series of rules to accomplish tasks without human intervention. Automation through information technology or machines can replace repetitive processes and tasks while freeing humans to do other tasks. In purchasing, digitisation is often the first step towards automation as information needs to be available digitally to any automation technology before it can be automated. In the end, the digital exchange of data and B2B documents along the P2P process needs to work automatically to make purchasing more efficient and future-proof. 

Automated document processing: the core of digital transformation in purchasing

The Netfira Platform transforms operational processes by automating the transactional document exchange. The platform automatically extracts information from B2B documents such as shipping notices, invoices and order confirmations and exports it into any downstream systems. For documents without deviances, the Netfira Platform offers fully automated processing thus completely erasing the need for manual work. When a discrepancy is identified, the tool allows the buyer to edit the data and avoid disruption. That way, buyers can process a high volume of documents and data efficiently.

Benefits of the digital transformation in purchasing

There are many benefits of a digital transformation in purchasing.
1. Empower your employees. The Netfira Platform as a part of companies’ digital transformation strategy enables purchasing teams to focus more on value-generating activities rather than repetitive manual tasks. The AI-powered SaaS solution replaces manual data entry with intelligent automated data processing. The resulting time savings allow employees to get more tasks done, without interruption.
2. Improves cross-departmental collaboration. The implementation of the Netfira Platform improves the collaboration between the accounts payable department and purchasing, while also relieving the internal IT. Thus, on individual, team, and organisational levels, the digital transformation of purchasing processes can streamline cross-functional operations, enhance alignment between departments, and strengthen a company’s culture.
3. Optimise your operations. The platform offers users better data quality with increased transparency and efficiency.
4. Grow with confidence. Facilitates a cultural shift that strengthens buyers’ digital capabilities. This will equip businesses with an agile, digital-savvy workforce that ensures sustainable business growth.
The Netfira Platform, which relies on AI and operates in the cloud, enhances workforce performance. The digital automation tool eliminates repetitive manual tasks, allowing employees to work more efficiently and effectively. Learn in our blog post how digital transformation tools future-proof the procurement manager’s role.

Conclusion

The automated processing of documents is the key to a successful digital transformation in purchasing. Automating transactional documents means efficient and smooth purchasing processes, transparent workflows, real-time information, short reaction times, seamless B2B communication, and more time for strategic tasks in purchasing. Business process transformation through digital automation solutions like the Netfira Platform not only eliminates manual tasks but also improves data quality, facilitates a cultural shift in the purchasing department to a modern and efficient work style and relieves employees.

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August 17, 2022
Seven tips for a successful digitisation project in purchasing

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Seven tips for a successful digitisation project in purchasing

End-to-end digitalisation of business processes sits atop the list of priorities for companies of all sizes. For a modern and agile procurement department, process automation is a key driver of digital transformation. However, the implementation of digital automation solutions in procurement is often more difficult than expected. One challenge is the sheer mass of digital tools: From specialists to full-suite providers, there are around 200 digital tools for purchasing on the German-speaking market. The systems support purchasing operationally, tactically and strategically in supplier, commodity group and risk management. To make an informed decision and to implement a successful digitisation project, purchasing should therefore rely on a structured approach and follow certain steps.

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1. Cooperate with internal IT

Purchasing should not simply delegate the digitisation project to the IT department. Although IT plays a central role in the digital strategy, it is not advisable to leave the entire digitalisation topic to a single department as it is too important for the business. The various digitalisation topics are multifaceted, so the IT department’s technical understanding alone is not sufficient. In addition, internal IT is usually busy with its core business. Consequently, a digitisation project in purchasing must be supported across departments to ensure technological, strategic, personnel and structural components are interlinked.

With that in mind, purchasing should ensure that the internal IT is on board right from the start. A quick and easy implementation and a smooth roll-out is important to achieve quick value-add for both purchasing and IT. The amount of work involved for IT should be considered in the decision-making process when selecting a software solution. The Netfira Platform, for instance, can be implemented with minimal effort from internal IT teams. As part of the implementation process, there are only 5 tasks that require action from internal IT teams.

2. Evaluate own starting position

At the beginning of the digitisation project, purchasing should ask itself where it stands, what its goals are and which project steps are necessary to achieve them. In order to determine which system supports purchasing needs, the team needs to analyse the purchasing processes. The analysis should aim to determine how standardised, measurable and IT-supported the processes already are. For each process, purchasing should determine the target maturity level it wants to reach.

3. Formulate the requirements

In the next step, the purchasing department needs to prioritise its improvement goals. There are a number of things to consider and evaluate before undertaking the software selection process. Well-defined specifications will help the team to define the business problem and accelerate the software selection process. Purchasing needs to determine, in detail, which functions they need at which point in time and how they should be designed to meet the requirements. Netfira has created a checklist to help purchasing work through the process of defining software specifications.

4. Coordinated search of software providers for digitising purchasing

For the evaluation of offers, purchasing should define an evaluation system together with IT and the other relevant departments. This enables a selection decision that is supported by everyone. It should include questions about data protection and data security, project management methods, usability, implementation experience and the business’s change management needs. Netfira offers a software selection checklist to support purchasing departments in defining goals that meet the SMART criteria (Specific, Measurable, Achievable, Relevant and Time-bound) and selecting suitable software that meets their needs.

On top of that, procurement teams should consider the following criteria when selecting eligible service providers for digitising purchasing processes:

5. Industry recognition

Industry recognition often equates to expertise. Buyers should choose a software provider that has repeatedly proven in the past that it can support purchasing departments in their digitisation efforts in an uncomplicated, fast,and reliable manner. Learn here how Rosendahl Nextrom successfully digitised its operational processes with the Netfira Platform.

6. Flexibility of the provider and the software solution

Procurement is different in every industry and every company. Each procurement department has specific requirements, challenges, and needs. A flexible solution, easy implementation and high ease of use are preferable to rigid systems. Read here how Fissler GmbH benefitted from Netfira’s flexibility when carrying out the digitisation project in purchasing.

7. The solution’s future potential

Purchasing must consider, with foresight, what future enhancements the department might need. The software solution purchasing uses should grow with the department. For this reason, modular solutions that can be introduced and expanded step by step are beneficial. The Netfira Platform is a SaaS solution that is hosted in the cloud. Cloud solutions are efficient, flexible and easy to scale so they are tailored to users’ needs.

Conclusion: How to digitise purchasing successfully

With a structured approach, businesses can carry out digitisation projects in purchasing smoothly and successfully. Cross-departmental collaboration, a good evaluation system and the definition of software specifications are among the crucial factors for preparing and implementing a successful digitalisation project. Keeping these seven tips in mind will help you find the right software solution that meets the needs of all departments involved.

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July 20, 2022
Five reasons for purchasing to focus on process optimisation through automation

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Five reasons for purchasing to focus on process optimisation through automation

Outdated and inefficient ways of working often characterise purchasing departments. Manual activities which are time-consuming and error-prone prevent purchasing teams from focusing on more important tasks. In an increasingly digitised B2B world, purchasing needs to optimise its processes and improve operational efficiency to stay competitive and resilient. Automating purchasing processes with digital automation tools leads to increased process optimisation. Here are five reasons why purchasing should focus on process optimisation through automation.

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1. Purchasing departments that automate their processes are more successful.

Automating the steps along the P2P process offers numerous competitive advantages such as reducing the stress placed on procurement managers and allowing them to focus their energy elsewhere as demonstrated by Netfira’s client Gardner Denver’s global commodity manager: “We can reduce manual activities to a minimum so that we have more time for important tasks.” Learn here how the Netfira Platform helped Gardner Denver achieve process optimisation through automating operational purchasing processes.

2. Purchasing teams that invest in automation can realise their full potential.

Essential purchasing tasks are often neglected due to the exhaustive manual activities that dominate day-to-day work. Automated document processing reduces the manual workload on team members while increasing reliability, enabling shorter processing times and reducing costs. Buyers can complete tasks more efficiently, quickly, and with greater foresight which unlocks the strategic, creative and value-adding potential of the procurement team. They can use the time gained for other important activities such as supplier relations.

3. Buyers that build on digital and automated processes make more reliable business partners.

Automated processes based on cutting-edge technologies such as Artificial Intelligence (AI), app technologies or cloud solutions enable more foresight and flexibility towards unforeseen challenges or customer requirements. Moreover, these digital automation tools help to transform buyers into digital buyers. The three pillars of modern procurement are internal and external networking, production and value creation, and the establishment of new digital business models. Purchasing acts as a moderator at the interfaces to internal partners – such as controlling and accounting – and external partners – for example suppliers – and increases contributions along the value chain. As digital managers, buyers establish themselves as resilient business partners both inside and outside the company. In our blog article you can find more information how digital transformation tools future-proof the procurement manager’s role.

4. Purchasing departments that use new technologies can act more efficiently and transparently.

New automation technologies are drivers of process optimisation in purchasing. Digital automation tools powered by Artificial Intelligence, robotic process automation (RPA) and cloud computing support a modern and efficient working style. AI and RPA digitise and automate repetitive, manual and error-prone processes. Find out in our blog post why AI in particular is suitable for automating processes and document flows in procurement. Cloud solutions make your company more flexible, agile and future-proof. SaaS solutions eliminate the need to purchase, install, maintain and update hardware and software. Buyers can use the applications immediately. Cloud-based SaaS solutions stand for efficiency, cost-effectiveness and scalability. Read more about the benefits of a SaaS solution for procurement in our blog article.

5. Purchasing departments that drive process optimisation through automation will remain competitive in the long run.

Process optimisation does not happen automatically – if purchasing wants to be future-proof and remain competitive in the age of Industry 4.0, it needs to adapt its processes, approaches and business models. The future complexity of digitised business processes and the resulting volume of data require intelligent approaches. Furthermore, good data quality is a mandatory prerequisite for the successful digitisation and automation of business processes. Software solutions for the automation of purchasing processes enable process optimisation and operational efficiency.

Conclusion: process optimisation through automation

It is important to automate purchasing processes to ensure teams are equipped to face unforeseen challenges and seize future opportunities quickly. Digitisation and process optimisation lead to an increase in efficiency, cost reductions as well as flexibility and agility in a complex and challenging B2B world.

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June 29, 2022
Process automation in mechanical engineering with the Netfira Platform
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Process automation in mechanical engineering with the Netfira Platform

Machine and plant manufacturers have been under pressure even before Covid-19 wreaked havoc. The industry is facing numerous challenges such as strongly fluctuating order volumes, decreasing internal value creation depth, increasing competitive pressure and complex interlocking of value creation structures. Added to this are rising raw material prices and tight markets on the supplier side. As a result, the mechanical and plant engineering industry needs to optimise its processes to remain competitive and future-proof. Process automation in purchasing plays an important role. High degrees of automation can be achieved through AI and the elimination of manual activities. The Netfira Platform enables process automation in mechanical engineering through automated document processing and electronic supplier connection.

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The role of procurement in mechanical engineering

Given the challenges and demands with which the mechanical engineering sector is confronted, the importance of procurement has grown steadily. An efficient procurement department can make a significant contribution to the company’s success and increase its overall resilience. As development cycles are shortening, especially in sectors where innovation is a key growth driver, procurement processes need to be flexible and efficient. The complexity of requirements is increasing rapidly due to fast-moving markets, which makes smooth and transparent processes even more crucial.

Operational purchasing in mechanical engineering: automation of manual tasks

The focus for operational purchasing should be on automating manual tasks throughout the supply chain. Automating steps along the Procure-to-Pay (P2P) process is central to the financial health and overall competitive strength of machine and plant manufacturers—especially if they are seeking to build value while reducing costs. These steps along the P2P process always involve exchanging data and documents and approving them. In most small and medium-sized companies – of which many are found in the mechanical engineering sector – buyers must check, compare, and validate information manually before further processing. However, the manual processing and exchange of documents and data and paper-based record-keeping are no longer sufficient for companies that want an optimal return on their purchasing investment or a resilient strategic supply chain. Therefore, purchasing in mechanical engineering needs to rely on secure and reliable software solutions that automate operational purchasing processes and eliminate manual and repetitive work.

Automated document processing for the mechanical engineering sector

Removing manual processes throughout the purchasing process improves process efficiency and cost savings. Purchasing needs to automate document processing to achieve these results. With the Netfira Platform, machine and plant manufacturers can quickly achieve high degrees of automation and process optimisation through automated document processing. As a secure cloud-based SaaS solution, the platform automates the bidirectional exchange of B2B documents and data. The Netfira Platform increases operational efficiency in purchasing by providing a solution that automates all documents (purchase order confirmations, invoices, shipping notices, purchase orders etc.) It automatically extracts relevant data, processes it intelligently and exports it into any ERP system. This automation eliminates time-consuming and error-prone manual activities.

How the Netfira Platform achieves a high degree of automation in purchasing

Automatically extracting data from procurement documents with a software solution is not enough for companies to achieve automation and noticeable relief. True automation requires automation tools to not only extract but also understand, compare and validate data. This level of automation means users only need to be involved when discrepancies occur and action is required. As a result, automating the processing of documents does not just mean extracting information like price, quantity, delivery date etc. from a document and exporting it into downstream systems. True automation occurs when purchasing can automatically process previously defined deviations between B2B documents. For example, the Netfira Platform automatically processes pre-defined deviations between purchase orders and purchase order confirmations. This applies when purchasing requests an order to be delivered on a fixed date, but the supplier confirms a calendar week. If purchasing cannot process these deviances, a high degree of automation cannot be achieved because buyers will face many discrepancies that they must process manually.

Electronically connecting business partners in the mechanical engineering industry

The processing and exchange of B2B documents along the P2P process can only be automated successfully if all important business partners are connected electronically. As in many other industries, supplier loyalty and delivery quality play a prominent role in mechanical engineering. When it comes to connecting suppliers, the aim is to reduce obstacles instead of creating additional work through a new solution. EDI is a set standard in some industries and sectors, such as in retail or the automotive industry. For many enterprises, however, EDI is not the right solution as it is too complex and expensive. For the mechanical engineering industry, there are innovative alternatives to the classic EDI solutions. The Netfira Platform electronically connects all significant business partners easily, quickly and cost-effectively. The unique Netfira Onboarding App allows buyers to connect with their business partners in three easy steps without burdening the IT team. As a result, suppliers are quick to adopt a digital connection because they do not have to change their systems, do not need any training and do not incur additional costs.

Process automation in mechanical engineering through AI

Automatically extracting data from B2B documents is central to connecting business partners and enabling seamless B2B communication. Documents like purchase order confirmations or invoices need to be processed digitally. For that, OCR is often used to convert documents into a digital format. However, for many businesses OCR is not the right solution as it is too inaccurate and inflexible. Consequently, buyers still need to check data and correct mistakes manually. The Netfira Platform, on the other hand, offers a data accuracy of almost 100% with the help of AI. It enables unprecedented process automation for mechanical engineering because, unlike OCR, it captures documents not graphically, but in terms of content. Therefore, data can still be read out accurately even if, for example, the formatting of a document has changed. AI can identify the content that needs to be extracted. Moreover, the Netfira Platform can also capture information such as dimensions, declarations of origin, drawing numbers, etc. Industry-specific data can also be processed. In mechanical and plant engineering this applies to technical drawings, different units of measurement and material cost surcharges.

Documents the Netfira Platform can process automatically
- Quotes
- Request for quotes
- Advanced shipping notices
- Customer orders
- Purchase order confirmations
- Invoices
- Certificates
- Etc.
Process automation through automated document processing

Future-proof procurement teams in the mechanical engineering sector work digitally and automatically. Procurement cooperates closely with partners in the supply chain to drive innovation and achieve sustainability goals, and it makes a strong independent contribution to value creation. With the Netfira Platform, the P2P process can be automated through the automation of document processing. The electronic connection of all important business partners and the AI-powered data accuracy of the automated document capture leads to noticeable process automation in mechanical engineering.

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June 17, 2022
Fissler case study

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Automation and digitisation of purchasing processes using AI

Fissler GmbH is one of the world market leaders for high-quality cookware and manufactures 90 per
cent of its products in Germany. In the past, Fissler could not connect suppliers electronically despite EDI and portals as these solutions were too time-consuming and expensive. For operational purchasing, this meant significant additional manual work, which took time away from value-creating strategic activities. Fissler needed error-free data at the push of a button and a smooth, bidirectional exchange of B2B documents – preferably in real-time. With the implementation of the AI-powered Netfira Platform, Fissler successfully digitised and automated its purchasing processes, electronically connected all important business partners and achieved high efficiency and effectivity.

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June 2, 2022
How the Netfira Platform helps to process csv files automatically

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How the Netfira Platform helps to process csv files automatically

In times of supply bottlenecks and supply chain disruptions, purchasing needs to process large amounts of data in crisis managment of material supply. Due to a backlog of unprocessed documents caused by overdue deliveries, many companies currently use csv files as a means of communication between suppliers and customers. Because processing csv files manually leads to problems, the Netfira Platform enables buyers to process csv files automatically.

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The background: COVID-19 and war cause supply chain disruptions

The COVID-19 pandemic has caused profound supply chain disruptions. In procurement, these disruptions have manifested themselves in delays and a subsequent backlog of purchase order confirmations that need to be processed. Businesses are reporting a dramatic increase in order confirmations as the ongoing disruption is forcing suppliers to provide multiple order confirmations for each purchase order. 

The result: Suppliers send csv files to purchasing

Due to a backlog of unprocessed documents caused by overdue deliveries, purchasing and suppliers have switched to a crisis management mode. In contrast to the standard process (order-confirmation-delivery), many companies currently use csv files as a means of communication between suppliers and customers. A lot of suppliers use these files instead of sending purchase order confirmations to the purchasing department.

What is a csv file?

CSV stands for comma-separated values and is a file format for structured data. A csv file enables simple data exchange between software programmes. It is saved as a text file with the extension .csv. It is often used to save tables or databases or to export them from the respective software programmes so that they can then be further processed in spreadsheet programmes such as Excel.

The problem with processing csv files manually

The use of Excel lists to process purchase orders often means that an already existing semi-automated or automated process is interrupted or even replaced by manual processing. In addition to the challenges created by restricted material availability and logistical bottlenecks, procurement departments usually do not have resources available to handle the tasks of manual data entry and processing. 

How the Netfira Platform helps to process csv files automatically

In addition to the automatic and reliable extraction and processing of data from B2B documents such as invoices, quotes, purchase order confirmations, purchase orders, advanced shipping notices etc., Netfira offers a quick digital connection and automated processing of data formats such as csv files. These csv files can be processed either in parallel to the processing of order confirmations or substitute the processing of order confirmations altogether for the time being. This does not solve the general problem of delivery backlogs and transport bottlenecks. However, Netfira offers a flexible and easy digital solution that supports the supplier and the operational purchasing department in processing and entering data from Excel lists into the respective systems. As a result, the Netfira Platform saves resources and time and prevents errors and data inconsistencies by guaranteeing high data accuracy.

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May 26, 2022
Internal IT requirements

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Internal IT requirements of the Netfira Platform

Unlike other document automation solutions, the Netfira Platform can be implemented with minimal effort from internal IT teams. As part of the implementation process, there are only 5 tasks that require action from internal IT teams.

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March 17, 2022
Internal IT requirements

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Internal IT requirements of the Netfira Platform

Unlike other document automation solutions, the Netfira Platform can be implemented with minimal effort from internal IT teams. As part of the implementation process, there are only 5 tasks that require action from internal IT teams.

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March 17, 2022
Digitisation vs. automation: Why purchasing should automate and not simply digitise its processes

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Digitisation vs. automation: Why purchasing should automate and not simply digitise its processes

Digitisation and automation have increasingly become disruptors in today’s industry. As a result, a new technological age, which many consider to be the 4th industrial revolution, has dawned. Industry leaders refer to this development as Industry 4.0. This trend has been mirrored in purchasing through the development of Procurement 4.0. But what is the difference between digitisation and automation? And why is it not enough for purchasing to simply digitise its processes? Find out how high degrees of automation can be achieved through automated document processing with the Netfira Platform.

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Industry 4.0 and Procurement 4.0

Industry 4.0 refers to the progressive digitisation of industrial production and the intelligent networking of machines, systems and processes. The 4th industrial revolution and digital transformation are important for purchasing teams. Based on the term Industry 4.0, experts frequently refer to Procurement 4.0 to describe procurement’s new role and function. The increasing complexity of digitised business processes and the resulting data volume require intelligent approaches. Cutting-edge technologies like advanced robotics, Internet of Things (IoT), Blockchain, Artificial Intelligence and cloud computing fuel Procurement 4.0 and have a transformative impact on purchasing and supply chains.

What is digitisation?

Digitisation describes converting non-digital information, like a hard copy, into digital data. For example, digitisation means turning printed communications into electronic mail (e-mail) or converting hand-drawn schematics into CAD (computer-aided design) drawings. In purchasing, digitisation is often the first step towards automation as information needs to be available digitally to any automation technology before it can be automated. Initially, digitisation meant the conversion of analog formats into digital data to be processed with the aid of computers. Today, digitisation also means the digital networking of processes and products in real-time with the growing size and complexity of data structures. 

What is automation?

Automation, on the other hand, improves processes that are already digital. It relies on a series of rules to accomplish tasks without human intervention. Automation means using information technology or machines to take on repetitive processes and tasks while freeing humans to do other tasks.

Digitisation vs. automation: Digitisation as a first step towards automation in purchasing

The digital exchange of data and B2B documents needs to work automatically to make purchasing more efficient and future-proof. The digitisation of information is a crucial but not sufficient step towards achieving real automation.

Even today, many purchasing departments still rely on paper-based processes and manual data entry and comparison. Optical Character Recognition (OCR)  is one method of making data available for digital use. The technology converts documents into a digital format by scanning and digitising information from printed documents, images or handwritten text. However, it lacks the data quality, flexibility and reliability of more sophisticated technologies. Moreover, OCR is highly limited in its use and error-prone, which can increase manual workload, preventing true automation. 

Electronic Data Interchange (EDI) does not focus on text recognition because, in the EDI process, data is readily available in digital form. Instead, EDI describes an interface for data exchange between two ERP systems. Companies adopting this complex technology face long implementation times, non-compliance from supplies and other barriers that prevent fully automated B2B workflows.

Automation in procurement: More than just intelligent data extraction

Automatically extracting data from procurement documents with a software solution is not enough for companies to achieve automation and noticeable relief. Intelligent data extraction can help businesses digitise their processes. Automation, however, requires automation tools to not only extract but also understand, compare and validate data. This level of automation means users only need to be involved when discrepancies occur and action is required.

How the Netfira Platform achieves a high degree of automation in purchasing

Automating the processing of documents does not just mean extracting information like price, quantity, delivery date etc. from a document and exporting it into downstream systems. True automation occurs when purchasing can automatically process previously defined deviations between B2B documents. For example, the Netfira Platform automatically processes pre-defined deviations between purchase orders and purchase order confirmations. This applies when purchasing requests an order to be delivered on a fixed date, but the supplier confirms a calendar week. If purchasing cannot process these deviances, true automation cannot be achieved because buyers will face many discrepancies that they must process manually.

Automated processing of order confirmations with the Netfira Platform

The Netfira Platform achieves an unprecedented degree of automation because it reduces manual activities and the need for human intervention to a minimum. How it works can be demonstrated through the automatic processing of order confirmations. The platform automatically extracts data from transactional emails, for example, and compares it with the purchase order. If the confirmation matches the order, the information is automatically entered in the buyer’s ERP or downstream system. The Netfira Platform allows organisations to achieve nearly 100% automatic processing of order confirmations where there is no deviation. On the other hand, deviations can be identified quickly and easily in the familiar ERP environment. The platform directs the buyer to parameters that need to be checked. The structured and standardised process for handling deviations saves the purchasing department time and reduces stress in the approval process.

Digitisation vs. automation: Automate and not just digitise operational procurement

Simply digitising the data and document exchange is not enough to achieve noticeable benefits. Buyers need to be relieved of manual activities to save costs, time and resources. True process optimisation can only be achieved by fully automating purchasing processes. Moreover, simply extracting data with a digital automation tool is not enough to enable automation. High degrees of automation can only be reached if the software solution understands, compares and validates the data based on pre-defined specifications. Only then the need for human intervention and corrections can be reduced to a minimum. If purchasing smartly combines the potentials of digitisation and automation, it can meet the requirements of Purchasing 4.0.

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March 11, 2022