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Why purchasing should choose an AI-based automation solution

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Why purchasing should choose an AI-based automation solution

Cutting-edge technology like Artificial Intelligence (AI) has the potential to revolutionise procurement. In operational purchasing, there is still a predominantly manual process chain with many error-prone activities. The pressure on purchasing is increasing as the effort required for manual operational processes increases exponentially with the number of transactions and suppliers. For businesses to remain competitive and future-proof, operational activities must be automated. Manual tasks must be completed quickly and without error, so that team members have more time for value-adding tasks. Therefore, it has become increasingly important to implement automation solutions that optimise document processing. AI-powered software solutions automate document processing efficiently and reliably which enables a smooth electronic connection between business partners.  Read more about the benefits and the steps involved in choosing an AI-based automation solution in purchasing.

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Step 1: Collect and evaluate data

In every company, data is collected on a daily basis. The first step should be to get an overview of where and how data is collected and what data is available. Find out here why clean data is foundational to efficient processes and how the Netfira Platform improves data quality through automation. 

Step 2: Identify and evaluate fields of application

This data is a prerequisite for identifying and evaluating fields of application in the company. AI technology can be used profitably in many areas – such as the purchasing department.  Moreover, AI technologies far exceed the possibilities of conventional Robotic Process Automation (RPA) and are therefore better suited for implementing sustainable digitisation and automation strategies in the long term. For more information on the differences between AI and RPA and the advantages of AI, check out the blog article “Which intelligent automation solution for procurement is better: RPA or AI?“

Step 3: Develop a strategy and select an automation solution

The vision of a paperless office with automated operational processes is shared by many future-focused companies. A strategy developed to achieve this includes the definition of strategic goals which includes the selection of suitable AI-based software. Doing that, some questions need to be answered: What resources are available? Which software provider do I work with? Which platform is used? Do I use a self-hosted cloud? Do I work with the company’s own IT or do I use the services of an external IT department?

Netfira’s checklist for defining software requirements helps you to prepare and accelerate the software selection process.  Subsequently, the software selection checklist from Netfira supports you in defining goals that meet the SMART criteria and selecting a suitable software solution that meets your needs. 

Automating operational purchasing with AI

The use of AI-powered software solutions in operational procurement leads to automation, acceleration and optimisation. AI can support the exchange of information and at the same time relate content. In operational procurement, this applies to the extraction of data, the comparison of data and the validation of information.

How the Netfira Platform uses AI to automate purchasing

With the AI-based solution from Netfira, B2B documents such as orders, order confirmations, advanced shipping notices, invoices and other documents can be automatically exchanged and processed between purchasing and its business partners. AI enables purchasing to connect business partners electronically. All significant suppliers, including the small ones, can be connected quickly and easily with the AI-based Netfira Onboarding App. Thanks to AI, unstructured data can be harmonised in free texts or in documents such as order confirmations and customer orders. Deviating terms in supplier documents, ambiguous units of measurement or rare languages are no longer a problem as Netfira’s AI is constantly learning. Manual intervention is hardly necessary.

The Netfira Platform: A cloud-based SaaS solution

The Netfira Platform relies on AI to automate the bidirectional exchange of B2B documents and data.  Automating document workflows in the cloud increases efficiency, optimises processes, and unlocks procurement’s full potential. SaaS solutions allow flexibility, scalability and low costs. In addition, the automation solution can be implemented without training and internal IT is hardly involved in the project. The central advantage is that IT teams, who are usually busy with existing responsibilities, do not have to be convinced of the automation strategy and do not have to deal with a work-intensive project. When implementing the Netfira Platform, there are only five tasks that require action from internal IT teams. The Netfira Platform is offered as a SaaS solution hosted in the cloud. 

The benefits of SaaS and AI

Artificial intelligence and the SaaS service model are two technologies with high future potential. Connecting the two with each other leads to even greater added value for purchasing. AI works more effectively in a web-based platform than in a locally installed solution, as a cloud solution offers frequent and free updates. Thus, AI-based automation solutions that operate as a SaaS model in the cloud bundle a multitude of advantages that enable purchasing to become future-proof: The flexibility of the cloud goes hand in hand with the flexibility of a learning AI, which can even process unstructured content with extremely high data accuracy. On top of that, there are low costs, a quick roll-out as well as uncomplicated and cost-effective scalability.

Why purchasing should choose the AI-based Netfira Platform

Thanks to its innovative AI, the Netfira Platform increases operational efficiency along the Procure-to-Pay (P2P) process by automating all documents, including purchase order confirmations, invoices, shipping notices, purchase orders, quotes and many more. With Netfira, the entire supply chain can be digitised and automated so that internal and external partners are seamlessly connected with one another. Manual and thus error-prone tasks are significantly reduced so that buyers have more time to concentrate on strategic and value-adding activities. The optimisation of the purchasing process with an AI-powered automation solution has positive effects on all downstream processes and involved departments. 

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April 22, 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
Whitepaper: Document automation along the P2P process

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Whitepaper: Document automation along the Procure-to-Pay process

A well-established P2P process is central to the financial health and overall competitive strength of businesses—especially if they are seeking to build value while reducing costs. Since the P2P process always involves exchanging data and documents, buyers must manually check, compare, and validate information before further processing. Removing manual processes throughout the P2P process improves process efficiency and cost savings. Purchasing needs to automate document processing to achieve these results. By automatically processing all B2B documents along the P2P process, the Netfira Platform enables a bidirectional digital exchange of data and documents and makes businesses efficient and future-proof.

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March 3, 2022
Procurement automation: Can you afford not to automate your business processes? 
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Procurement automation: Can you afford not to automate your business processes? 

In procurement, many people think that they cannot afford to automate their business processes. Due to heavy workload and supply bottlenecks, many buyers believe they lack time, money and resources to automate procurement processes. Therefore, they often hesitate to implement a procurement automation solution for fear of long, expensive and exhaustive projects. But the real question is: Can you afford not to automate? Or is automation the key to remaining future-proof and competitive in the coming years? What are the benefits of procurement automation? What risks do companies run if they do not automate their procurement processes? And how can you automate your operational procurement processes quickly and cost-effectively?

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What is a business process? 

A business process is a collection of business tasks and activities that, when performed by people or systems in a structured course, produce an outcome that contributes to the business goals. There are many different business processes within one company. Moreover, each department has its unique business flows. The process must involve clearly defined inputs and a single output. 

What does the procurement process look like? 

The procurement process is defined as a process used to purchase goods and services via a supply chain. A widespread synonym is the Procure-to-Pay or Purchasing-to-Pay (P2P) process. The procurement process can be considered a cycle following a well-established pattern of events. It usually includes the following steps: 
1. The company identifies a need for goods or services 
2. The procurement team sends purchase orders to suppliers 
3. Procurement reviews quotes from suppliers and selects the best option 
4. The supplier sends a purchase order confirmation 
5. Procurement compares the purchase order with the order confirmation and contacts the supplier in case of any deviances. Read here how the Netfira Platform automates this process.
6. The supplier sends an advanced shipping notice to the procurement department 
7. The supplier delivers the goods or services within the agreed-upon timeframe and sends an invoice
8. Procurement compares shipping documents with the original purchase order and the invoice issued by the supplier
9. Successfully matched orders are approved for payment
The steps along the P2P process always involve exchanging data and documents and approving them. That is why buyers must check, compare, and validate information before further processing. These operational procurement processes are often carried out manually, take a lot of time, and are prone to errors. However, since procurement sits at the heart of the value creation process for organisations, it is vital to make the Procure-to-Pay process flow quick and efficient. To achieve this, procurement needs to automate its operational business processes. 

Benefits of procurement automation with the Netfira Platform

The Netfira Platform is a secure cloud-based SaaS solution for automating the bidirectional exchange of B2B documents and data. The Netfira Platform increases operational efficiency in procurement by providing a solution that automates all documents along the P2P process. The standalone solution makes manual data entry obsolete by automatically extracting relevant data, processing it intelligently and exporting it into any ERP system or downstream system.  

Increased efficiency 

Automatically exchanging B2B documents with Netfira increases procurement efficiency significantly. As a result, procurement departments can process important information quicker and have more time for strategic and other value-adding activities. 

Saving costs 

Automating the P2P process with the Netfira Platform helps shorten and speed up the procurement cycle. As a result, less money is caught up in lengthy reviews and evaluations. 

No paperwork and less manual work 

Traditionally, the procurement process is paper-based, manual and arduous. Buyers need to spend a lot of time comparing, validating and entering data manually into downstream systems. Managing massive volumes of paperwork can be a challenge for procurement teams. Thanks to the automatic document and data exchange with the Netfira Platform, buyers are relieved of manual workload, and mistakes and deviances due to human error are avoided. 

Improved transparency and shorter reaction times

For a P2P process to be smooth and efficient, buyers need to have reliable information and to be able to react to discrepancies or unforeseen changes promptly. Automated document processing with the Netfira Platform leads to shorter reaction times and higher transparency. Buyers receive information and notifications at the push of a button. Real-time information accelerates purchasing processes and improves the supply chain’s digital connection. 

Higher data quality 

Any process that humans predominantly handle is prone to data inaccuracies and inconsistencies. However, reporting and analysis of procurement data provide key performance insights. Good data quality is a prerequisite for a successful purchasing department. Automating the business steps along the P2P process prevents data inconsistencies. Find out here how the Netfira Platform improves the quality of data through automation and process optimisation.

Problems of manual procurement processing

At the same time, the refusal to automate business processes in procurement leads to a lot of problems. Relying on manual procurement processes exposes the business to multiple risks. For instance, the operational efficiency of the procurement department is significantly limited. Without automated document processing software, buyers must deal with a high manual workload and voluminous paperwork, preventing them from focusing on more value-adding tasks. In addition, manual data entry slows down procurement and leads to more errors. This results in poor data quality, slow reaction time to problems or discrepancies, and damages supplier relations. High process costs and unnecessary expenses occur as a result. 

Conclusion: Why procurement automation pays off 

Considering the points covered in this article, it is safe to say that businesses cannot afford not to automate their procurement processes. The benefits of an automated P2P process outweigh the initial costs of implementing an automation solution to optimise business processes. A SaaS solution operated in the cloud, like the Netfira Platform, offers a quick, easy and cost-efficient procurement automation. With Netfira, companies can automate their processes in operational procurement. These processes are essential, and their optimisation is crucial as they generate revenue. Manual operational workflows are not sufficient for procurement to get an optimal return. Instead, to stay competitive and future-proof in a more and more globalised digital B2B world, procurement must rely on speedy, transparent, accurate, consistent and manageable processes through procurement automation. 

Sources

https://blog.processology.net/what-is-a-business-process

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March 2, 2022
BME eSolution Days 2022
Event

BME eSolution Days

2022

May 31st – June 1st 2022

Stand 76 | Areal Böhler Düsseldorf

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On May 31, Netfira gave a customer presentation together with its customer Syntegon Technology GmbH at the eSolution Days. Oliver Merle, Director Supply Chain Digitalization & Automation at Syntegon presented the successful implementation of global purchasing automation with the Netfira Platform. He showed how the Netfira Platform is easily integrated into all existing ERP systems and how the standardisation of all purchasing processes at all sites worldwide leads to unprecedentet automation and efficiency.

We want to thank all prospects, partners and customers for interesting discussions about automated document processing, the automation of process steps along the P2P process and the Netfira Platform.

Customer Presentation

Implementation of global purchasing automation

May 31, 15:30-16:15

Read Case Study Syntegon
- One solution for all existing ERP systems
- Standardisation of purchasing processes at all locations worldwide
- High level of automation and standardisation
Presenters

Oliver Merle

Director Supply Chain Digitalization & Automation, Syntegon GmbH

Michael Kuhn

Head of Sales, Netfira GmbH

Venue

Stand 76 | Areal Böhler Düsseldorf

Hansaallee 321, 40549 Düsseldorf, Germany

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February 24, 2022
Whitepaper: A unique alternative to EDI and OCR

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Whitepaper: A unique alternative to EDI and OCR

Optical Character Recognition (OCR) and Electronic Data Interchange (EDI) are two well-known solutions for making data available for digital use in purchasing and sales. While both technologies have advantages, they fail in crucial areas such as data extraction accuracy and business-partner connections. Therefore, companies must carefully access both the advantages and disadvantages of these technologies to find a solution that works for them. This whitepaper will examine both OCR and EDI before presenting a unique alternative in the Netfira Platform.

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February 17, 2022
Software selection checklist

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Software selection checklist

The vision of a paperless office with automated operational processes is shared by many future-focused companies. A strategy developed to achieve this includes the definition of strategic goals which includes the selection of suitable software. The purpose of this checklist is to support you in defining goals that meet the SMART criteria (Specific, Measurable, Achievable, Relevant and Time-bound) and selecting a suitable software that meets your needs.

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February 10, 2022
Rosendahl Nextrom case study

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High efficiency gains and satisfied suppliers through digitsation of operational purchasing processes

Rapid growth, especially in electromobility and telecommunications, requires significantly accelerated processes from Rosendahl Nextrom. The leading international supplier of production plants for the battery, cable and fibre optic industries is making a significant contribution to more value creation through the transformation of purchasing with the Netfira Platform. The company hoped to achieve the complete automation of operational processes in purchasing and the digital connection of all suppliers — the result: high efficiency gains, significant cost reductions and more time for value-adding activities.

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February 9, 2022