Employees must select the right products or services, and vendors, as well as ensure the necessary documentation is created and forwarded to the appropriate internal and external departments. Without the right systems in place, the entire process can become inefficient and waste valuable employee time and money.
That’s where guided buying comes into play. Guided buying represents all the tools and technologies, from data analytics to artificial intelligence, that businesses use to allow their employees to make smarter purchasing decisions on a relatively small but important scope. It’s a major component of the digital transformation that can offer up immense improvements to ROI.
So, how can you leverage guided buying to optimize spending at the employee level?
Learn more about how you can instill guided buying practices into your workflow and start using modern tools and automation to get the job done efficiently.
Defining Guided Buying
Most companies have entire procurement teams or a procurement department whose job it is to order the right amount of supplies, materials, professional services, at the right price, for the continued operations of the organization. These teams must also handle invoicing, payment, and fulfillment as well as various other aspects of procurement.
Because dedicated procurement departments already have their hands full with company-wide contracts and high-volume purchases, it would be a waste to force them to help out with all the “small” transactions employees make at work, such as buying office supplies or covering meals and travel expenses.
It’s more efficient in these cases to assist employees directly with buying so that they can work independently while still staying compliant with the budget and overall goals of the business. Guided buying, in other words, helps employees with their own small-scale spending by guiding them through the process. This employee spending process is a huge help to individuals and smaller teams.
How Does Guided Buying Work?
In a typical guided buying process, employees can make pre-approved purchases from a portal at any time without any input from procurement team members. This process speeds up the transaction cycle without the risk of maverick or negligent spending.
A company can configure this portal so that individual staff members have different personas depending on:
- Role in the organization
- The types of purchases likely to be made
This way, the portal can accurately determine what a specific employee would need to purchase and how much spending is allowed. It then tunes its recommendations accordingly.
Who Does It Help?
Staff members enjoy a self-service purchasing environment where they can be confident that all options available are from verified suppliers with curated pricing. There’s no guesswork when every option presented to you is viable.
To the business, guided buying ensures that all transactions, no matter how small, align with the overall goals and fit within the company’s procurement policies.
And for procurement departments, they have stronger control over procurement policies and have better tools to manage not only the purchasing process but also strategic sourcing, contracting, and other requests.
How Guided Buying Solved the Problems of Traditional Procurement
Compared to the older approaches to procurement, guided buying brings with it several unique benefits that are too substantial to ignore.
- Improved efficiency: Guided buying cuts down on research and bureaucratic inefficiencies. It helps steer employees in the right direction when it comes to sourcing vendors and suppliers, as well as setting up their processes to require minimal input from the procurement or finance team. and Since getting approvals can often take days or weeks, it greatly accelerates the process overall.
- Better staff morale: When employees have more control over their own purchasing decisions, they feel like they have more autonomy at work and enjoy a boost to morale.
- Taking advantage of data: Organizations keep a database of vendor information, pricing, and payment terms as they grow their supplier catalogs, and guided buying lets any employee tap into that treasure trove of valuable insights.
- Smarter buying decisions: Users of the guided buying portal can cross-check their decisions with internal company policies and receive warnings whenever a potential purchase may be non-compliant.
- Faster buying decisions: Employees also have a short catalog to browse through when shopping rather than having to do all the market research themselves.
- Integration with other business tools: Guided buying solutions work cohesively with accounting software and other enterprise applications to form a connected software environment.
The Impact of AI on Guided Buying
Purchasing Process Suggestions
Machine learning algorithms have helped companies make more strategic buying decisions by looking at past transactions and suggesting new goods and services based on current needs. Workers looking to fulfill a particular need might end up finding a new offering on the market that they haven’t considered before.
In an age when fraudulent and rogue spending are unfortunately common, management is always looking for ways to achieve predictive compliance, or the ability to detect strange purchasing activities early on.
Artificial intelligence works alongside guided buying platforms to flag any unusual financial activity and notify management. For example, if a purchase seems to fall outside of a company’s internal policy, the guided buying portal will notify the user beforehand.
Achieving Better Deals with Preferred Suppliers
E-procurement solutions in general are known for using artificial intelligence to capture market research data and information on preferred suppliers to find better deals, negotiate lower prices, and search for higher quality products and services.
Even when employees are the ones making the decisions, an AI-powered guided buying portal can suggest the best options immediately.
Data Collection and Analysis
AI is ultimately powered by data. All of AI’s capabilities from making predictions to offering suggestions are based on data collected in past business activities. The implementation of machine learning into the workflow allows businesses to form actionable insights and take advantage of all this information that would otherwise go to waste.
How Do You Set Up Guided Buying?
Guided buying is a specific function of the procurement process. If you want the benefits of such a portal, look to the following best practices.
Provide Procurement Data
First, remember that a guided buying portal first needs the right information and procurement data about your preferred suppliers, and verified products and services, in order to deliver a seamless experience to your staff.
Whether we’re talking about direct purchases (raw materials, supplies, etc.) or indirect ones (professional services, travel costs, etc.), have a catalog of accepted buying channels and suppliers to draw from.
Apply the Policies
Next, feed the portal your procurement policies that buyers must follow when deciding on what to purchase. The rules can change depending on the rank or role of the user being guided. For instance, a higher budget might be a privilege of a higher-ranking employee.
Also allow users to give a justification for a transaction if necessary or even request an exception with management approval should the need arise.
Collect Information and Insights
Finally, make sure that the solution you choose is capable of collecting and automatically analyzing its own data. The spending habits of your employees can be useful for deciding on future procurement functions. You might find new opportunities to negotiate better terms with suppliers or even find brand new partnerships.
Key Features To Look For in an Solution that Simplifies Procurement Operations
Like many other e-procurement solutions, guided buying is available as a service through third-party providers. If you’re choosing a procurement platform for your business, ensure that it contains functionalities related to guided buying. A few examples are listed below.
- Buyer persona functionality and a convenient dashboard to work with it. Administrators can set user permissions and preferences for individual users to provide targeted help to functional buyers.
- Search functionality so that users can search for the right products and services by category. Being able to find needed goods faster is one of the major benefits of guided buying.
- Operational sourcing, where users can not only choose the goods they want from a pre-approved catalog but also be guided to request quotes from suppliers and follow through with transactions.
- Company-wide visibility through a single gateway of approved vendors that anybody in the organization has access to and can use to select preferred suppliers. Any data collected regarding financial activities is also immediately gathered together in a single location.
- Notification support so that management and relevant stakeholders are immediately aware whenever a potential policy violation or budget overflow occurs.
- Automatic paperwork management, as some solutions even automatically route purchase requests to the right stakeholders for approval and generate purchase orders from approved requests.
Because you want all your business software to work together cohesively, you typically don’t want to be searching for an isolated guided buying solution. Rather, look for an overall e-procurement software suite with the built-in capability to support a guided buying portal.
Solve Your Biggest Procurement Pain Points With Guided Buying
Guided buying takes all the expertise of your top procurement managers and puts it in the hands of everyday employees. Even the more minor transactions made during business operations will be compliant with company policies and budget as a result.
Guided buying solutions today utilize artificial intelligence, machine learning, and online tools to help businesses get the most out of their knowledge of the market and their catalogs of proven suppliers. Raise user adoption of the portal, and you’ll find that the smart guidance features provide employees with instant access to the goods and services they need in their every day roles.