The procurement of freelancers and interim managers presents unique challenges for companies. Particularly in indirect procurement, transparent processes are often lacking, leading to inefficient workflows and risks such as maverick buying—the unauthorized purchasing outside of established procedures. In this blog post, we explore how guided buying using chatbots can overcome these hurdles and revolutionize procurement. We demonstrate why transparency is crucial and how FRATCH GPT, as an AI solution, optimizes the process for all parties involved.

The Importance of Transparency in Indirect Procurement

A lack of transparency in indirect procurement can have costly consequences for companies. Without a clear overview of expenditures, processes, and supplier relationships, there's a risk of inefficient processes, as the lack of standardization leads to increased administrative effort. Additionally, compliance risks arise because unclear guidelines can lead to violations of internal and legal regulations. Cost increases are another consequence, as uncontrolled spending and missed bundling opportunities drive up expenses. Finally, audit risks pose a challenge; without traceable documentation, audits become time-consuming and risky. Transparency is therefore a key factor in overcoming these challenges and making procurement efficient and secure.

Maverick Buying: One of the Greatest Challenges

Maverick buying refers to purchases made outside of established processes and without involving the procurement department. This phenomenon is widespread in indirect procurement and often arises from frustration over complicated or lengthy procurement procedures.

The impacts of maverick buying are manifold. It leads to intransparency, as procurement loses track of expenditures made. Higher costs result because a lack of bundling and negotiation power leads to less favorable terms. Additionally, compliance violations occur as contracts and internal guidelines are circumvented, and the risk of quality and delivery issues increases due to unvetted suppliers.

The causes of maverick buying often lie in complicated processes, long approval paths, and confusing systems that deter users. A lack of user-friendliness in procurement systems leads employees to seek alternative routes. Departments that rarely need external resources do not know the processes well enough and therefore resort to unofficial solutions.

Guided Buying as a Solution: Efficiency through Intuitive Processes

Guided buying offers a user-friendly approach to prevent maverick buying and optimize indirect procurement. Through intuitive platforms and virtual assistants, users are guided through the procurement process without requiring in-depth purchasing knowledge.

The advantages of guided buying lie in user-friendliness, as easy operation reduces the barrier to using official processes. Standardized workflows ensure efficiency and reduce errors, while integrated guidelines guarantee the compliance with contracts and regulations. Additionally, guided buying creates transparency, because all steps are traceable, simplifying audits and minimizing risks.

The Role of Chatbots in Guided Buying

Modern chatbots revolutionize guided buying by acting as virtual assistants that support users in natural language. Chatbots improve the procurement process by enabling intuitive interactions. Employees can simply express their needs without having to fill out complex forms.

Through intelligent questions, the chatbot captures all relevant requirements, leading to a targeted needs assessment. Automated processes significantly accelerate procurement, and the 24/7 availability and use across various devices increase flexibility.

Example: Procuring a Freelancer via Chatbot

A project manager urgently needs a data scientist for an analytics project. Instead of struggling through complicated systems, he simply tells the chatbot: "I need a data scientist with experience in machine learning." The chatbot then asks further questions about:

• Required skills: Which programming languages or tools are important?
• Project duration: How long will the freelancer be needed?
• Budget: What budget is available?
• Contract details: Are there any special compliance requirements?

The chatbot then creates a complete requirements profile and initiates the procurement process.

Challenges in Indirect Procurement of Freelancers and Interim Managers

Procuring external experts is complex and entails specific risks. Departments often procure such resources only once or twice a year, leading to infrequent procurement needs. The required profiles are often highly specialized, resulting in complex requirements. Compliance risks, such as those related to misclassification of employment status, must be considered. Without clear processes, intransparency and increased costs arise, further complicating procurement.

How FRATCH GPT Optimizes the Process

FRATCH GPT is an AI-based assistant that combines guided buying with chatbot technology to make the procurement of freelancers and interim managers efficient and secure.

Features of FRATCH GPT

• Intelligent Needs Assessment

  • Natural Language Input: Users can formulate their requirements in their own words.
  • Automated Profiling: The AI creates detailed requirements profiles.

• Fast Matching

  • AI-Powered Search: Suitable candidates are suggested within seconds.
  • Pre-qualified Profiles: Only suitable and vetted candidates are presented.

• Compliance and Transparency

  • Integrated Guidelines: Compliance requirements are embedded in the process.
  • Documentation: All steps are traceable and auditable.

• Avoidance of Maverick Buying

  • User-Friendliness: The intuitive interface encourages the use of official procurement channels.
  • Automated Approvals: Integrated approval workflows prevent unauthorized purchases.

Benefits for All Parties Involved

Departments and Hiring Managers

• Time Savings: Fast procurement without deep purchasing knowledge.
• Support: The chatbot assists with needs assessment.

Procurement Department

• Control: Full transparency over expenditures and processes.
• Cost Savings: Bundling and better terms through centralized procurement.

Recruiters

• Efficiency: Precise requirements profiles simplify candidate search.
• Quality: Access to suitable and pre-qualified candidates.

Optimizing Expenditures through Data and Analytics

With increased transparency through FRATCH GPT, companies can better manage and optimize their expenditures. The advantages of data analysis in procurement include a clear view of all costs and transactions, allowing for comprehensive expenditure overviews. Supplier management is improved as the performance and reliability of service providers can be evaluated. Strategic decisions are supported through data-driven negotiations and risk analyses, leading to more efficient and cost-effective procurements.

Reducing Risks and Improving Compliance

A transparent procurement process minimizes risks such as supplier failure, as evaluation and diversification of service providers are enabled. Compliance violations are avoided through automated checks and standard contracts that ensure legal certainty. Fraud and corruption are prevented through traceable processes that block unauthorized transactions, thus ensuring the integrity of the procurement process.

Simplifying Audits through Traceable Processes

With FRATCH GPT, all procurement activities are documented, simplifying and accelerating audits. The advantages during audits include the rapid provision of information, as all data is centrally available. Transparency allows for complete traceability of each step, minimizing risks and avoiding objections and sanctions.

Conclusion: Efficient and Secure Freelancer Sourcing with FRATCH GPT

Guided buying and chatbots like FRATCH GPT offer a forward-thinking solution for indirect procurement of freelancers and interim managers. Through increased transparency, intuitive processes, and compliance security, companies benefit from efficiency gains, as procurement processes become faster and easier. Cost reductions are achieved through optimized expenditures and better terms. Risk minimization occurs by avoiding maverick buying and compliance violations. Employee satisfaction increases as user-friendly systems enhance acceptance.