Why Procure-to-Pay Software is Critical to Procurement Teams TodayProcure to Pay
This month Gartner published its eagerly awaited Magic Quadrant for Procure-to-Pay (P2P) Suites, ranking the top 14 vendors based on ability to execute and completeness of vision. This year’s edition comes at an interesting time, with the Covid-19 pandemic having shifted Procurement priorities and employee working practices. Hence, I thought it valuable to review why the Procure-to-Pay Process flow is so important today and, most importantly, how to realize the potential value of a successful digital transformation.
1.Investing in Procure-to-Pay solutions is seeing the bigger picture
In Gartner’s Magic Quadrant, they forecast the Procure-to-Pay software market to dip slightly this year, as companies focus on solutions with faster time to value. If true, that would be a real shame. In the current environment, Procure-to-Pay automation is even more critical than normally (and solutions are available that can be deployed quickly at most organizations).
2.Digitizing the P2P Cycle is good for productivity
As work has shifted from the office to the home, ensuring productivity while remote is essential. digitization Procurement processes from sourcing to accounts payable is a key strategy. The P2P process flow touches virtually every employee and should be a top priority.
The benefits of P2P Solutions are much broader and will continue long after Covid-19 is history (hopefully sooner rather than later). With employees increasingly expecting the purchase order process to be as simple as consumer-shopping, it is not just a matter of their productivity but also satisfaction. More advanced Procurement organizations are regularly measuring this as a KPI and good Procure-to-Pay systems are a must.
3.Procure-to-Pay Software mitigates financial risk
Cash management has quickly risen up the (increasingly long) totem pole of Procurement priorities. Having visibility and control into purchase orders and Invoices helps not just ensure a company’s financial viability but also that of it’s supply chain. This is a significant benefit of an effective Procure-to-Pay cycle.
4.Procure-to-Pay will reduce costs and support CSR objectives
Procure-to-Pay software also helps capture negotiated savings, by simplifying and enforcing compliance to contracts and policies. This compliance also supports achievement of other corporate objectives. For example, successfully meeting CSR objectives such as reducing the corporate carbon footprint or preventing child labor in the supply chain depends on the ability to direct purchases to properly vetted suppliers. The same logic supports effective supplier risk management.
In light of these benefits, it is no wonder Procure-to-Pay has been a high priority for most large organizations in recent years and is expected to grow rapidly in the coming years. The real key is realizing the expected benefits from your Procure-to-Pay project so, in part 2 of this blog, I’ll share my experience on how to plan a smooth journey.