As Chief Procurement Officers (“CPOs”) and procurement practitioners move into 2016, they have the need and the capability for advanced technology solutions to automate and link the source-to-settle process – upstream, strategic sourcing and downstream, procure-to-pay (“P2P”). Digital, automated supply management solutions can help overworked and understaffed procurement teams scale resources and extend their power and influence throughout the enterprise.
Procure-to-pay technologies can be real value drivers for procurement teams looking to take enterprise performance to the next level. For starters, eProcurement tools bridge the gap between upstream sourcing and value negotiation and downstream purchasing and value realization. With eProcurement tools, buyers simply log into a proprietary eCommerce platform that has the look and feel of Amazon, eBay, and other online shopping sites, but connects to preferred suppliers with which the enterprise has established a relationship. Buyers can search through punch-out catalogs provided by suppliers, and can drill down into different categories, such as department, make, model, price range, etc. After making their selection, buyers can purchase the good or service on the platform, which then routes payment information directly to AP/Finance for fast and seamless processing. In sum, eProcurement tools leverage existing suppliers, drive greater on-contract spend/contract compliance, and link directly with AP/Finance. They embody P2P.
Automated P2P tools, are scalable and repeatable in ways that manual, paper-based processes are not. For example, automated, digital procurement platforms allow buyers to purchase more goods and services in a shorter period of time, driving more value through the procurement process than performing manual, one-off buys, three-bids-and-a-buy, or off-contract (maverick) spending. Moreover, fully-automated P2P tools can provide greater visibility into the needs of the enterprise, and allow procurement and AP to collaborate to deliver them. With procurement and AP linked on either side of the spectrum by a common platform, AP can peer into the buying habits of procurement and help them find ways to save, while procurement can better track spending and help reign in maverick/off-contract spend.
Ultimately, linking upstream and downstream processes and tools – a fully automated and integrated source-to-settle suite, like Precoro, – can be even more of a game-changer for supply management leaders than automating one stream or another. For CPOs and other procurement leaders, that is the ideal, new and improved technology end-game.