Assessing The Prospects Of Employing A Source-To-Pay Solution: A Definitive Guide
Spend Management Definition
The prospects of source-to-pay solution and its applications to establishing cost effectiveness and enhancing spend management has been the focus of considerable attention in recent years. Much has been written about the process of transforming conventional procurement system into holistic, integrated process. Adopting such complex system, however, can often be daunting for executive decision makers and those within the finance department.
This guide intends to provide an in-depth understanding of spending management-specific solutions and their associated benefits, making the decision-making process more informed and strategic. We?ll be covering the core principles of such solutions, including the value they offer, technological implications and host of helpful tips and tricks.
According to research conducted by Euromonitor, ?the world?s population is projected to reach an estimated 8.4 billion by 2030, and this presents unique problem for governments. Resource complexities, budget limitations and ever-growing infrastructure demands mean that tools for spend management and optimization are becoming increasingly important. Automating processes and managing costs are major motivators for decision makers looking to overhaul their procurement systems.?
This directly translates to an exponential rise in the use of Source-to-Pay (S2P) solutions. Simply put, Source-to-Pay solutions are end-to-end, comprehensive frameworks designed to support business, government agencies and educational institutions in streamlining corporate procurement and payment processes. These solutions integrate features, such as contract lifecycle management, invoice processing and analytics, under single umbrella.
The value of S2P solutions is evidential, mostly in terms of cost savings and productivity increases. Paper-based processes lead to arduous double-entry of data, higher chances of data loss and, often, paperwork backlog. On the other hand, S2P solutions facilitate continuous real-time monitoring of all costs and payments related to an organization, eliminating costs associated with manual data entry and manual errors.
Moving to an efficient S2P also has evidential advantages when it comes to resource allocation. Resource-intensive manual processes often limit the ability of organizations to take appropriate measures to drive financial performance and save costs in other critical areas.
However, the challenges of moving to an integrated S2P system should not be understated. Before fully committing to such solution, organizations need to consider myriad of elements, such as the availability of appropriate technology, the cost of implementation, legacy commitments and collaboration between different divisions. This guide seeks to provide complete picture of the challenges in relation to implementing S2P system.
The most important prospects of Source-to-Pay solutions revolve around effectiveness and automation. By streamlining every step of the procurement and payment process, organizations can more easily realize the cost benefits associated with S2P solutions.
In addition to making cost management easier, Source-to-Pay solutions also reduce the need for manual work and data entry, thereby freeing up resources to focus on more value-driven activities. Implementing such solutions can also help organizations better manage their supplier and customer relationships, reducing supplier risk, improving customer loyalty and ensuring economies of scale by associating costs more accurately with the right customer or supplier.
The implementation of such an all-encompassing system does require whole-organization collaboration and communication, which can prove to be major challenge. Additionally, resistance from users of existing procurement systems can potentially hamper the process of transitioning to an integrated system and lead to delays in meeting goals within the organization.
In order to assess whether such system is suitable for any given organization, an audit and assessment of the current procurement system must first take place. This audit will highlight opportunities for improvement and assess current manual processes in terms of cost, value and customer impact.
Subsequently, the next step is to develop comprehensive vision and plan, including risk assessments and strategic motive behind the change. Once plan has been devised, the next step is to identify the requisite high-level role players within the organization, members of the executive and any other affected stakeholder groups, and communicate the vision to them.
Once this has been conducted, the organization must define measurable goals and have dedicated resources allocated to the task. This forward-thinking may require the organization to invest in appropriate technology, ensure compliance with all relevant regulations and definitions, and ensure the ongoing alignment of internal processes with external demands.
Ideally, the next step would be to procure and implement the chosen solution and make sure that all stakeholders receive comprehensive training to ensure the system is being utilized as per its intended specifications. useful addition to the process may be to periodically assess the impact of the software and apply necessary corrective measures.
Before selecting solution provider, organizations should consider elements such as the experience of the provider and the track record of similar implementations. Selecting the right provider is paramount and can be instrumental in ensuring the organizations success. The provider should also be well versed in requirements unique to the organization, aware of potential pitfalls and capable of providing suitable guidance on choices of software, technical setup and system integration.
A solution incorporating source-to-pay technology can improve the effectiveness and efficiency of an organizations procurement processes, improve communication and collaboration outside of the organization and incorporate analytics to give leaders the data they need to make better decisions.
Ultimately, strategic implementation of S2P system could be the difference between hand-to-mouth existence and well-planned successful growth for an organization. All in all, Source-to-Pay solution is combination of the right technology, strategic vision and appropriate implementation. This guide gives comprehensive picture of the challenges and the incredible benefits S2P system can bring.
Sources:
Euromonitor. ?Future of Spend Management Solutions.? Focus Reports (2018) https://www.euromonitor.com/future-of-spend-management-solutions/report
