Risk Implications Of Not Utilizing Source-To-Pay Software
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For any organization consistently engaged in purchasing activity, the implementation of robust source-to-pay (S2P) system is essential. Failing to incorporate such software into the procurement process may have significant negative repercussions ranging from diminished ability to contain costs, to potential legal and financial liabilities.
For finance executives, not adopting S2P system can result in serious risks due to the presence of manual processes. The absence of cloud-based, automated architecture can be source of preventable errors caused by human beings. Such mistakes are expensive to remedy and can lead to financial penalties. Furthermore, the effort required to identify, diagnose, and fix procurement issue can erode an organizations resources, leading to significant opportunities foregone due to inefficiencies, delays, and labor expenses.
At the tactical level, S2P software can be leveraged to provide increased visibility, thus enabling smarter decisions to be made in more informed manner. Without the appropriate application of such analytics capabilities, organizations can miss out on potential savings as well as visibility into the entire procurement chain. Automated workflow capabilities, often embedded into S2P systems, can ensure compliance with legal regulations and mitigate risks raised by incomplete or inaccurate paperwork.
It is worthwhile noting that costly errors are not only financial. Purchasing items with incorrect specifications can result in an underutilization of assets; or, they can cause disruption to normal operations and delays of the whole procurement cycle. Such mistakes may also lead to dissatisfied stakeholders, who recognizing the role of technological advances in optimizing business operations, can be derisive of management or procurement staff, or both.
In sum, incorporating S2P system is critical exercise in risk mitigation. It allows finance executives to limit the risk of manual errors, maximize purchasing flexibility, power smarter decisions with visibility into performance, address compliance issues, and mitigate liabilities. After all, S2P system is ?must have? for organizations striving for cost-efficiency and success.
