Achieving Control With Source-To-Pay Solutions: Procurement Spend Management
Procurement Spend Management
Modern-day executives must be ever-vigilant to ensure control of their organizations spend to maximize profits and procure the best products and services with minimal waste. One strategic approach is Procure-to-Pay — typically referred to as Source-to-Pay (S2P) — which is the integrated suite of automated processes designed to purchase the most cost-effective materials from the most suitable suppliers, monitor supplier performance and stock levels, manage contracts, and automate payments for goods and services.
C-level executives and financial stewards understand the imperatives of having an effective Source-to-Pay solution deployable quickly throughout the entire organization. By gainful utilization of S2P technologies, these teams can improve efficiencies in the lifecycle of sourcing, procurement, and payments, reduce cost and risk, streamline processes and better collaborate internally and externally.
For those managers and executives wishing to more effectively track and manage their procurement spend, the following steps are paramount:
Step 1: Assess the organizations needs A robust S2P solution should be tailored to meet your organizations unique goals, objectives, and needs. As such, it is important to take stock of the organizations size, budget, areas for cost savings, target supply base, and purchasing methods.
Step 2: Determine the desired levels of automation Once the organizations needs and objectives are inventoried, choose the most suitable automated Source-to-Pay solution that can improve the purchasing process, cost savings, and strategic supplier relationships. Consider wide spectrum of automation solutions, ranging from outsourcing to hosted S2P solutions provided in the cloud, or hybrid approach.
Step 3: Establish the infrastructure and support that is needed When deploying an automated Source-to-Pay solution, it is important to configure the system to match the organizations existing infrastructure and support requirements. All solutions should have the ability to scale with the organizations needs.
Step 4: Spend time with stakeholders to identify the best solutions After assessing the organizations needs and desired levels of automation, sit down with the appropriate stakeholders, such as budget owners and procurement professionals, to identify the best S2P solutions. Assemble strong project team and agree on realistic goals and objectives for the organization.
Step 5: Focus on the implementation process The implementation process for an automated S2P solution can be overwhelming. Feasibility studies and cost/benefit analyses should be performed to determine the best options for the organization. Plan for training and strong support system to ensure the successful implementation of the solutions.
Step 6: Utilize the solutions to optimize the procurement process Finally, use the S2P solutions to streamline and optimize the procurement process and properly measure results. Measure ROI in terms of cost savings, process and time efficiencies, and other key performance indicators. Focus effort on continuous improvement by implementing solutions that allow for periodic reviews and supplier performance evaluations.
As an effective tool to track and manage procurement spend, the implementation of an automated Source-to-Pay solution with acceptable levels of automation can create tremendous value. With strategic plan in place and the right team paired with the right solutions, your organization can achieve greater savings, scalability, and control of its procurement spend.
