Best Practices For Source-To-Pay Solutions
E Purchasing Solution
Source-to-Pay (S2P) solutions provide executives in the finance departments with comprehensive, comprehensive supply chain visibility across the entire purchase-to-pay cycle. This technology is invaluable for organizations seeking to maximize their operational efficiency. By creating an end-to-end process, from sourcing through to payment, it allows for stringent costing controls and tight integration with other financial processes.
In order to make the most of an S2P solution, executives need to understand both the automated components and the manual interventions needed to ensure compliance with internal policies. This article guides executives through best practice demands for optimizing an S2P system for maximum ROI.
1. Strategic Planning
Before an S2P system can be deployed, business requirements must first be established. An essential part of this process is understanding the organizational strategy. What are the goals and objectives? The financial targets? The required speed of implementation? What processes need to be centralized and which remain decentralized? How high is the risk of fraud and/or ineligible purchases? What regulations and policies should be adhered to?
In addition, executives must decide on criteria for vendors, create categories and decide on how savings will be monitored. This stage is crucial as all other stages depend on the decisions taken at this stage.
2. Designing the System
Once the strategic planning is complete, executives will need to spend time designing the system. This includes choosing product that fulfils the organizations needs, customizing the system to the needs of the business, and mapping the process for all S2P-related activities. Executives should strive to find the best system for their circumstances, bearing in mind such issues as workflow, reporting capabilities, and scalability.
Executives should also establish timeline for system configuration and implementation, and create list of ?quick wins? and other benefits from deploying the system.
3. Preparations for Go-Live
The go-live date is the most critical stage in the implementation process. Executives will need to ensure their internal teams are well-prepared, which may include end user training, line-manager authorization, supplier onboarding and category assignments.
Some of the most commonly overlooked areas include supplier contracts, compliance, regulations and global data regulations, data verification, and contingency plans.
In addition, executives must consider how the implementation process will be monitored and how they will measure the success of the system once it is operational.
4. Post-Go-Live Operations
Once the system has gone live, executives should evaluate how the system is operating and make any necessary adjustments. This includes analyzing and improving the process flows and the suppliers used, monitoring supplier performance, evaluating the savings made, and evaluating the organizational performance against established benchmarks.
Executives should also create feedback loops to assess user satisfaction and to ensure any system updates needed are made in timely manner.
5. Compliance
Executives must ensure that all S2P activities meet the legislative regulations of their local jurisdiction. This involves regularly assessing compliance requirements and appropriate guidelines for controlling unjustified payments and reducing non-compliant purchases.
Executives must also create processes for checks and balances, especially with regard to compliance and auditability. This could include using audit trails to ensure original information cannot be tampered with and access control systems to ensure that only authorized personnel can access the system.
Conclusion
By applying the above best practices to their S2P systems, executives can maximize their operational efficiency and guaranteed compliance with all relevant legislation. This will help organizations make substantial financial savings and foster organizational agility.
