Sourcing-To-Pay Software: Achieving Superior Operational Performance
PROCUREMENT VS ERP
Maximizing operational performance is primary goal for Finance executives looking to drive business growth. With the software-as-a-service (SaaS) market for financial processes projected to grow at an average annual rate of around 15% through 2025, the procurement sector stands to benefit greatly from savvy investments in suitable software solutions. Chief among such solutions is source-to-pay (S2P) software.
In addition to the deregulatory benefits of S2P software, enhanced transaction visibility across the procure-to-pay (P2P) cycle, and the ability to drive strategic sourcing decisions in-line with business objectives, executives should consider the capacity of S2P solutions to optimize bottom-line performance through improved efficiency and cost savings.
As S2P solutions are increasingly adopted as an alternative to purchasing Enterprise Resource Planning (ERP) systems, the modern C-suite should be aware of the advantages S2P solutions offer for procedural optimization. Automation is major factor driving the success of S2P solutions in performance optimization, enabling comprehensive view of the entire procurement cycle from the creation of the requisition to the delivery of services or goods. Furthermore, S2P solutions can standardize the complex mix of invoice formats and approvals processes across disparate external business partners, helping to streamline the invoice validation process, promote supplier performance, and reduce manual error and P2P cycle times. Automated features may also serve to reduce the SLA times associated with payment processing.
To ensure that the full potential of S2P solutions is leveraged for operational optimization, strategic planning for implementation should feature comprehensive evaluation of the supplier performance data available through previous procurements, detailed discussions with existing stakeholders, and an examination of the existing financial data flow. As S2P solutions also provide valuable visibility into previously opaque procurement and analytics data, executives should look to identify identified opportunities to harness the software’s integrated analytics functionality.
In addition to the strategic capabilities of S2P solutions, executives should be aware of the tactical potential of the software for streamlining payment processes and leveraging sourcing opportunities for further cost-savings. Examples of such functionalities are master purchase ordering, advanced invoice validation features, and automated bid events. Execution of such features can drastically reduce the manual overhead associated with procurement processes. To ensure the efficiency of these features, executives should consider the integration of S2P solutions with existing corporate accounting systems and suppliers.
As C-suite executive charged with improving operational performance, the evidence in favor of an S2P software-driven solution is compelling. Consolidating manual process with automated, cloud-based functionalities fueled by integrated analytics, executives can leverage the power of S2P solutions to unlock vast financial performance opportunities. The primary benefit of an S2P solution, however, lies in the capacity of such software to remain agile and adaptable to the changing needs of the modern business as it grows and evolves.
