Efficient master data management (MDM) is vital for the success of any enterprise looking to create a competitive edge through more informed, data-
Why A “Unified” Source-to-Pay Software Is the Fastest Route to Digital Transformation
With the demands on procurement becoming ever more urgent, CPOs in nearly all industries are coming around to the value of going digital. They are increasingly using sophisticated procurement software for a variety of source-to-pay processes to reduce errors, increase spend visibility, improve cycle times, get more spend under management and realize savings.
Yet, for many, true step change — and true transformative impact — remain stubbornly out of reach.
Standalone Source-to-Pay Tools
Most companies try to improve their source-to-pay processes incrementally, rather than commit to full transformation. Wary of upsetting the status quo, and armed with assumptions about the costs associated with end-to-end procurement software, they prefer to use niche specialist solutions to resolve their problems. Even companies with an ironclad business case for a fully automated source-to-pay application suite hesitate to take the plunge.
However, most companies that go this route fail to achieve the process efficiency and savings they had hoped for. Issues such as spend visibility, savings tracking and compliance remain, chipping away at profits.
Challenges of Using Standalone Tools
Lack of Interconnectedness: When disparate solutions are deployed for each function within source-to-pay, they create barriers to optimal communication and exchange of critical data. For example, data from a standalone sourcing software cannot automatically flow into a contract management software. It needs to be extracted and re-entered from one module to the next, which is an error-prone and labor-intensive process.
But in a unified source-to-pay software, all processes are interconnected, enabling end-to-end procurement automation and seamless data flow. This dramatically boosts efficiency and minimizes cycle times.
Lack of Easy Availability of Critical Information: With enterprise operations spread across the globe, it’s crucial that every function have access to critical information on sourcing, contracts, suppliers, SLAs, etc. to ensure that the business functions efficiently. Standalone procurement tools just can’t achieve this, resulting in lack of transparency and enterprise-wide visibility into the overall state of the business.
A unified source-to-pay software platform enables easy flow of information and helps to improve visibility and transparency across all processes. Cross-functional collaboration improves, and higher compliance is achieved with greater stakeholder involvement.
User Adoption and Compliance: A key challenge when using disparate tools for each process of the source-to-pay cycle is having to go through different applications to obtain a particular set of data points for analysis and optimization purposes. This is time-consuming, frustrating and results in low user adoption, which defeats the whole purpose of implementing these tools. Stakeholders are likely to get overwhelmed by all the different modules and unlikely to use them effectively. This creates confusion over policies and requirements in buying, impeding companies from achieving true digital transformation.
With an integrated source-to-pay suite, users can access all necessary information on a single screen via a single system, whether they want to get detailed drill-downs or big-picture views. This results in more accurate analysis, reporting and decision-making capabilities, along with smoother processes and seamless information flow.
Implementation and Ongoing Costs: While implementing standalone solutions might seem to be a more cost-effective strategy, the TCO is much higher when compared with a unified source-to-pay software solution. The TCO includes hardware costs, software licensing and renewal fees, and overheads as well as IT costs for the upkeep of the system. Implementing multiple standalone applications requires multiple downtimes and training programs for each piece of software.
When TCOs are compared, unified procurement platform solutions are the ones that prove to be more cost effective over the long term.
True Value of Unified Procurement Software
Here’s a concise, four-pronged argument as to why unified procurement software serves as the catalyst for step change in the function:
- A unified procurement system tracks and time-stamps every step of the core procurement process, improving visibility and transparency.
- A meticulous tracking process for control over demand and spend, and a comprehensive, user-friendly catalog for purchases, encourage buyers to purchase via the system within contracted pricing terms and from preferred vendors, reducing maverick spend.
- This improves spend visibility for upper-level management and leads to more effective strategic sourcing and spend management.
- Finally, this enables clients to gain greater visibility into supplier performance and take corrective actions faster.
The true value of an end-to-end source-to-pay solution, however, goes way beyond the savings it generates or even the efficiencies it unlocks. Executed well, it empowers people to get what they want at the best price and in less time, while seeking better-quality offerings and more competent suppliers. It also, crucially, gives back time — very significant amounts of time — to procurement resources, helping them shed mundane, low-value tasks, focus on the business’s strategic needs, and become the real ambassadors of source-to-pay transformation.
As all contract managers know, managing contracts is a highly complex task prone to errors — of omission, duplication, inconsistency, and so on.
Emerging technologies such as artificial intelligence (AI), robotic process automation (RPA), machine learning (ML) and natural language processing