The Business Case for Procure to Pay

Automated procurement solutions enable end-to-end visibility into purchasing transactions to boost operating margins and efficiency

Aug 11, 2022 (Aug 15, 2022) -- GigaBrief

What it Does

Procure to pay is the end-to-end process and supporting tooling for managing purchasing transactions across the organization, whether emergent or planned through an annual operating budget.

Benefits

1.5% increase in procurement staff productivity.
5% reduction in accounts payable costs.
20% reduction in supplier numbers and associated costs.
0.25% increase in operating margin.

Urgency

High: Do it now if the organization is struggling with procurement team inefficiency, non-budgeted spend, or if there is a policy non-compliance issue and increase in procurement costs.

Risk Level

Low: With effective change management and proper planning, implementation should be straightforward.

30/60/90 Plan

30 Days: Perform a strategic enterprise analysis with focus on procurement.
60 Days: Achieve board-level buy-in, scoping, and approval of the decision package.
90 Days: Conduct project planning, sponsorship, and preparation for delivery.

Time to Value

Procure-to-pay solutions should produce a return on investment within a year of implementation.

What Is Procure to Pay?

The Procure to pay category of applications falls within the enterprise resource planning (ERP) family. Procure to pay cuts across procurement and financial accounting processes to provide end-to-end visibility of a purchasing transaction across purchase demand, procurement, verification of procured goods and services, and payment. It presents purchasing information in an integrated manner, enabling stakeholders to understand the complete picture of what they are spending, with whom, and at what stage.

Enterprise software manufacturers like Oracle, SAP, Microsoft, and Sage are leaders in the sector, providing modular solutions that can provide basic or advanced functionality as required. Procure-to-pay solutions provide accountability, traceability, and transparency around company spending and enable reporting against annual operational budget lines.

Implementation challenges are largely around understanding existing processes, and mapping them to more streamlined processes that can be underpinned by a procure-to-pay solution. Therefore, achieving the benefits requires a combination of software deployment and business/operational change.

What Is Procure to Pay?

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