Bring sustainable value to the bottom line
Increasingly, procurement is being looked to for the added value it can bring to the organisational table. Furthermore, expectations are on the rise, with big data and advanced analytics driving decision making to new levels by enabling teams to generate new insights and achieve unprecedented proactive capabilities.
Demonstrating procurement’s value can include many components depending on the priorities of any particular company. But, with increased reliance on cloud platform P2P solutions, showing procurement’s return on investment (ROI) is a great place to start, says Michael Mitchell, Senior Content Manager at Determine, a source-to-pay enterprise contract lifecycle management solutions provider.
Research by PayStream Advisors’ indicates that the majority of organisations manage their procurement through manual processes or with inefficient, outdated technology. This is perplexing, considering that research companies have identified top procurement priorities for a number of years as:
1. Increase savings
2. Achieve process efficiency
3. Better leverage technology
You cannot leverage technology you do not have, and you need those tools in order to achieve the first two goals.
Budget pressure is the usual culprit when companies forego or delay technology implementations, but that is something of a vicious cycle: put off the investment and you delay the returns it delivers. Being able to demonstrate upfront what the procurement ROI could be makes a powerful argument for investing in the power of automation, integration and collaboration that the right technology provides.
Unseen procurement data, unrealised potential
To achieve cost savings and increase spend under management, you need to have all the data accessible and visible from across your organisation in order to analyse it. Without a cloud-based procure-to-pay solution that includes integrated master data (and ideally contract management), procurement teams run into a slew of challenges:
– Poor quality and/or insufficient spend data
– Manually intensive and error-prone processes of data management
– Lack of visibility to identify potential savings opportunities
– Inability to prioritise top spend under management areas
– No viable way to determine contract compliance and obligations management
– Lack of collaboration between people, departments and offices
– Out-of-control maverick spend
Without technology and the data mastery it enables, business decisions can be affected — such as incorrect decisions, poor quality or poorly-timed decisions, or even decisions not being taken at all. It could even affect the ability to remain compliant, owing to inaccurate regulatory and legislative reporting.
Just as critical: without technology it becomes difficult or impossible to accurately demonstrate procurement’s value.
There’s no question that there are serious disadvantages to using outdated procurement solutions, especially where data is concerned. PayStream Advisors’ 2018 Procurement Insight Report and Ardent Partners’ CPO Rising 2018: The Age of Intelligence reports show that integrated-solution technology provides the automation, integration and collaboration that standardises process efficiency, enables optimised spend and savings management, maximises your team’s agility and allows you to clearly show your procurement ROI.