We would like to welcome back Roshnee Mistry who works with the content leadership team of Zycus.
One of procurement’s main functions is to help organisations achieve excellent value from supplier relationships. Top performers deploy holistic purchasing and payables technology platforms to deliver breakthrough results from sourcing, purchasing and invoice processing.
Deriving operating efficiencies and improving performance of working capital to deliver maximum value to internal business customers is only possible when internal processes and external supply relationships are managed collaboratively.
According to a study conducted by The Hackett Group, “Top-performing purchase-to-pay organizations outperform their peers nearly two-to-one when it comes to efficiency, while also delivering on the higher-level effectiveness objectives of the company. Such objectives include payment strategy optimization, compliance to preferred suppliers, spend visibility and internal compliance and control.”
The current business environment allows little margin for error. Business enterprises must constantly re-evaluate processes and cost structures and align CPOs’ agendas to top corporate priorities. Data shared in a recent white paper by Zycus titled ‘The P2P Payoff: Mining the Untapped Return from Procure-to-Pay’ demonstrates simple ways of maximizing savings opportunities by optimizing P2P processes.
Ø Make your P2P system the only approved way to buy. By guiding users all the way through procurement processes, compliant buying for can be increased for all indirect purchase categories, boosting potential procurement ROI by a factor of three or more and eliminating maverick spending over time as user acceptance and spend visibility increases. In a service-friendly way, turn off all other order and payment vehicles – make it policy.
Ø Guide requisition approvers by providing visibility into current budget consumption. Effective P2P systems ensure that all purchases are on-contract and enforce budget control at a line-item level, denying or deferring purchases that are not budgeted and providing complete, real-time visibility into spending versus budget. Such visibility creates individual accountability, engenders proactive management of corporate funds and aids in plugging savings leaks.
Ø Achieve best-in-class P2P performance by accurately coding and classifying purchase transactions without burdening end uers. An Artificial Intelligence–powered platform assists in eliminating user guesswork, classifying transactions accurately and triggering pre-configured approval workflows, which improves overall P2P usability.
Ø Streamline requisition-to-order cycles to enable reduced inventory and associated carrying costs. Seamless requisition approval and visibility into order status ensures that all indirect goods and materials can be purchased as and when required. Buying teams can provide outstanding customer service to each business unit and realize exceptional transactional efficiency.
Ø Eliminate manual invoice processing. Best-in-class invoice processing is achieved only through automation. High first-time match rates feed through to other areas, resulting in greater productivity, lower costs per invoice and larger numbers of invoices paid on time.
Ø Increase discount capture. Both suppliers and buyers benefit when financial supply chains operate efficiently. Discounting is an effective way for buyers to generate returns on surplus cash and for suppliers to boost cash flow. Automated and accelerated invoice approval cycles enable greater capture of prompt-payment discounts while maintaining appropriate controls.
Ø Improve spend visibility and enable advanced analytics with P2P automation. Provide insights into suppliers, categories, prices, supply lead-times and contract compliance to promote and maintain strong supplier relationships and to proactively manage supplier performance and improve contract utilization.
Seamless integration of a procure-to-pay automation solutions with existing systems is critical to ROI and employee usability. End-to-end process management approaches are required to transform and realize ROI from automating P2P processes. It is imperative to track successes, report and follow up to prevent leakage and to improve controls and compliance. Corporations must understand that usability, customer centricity and vision are key differentiators for maximizing adoption of P2P systems across organizations.
Each new dollar of spend brought under control can yield significant total cost savings for organizations. As the old adage goes: "A penny saved is a penny earned." Read the whitepaper to learn about more ways to save.
Roshnee Mistry from Zycus regularly writes on procurement-trends and best practices, sometimes taking the off beat path to bring in a fresh perspective. She also drives the branding activities of her company.
In her free time she enjoys hot cuppa coffee with the latest fiction book.
She is an MBA in Marketing and a commerce graduate.