Procurement functions, such as contracting, spend analytics, sourcing and vendor management, are all important. But in the end, there is always an invoice to be paid. And this particular payment needs to be processed to ensure that it reaches the right supplier and for the right goods and services. For any organization this function means having an efficient Procure-to-Pay (P2P) solution that integrates seamlessly with the already installed financial structure, which in most cases is an ERP (enterprise resource planning) software.
Most procurement executives know that a positive business case can be made out of invoice automation. They also understand that automation improves productivity, efficiency and visibility with higher accuracy. But few have aggressively pursued this potential improvement because they continue to leverage their existing ERP systems. However, the ERP systems do not provide the same level of sophistication that a P2P solution can to manage the procurement process. These barriers can be overcome if the ERP is integrated with P2P software.
Successfully integrating these two systems has become easier than in the past. However, it requires careful consideration on aspects like the data format that should be followed or which processes can work together. As the use of cloud-based solutions has increased, the risk of integrating ERP with P2P has lessened.
Integrating ERP with P2P can also deliver the substantial advantage of long-term scalability. Spend Matters research suggests that the rising need for connectivity and integration between systems touching on procurement mirrors four current business needs that many companies are looking for from procurement and finance organizations:
Flexibility: Focused on the ability to integrate new systems quickly while adapting to the changing business environment
Control: Influencing and controlling spending decisions on the front lines of the business
Visibility: Insight into both spending activity and decisions, plus broader budgets and the ability to proactively manage cash more efficiently and effectively
Forecasting: Using procurement intelligence for finance-driven forecasting, scenario building, budget building, etc.
In these four areas, business leaders are the ones who benefit the most by integrating procurement and enterprise application software. One can also mention that for both procurement and finance teams – P2P and related system integration has become the glue to establish effective e- procurement and e-invoicing processes.