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Procurement Systems Integration Within the Enterprise: Exploring Integration In The Cloud

By Jason Busch, Managing Director, Research, Spend Matters

P2P systems integration is a topic of interest that is rising to the surface as one of the top enablers (and requirements) for driving lasting eProcurement impact and change. Yet it’s a subject that precious little research focus has been devoted to in the past. With our latest Spend Matters Perspective, we aim to change this. On the highest level, one of the side effects of the rising stature and role of procurement in the past decade is that the function is no longer a purchasing silo of its own. As a result, procurement – both teams and systems – is interfacing with more systems as it expands its role and reach across the enterprise.

An essential component of this expanding charter is the need to increasingly focus on influencing, controlling and managing front-line buying and spending decisions. To be effective, however, the mission requires linking procurement and process more tightly across a range of systems including ERP (financials), inventory management, human resources/human capital management (HCM), vendor management systems (VMS), customer relationship management (CRM) and other business applications.

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 each of these four areas (explored in significant detail in this research brief), business leaders and executives are the ones who benefit most from successful procurement and enterprise application integration. But integration is just as critical to enable typical employees. On the frontlines of most businesses, properly configured and enabled P2P tools are just as ubiquitous and frequented as CRM or HR systems. More and more casual users that interact with a single system of record on a frequent basis (outside of ERP or employee benefits systems) are now touching on procurement.

For these employees, P2P can ideally serve as a bridge to drive greater accessibility into information contained across other systems – and likewise, can play a key role in the quality and use of data in other systems (e.g., supplier/vendor master). Yet systems integration and visibility is a key foundational component to enable the types of outcomes that typical frontline users are after whether they want to make a basic purchase and “do the right thing” or have a more advanced query or action they want to take.

In short, for both procurement and finance teams – not to mention line-of-business users – P2P and related systems integration has become the glue to cement better overall business strategies and, of course, successful eProcurement and e-invoicing surround strategies. If you are looking for a resource that articulates a business-driven look at the benefits (and challenges) associated with many of the steps in eProcurement and broader P2P systems integration in a cloud environment, we encourage you to download this Spend Matters Perspective.