Source-to-Pay Solutions
An In Depth Guide
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What are Source-to-Pay solutions?
Source-to-pay (S2P) solutions are end-to-end solution suites that span spend/supply analysis, sourcing, contract management, supplier management and transactional procure-to-pay (P2P) to manage integrated procurement/payment processes. In other words, S2P technology solutions cover the entire procurement lifecycle. As you can see in the following graphic, S2P can be further divided into upstream procurement (source-to-contract [S2C]) and downstream procurement (P2P). Each of those categories can also be further divided.
An S2P solution offers technology that supports each of the categories outlined above and may also support adjacent areas, such as Travel and Expense, Risk Management and Contingent Workforce.
For more information on what each of these specific subsets are, please refer to the relevant in-depth guides:
As well as adjacent covered areas:
- Expense Management
- Vendor Management Services
What kinds of organizations should consider a Source-to-Pay solution?
A source-to-pay solution can benefit a wide range of organizations, but it is particularly advantageous for those experiencing challenges in their procurement processes. The following gives some of the types of organizations that should strongly consider an S2P solution:
- Large enterprises with multiple locations and diverse suppliers: Managing a vast supplier network, multiple internal stakeholders and transactions can be overwhelming without automation and without breaking silos.
- Mid-market companies: Mid-market companies can benefit from S2P solutions that offer a functional fit without a prohibitive cost of entry and with rich out-of-the-box content to support them.
- Organizations seeking enhanced process maturity: Organizations aiming to kickstart continuous process improvement and overall procurement maturity through the adoption of technology would find value in S2P integrations.
- Companies with high procurement spend: Automating the procurement process can lead to significant cost savings through improved efficiency, reduced errors and optimized supplier relationships.
- Organizations aiming to improve cash flow: Faster invoice processing and payment cycles can positively impact cash flow.
- Companies in highly regulated industries: S2P solutions can help ensure compliance with regulations and reduce the risk of fraud.
- Businesses seeking to optimize procurement strategies: Advanced analytics and reporting features in S2P solutions can provide valuable insights into spending patterns and opportunities.
- Teams drowning in manual tasks: A digital approach to S2P can result in collaboration and overall efficiencies.
Industry-specific examples
- Manufacturing: Managing complex supply chains, controlling costs and ensuring quality.
- Healthcare: Compliance with regulations, managing a variety of suppliers and controlling costs.
- Retail: Fast-paced environments with fluctuating demand and numerous suppliers benefit from streamlined and end-to-end processes.
- Government agencies: Complex procurement processes, compliance requirements and budgetary constraints make S2P a valuable tool.
How technology supports Source-to-Pay — Top 5 capabilities
These ‘Top 5’ critical digital capabilities stem from the Spend Matters TechMatch workbench — derived from a larger number of requirements scored in the SolutionMap solution benchmark.
The Top 5 capabilities are the highest-weighted critical capabilities that are central to the displayed solution market benchmark. They have been developed by the Spend Matters analyst team and refined by procurement users in tech-selection projects using our market-proven SolutionMap benchmarking dataset and associated TechMatch decision-making tool.
1. Analytics
The ability to provide a single view into all historic, current and planned supplier spending in order to improve that spending through better sourcing, compliance and demand management.
On average, buyers should expect a vendor to include out-of-the-box report builders (drag-and-drop models), reporting dashboards and descriptive reports of all S2P metrics. Top performers have deeper analytics capabilities, such as market intelligence through community data and AI/ML-enabled actionable analytics that support the identification of opportunities.
Some top performers have actionable analytics for benchmarks, process KPIs and user KPIs, as well as predictive and prescriptive analysis to guide users during their S2P activities, achieving a greater contribution from all stakeholders and generating greater value for the business.
2. Contract Lifecycle Management
The ability to automate the authoring, negotiation, execution, implementation, monitoring and renewal of B2B contracts (with an emphasis on supplier contracts).
Contract lifecycle management (CLM) acts as the intermediary between upstream S2C and downstream P2P processes. By connecting the two areas, organizations increase the speed and quality of the contract drafting, negotiating and ongoing repository-based management processes.
Within S2P, CLM is especially useful when it is fully integrated. For example, a sourcing event can automatically generate the creation of a new contract within the platform, or post-signature contracts can connect to the P2P side to manage corresponding purchase orders/payments. Top solutions for CLM will go beyond cross-functional/module collaboration and offer deep configurability, guided authoring, suggested clauses, clause-level risk scores and more.
3. Procure-to-Pay
A combination of the e-procurement and AP Automation/I2P markets spanning the procurement process, including automation of purchase requisitions/orders, receipts, invoices and payments.
An average S2P solution includes core catalog management, requisitioning, ordering, receiving and invoicing capabilities, such as catalog creation and management, life-cycle support, content search support, purchasing guidance, workflow and business rules approvals support, order creation and collaboration and receiving support. Core support for invoice capturing, validation, matching, compliance and approvals are also expected. Top performing vendors can support more complex P2P use cases, use AI/ML technologies to improve process automation and effectiveness, have more robust workflow and business rules engines and include additional capabilities, such as payment processing and financing capabilities.
Some top performers use advanced analytics embedded into the processes to guide users to make better decisions and even use AI/ML to make decisions for them. Top vendors have also extended their capabilities to finance and treasury areas, supporting cash management effectiveness and working capital optimization. Additionally, they use advanced technologies supported by managed services to improve the usage and adoption of users and providers.
4. Sourcing
Solutions and supporting content and services for managing sourcing strategies (including category strategy), execution (e.g., RFx management and e-auctions) and portfolio/performance management.
Average vendors enable customers to manage moderately complex sourcing events that partially leverage the other modules of the suite (SxM and CLM). Top performers can better cross-fertilize processes, bringing more data into the sourcing process to enhance key steps, such as supplier invitations and bid analysis/evaluation, by providing users with a bigger picture and the means to perform more complex scenarios. They also have more capabilities to bring outside-in intelligence, enhancing strategizing and execution.
Some leading performers leverage AI to automate the sourcing process and augment sourcing professionals with recommendations on when to launch events and what to do when managing an event.
5. SxM
Supplier-centered applications that not only orchestrate user experiences between suppliers and employees across S2P but also augment sourcing/contracting and P2P solutions with capabilities to optimize supplier-related information, performance, relationship, quality, risk and compliance management.
The average provider supports customers in managing the complete supplier lifecycle and feeds other modules and systems with supplier-related information. The differences between average and leading providers reside in the breadth and depth of managed and verified information and configuration capabilities (data model, workflows, etc.).
Some leading providers help customers tackle data quality issues by leveraging various capabilities (network, community, AI/ML, etc.) and ensuring that every supplier interaction managed in the suite is an occasion to review/update data. These leading solutions also foster a bi-directional collaboration.
Why selecting the right Source-to-Pay solution can be difficult
Every procurement organization needs an S2P digital strategy, but choosing a full-footprint S2P suite vendor should be a careful consideration.
Upon first glance, S2P suites can appear a time saver — they cover the entire procurement lifecycle rather than cobbling together a variety of solutions. Ideally, they also have a shared code base, UI/UX and data warehouse.
As we noted, this is the ideal state of S2P. In reality, some suites are less integrated than buyers are led to believe while other integrated suites lack the capabilities to handle all spend or organizational/industry complexity. Understanding all of the ROI factors (not just TCO) is critical.
Other roadblocks include:
- Internal clashes: CIOs favoring ERP-centric S2P suites often clash with CPOs looking for balanced architectures with specialized vendors (and partners), resulting in poor decisions, alignment and joint value to the business
- Marketing noise: Navigating overwhelming ‘vendor noise,’ non-objective council and high-level analyst reports that create delay (as do approaches ONLY considering peer networking) and blindness to viable market choices.
- Repetitive shortlists: Avoiding select processes that end up with the same shortlisted players but are ‘sub-optimized’ at best (or scrapped at worst) because of missing intelligence on granular vendor/product capabilities (e.g., major data model and platform level gaps), ROI business case realities, vendor risks and commercial ‘gotchas.’
How Spend Matters can help you select Source-to-Pay technology
Spend Matters specializes in procurement technology diligence. In addition to projects and advisory, Spend Matters offers Insider, the only membership community and technology comparison tool of its kind: access to Spend Matters SolutionMap vendor rankings dataset combined with independent, zero pay-to-play, brutally honest coverage of solution providers, market developments and trends affecting procurement, finance and supply chain.
We can help you find a solution that can:
- Meet the individual and collective needs of procurement, IT and functional partners (not just procurement), solving the all-or-none ERP vs best-of-breed selection problem.
- Quickly hone in on digital tooling optimized for many factors: procurement strategy/operating model, budget, backoffice environment, digital strategy, service partner ecosystem, etc.
- Deliver fast time-to-value but not get boxed out longer term with a system that cannot scale or meet unique business/IT needs and constraints.
Discover Source-to-Pay vendors
These are the vendors we are covering today (or very soon). Visit their vendor directory pages on Spend Matters for a quick vendor overview, demographic information and relevant articles, including vendor analyses.
| Solution Provider | What it does |
|---|---|
| Aavenir | Aavenir offers contract management, sourcing and accounts payable automation. It has deep out-of-the-box integrations with ServiceNow, Workday and Salesforce, among others. It also has a plug-in to Microsoft Word and Docusign. |
| Corcentric | Corcentric Platform is a comprehensive S2P offering, born out of Corcentric’s various acquisitions over the last decade (Source One Management Services in 2018; Netsend in 2019; Determine, Inc. in 2019 and Vendorin B2B Payments provider in 2020). Corcentric Platform currently includes supplier management, sourcing, CLM, procurement, invoice management, financial management, payments and analytics. The company also offers advisory and managed services. |
| Coupa | Coupa is an expansive S2P offering, including both core modules (S2P, S2C, P2P, AP automation) and many adjacent ones, such as supply chain design, treasury management and payments. It is well known for using its community-based intelligence to generate insights. |
| ebidtopay | ebidtopay is a European family-owned suite that typically serves the mid-market. Its ‘smart!’ modules cover S2C, P2P, supplier relationship management and supply chain management, as well as products focused on strategy and innovation. |
| EffiGO | EffiGO is an India-based S2P platform that offers modules in strategic sourcing, P2P and S2P. It also offers a supplier portal and a product called ‘eDisposal’ that focuses on processing surplus stock and scrap. |
| GEP | GEP offers three S2P solutions that work together. GEP SMART is an S2P suite application, GEP NEXXE is an SCM application, GEP Green is a sustainability application. Additionally, GEP Quantum is the AI-powered platform foundation that uses machine learning and low-code development tools to automate tasks, generate insights from data and allow for easy configuration of workflows across GEP. |
| ISPnext | ISPnext is an S2P solution that has modules for supplier management, sourcing, contract management, procurement, AP automation and spend analysis. Most of its customers are mid or mid+ organizations that have their HQ in Benelux, an economic and customs union comprising Belgium, the Netherlands and Luxembourg. |
| Kissflow | Kissflow offers modules that cover strategic sourcing, P2P, supplier management, contract management, inventory management, invoice automation, spend analytics and integrations. It typically serves SME companies. |
| Ivalua | Ivalua is a global solution with customers in over 75 countries and a strong partner network. Its modules cover the S2P process (including for direct materials management), and it offers some supplemental offerings such as inventory management. |
| Jaggaer | Since beginning in 1995 under the name of SciQuest, Jaggaer has acquired several other companies that now are part of the offering under the Jaggaer ONE banner, which launched in 2019. In addition to covering the S2P process, Jaggaer offers solutions for supply chain collaboration and payments. |
| Medius | Medius is a modular S2P suite that covers the mid-market in Europe. Customers mainly use it for indirect spend and to benefit from suite-level integrations. Its focus is on downstream processes (e-procurement and AP automation), but it also has upstream capabilities to support downstream that can be used to cover all processes. |
| MeRLIN | MeRLIN is an S2P suite provider launched in 2021 that supports direct and indirect spend for mid-market companies in the manufacturing sector or the public sector — the two verticals on which the company focuses. |
| Oalia | Oalia was created in 2000 at approximately the same time as several other European S2P providers. It started with a focus on intellectual services and added capabilities over time to become a full suite. However, P2P in Oalia is mostly deployed as a complement to the S2C offering and less as a full-fledged P2P offering. |
| OneMarket | OneMarket by LogicSource offers solutions that cover P2P, analytics, sourcing and contracts. It also offers a project management capability called Portfolio. |
| Onventis | Since its first release in 2002, Onventis has been incrementally building and expanding its S2P system which it offers to the European mid-market. Over the last few years, it has worked to close several gaps by acquiring Spendency for spend analytics, adding native CLM capabilities and third-party risk data providers. Today, it covers the entire S2P process. |
| Oracle | While arguably best known for its ERP, Oracle also offers many other applications, including a Procurement Cloud that covers the S2P process. Other applications include a supply chain and manufacturing solution, human capital management and product lifecycle management. |
| Proactis | The creation of Proactis goes back to 1996 when the company Get Real Systems was founded in the UK. The company changed its name to Proactis in 2003. It offers an S2P suite that includes a marketplace/supplier network. In addition to buy-side capabilities and revenue, Proactis has an offering dedicated to suppliers wishing to capture new business opportunities. |
| Promena | Promena is an S2P suite that focuses on smaller and mid-size businesses and supports supplier management, sourcing contracting and e-procurement. |
| ProcurePort | ProcurePort offers a strategic sourcing solution whose main focus is on configuring and managing RFx and auction processes. In 2018, ProcurePort acquired a separate P2P platform that it now sells under its brand. |
| Raindrop | Raindrop is a flexible and easy-to-use S2P tool designed for small to medium-sized enterprises. Today it offers products that cover supplier management, sourcing, contract management, analytics and payables. It also offers a digital signature platform called RainSign. |
| SAP Ariba | Since its initial founding as Ariba in 1996, SAP Ariba has continued to undergo significant development, and the solution’s overall SAP Ariba roadmap increasingly intersects with those of other SAP products. Today, it covers the full S2P lifecycle. |
| Synertrade | Synertrade offers solutions for supplier management, P2P and S2C. |
| VORTAL | VORTAL offers solutions connecting thousands of public and private buyers with an international community of qualified suppliers. Its solution covers S2P but focuses more on sourcing and e-procurement (analytics and CLM are not as advanced). |
| Zapro AI | In addition to covering the S2P cycle, Zapro AI offers solutions for vendor management and inventory management. |
| Zycus | Zycus is an S2P provider that offers P2P and S2C platforms, as well as applications for intake management, risk management and ESG management. |
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