Buying Into An Integrated Approach to eProcurement

We are pleased to welcome this post from Daniel Ball, director at Wax Digital.

Change is taking place in the way businesses are buying eProcurement technology. Increasingly, professionals are recognising the benefits of an integrated Source to Pay (S2P) approach to their procurement strategies. This was revealed to be on the cards for many of the respondents to our recent survey on the true business benefits of eProcurement, charting a shift from cherry picking individual software modules to automating certain parts of the procurement process towards adoption of one integrated platform.

Our survey of 200 procurement professionals showed that over half are currently using at least one or more eProcurement software modules to gain the time, accuracy and cost saving advantages offered in areas such as eSourcing, Contract Management, Purchase to Pay or eInvoicing. However, what also became abundantly clear was that there is an upward trend towards the adoption of single source to pay suites (S2P) and a shift away from the use of these individual modules. 21% of our survey respondents claimed that they were already operating an S2P approach to procurement but 36% want this as their model of choice within the next two years. While this shows there’s still a range of eProcurement adoption models out there, the telling finding was that the only area where adoption is likely to increase is full Source to Pay.

And of course, with this movement towards S2P, the research suggests that we’re likely to see a decline in the reliance of piecemeal or disconnected systems to manage separate procurement processes.

It’s easy to see why this change in approach is happening when a move to S2P can help organisations bring the procurement lifecycle under the control of one platform, enabling:

  • Immediate access to real-time buying activities.
  • A joined up view of all supplier data, from initial tender through to ongoing relationship.
  • Easy, organisational-wide adoption as it’s an online platform with a common, consistent interface.
  • Improved compliance and control.
  • A comprehensive end-to-end audit of the entire purchasing process at the touch of a button.
  • Spend analysis as less time needs to be spent on manual data consolidation and comparison.

This move to one all-encompassing platform could also be a sign that procurement is turning its attention towards support of its organisations’ longer term, strategic goals. According to our research it certainly looks that way as it predicts a 71% rise in the number of UK organisations expected to adopt integrated S2P processes over the next few years. Respondents are clearly expecting eProcurement to deliver on a range of wider business benefits such as strategic sourcing and improved supplier relationships, thereby contributing to the broader success of the business.

That said, procurement professionals aren’t losing sight of eProcurement’s ability to deliver opportunistic and tactical benefits either. 32% of respondents anticipate quick savings on easy spend categories, while quick wins maximising efficiencies in purchasing and requisitioning are also on the wish list.

Turning attention back to the rise of Source to Pay however, for many organisations there’s still some technical catching up to do if they’re to realise any of these strategic, opportunistic or tactical benefits. A third of our respondents don’t have an eSourcing system; 40% are missing out on the benefits of contract management; 43% are yet to embrace Purchase to Pay; while almost half, 47% don’t have eInvoicing. While the intent is clearly there, gaps in the development of fully integrated Source to Pay are clear.

The research suggests that procurement professionals are looking to raise the stakes over the next few years in terms of what they hope to achieve through the wider adoption of eProcurement. This is a chance for them to make their mark and deliver far more strategic value to the business beyond cost savings.

 

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