Why Your Procure-to-Pay Solution Is Failing (& How to Fix the Problem)

Are you paying six figures for your procurement solution system and still using emails and spreadsheets to conduct purchases? You’re not alone.

Many businesses invest in a procure-to-pay solution, only to be disappointed when procurement inefficiencies like high spend and time delays remain unresolved.

Failure to automate and streamline purchase and supply chain systems affects spend management. Manual and siloed systems make it difficult to track expenditures across the company. These systems are prone to errors, inconsistencies, and duplications that inflate spending. Companies using such systems also lose opportunities to negotiate on bulk orders, foregoing direct savings.

While a procure-to-pay solution has many benefits, a company must choose the right system based on its needs, objectives, and stakeholders. This article highlights the main pitfalls companies fall into when investing in a procure-to-pay solution. It covers what to do to avoid these problems and ensure the successful implementation of the right procurement system.

In this article, we’ll dive into:

• Why a procure-to-pay solution can fail
• The best procure-to-pay solutions of 2022
• How to best implement P2P software

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Why do procure-to-pay solutions fail?

The most common culprits in a failing procure-to-pay process are lack of visibility and lack of process. Establishing a repeatable review, approval, and documentation process allows organizations to capture vital information on each purchase and integrate that data into the accounting and reporting process.

No management validation

Like any other important organizational decision, purchase-to-pay solution systems must have the approval of the company management. Unfortunately, many companies do not prioritize supply chain processes. 

As such, related technology upgrades can encounter opposition from the top. Failure to convince senior managers of the need to change supplier management systems results in a lack of validation and cooperation when implementing new processes. Instead, they stick to old systems.

Poor onboarding processes

The managers, employees, and vendors who use P2P systems determine their success or failure. Without proper training, sensitization, and support, your colleagues can sabotage a new P2P system.

Additionally, a Tungsten report shows it’s normal for employees and suppliers to resist change—especially if new solutions are introduced without sufficient preparation.

Poor user interfaces

Many employees and suppliers fail to use their procure-to-pay solution because of complicated software, poor system interfaces, and bad user experience. Most of the creators of SaaS programs tend to be technical professionals concerned with the complexities of different systems. If left to create a P2P system on their own, such professionals are less likely to consider the technical and knowledge gaps of the intended users.

Lack of automation and integrated systems

In many large organizations, different departments and external suppliers have independent operating systems and tools in place. Various departments manage requisition, sourcing, procurement, and accounts payable processes. Furthermore, departments might work with different suppliers that use their own independent systems.

Many departments, vendors, and suppliers insist on sticking to their established processes in scenarios such as when introducing a new ERP system. The widespread use of paper invoices and manual systems further exacerbates this.

Unless all the departments and vendors involved streamline their processes and use a unified automated system, enforcing a single P2P solution is practically impossible. Non-integrated systems ruin the essence of purchase-to-pay solutions because they create room for confusion, delays, and inflated purchases.

Spend visibility and reporting challenges

The unintegrated and manual systems discussed above make tracking spending difficult and prevent access to real-time data. Such outdated systems and processes mean that reports must be obtained from diverse sources and compiled later.

Many procurement systems lack built-in reporting functionality and spend visibility. This limits employees’ use of the system and forces them to generate reports manually. Such systems make it difficult to get accurate, real-time data or conduct analyses.

Companies also sometimes avoid procure-to -pay software that has an automated system and produces auto-generated reports because of pricing factors.

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The Procurement Strategy Playbook for Modern Businesses

Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.

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Top procure-to-pay tools of 2022

If you’re looking for the right solution to automate your procurement process, check out these top-rated options. To learn more about each, read our full review of today's top 7 procure-to-pay tools. 

Order.co

Order.co combines simple, intuitive design with powerful back-end features to create a platform everyone in your organization will value. It offers purchasing through a streamlined catalog with dynamic spend permissions and guidelines. Order.co is great for companies of any stage or size, with capabilities to support multiple locations using centralized, automated functionality. 

PRM360

PRM360 gives buyers using the platform for e-procurement a visible, streamlined process. It features real-time reporting on bid processes and automated payment solutions for quick, spend-optimized procurement. The platform is best for mid-market and enterprise customers. 

Coupa

Coupa is one of the largest solutions for enterprise customers looking to automate the procurement process. The platform offers a guided buying process with vendor management, inventory management, and other features. Coupa is a component of the Coupa digital management suite for end-to-end enterprise resource planning (ERP). 

Zycus

Enterprise users choose Zycus because of its compliant, guided buying options. The tool uses an AI engine to enable and automate the procurement process. It offers robust integrations that allow users to extend the platform for controlling and monitoring spend and risk. 

JAGGAER

Billed as the world’s largest independent spend management tool, JAEGGER serves clients across all market segments with procurement management and processing. The tool integrates with other top-quartile business management tools to enable automated P2P.

The keys to the successful implementation of procure-to-pay software

Despite the challenges some companies face when buying and implementing their procure-to-pay solution, the ability of these systems to reduce maverick spending and save time cannot be ignored. 

In order to select and properly implement the right P2P system for your company, bear the following things in mind:

Start with a needs analysis

A SaaS or SAP solution will only work if it addresses your company’s needs. Knowing your current purchasing process and P2P process helps determine whether you need a sourcing system, purchasing tools, vendor management system, or a full P2P system. It also reveals budgetary issues, gaps in business processes, supplier relationships, strategic sourcing, and spend management.

Knowing the current problems and the proposed procurement system’s potential solutions gives you more leverage when bringing your management and team on board. Moreover, a needs analysis enables you to identify the best individuals for implementing your new procurement solution and helping the team adjust.

Move to a pilot phase and continuous evaluation

Based on your needs analysis, choose a user-friendly system that fits the capacities of your organization, employees, and vendors. Then conduct a pilot phase to test whether your software solution is feasible and compatible with your transaction needs and lifecycle. Once implemented, you will also need to evaluate your P2P solution periodically to ensure that you are reaping the intended results and conducting data-backed optimization.

Continue with stakeholder education and involvement

Apart from conducting a pilot phase, also educate and involve your employees and the vendors or suppliers who will be using your P2P solution. Involving all the relevant teams helps you get important user feedback and suggestions for the system. 

Training and providing necessary information through videos, handbooks, and FAQs reduces challenges for colleagues, vendors, and suppliers as they adapt to the new system. This empowers them to adopt and implement your P2P management solutions quickly.

Choose full automation and integration of purchase requisitions

If you really want to reduce inefficiencies through a procure-to-pay suite, opt for an automated and integrated solution. Access to data will make it easier for your employees to avail reports upon request. Ensuring every department in your company and external team uses the same procure-to-pay software will fast-track its implementation and improve your procurement processes.

Automation should include a mobile approach to allow all relevant stakeholders to access the system anywhere they have an internet connection. This reduces delays in decision-making and approval of requisitions. In addition, your automated P2P solution provider should advise on the best way to migrate and store your data when transitioning to the new system. Given the sensitivity of data, ensure migration and storage are secure.

When done correctly, automation and integration enhance transparency and cut out bureaucratic delays. It facilitates timely payments and deliveries while giving employees time to focus on other important duties.

Ebook

The Procurement Strategy Playbook for Modern Businesses

Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.

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Appoint a P2P system manager

A good procurement system is only as efficient as those managing it. 

Unless you appoint specific people to be accountable for properly implementing your P2P system, you will end up with poor implementation and blame games amongst employees and different departments. 

If your organization has no supply chain department, allocate this task to the finance team or outsource management services, preferably from your procure-to-pay solution service provider. Alternatively, hire an in-house team or form a department tasked with handling all your e-procurement matters, depending on your needs.

Plan compliance and policy reforms

Regardless of how well you prepare your employees, vendors, and suppliers, you will still encounter some form of resistance during the implementation of your new procure-to-pay solutions. Some suppliers and vendors might insist on using their own system, while your employees may struggle to adapt to the new way of doing things. 

This calls for compliance and policy reforms compelling everyone to adhere to your new contract management and procurement process. If anyone comes with a non-purchase order invoice, refer them to the new invoicing and three-way compliance requirements.

If you compromise on this, you risk failure and the possibility that your P2P system might never be used. The best way to introduce these reforms is to communicate them to all the relevant stakeholders and employees at least three months before they come into action.

Start looking for the spend management system that fits your needs

Choosing a needs-based procure-to-pay solution and involving both your team and external stakeholders ensures the success of your new procurement management system. 

Order.co is a user-friendly, intelligent spend management system that works for your entire organization by: 

• Giving your finance and operations teams full visibility into tracing and managing all their purchasing needs
• Providing other departments with easy traceability of their spending 
• Allowing users to make purchases and pay for goods on one platform

The time to automate your process and close cash gaps is now. Begin by choosing the right software to enable your organization. Check out our guide, Choose the Right Procurement Technology, to start your search.