Friday 29 January 2016

Procure-To-Pay (P2P) Provides transparency and countless benefits to organization

Authored by Usama Shahid

Today’s organizations are increasing their focus on financial process automation, and many are moving to automate sourcing and purchasing activities by implementing Purchase-to-Pay activities software’s. 

We have observed that P2P software’s bringing numerous benefits to organizations and assisting material professionals to achieve core methodologies like time reduction in  Procurement Cycle, Visibility of Procurement Spend, Increased Cost Savings,  Transparent Business Process and early payments made via P2P system enhance confidence of suppliers to provide significant discounts to organization. 
Indirect goods management software providers are a major leader in this space, as they provide simple process and cost control for requisitioning and purchasing operations. However, the value of these solutions may be limited in industries where indirect spend is less than direct procurement spend, as direct procurement involves a far different set of requirements. On the other hand direct goods procurement is a much more complex and expansive process than indirect procurement. It entails multinational suppliers, lengthy lead times, and heavy reliance on logistics. Direct procurement also requires extensive collaboration - there are numerous parties and activities in each order’s lifecycle that procurement officers must track, coordinate, and control.

Increasing acceptance of information transparency will amplify the degree of scrutiny on procurement organizations. This disruptive change, coupled with the adoption of real-time social technologies, will make procurement one of the most visible corporate functions to the outside world. To that end, procurement leaders need to encourage their teams to adopt a social mindset and operating model that will sustain the corporate brand in this more transparent era. By 2025, the best procurement officers will be as comfortable speaking to consumers, regulators and the press as they are with suppliers.
Procurement leaders will mirror the overall transformation for all procurement teams, in which they move beyond the role of buyers that exclusively specialize in finding, acquiring and ensuring the timely delivery of goods and services. Companies that begin adapting to the new procurement landscape today will be poised to seize a competitive edge in the decade ahead.

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