2024 is going to be a critical year for procurement leaders. You’re responsible for finding and implementing technology throughout the complete source-to-pay (S2P) process, from finding suppliers to paying them.
But it can get tricky! Short-term fixes for immediate process gaps can lead to bad tech choices that don’t last.
So, the big question is: how can you stay ahead of the curve and use technology to boost your whole S2P operation?
Drawing on insights from Gartner’s “2023 Strategic Roadmap for Source-to-Pay Technology”, this post aims to provide actionable steps for procurement leaders to optimize their source-to-pay technology.
Strategic Roadmap for Source-to-Pay Technology for Procurement Leaders
Here are 3 Strategic Recommendations:
- Embrace Gen AI
Generative Artificial intelligence (Gen AI) is changing the way procurement operates. Imagine using Gen AI to automatically find the best suppliers, manage contracts, and analyze your spending. It’s faster, safer, and smarter!
- Get rid of the Tech Patchwork
As procurement teams mature, many teams end up having a messy mix of different software programs. This makes it hard to connect everything, ensure data flow and automate processes. In 2024, focus on simplifying your tech stack with integrated and composable solutions.
- Master Your Data
Data from different ERPs or financial systems can be a nightmare. To streamline procurement, you need a unified approach to data across your tech stack. Think of it as building a clean, organized data highway!
While it’s imperative to move to a better connected, more automated future state, we also need to define what such a tech stack should have. The following figure from Gartner showcases a Strategic Roadmap for S2P Applications:
Here are some key considerations for the future state of source-to-pay technology:
- Integrated Cloud-based applications: These applications ensure data flows between connected apps and make it easy to work with the same data across a suite of solutions.
- Machine learning models: Machine learning can be used to analyze data and make predictions, such as which suppliers are most likely to deliver on time and on budget.
- High-quality supplier data sources and networks: These resources can help you easily find and qualify new suppliers, as well as collaborate better with existing ones.
- Document digitization and analysis: Digitizing your documents such as contracts, POs, invoices among other documents, can save you time and money and make it easier to track and analyze data.
- Anywhere user experience: Modern procurement applications should be easy to use from any device, without the need for extensive training. For example, the right eprocurement app should mimic an Amazon-like interface.
- Generative AI: AI can be used to automate tasks such as analyzing data, writing reports, automatically routing invoices to payment and responding to emails, freeing up your time to focus on more strategic work.
To understand more about the current state of Source-to-Pay technologies and how to go about assessing the gaps, you can access the Gartner report here.
Ready to act? Here’s an action plan for embracing S2P tech in 2024:
Short Term (Q1 & Q2, 2024):
- Identify Improvement Goals: Figure out what you want to achieve with the new tech. o you want to save money, improve visibility and collaboration, find better suppliers, or make processes faster?
- Scout for the Right Tech: Research the latest source-to-pay solutions and see how they fit your goals. Check out vendor roadmaps to see if their plans align with yours. Vendors who do not plan to capitalize on AI should be retired.
- Map Your Procurement Processes in Detail: Chart out your current procurement steps and see where technology can automate and improve things. Technology is only as good as the process it maps.
- Master Data Magic: Develop a plan to clean up and unify your data across all ERP and financial systems. Think of it as decluttering your digital filing cabinet!
- ERP & Finance Systems Check: Make sure your financial and enterprise resource planning (ERP) systems can handle the new data flow with the new apps.
- Rethink Existing Tech Investments: Review your current software agreements and see if they’re still the best fit. Retire solutions that are not scalable or can’t integrate with the future state.
Medium Term (Q3 & Q4, 2024)
- Build Better Business Cases: Show the financial benefits of investing in specific S2P technologies. Think of it as making a convincing case to your boss! The investments that show a balance of high ROI along with bridging critical process gaps can be taken up first.
- Cross-functional Policy Makeover: Update your procurement policies to work with new tech features. Procurement affects most of the functions in an organization, so ensuring policies are updated before implementing new tech is key.
- Pilot Power: Test out new automation tools in small-scale projects before going all-in.
- Team Up: Get everyone on board! Share your tech plans with other departments and track progress with key performance indicators (KPIs).
Long Term (Beyond 2024):
- Upskill the Team: Train your team to use new technology effectively. Your software provider should have a solid change management program. You might need to hire some tech-savvy folks too!
- Data Privacy: Set clear rules for storing and protecting your valuable data. Knowing how tech vendors manage your data is very important.
- Inter-Departmental Harmony: Work with other departments to avoid duplicate tech purchases and make sure everyone’s on the same page.
- Tech Support: Develop a sustainable plan for maintaining and updating your S2P technology. Think of it as keeping your tech engine running smoothly!
2024 is the year to embrace sophisticated yet simple, integrated S2P technology. By following this action plan, you can improve and speed up processes, generate savings, foster collaboration, make time for strategic activities and set your organization up for future success. The journey to an optimized S2P system might be complex, but the rewards are huge. Let’s make 2024 the year procurement transforms into a strategic powerhouse!
To learn more about how Zycus can help you implement a robust Source-to-Pay system, book a demo with us today!
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