Find out why an ERP system is not sufficient for procurement and how a Source-to-Pay platform optimises processes, saves costs and delivers better results.
Many organisations assume the ERP covers procurement well enough.
An ERP records transactions, but it does not steer the procurement process.
A Source-to-Pay platform complements the ERP instead of replacing it.
In practice, we often see it: people try to integrate the procurement function into the ERP system and spreadsheets. We frequently see it fail. The reason for trying is obvious. The ERP system is already in place and creating, sending and managing purchase orders for product-related purchases works well. So why not use it for the entire procurement function, including non-end product related expenses?
The tooling is in place anyway and the implementation seems to come at ‘limited additional cost’, both in terms of time, resources and licensing. In addition, no integrations need to be built. The information is already in the ERP system and employees are familiar with the ERP system. In short, it’s a win-win for the organization with a fast time-to-value. Unfortunately, this time-to-value is not always realized in practice, because the expected results and business case are not achieved. For example, the cost of licenses and consulting is higher than expected. John Schouten, Director of Product Management, shares 5 reasons to choose a Source-to-Pay platform for the procurement function in this blog.
Discover in six steps how to bring procurement and finance together.
The basic function of an ERP system is to process and combine planning inputs, key business information and processes from across the organization. Examples include processing and maintaining financial and inventory-related information. These are basic processes exchanging huge amounts of data, but these often lack the finesse for a full and mature procurement function. This is why Source-to-Pay (Source-to-Pay) is gaining traction. Source-to-Pay covers the entire Source-to-Pay process in conjunction with the ERP systems in place.
There are 5 reasons why a Source-to-Pay platform is the perfect solution for Procurement. John Schouten, Director of Product Management, shares 5 reasons to choose a Source-to-Pay platform for the procurement function.
User ExperienceThe most common reason to add a Source-to-Pay implementation to an ERP system is the user experience. Whereas an ERP system excels at processing transactions and storing a lot of data, little attention has been paid to the User Experience. This component has been included to a limited extent. End users must first be trained, using manuals to work with the ERP system. End users experience a complicated system. The added value is not immediate visible as they experience a huge administrative burden. A procurement system creates a B2C online shop experience for the end user in a B2B environment, allowing the entire organization to embrace it.
IntegrationsSource-to-Pay systems operating in the cloud are made for flexible exchange of data between other systems and the ERP system. This is done through online services or APIs. A Source-to-Pay system can provide timely insights from the volume of data that would not otherwise be available. This information enables accurate response to policies or collaborations. In addition, it is possible to connect to online marketplaces (online shops). As a result, it does not need to be managed internally. If a supplier does not have an online shop, it is easy to set up supplier catalogue management. People often wrongly assume that digitizing the process in an ERP system will enable a degree of automation. This digitization is rarely accompanied by electronic processing of non-end product related transactions. As a result, the degree of automation is disappointing.
“Procurement solutions in the cloud are made for flexible data exchange between the ERP and other systems.”
An ERP system is an indispensable part of business life and has proven itself over the last 40 years as an important link for processing transactions in various business processes and storing data. However, practice shows that ERP systems are less suitable for the automation and centralization of the entire procurement function. With a Source-to-Pay platform, the entire procurement process with associated tasks, applications and data is centralized and optimized in a single ecosystem. This provides insights, allows for minimizing risks and standardization and automation of processes.
Start managing all your organization’s expenses and processes. A single Source-to-Pay platform for: Vendor Management, Sourcing, Contract Management, Procurement, AP Automation, Spend Analytics and more.