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    Blog

    Source to Pay: The Real Value for Purchasing

    Source to Pay

    Procure-to-Pay (P2P) and Source-to-Pay (S2P) are two terms often used within the software industry to describe digital solutions that create efficiencies within procurement. And while both systems include many of the same features, they are distinctly different in terms of the functionality, control and the value they deliver.

    In the simplest of terms, P2P solutions deliver improved processes as it relates to purchasing. It is the essential link between all purchasing functions and accounts payable within an organization and includes essential functions such as supply management, requisitions, purchase orders, receiving, and invoicing.

    Source to pay includes all of what P2P has to offer, and expands capabilities to include the “sourcing” of products and services. Source-to-Pay is a more strategic approach to procurement’s core business process because it focuses on behavior – compliance and policy enforcement – promoting more efficient processes and ultimately better spend management.

    As a procurement leader, you are all too aware of the repercussions of inefficient spending. McKinsey reports that most organizations waste up to 4 percent of their overall external spend on excessive transaction costs, inefficiency and noncompliance. Furthermore, organizations that deploy a S2P system can get up to 50% more of its spend under management to drive an additional 31% in total savings.

    These stats are pretty powerful.

    While S2P solutions can save you money, the headline here is more transformational than that. S2P solutions provide other opportunities such as:

     

    • risk avoidance in terms of contract management
    • smarter data analytics
    • more intuitive supplier management (with the help of AI-enabled capabilities).

     

    Check out these top benefits of S2P:

    Increased flexibility

    Organizations vary in size, budget, and requirements. Having a system that meets your unique requirements and industry profile means you’ll be assured a platform that is suited to your business needs.

    Enhanced visibility

    A S2P solution will allow you to leverage data across the enterprise. Visibility allows procurement leaders to be more proactive when it comes to decision making and have greater control over spending.

    Increased Compliance and Risk Avoidance

    S2P solutions that include real-time price validation, budget and spend tracking, contract access and spend limits enforced at the time of transaction allow for more flexible workflow capabilities to ensure adherence to processes.

    Ease of use

    When users have access to contracts and suppliers directly, in an easy-to-use interface, they are more apt to use the system. A S2P solution that helps guide users through the requisition process ensures they will use the correct suppliers, products and services.

    Of course, the choice of technology partner is extremely important when choosing a S2P solution. Working with an integrated platform, like JAGGAER, can ease the transition and even guide the most technology resistant organization to success.

    Remember, you don’t have to take the S2P plunge with both feet. A transitional approach may be more beneficial and comfortable to you. As long as you have a clear vision and strategy, and the right people and the processes in place, you too, can find success and real value in S2P.

     

    For out more about JAGGAER’s full Source-to-Pay Suite. 

     

    Additional Resources

    Maturity Assessment

    Take this quick Autonomous Commerce Maturity Assessment now to identify your maturity stage and the next steps to take in your journey.