eProcurement Survey: Realities of Disconnect Between Finance & Procurement

PROACTIS, a global Spend Control and eProcurement solution provider, today released findings of a survey aimed at understanding the level of eProcurement use in the market today. Called "PROACTIS End-to-End eProcurement Survey", the survey evaluated over 200 organisations currently using best-of-breed, ERP-based or internally built purchase-to-pay software. Data from this survey will be released at eWorld Purchasing & Supply event, 24 Sep 2013, London.
PROACTIS is recognised globally for helping organisations of all sizes better control spending while streamlining the entire procurement process. The company is known for offering the most comprehensive range of integrated source-to-contract and purchase-to-pay solutions available today.  PROACTIS solutions feature sophisticated built-in capabilities and controls combined with an easy-to-use design that makes organisation-wide adoption a reality.

The survey data includes information on mid-to-large commercial and public sector organisations using purchase-to-pay technology in the UK, US, France, Benelux and Australia. The purpose of PROACTIS' 'End-to-End eProcurement Survey' was to understand the level of automation and control for the entire procurement process, including purchase-to-pay, sourcing, contract management, and supplier communications for routine items, as well as strategic and capital goods/services. The survey results highlight the realities of the disconnect between Finance and Procurement processes.

Despite the fact that current market conditions are driving a marked increase in demand for eProcurement solutions as an effective means to reduce costs, organisations are not yet achieving maximum value. Significant aspects of the procurement cycle remain unaddressed:
  • 44% primarily use traditional purchase-to-pay functionality only to support the basic steps of indirect spending: creation of purchase requisitions, access to generic items and catalogue content, obtaining management approval for purchases, communicating the resulting purchase orders to suppliers and basic invoice matching.
  • Only 56% have extended the 'pay' in purchase-to-pay to include a significant proportion of electronic invoice receipt, configurable workflow to handle mismatches and functionality to streamline supplier collaboration around the invoice. 25% of organisations have extended payables automation to include employee and in-the-field expenses.
  • Less than 27% have put in place solutions for Source-to-Contract to benefit from integration of features such as supplier master file management, support for in-line RFQ, matching payment against contracted rates, electronic trading and supplier-managed content.
"Gaining control and visibility of your purchase-to-pay process is a big step towards realising the benefits of Spend Control, including better management of budgets and consistent compliance with purchase authorisation policies," said Simon Dadswell, Marketing Director of PROACTIS. "But the biggest benefit comes when you are able to actually reduce the cost of goods and services your organisation buys by channelling a higher percentage of purchases to preferred suppliers and contracts."

Dadswell stated that: "When Senior Finance executives discuss this survey with their Procurement team, it's likely they will become aware of two important things:
  • The potential impact existing and improved Strategic Procurement practices can have on their organisation's bottom line when those efforts are fully integrated into the purchase-to-pay process.
  • The waste that is probably occurring today in terms of excess cost of managing supplier information and inefficient supplier communication because of uncoordinated supplier management. In essence, the profits that are being lost due to unnecessary costs."
PROACTIS promotes the importance of end-to-end eProcurement and a Spend Control environment that integrates two important sets of activities:
  • Source-to-Contract functions that create value: supplier management, sourcing, contract management, and supplier content management
  • Purchase-to-Pay controls that capture value: supplier and item selection, purchase authorisation, PO/invoice matching, electronic trading and expenses
With integrated end-to-end eProcurement, the entire process is based on best practices and workflow driven.  No data has to be re-keyed, so no time and productivity is lost. Any narrower or a more disjointed view leaves holes that cause leakage of benefits.

An infographic illustrating the PROACTIS 'End-to-End' eProcurement Survey findings is available here
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