No eProcurement system should exist in a vacuum. And no existing information systems environment is a blank sheet of paper.
No eProcurement system should exist in a vacuum. And no existing information systems environment is a blank sheet of paper. Clearly, P2P systems should integrate seamlessly with an organisation’s core financial systems for things like automatic budget-checking, spend pipeline visibility, cheque-writing, cost allocation and all GL posting. However, integration often needs to go beyond the basics.
Every organisation that implements eProcurement to support their Spend Control initiative wants that system to ultimately encompass all spend. But let’s be realistic – ‘all spend’ includes a lot of things. In manufacturing, distribution and retail companies, this includes direct materials used in the manufacturing process or items purchased for re-sale. Planning and PO release for those items is usually done in the organisation’s ERP or merchandising system. In many organisations, certain large assets and service parts are planned for and purchased in specialised asset management, building management, or Maintenance, Repair and Overhaul (MRO) systems. Sub-contracting arrangements are usually managed in part by a manufacturing system. Some indirect goods are purchased in bulk, managed in stocking systems, and distributed as requested. Scheduling of temporary labour may be handled in a Human Resources system. Most organisations have a range of systems already in place to handle planning and purchasing of specialised goods and services.
But every category of spend still has the need for strategic sourcing, supplier management, and contract management. And every PO placement or release, and every non-PO invoice ultimately arrives at Accounts Payable where it needs to be somehow matched to the right PO or contract to verify accuracy. In addition, organisation-wide spend analysis needs to have information about all spend through all channels in order to be fully effective.
What we are seeing at PROACTIS is that, once an organisation gets the indirect spend NOT planned in other existing systems under control, they usually want to start tying the P2P system into all those other systems that generate purchases or manage stock so that they have a consolidated way of handling – and seeing – all spend from the point of PO placement onwards.
That requires a P2P system with a well-conceived integration framework. Fortunately, PROACTIS software was built with integration in mind from the start. We are seeing some of our more mature clients integrating PROACTIS solutions with a wider and wider range of systems in order to create a single Spend Control umbrella over all aspects of enterprise-wide spend.
We are even seeing a few of our larger clients stretch that umbrella across multiple ERP systems to create a common Spend Control process across the entire organisation.
To find out more about this and other key procurement trends, download 'Procurement Automation: Key Trends & Hot Topics'