e-Procurement systems reduce operational costs and errors, and increase the speed of B2B order fulfilment. Surprisingly, finance leaders don’t often consider the potential of AP automation tools to maximise these benefits further.
With today’s heightened pressures on supply chains, efficient and effective procurement is more important than ever. Yet, disparate invoice processing systems are creating severe bottlenecks on finance teams’ resources.
In this article, we’ve collated some of the top trends in digital procurement from Steve Emecz, VP of Enterprise Sales at Tungsten Network. We’ll discuss the forthcoming landscape of enterprise procurement, the problems of siloed processes, and the growth potential of AP automation solutions.
What is the state of procurement in 2022?
Unfortunately, supply chain disruptions are likely to continue this year. Sustained closures of major global logistics hubs have created a ripple effect, with goods piling up in storage and transit. Moreover, manufacturers are competing for a limited supply of key commodities, causing ongoing production delays and less consumer choice on the shelves.
The 2021 CPO Study by Jaggaer found 73% of respondents reported the importance of faster sourcing speeds has increased. Yet, half of the respondents linked ongoing COVID-19 restrictions with slower sourcing cycle times. Therefore, CPOs face fundamentally opposing forces. Digital procurement strategies must become faster to cope amid an unpredictable landscape.
At the same time, six out of ten respondents to the study said senior leaders are tracking returns from functional costs versus profit and loss savings, up from just 39% last year.
With most procurement leaders saying less than 50% of their processes are automated, there is a significant investment gap remaining. As a result, procurement strategies must also become smarter and more efficient when budgets are more scrutinised.
The potential of accelerated digital procurement
Digital procurement solutions offer CPOs a straightforward remedy to some of the forthcoming challenges in supply chain management.
Research from the Hackett Group found that world-class and fully-digital procurement solutions generated 30% of savings versus manual methods in other organisations. In particular, electronic procurement solutions returned nearly 11 times its initial investment.
The problem of inconsistent automation
Digital transformations must be organisation-wide strategies. Though digital procurement solutions generate significant value across organisations, the unequal automation effort has shifted the administration burden downstream.
As a result, the siloed invoice data is compounding the workloads of finance teams in accounts payable. Despite closer supplier-customer relationships, invoice data rarely arrives in buyers’ preferred format, meaning that organisations lack the efficiency gains of straight-through data processing.
Unifying invoice data across procurement orders and AP departments will generate further cost savings, hasten order fulfilment, and uncover strategic expenditure insights.
Read more about AP automation with Tungsten Network
We regularly host webinars and publish articles from leading financial voices on our website.
If you’re interested in learning more about our AP automation solutions and the future of digital procurement, check out the recent webinar that inspired this article.
Alternatively, you can find other blog pieces, webinars and case studies in our resources page.