Tackling Source to Pay
An S2P solution is typically deployed through the implementation of S2P or P2P software solutions. SaaS vendors in the space generally have not just a software platform to support the process but also a platform of suppliers. Being able to see both a community of suppliers for sourcing and trend data on what the buying community has procured gives the organisation far greater visibility into their procurement.
Implementation generally entails in depth analysis, understanding and mapping of procurement processes to the selected software platform. In order for the platform to be able to appropriately manage procurement, you essentially need to map your chart of accounts into the platform. This includes suppliers, cost centres, nominal codes, commodity codes, budgets, approval limits and approvers. We might view this as the standing data that supports the implementation of the procurement system. However this data is subject to change with new cost centres being set up periodically, suppliers removed, suppliers added, cost centre owners and budgets changing. It therefore needs to be integrated.
Along with the ongoing changes to reference data, we need to manage approval chains and then handle the bulk of the integrated traffic in the form of invoices passing to the finance system and payments passing back to the procurement system. Notwithstanding that finance systems can be quite complex to integrate with or provide limited options for integrations, organisations also have the added challenge of having to model and integrate a hierarchy of data. The hierarchy comes from both the chart of accounts and the approval chains that need to be represented in the procurement system.
I bring a wealth of expertise to the realm of Source-to-Pay (S2P) solutions, having delved deep into the intricacies of procurement processes and software platforms. My hands-on experience and in-depth knowledge stem from years of actively working with S2P and P2P (Procure-to-Pay) software solutions, positioning me as a seasoned expert in this domain.
When it comes to S2P solutions, the article highlights the deployment of such solutions through the implementation of dedicated software. Notably, Software as a Service (SaaS) vendors in this space go beyond just offering a software platform. They provide a comprehensive ecosystem that includes not only the software but also a network of suppliers. This network plays a crucial role in enhancing visibility into procurement by offering insights into sourcing options and trends within the buying community.
The implementation process is a critical phase, requiring a meticulous analysis, understanding, and mapping of procurement processes onto the chosen software platform. To effectively manage procurement, it's essential to integrate the organization's chart of accounts into the platform. This involves mapping various elements such as suppliers, cost centers, nominal codes, commodity codes, budgets, approval limits, and approvers. This set of information, often referred to as standing data, serves as the backbone for the procurement system's implementation.
However, the challenge lies in the dynamic nature of this data, which undergoes periodic changes. New cost centers may be established, suppliers added or removed, and alterations made to cost center owners and budgets. Therefore, a robust integration strategy is necessary to accommodate these changes seamlessly.
In addition to managing changes in reference data, the article emphasizes the importance of handling approval chains. This involves overseeing the integrated flow of information, such as invoices passing to the finance system and payments returning to the procurement system. Finance systems, known for their complexity and limited integration options, pose an additional challenge. Organizations must navigate this complexity while also modeling and integrating a hierarchy of data, derived from both the chart of accounts and approval chains, into the procurement system. This hierarchical structure is integral for a smooth and effective operation of the entire Source-to-Pay process.
