This Spend Matters series takes a look at the state of procurement technologies in the market today and whether they meet user demands. Spend Matters is featuring the top 5 digital capabilities of different procurement technologies and what functionality you can expect from average and top performing solutions, leveraging its SolutionMap dataset.
In this article, our analyst Xavier Olivera looks at Procure-to-Pay solutions. Supply Planning
A Procure-to-Pay (P2P) solution is a combination of the e-procurement and AP Automation/I2P markets spanning the procurement process, including automation of purchase requisitions/orders, receipts, invoices, payments and financing.
Integrated P2P solutions help procurement and finance by implementing sourced contracts to actually deliver value, reduce paper-based processes and improve operational efficiency and effectiveness. They reduce late payments, optimize working capital and minimize risk and non-compliance. They also include the ability to configure and deploy more complex invoicing (e.g., invoices that vary by country), cash management and trade financing processes.
What’s the state of different procurement technologies in the market today and do they meet user demands? Spend Matters is featuring the top 5 digital capabilities of different procurement technologies and what functionality you can expect from average and top solutions, leveraging its SolutionMap dataset.
The ability to get deeper and better control over more spend by managing catalog and content that models and supports all category requirements, e.g., item catalogs, service catalogs, smart forms or inventoried items.
Average performing vendors have basic capabilities that include limited catalog creation support, partial support for catalog level of data detail and template-based forms for non-catalog items and services. Top performing vendors have more options to create catalogs (e.g., from sourcing events), the ability to use external content as part of its catalogs (e.g., API integrations or multiple punch-outs), limitless level of data detail for catalogs to incorporate guidance — including advanced data quality, mapping and validations — and multiple purchasing models, such as shopping lists, bundles or kits.
I have seen top performers with catalog content that includes volume/promotional pricing, real-time price checks, multi-currency, multilingual and custom or specialty attributes for industry-specific inventory data, which were also embedded into shopping lists and more. Top vendors also have advanced access to content/catalog configuration, e.g., roles, product views, business units and countries, even by business rules for guidance purposes.
The ability to extend the next-generation guided-buying user experience beyond the typical Amazon-like shopping experience.
Average performing vendors have core support for guided searches in their shopping content, e.g., keywords, faceted search and punch-outs. They have pre-built templates, pre-built kits and the ability to create shopping lists or mark items as preferred. They allow the inclusion of flags, supplier rating, predefined help or FAQs in the search. Top performing vendors have guided access control, the ability to show recommendations based on past behaviors or business rules, the use of highly configurable smart forms (inclusive in the form of intake process), real-time budget monitoring and advanced use of information or icons to guide the user, e.g., logistics cost, inventory availability, tiered pricing or on/off contract.
I’ve seen top performers weighting preferred items/suppliers and offering customized filtering in search results to ensure visibility, use real-time support guidance in the form of conversational systems, enable AI/ML to personalize, recommend and keep sustainable purchases, prescribe savings and mitigate problems and risks.
The ability to optimize ordering efficiency while supporting category needs and maintaining compliance with budgets, contracts and accounting.
The average AP/I2P vendor has core support for standard invoice requirements. Core support includes the ability to automate invoice capturing, matching, validation and approvals based on business rules, to support dispute resolutions through portal capabilities, to create credit notes and to implement full invoicing functionality within a mobile device. Top performers go above and beyond by processing invoices through multiple approval chains, using AI/ML capabilities for automatic approvals and offering the ability to create recurring invoices from various methods.
In my experience, the vendors that differentiate themselves as top performers focus on processing no-touch, completely automated invoices, with the option to configure the extent of exceptions and human interventions. Top vendors also use AI capabilities for approvals, coding (including Non-PO invoices) and fraud detection, which streamlines the validation and approval process.
The ability to receive all goods, assets and services to match with POs and invoices.
The average vendor has basic support for handling payments in multiple methods, such as the ability to capture the supplier’s payment method and transfer it to the payment system with the invoice. The average vendor also supports cross-border payment scenarios; however, support is limited to certain countries. On the other hand, top performers support global cross-border payments, the ability to create payment plans based on multiple criteria and AI/ML analysis for fraud prevention. Top performers also have a workspace (UI/UX) to view, select and approve payment files to be processed.
I have seen top vendors with AI/ML analysis and AI-led identification of discrepancies. Vendors also have advanced capabilities, such as an automated payment scheduler and worldwide presence to support cross-border payments without the hassle of banks — some are even licensed money transmitters.
The ability to derive strategic, actionable insight (in the context of shopping) to meet goals for P2P, S2P and the business.
The average vendor includes out-of-the-box report builders (drag-and-drop models), reporting dashboards and descriptive reports for payment, invoicing and finance analysis via AP metrics. Top performers have deeper analytics capabilities, such as market intelligence powered by community data and AI-ML enabled actionable analytics for procurement and finance.
I have seen top performers with actionable analytics for benchmarks, process KPIs, user KPIs and predictive and prescriptive analysis to guide users during their procurement and finance activities. P2P analytics enables contributions from all stakeholders to ultimately generate greater value for the business.
Basware Corcentric Platform Coupa ebidtopay Fraxion GEP ISPnext Ivalua Jaggaer Kissflow Medius Onventis OpusCapita Oracle Proactis SAP Ariba Vroozi
These ‘Top 5’ (of 29) critical digital capabilities stem from the Spend Matters TechMatch workbench — derived from 229 requirements scored in the P2P Spring 2023 SolutionMap solution benchmark.
The Top 5 capabilities are the highest-weighted critical capabilities that are central to the displayed solution market benchmark. They have been developed by Spend Matters team of analysts and refined by procurement users in tech-selection projects using our market-proven SolutionMap benchmarking dataset and associated TechMatch decision-making tool.
Spend Matters built a better way to help companies, and their consultants, advance procurement practices via technology. SolutionMap compares technologies on two main factors: technical capability (gathered via a rigorous RFI process) and validated customer ratings. Data is refreshed every six months. Participation for vendors is completely non-commercial.
Local Movers Featured vendors undergo a rigorous, RFI-based assessment process including functionality counter-scoring, supporting materials review, tech demos and submission of independent customer references. Expert analysts deeply vet solutions capabilities prior to ranking inclusion. Only relevant industry players who meet the criteria determined by Spend Matters are invited in order to create a complete view and optimal intelligence for its members.