July 31 2015 0comment

Enterprise Information Management for Procure-to-Pay (P2P)

For some time now, there has been an intense interest in the need to optimize the Procure-to-Pay process in organizations across industries. The emergence of P2P as a ‘process of interest’ is not doesn’t come as a surprise, what could be more important than how your company spends its money?

Procurement is a key business unit in any organization. For a long time now, procurement executives have had an ever changing environment where the P2P process is fraught with inefficiency and risk. Keenly integrated with both the Accounts Payable and Purchasing departments, Procure-to-Pay is an important business process that refers to the series of tasks by which an organization buys and pays for goods or services. P2P initiates from the request for the product or service by various other departments and extends to the issuance of the purchase order, receipt of goods or services, receipt of the invoice and finally payment of the invoice. The general trend among organizations is to adopt document digitization, automated extraction or capture, automated exception identification and workflows for exceptions and approvals – to achieve P2P excellence. While automation can play a significant part in revamping the existing P2P process, the emphasis should be on the right automation & standardization strategy that seamlessly fits into the Organization objectives. After all, automating a wrong process simply delivers wrong results faster!

A recommended practice would be to standardize and automate the P2P process by incorporating information management and workflow solutions. A Gartner 2013 Survey states that “86% of times companies cannot deliver the right information at the right time.” For enterprises running in today’s competitive environment and demanding economic conditions, Information is the key to operational excellence. This is where Enterprise Information Solutions (EIM) can make a huge difference for enterprises who are on the path to competitive excellence. The biggest challenge to date for Procurement and AP executives has been to work with minimum quantum of personnel & capital and still achieve operational goals efficiently. EIM can offer technology and process solutions that can standardize and automate Procure-to-Pay solutions and make key process information available to the right process owner at the right time, e.g. for Invoice approval, Requisition Approval etc.

In general, EIM facilitates the following for P2P:

  • Creation of paperless & manual Procurement Process
  • Reduce P2P cycle time
  • Reduce P2P processing cost
  • Better Supplier Relationships
  • Increase the number of transactions received & sent electronically (PRs, POs, GRs, Invoices)
  • Transparency and Traceability of the entire P2P cycle through increased visibility for key stakeholders such as Suppliers, buyers, Approvers, Reviewers etc. and comprehensive audit trails
  • Reduce maverick buying
  • Reduce Revenue leakage
  • Minimize risk and maximize compliance
  • Seamless integration with the existing ERP landscape.

OpenText EIM:

OpenText offers a plethora of EIM solutions that can be tailor-made for an organization’s procurement and AP needs. Procurement Excellence with OpenText EIM if executed perfectly is capable of enabling information driven technology automations and standardizations. For instance, OpenText VIM (Vendor Invoice Management) which can automate P2P – vendor invoice management right from the point the invoice comes into the organization to the actual posting of the invoice in SAP (or any other ERPs) through its powerful OCR engine and workflows. Streamlining the process with AP involves automatically capturing invoices and pulling the data out of the invoices to ERP System, without any manual indexing thereby reducing manpower. OpenText also provides ECM based solutions for Supplier and Contract management that can take the P2P automation to the next level. ECM based information repository helps prevent document silos and unreconciled information from affecting the Organization’s decision making ability. For.eg. the OpenText DocuLink component can enable creation of a Supplier folder that can provide a 360 degree view on all Supplier Information (both transaction data and supporting documents. In addition, transparency and traceability can be enabled from a Supplier perspective via a Supplier Self Service Portal where a suppliers can track and trace all of their invoices and payment status. OpenText also offers an Order Lifecycle management suite which helps to track orders and associated information through the lifecycle of the Order.

The underlying principle in each of these solutions is the ability to connect Content with the Business Context thereby enabling improved process efficiency and optimization.