Bridging the Procure to Pay (P2P) Tech Gap in B2B Trade
James Stirk, CEO, Tradeshift
Free trade has broadly defined the global economy in recent decades. Today, however, geopolitical tensions and economic fragmentation have placed new demands on large, global businesses’ finance, procurement, and supply chain management functions.
The ability to react quickly to changing circumstances is often the difference between success and failure. Pivoting, making informed decisions, finding alternative suppliers, or adjusting production based on real-time, predictive data can—and does—significantly impact bottom-line performance.
Executives are increasingly focused on removing latency and friction from the procurement process to speed up decision-making and improve response times in the face of the myriad forces shaping global business today.
Procurement teams recognize the need to rethink their sourcing approach, aiming to build supply chains that are more resilient to geopolitical tensions and potential disruptions. This shift requires buyers to develop and manage a significant expansion in their trading relationships. However, this transition is fraught with challenges. Many organizations are experiencing firsthand the difficulties of scaling existing processes to accommodate an increasingly diverse range of suppliers.
One critical hurdle lies in technology, particularly integrating procurement and finance systems that underpin key aspects of relationships between large organizations and their extended supplier bases.
These systems and processes, long overlooked during periods of growth and stability, need to be updated and revised. The disconnect between procurement and finance functions creates inefficiencies, increases the risk of errors, and hampers swift responses to supply chain changes.
Such challenges are particularly acute among mid-market and upper-mid-market organizations.
Rapid growth often results in a patchwork of disparate software and processes struggling to keep pace with expanding needs. According to a recent study, 84% of mid-market organizations report outgrowing their existing processes, while 75% claim their technology is not adequately enabled for their business size.
The technological gap in procure-to-pay (P2P) systems is a significant issue in an environment where agility and precision are crucial. However, the benefits of getting this right are clear. Integrating procurement and finance effectively can automate routine tasks and speed up transaction cycles.
Real-time data and analytics provide comprehensive insights into e-procurement activities, spending patterns, and supplier performance, allowing businesses to make informed decisions and anticipate disruptions. Timely and reliable payments facilitated by an integrated procure-to-pay system help maintain strong supplier relationships. Advanced P2P solutions are scalable and adaptable, essential in a dynamic global market. Additionally, P2P systems streamline compliance with procurement policies and regulatory requirements, reducing the risk of fraud and legal issues.
Transitioning to new systems is often seen as a significant investment, requiring lengthy integrations and a complex change management process. This can be daunting for many organizations, especially those in the mid-market, with limited resources.
At Tradeshift, we are committed to ensuring that every business can access technology and tools to handle change. With this goal in mind, we have developed a dedicated procure-to-pay offering for growth-minded organizations, delivering all the benefits of a fully digitized P2P environment within 90 days.
Want to know more about our new P2P offering? Please contact us.
