Procure to Pay

Beyond ERP: Why a Dedicated P2P Solution is Your Procurement’s Missing Piece

September 11, 2024

Beyond ERP: Why a Dedicated P2P Solution is Your Procurement’s Missing Piece

By Lisa Livesley, Account Executive, Tradeshift

Traditional ERP systems offer a comprehensive solution for many business functions, but they often fall short when it comes to the intricacies of procure to pay (P2P) processes. In this blog post, we’ll explore why a dedicated procure to pay solution is essential for mid-market organizations seeking to optimize their procurement operations.

The Growing Pains of Mid-Market Procurement

If you work in procurement at a mid-market or high-growth organization, then you may feel like you’re standing at a crossroads: caught in the middle of a tug-of-war between two contradictory pressures. On the one hand, you’re required to deal with a rapid increase in the volume and complexity of tasks that cross their desk; on the other, you have to perform this duty faster and at a lower cost.

These impossible demands are made even harder when procurement leads are expected to rely on outdated systems and processes, many of which require a high degree of labour-intensive manual work.

Procure to Pay (P2P) breakdown – the warning signs

You’ll know there’s a problem when invoices start to get missed, suppliers start to grumble, and cost savings go begging as employees increasingly take matters into their own hands. If this sounds familiar, you’re not alone.

Research indicates that around a third (32%) of all businesses say the overall B2B purchasing process is broken. Meanwhile, a separate study found 84% of mid-market procurement teams have outgrown their ‘homegrown’ processes.

It’s cold comfort to know that you’re in the same leaky boat as your competitors. A lack of end-to-end procurement capabilities is one of the biggest drags on growth, restricting businesses’ ability to process approvals and payments reliably and quickly. It also limits visibility into spending and deepens siloes between the procurement and AP departments. This not only affects areas such as risk management but also denies businesses the insight that’s so central to organisational strategy and growth ambitions.

The Advantages of a Dedicated P2P Solution

While ERP systems provide a solid foundation for managing various business functions, they often struggle to address the specific needs of procurement. A dedicated P2P solution can offer several advantages over ERP-based systems, including:

Enhanced Efficiency: Procurement and finance teams spend over 30% of their time on manual tasks. Dedicated P2P platforms streamline procurement and payment workflows using AI to reduce manual work through increased automation.
User-Friendly Interface: ERPs can be complex and require extensive training, while dedicated P2P platforms offer intuitive interfaces and even punch-out capabilities to B2B marketplaces like Amazon Business, allowing employees to make purchases while maintaining control.
Global Compliance and Risk Management: ERPs handle general business compliance, but may not cover specific procurement regulations. A dedicated P2P platform ensures compliance across all territories and is regularly updated to meet the latest requirements, allowing companies to focus on delivering products and services without worrying about staying compliant with evolving regulations.
Better Spend Visibility and Control: ERPs track spending but lack detailed insights and real-time data on procurement. Modern P2P platforms offer advanced spend analytics, real-time reporting, and detailed insights into procurement, enabling better budget management and cost-saving opportunities.
Enhanced collaboration functionality: Most ERPs lack collaboration between internal business users and external suppliers, leading to reliance on manual processes like email and spreadsheets. Modern P2P solutions facilitate collaboration between procurement, finance, and accounts payable.
Better Supplier Relationships: ERPs are often inaccessible outside a company’s network, limiting real-time interaction in the procurement process. Advanced procure to pay solutions create ecosystems involving both buyers and suppliers. Platforms like Tradeshift provide a central space for exchanging transactional data, allowing suppliers to manage their products, pricing, and customer support, and issue invoices from a single account.
Scalability and Flexibility: As a business grows, its needs evolve and become more complex. A good P2P platform will scale with your business, adapt to new requirements, and seamlessly integrate with existing ERP systems, ensuring that your procurement processes remain efficient and effective, even as transactions increase in volume and complexity
Innovation; ERP vendors have limited focus on each product module and often use outdated platforms. They only add new features for strong business reasons, and there’s no incentive to do so for a small number of customers. In contrast, modern SaaS-based P2P solutions are constantly evolving to meet customer

Implementing a P2P Solution: Best Practices

Modular, digital procure to pay solutions like Tradeshift are helping mid-sized and high-growth companies unlock new levels of visibility, efficiency, and control in their procurement processes. Moreover, they deliver a real, rapid, and measurable return on investment, making them a no-brainer for procurement leaders at growing companies.