Procure-to-pay automation software simplifies the procurement process by automating the entire purchasing cycle, including supplier discovery, sourcing, purchase order management, and contract management. This often includes minimizing or eliminating manual data entry across multiple systems to speed up the procurement process.
The solution streamlines end-to-end procurement processes with minimal manual intervention. So it prevents errors which can lead to delays in execution and increased costs involved in completing transactions related to obtaining goods and services for different departments in an organization.
We had the chance to interview Ilan Friedman, Director of Business Development of Nipendo, one of the leading Procure-To-Pay platforms that offer a variety of solutions, including Accounts Payable & Receivable Automation Invoice Automation, Supply chain management, and full Purchase-To-Pay Automation.
Why should a finance executive care about automating procure-to-pay functions?
Ilan: Manually handling procure-to-pay processes is a very costly headache for organizations, especially if they work with a large and varied number of suppliers. It’s not only the cost of personnel, which have to sift through enormous amounts of documents to ensure the accuracy of numbers and information. It’s also the time invested in doing so, which often involves back and forth communications with suppliers, the number of errors that end up going through to the ERP, which could amount to a lot of money, and the dissatisfaction of suppliers, which impacts overall supply chain efficiency. There’s also the issue of missed discounting opportunities. Effective automation could remove the costly errors, slash processing time and enable staff to focus on exceptions.
Are all procure-to-pay automation solutions the same? What should a finance executive look at when considering such a solution?
Ilan: Definitely not. Some solutions focus on simple tasks automation, with no built-in intelligence or an ability to see the entire set of processes. Others can only process simple and repetitive procurement but get stuck when things get messy, and so on. An effective automation solution should be holistic in nature – it should cover all processes and all types of spend and be able to handle complex supply chains, which might also involve cross-border tax and regulatory issues. A good solution should also be simple to implement and avoid the need to rip out existing ERP systems or procurement applications. Finally, and very importantly – a good solution should be able to generate a very high rate of supplier participation.
If you consider the investment of time, money, and effort required to implement a procure-to-pay automation solution – does it translate into an ROI, and within what period of time?
Ilan: ROI in this space is comprised of several factors: simple, short, and cost-competitive implementation, extremely high rates of supplier participation, process-type and spend-type coverage, error, and fraud reduction, staff reduction or repositioning, and so on. A company should start seeing a return on their investment within a matter of weeks, but certainly within a few short months, as more and more suppliers onboard.
Does the automation of procure-to-pay processes impact a company’s competitive standing?
Ilan: For sure. To be competitive, a company must have an effective supply chain. It must be able to reduce processing time and become as lean as possible in terms of the cost of managing its procurement. They must have visibility into the process in real-time and must also see savings opportunities. Errors must be identified and caught right away, and data entering the ERP system should be accurate and reliable. An effective procure-to-pay automation solution should enable all of the above.
What is Nipendo’s particular advantage in this space?
Ilan: Nipendo offers many advantages around cost reduction and greater efficiencies. It has end-to-end coverage of all procure-to-pay processes and sits on top of existing ERP and accounting systems, requiring no replacement or customization. It can also interact with existing spend management solutions, augmenting their capabilities across all spend types and all processes – even the most complex ones. Nipendo has a track record of fully onboarding in excess of 90% of suppliers, enabling them to use the platform in a variety of ways with minimal business disruption. Nipendo completely automates supplier interactions and removes all errors. Sophisticated intelligence is built into the system such that documents are transmitted to the ERP system only after data accuracy is ensured.