As much as we would like life to be black and white for simplicity’s sake, that just isn’t the case. Much of life exists in a blurry grey area, and we’re all doing our best to navigate through uncertainty. Well, the same theory can be applied to creating processes and workflows internal to an organization. Essentially, there’s no one-size-fits-all here. That same philosophy is integral to developing your organization’s procurement team, their source to pay process, and various other procurement definitions as they pertain to the specific organization.
Countless businesses, organizations, and companies make use of a procurement team. Procurement is one of the vital elements of the continuous improvement of any entity. As such, there are mountains of information on procurement strategies, tactics, suggestions, and everything in between. So much so it can be a little overwhelming at times to pinpoint which strategies and tactics will be the best for your supply chain management.
Therefore, it might be helpful to know that the best procurement strategy for your organization might look quite different from the optimal procurement strategy for a competitor or another company in a different industry. There are many different factors to consider when building your company’s specific procurement strategy and it’s ultimately crucial to understand that every organization is slightly different.
Creating Internal Definitions
Creating internal definitions is one of the best ways to start developing or reviewing the company’s procurement plan. One of the very first steps in designing the procurement plan must be to establish internal procurement definitions. The definitions would help construct the remainder of the strategy.
A commonplace to start with internal definitions is building the company’s definition of the source to pay process. This is a good place to begin because the source to pay process is typically one of the more inclusive procurement workflows. As a more inclusive procurement workflow, defining the source-to-pay (s2p) process will help inform the remainder of the procurement strategy.
The payment process is usually characterized as a process that starts with the selection, negotiation, and award of contracts to suppliers of goods and services and culminates in the final payment of those goods and services.
In other words, the source to pay process (or S2P), can be as broad as enveloping the entirety of the procurement lifecycle from start to finish. As such, most companies that employ a version of the source to pay process to rely on sophisticated S2P software. This is because S2P software utilizes a variety of technologies that yield significant improvements to the procurement lifecycle and the source to pay process as a whole.
For example, the source to pay software makes use of master data, cloud technology, and digital networking to optimize the procurement process from start to finish. This software allows companies to be more efficient with their front-end procurement activities such as supplier sourcing and shortlisting, hosting negotiations and reverse auctions, and the actual awarding of the contract itself.
Procurement S2P Software
Beyond the front-end boost to efficiency, source to pay procurement software also results in back-end boosts to operational efficiency. These benefits stem from the software’s ability to streamline processes and communication channels, as well as its ability to automate specific procurement activities that typically can cause delays.
Implementing S2P software is the main component of building a successful source-to-pay procurement workflow for your company. However, the software itself isn’t going to be able to revamp and optimize your procurement team. The S2P software is simply the tool, and it needs the right practitioners and surrounding context to be effective.
To build a stronger and more comprehensive procurement solution that makes use of the source to pay processes, it takes a blend of tactics. The managers, executives, and procurement staff need to have a clearly defined set of processes and procedures. The S2P software can help streamline activities, without causing accidental redundancy or other working inefficiencies and boost performance management.
Wrapping Up
The source to procure to pay process is only one of many procurement strategies you and your team can utilize. For more information on procurement strategies, procurement software, or anything else related to procurement, visit ProcurePort today. ProcurePort is the internet’s premier source for information, knowledge, and anything else procurement.
