Changing views on purchase-to-pay processes – 2016 ProcureCon Report “Procurement Challenges”
In the digitized, networked economy more and more corporations find themselves in the middle of a changed competitive field. How do executives at the top of procurement departments in Europe respond to the new challenges? The 2016 ProcureCon Report “Procurement Challenges” provides insights.
“The results underpin how digitization and the automation of procurement processes are changing the face of the industry. The traditional view on purchase-to-pay (P2P) processes will open up towards the connections between buyers and suppliers. As a result, the responsibilities of CPO and CFO functions will begin to converge,” says Patrik Sallner, CEO OpusCapita.
In the course of the ProcureCon survey, which was supported by OpusCapita as a partner, 100 high level procurement professionals such as CPOs, Heads of Procurement and VPs Global Sourcing of Europe’s largest companies have been interviewed. The interviews have been compiled and analyzed by WBR Digital.
Expanding the traditional view on P2P processes
Results show that the focus of digital procurement strategies is still linked to traditional targets such as efficiency and cost, though upcoming reactions to challenges are in evidence. For instance, more than 75 percent of the respondents are concerned with their existing supplier base not serving future business needs. At this point, OpusCapita sees also the need for the software- and service-providers to act.
“It is significant that more than half of the respondents gave high priority to the implementation of automated procurement processes. We expect a future adjustment of the demand drivers and criteria used for selecting P2P service providers. This trend is due to a far-reaching shift in business priorities”, says Kelly Babbit, Head of Business Development, jCatalog (currently part of OpusCapita Group).
Babbit recommends to expand the traditional view on P2P processes: “Enterprises will no longer evaluate the quality of solutions with a sole focus on basic procurement functions. Solutions need to be part of a global strategy, based on pivotal interconnections between buyers and suppliers.” Progressive solutions should cover the complete process from sourcing to payment – from managing the first request for quotations (RFQ) to optimized working capital management and supplier settlement.
The new CPO / CFO dynamic
“As a further result of the shift in business priorities, the responsibilities of the CPO and CFO functions will begin to converge”, Babbit predicts. According to 2016 survey results, 60 percent of respondents are limited to occasional contact with their respective financial colleagues. “In the future we expect closer cooperation. Breaking down the silos between procurement and finance will be on the agenda of more and more executives”, Babbit explains.
Mutual benefits are easier to realize when both the CFOs and CPOs share similar goals within the company. Each seek to increase margins, cut costs and enforce compliance and business control to reduce risks. “Cloudbased SaaS solution providers will need to support this interconnection with a global perspective and inclusion of diverse stakeholders”, Babbit says.
From single solution to buyer-supplier ecosystem
“We have accepted this challenge. OpusCapita has integrated jCatalog, and our new joint portfolio will create advantages for existing and new customers with our comprehensive P2P approach, including sourcing, procurement, invoice management, cash management, and financing solutions”, Sallner explains. “OpusCapita aims to support customers in building up a whole buyer-supplier ecosystem. As a small first success due to our new joint approach, we have been acknowledged as a ‘Provider to Watch in 2016’ by Spend Matters, a leading global publication examining procurement and supply chain issues.”
Download the report here.