Procure-to-pay may traditionally have been more art than science — the art of getting goods or services, or both, from a supplier in a timely, efficient manner, with everything from delivery to payment acting as a key consideration along the way.
But no longer is procure-to-pay the purview of phone calls, invoices and paper checks. Now, it is increasingly driven by technology, in a way that marches enterprises toward integration of different departments, extending from supply chain management to cash flow management.
One recent pact between Tradeshift, a supplier collaboration platform, and MetaProcure, which helps outsource procurement activities with suppliers, looks to bring a gestalt view to the interactions between buyers and suppliers. The latter firm is joining as a value-added reseller, bundling its own services within the larger confines of Tradeshift’s own offerings.
In an interview with PYMNTS, Rinus Strydom, vice president of alliances at Tradeshift, said: “There is a need for a homogenous buying process … Right now, it’s still actually a convoluted process,” where spending can be done in a variety of ways: according to contracts, “free form” entries or purchases from already contracted suppliers, or through “maverick buying,” where purchasing can actually extend to, say, Staples or other avenues where eProcurement is not usually allowed.
Procurement processes show other inefficiencies in general, said Strydom, with professionals not necessarily knowing where to look when they want to do spot buying. But, said the executive, with the relationship in place between Tradeshift and MetaProcure and through a managed model, requisitioners are able to ask for assistance in locating what is needed. In addition, said Strydom, the “ability to source items can be done day in and day out.”
In reference to security, transactions are done through a virtual card number, “which is specific to that specific requisition.” Commenting on the link-up with MetaProcure, Strydom noted: “The reseller is very much aligned with what they [requisitioners] need, when they need it,” and procurement can help lead to better data analysis. Industries that are well-primed to take advantage of the new relationship include universities and pharmaceutical companies.
For the buyers themselves, there is the added efficiency of having a single invoice issued monthly across the company, which can prove helpful, especially to firms that have broad geographies and a huge roster of suppliers. “In other words,” said Strydom, “Coca-Cola has one invoice, each month,” and any firm forming relationships with Tradeshift and MetaProcure can help ensure that the three buying segments as described above, including catalog, free form or maverick, can be done with quick approval up and down the supply chain.
Such procurement strategies, streamlined and technology-driven to a “source-to-pay” (or S2P) model, can help modernize eProcurement, which Strydom said really has not changed since 1999, with myriad suppliers listed in online catalogs. The movement toward integration dovetails with other features of Tradeshift’s offerings, such as electronic invoice management (through cloud platforms) and payments offerings.