B2B Payments

Rediscovering The Value In Procure-To-Pay Digitization

While the global pandemic has opened many corporates' eyes to the value of automation, for many firms, the digitization journey may have lost its way.

"Digital transformation" is such a hot buzzword that some businesses might have forgotten the purpose behind the effort. For departments like procurement and accounts payable (AP), without a clear value proposition in mind, adopting cloud automation technologies may not actually provide the benefits most organizations seek today.

In a conversation with PYMNTS, GEP's Director of AP Automation Dmitriy Lerman and Director of Product Marketing Paul Blake explained how businesses can redirect the ship to not only make headway in their modernization efforts, but do so in ways that will actually add value.

Bit-By-Bit Transformation

One of the biggest challenges today when digitizing areas of the enterprise with many touchpoints, like AP and procure-to-pay, is the need to adopt solutions that can integrate with each other and communicate across platforms.

According to Lerman, that's led some firms to take on the strategy of ingesting holistic, yet often clunky and inflexible, solutions that can offer a wide range of features. It's also created an enterprise environment in which various departments might have conflicting needs that cannot be solved with one giant solution.

For instance, the IT, procurement and AP departments must all have a hand in adopting an AP automation tool, and yet each department's requirements might differ from the others’.

"If you think about an enterprise-level procurement solution, a lot of it is going to be driven by the procurement team," he said. "Not always, but frequently, the AP team is not the same team, and they may not always have the same leaders in common."

By separating procure-to-pay solutions into more manageable pieces while still supporting integration capabilities, organizations might find themselves in a more flexible position to more easily adopt digital tools.

It's why, Lerman added, the payments function itself isn't necessarily the most important piece of an AP automation solution. What is key is automated invoice processing that can capture data and allow firms' enterprise resource planning (ERP) or other systems to initiate a financial transaction.

Modernization For Modernization's Sake

The digital transformation journey often involves a delicate balance, Lerman explained. For instance, there's a balance between saving your company money and still investing in the right solutions.

"If you want to pay your suppliers on time, and always on time and always correctly, you can throw a lot of capital against your process," he explained. "Or you can save on costs, but then you're going to miss your payments and going to make mistakes ... there's a fine balance there."

As organizations explore that balance, they must also manage the many meanings of compliance — both with regulatory requirements as well as internal spend control measures — all while managing all of the stakeholders involved in a single digitization initiative. In a procure-to-pay setting, that means tech-savvy users well versed in a certain platform, as well as the casual employee that may need to purchase office supplies once in a while.

Businesses continue to struggle to take all of these factors into account, which may be another reason why some companies may choose to adopt a system behemoth that, while holistic, may not actually provide meaningful value to workflows like procure-to-pay and otherwise. Yet there's an opportunity for these firms to instead embrace specific pieces of a broader procure-to-pay automation solution, allowing for more easily ingestible tools for specific departments and users.

According to Blake, what is also key is for businesses to remember why they began the digital transformation journey in the first place. It's not to compete with industry peers to see who can digitize faster, or to digitize for digitization's sake, he noted.

"Companies are starting to move away from looking for products for euphemistically-named solutions, and towards actually looking for results instead," he said, adding that firms today need technologies that will add value to the enterprise by boosting efficiency, lowering costs and more.

"As we start to look at how digital transformation can affect supply chains as a whole, it's not just so much about numeric change, but also about efficiency, about visibility, about control, and about predictability,” Blake added. “That's really been brought home in the last six months or so."

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