In our first blog of this series we discussed ideas on how to improve cost controls by doing more with less, and introduced the benefits of using a global, SAP-based, P2P system. We want to continue the series further by reviewing the issues facing CFO’s and their finance teams when multiple processes and software systems are in place in a global procurement function. We’ll also look at how these issues can be addressed, and the savings which could be achieved.
A report from The Cost of Control – Disrupted Networks stated that finance teams expect 15% of invoices to go unpaid past their payment terms, and 59% of those surveyed believe that the visibility of their supplier network activities and payments is becoming more complex. 64% went on to say that they believe that an open and transparent supplier network would help overcome this issue. This report, we believe, shows a need for change in a lot of organisations.
From our own research we’ve seen even more issues arise for the CFO and their finance teams when using multiple systems. These challenges include:
1. Data Accuracy: CFOs cite enormous difficulty in getting to “one version of the truth” when data sits in various systems outside of the corporate SAP system.
2. Time lag: With data in different formats and systems it can take weeks to consolidate and compile the data for reporting and analysis.
3. Cost: Companies need to update, integrate, maintain and train users on multiple different systems.
4. Silo-ed data: This issue leads to multiple issues. As an example, it’s difficult, to tell where suppliers are being used in different parts of the world or by different parts of the company. This means opportunities for group discounts can be over looked and higher fees can be paid for lower amounts of stock.
5. Added administration: Extra administration overhead is needed for data rekeying, and manual data checks – meaning human error is much higher as a consequence.
Although different organisations may experience only some of issues from those listed above, the case is probably still the same. Using multiple systems and processes to manage an organisation’s procurement process is inherently problematic, but there is a solution. Using a single purchase to pay system can help as it uses a single, common database to hold all data. The end result – a more consistent, accurate, timely and cost effective way to manage spend.
Having one global purchase to pay system helps companies to automate the entire procurement process from end to end. It will help to improve data accuracy and reliability, eliminate expenses associated with third party software solutions and it will eradicate any system integration issues. Because manual data entry, validation or interrogation is required it removes the risk of errors and extra overhead costs.
The current market conditions may be seeing “green shoots of recovery” but organisations still need to position themselves against competitive threats. Reducing the incidence of multiple systems can help reduce data errors, improve efficiency and improve cost efficiencies. What’s more it provides timely, reliable reporting, meaning the critical decisions CFO’s and Business Leaders have to make will be reassured by correct data from the past, present and future.
Multiple systems can be moved to one single platform but there are many options out there and the landscape can be very confusing. Here at Invenio, we help our customers choose the right system to suit their needs. We develop the system around the business needs and business processes with as little disruption as possible.