Each year we take the time to take a look at where we’ve been and where we’re going in the world of procure to pay (P2P). After digging deep with our area specialists, here are the top 5 trends we see making a big impact going into the new year.
While it may feel like this year is winding down, the new year is closer than you think and winding up. And that means new strategic planning for 2020. More and more, we’re noticing that digital trends are becoming prevalent in future business strategies. In order to keep up with the changing landscape of procure to pay (P2P) while looking forward to new innovations in the marketplace, we recommend integrating these top 5 trends into your approach for 2020 (and beyond).
Trend #1 – Data and Analytics
It’s been a hot topic for a while, but we don’t foresee this important theme going away anytime soon. Data and analytics were originally used with the intention to drill down into your operations. In that way, they only worked “reactively.” And though this was (and still is) tremendously helpful, it’s nothing compared to the benefits that come from using data and analytics “proactively.”
We anticipate using data in a more advanced, predictive way, going forward – to not only drill-down, but to alert-up. Using your data to establish actionable insights empowers your organization to not just look at your current state of operations but make a proactive and informed plan for the future. In particular, predictive analytics and committed spend analysis can help you forecast your spend and track budgets. You can even avoid supply chain risk with advanced analytics and information gathered from your system as well as external data sources.
Trend #2 – Ecosystem Approach to P2P
The concept of the “end-to-end” P2P suite is coming to an end. In its place we see the “ecosystem” approach rising. As businesses become more modern and emerging tech businesses and startups continue popping up left and right, it’s unrealistic to think a one-size-fits-all approach is feasible for growing organizations. It’s an idea that we, at Basware, have seen coming for a while. One vendor that provides total, end-to-end P2P might provide the breadth of functionality but not necessarily the depth of functionality needed for each stage of P2P process.
It’s time to adopt an integrated approach, a P2P ecosystem that provides a central location for all the unique plug-ins and applications that best fit your organization. Because according to Forrester, over the next 3-5 years the products that will win in this new market will be open, dynamic, and built with AI.
Trend #3 – Supplier Risk Management
Admittedly, this trend is nothing new, per say. What it new, is the amount of emphasis that should be placed on mitigating your supplier risk. It’s not about just getting the cheapest suppliers anymore. There’s too much risk associated with thinking merely in terms of dollar signs when it comes to suppliers. There should be open dialogues and increased communication between both parties. The conversation shouldn’t just circulate around “how much?” It should entail in-depth dialogues and continuous research into how sustainable, diverse, and ethically upstanding a supplier is as well as what reputational and business risk a supplier can potentially cause.
Your suppliers are an extension of your brand and in that way a direct reflection of your business’ own beliefs. Additionally, customers are demanding visibility into how sustainable and ethical organizations’ processes are. In their 2018 Purpose Study, Cone and Porter Novelli reported that 78% of consumers say organizations must positively affect society, not just make money—and nearly the same amount (77%) say they feel more emotionally connected to organizations driven by a purpose and values. So, to keep risk at bay and adhere to the desires of consumers, it’s vital your organization monitor and act proactively using comprehensive resources like those that Basware offers—Dunn & Bradstreet and Mastercard Track.
Trend #4 – Global compliance
This is another trend that isn’t going away anytime soon. And like Trend #3, it’s likely that it will only continue to become more important over the years. Why? Because global commerce, especially, has seen significant growth. And though global trade offers many benefits to organizations, it also introduces the complex issues of tax laws and regulations regarding e-invoicing.
E-Invoicing regulations are becoming more stringent and as these laws develop more strict requirements, the risk associated with noncompliance increases substantially. Not to mention, these regulations can vary from country to country. So, if you’re a global organization, these various laws can be nearly impossible to keep up with. That’s why it helps to team up with a solution that relinquishes some of that pressure and automatically stays up to date on the latest invoicing regulations, so you don’t have to.
For instance, the Basware Network delivers a low friction option for supplier onboarding globally and enables you to receive all your invoices electronically and compliantly. With over 1.5 million organizations already transacting on it and more than 220 global partner networks, you’ll rid your company of paper from day 1 while also ensuring global compliance regardless of where and with whom you’re transacting.
Trend #5 – Smart Processing and AI
Smarter processes backed by data and powered by automation are the future for S2P operations. When data quality improves, automation becomes all the more effective. It takes the manual tasks and the back-end operations out of the hands of your team and instead empowers them with the ability to make more strategic decisions and contribute to tactical business moves.
Intelligent technologies backed with AI (artificial intelligence) and ML (machine learning) handle as much as possible behind the scenes without human interference. These technologies learn as they go and eventually gather enough data to perform the same job in a completely different but more efficient way. We don't predict that they'll become sentient and come for your job anytime soon (or ever, to be honest). In fact, these technologies will actually continue to make all parts of the P2P process easier and quicker, empowering you to become more strategic.
Basware uses AI and ML technologies to offer natural language processing (NLP) capabilities, handle back end operations through innovations such as SmartCoding and SmartPDF, and inform our Analytics to develop predictive forecasting and advanced deep dives.
Get ready for the future.
2020 is coming up quick and these 5 trends are sure to show up January 1, ready to join your business. So, make sure you’re ready for them by getting your strategic plan established early. Learn more about upcoming trends over the next 3 years in the EIU report “What’s now and next for finance and procurement?” Download the report now.