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In a bid to negate industry challenges and advance efficiently in their respective domains, business leaders have been progressively adopting new technologies and considering digital transformation. This has been the outcome of digital technologies intertwining with all aspects of businesses, changing the ways of working and how organizations deliver value to their customers. Moreover, a critical use case of digitalization in corporate services has most recently been seen in procurement as enterprises look forward to saving costs, time, and effort. Today, traditional procurement processes are being transformed thanks to the advent of technology, which is reshaping the conventional methods preferred by businesses and negating significant challenges such as maverick spending, compliance issues, purchase risks, and more.
One of the significant impacts of the digital transformation on the procurement procedure is the surging use of automation. In a bid to save cost, time, and resources on low-value, repetitive tasks, businesses are taking automation into consideration. According to a report by McKinsey, 20% of labour costs can be saved with the use of automation in business processes. As a result, businesses will be able to experience faster procure-to-pay cycles, fewer errors, and enhanced revenues. In addition, tech integration in P2P enables the dismantling of historically compartmentalized company processes, enhancing process effectiveness, spend management, and business decisions. However, the key to effectively managing the entire management process is picking the right software that can cater to enterprise needs such as sourcing, supplying, contract management, supplier relationship management, and more.
AI and ML technologies have matured today and have become key components of several business processes, which also include P2P. The usage of these new-age technologies can be ideal for several functions in both payables and procurement while also being used to enhance optical character recognition (OCR) and the data processing of purchase documents. Moreover, AI with OCR can be used far beyond digitizing information and can be tasked with identifying errors and completing transactions. It gives OCR the ability to pull necessary information, identify line items in invoices, and match them to multiple POs (Purchase orders). Furthermore, ML tends to improve every document it processes by learning the patterns of the suppliers and procuring the right information whenever required, collectively improving the PO approval workflow process.
P2P software generates and collects a great deal of data, which has historically been viewed as being too much to handle or provide any meaningful analysis from. Big data analytics in this context allows for the opportunity to get insight into this data, giving businesses that make use of the required technologies a competitive advantage. All of the historical data kept in the software is subjected to conventional statistical modelling to produce trends, and it then takes things a step further to produce forecasts that can aid future strategic decisions. Digital procurement's predictive analytics and real-time data directly address this issue, especially when economies are in flux and compliance standards are changing frequently, forcing businesses to look for cost-cutting opportunities.
Technology is impacting every aspect of procurement processes, with AI, ML, Big data analytics, and automation enhancing productivity, streamlining workflows, and enabling predictions that could positively reshape P2P processes. While digital transformation is providing several advantages for businesses, it is critical to understand how they evidently make the best use of it. Therefore, industry leaders must prioritize their KPIs (Key performance indicators) in a bid to find the right P2P software that could cater to their needs. According to a report by Research and Markets, the market size of P2P software is anticipated to reach a whopping USD 9.89 Billion by 2027, growing at a CAGR of 7.6%. As digitalization is the need of the hour, enterprises must utilize the right array of technologies across their P2P spectrum to achieve their transformation goals.
Arun Krishnamoorthy is the CMO of Techpanion, an automation & SaaS company. With over 15 years of experience in consulting, analytics, and strategic initiatives, he drives business expansion and leads sales and marketing efforts. Arun holds a Postgraduate degree in Business Administration and an ECM master's from AIIM, London. Prior to founding Techpanion, he excelled in operations, finance, and marketing roles, utilizing his expertise to propel the company forward.
