Top 10 Trends across Procure to Pay
Purchase to Pay Network
Bringing together leaders across Finance, P2P, AP and Procurement - elevating careers, passionate about people
As we head into the second month of the year, we wanted to share some of the emerging trends that we expect to impact our lives across Purchase to Pay this year.
Agility and Control
In an environment where much of what underpins a successful economy is in a state of flux with high interest rates, stagnant growth, high inflation, companies need the agility to act quickly to changing circumstances. In a recession, managing cash becomes paramount. If an organisation’s processing is fragmented, if the supply chain is opaque and if KPIs are nothing but a list to be ticked, then that’s an organisation heading for trouble. In fact, it’s an organisation out of control. In order to inject the control you need into an organisation, it needs KPIs aligned to outcomes, deep visibility into suppliers, accountability and a reporting structure that makes sense. And these days that needs to be supported by automation, analytics and clean data. Strong analytics give companies the kind of visibility that makes it possible for them to pivot when necessary and be proactive in their response to crisis.
Talent Retention and Attraction
While automation might be essential for today’s finance, P2P and procurement professionals, people are still what makes the difference between success and failure. Innovative ideas spring from organisations where people feel valued and trusted. Today’s P2P environment is competitive, and those organisations that offer professionals a chance to grow, in a forward-thinking digitised department, are those that are more likely to attract and retain the people the company needs.
The Rise of AI
Whether that’s Machine Learning, Internet of Things, Virtual Assistants, Intelligent Automation, Deep Learning, or the intersection of a variety of technologies, we are only at the start of Artificial Intelligence and being able to understand how it’s likely to change our lives. Across end-to-end procure to pay, we create hundreds of thousands of transactions that produce data. The job of AI in P2P is to capture that, understand it and tell us what it means. Essentially AI gives organisations assurance, predictability and faster, better-informed decision-making power. Though of course, it’s still only as good as the process and data that underpins it.
Sustainability and ESG
Sustainability and Economic and Social Governance have been pushing their way to the top of agendas over the last three years. During the pandemic, payment terms fell into this category too. With organisations eager to keep their supply chain strong, many companies, particularly in the retail sector, drew up terms for paying smaller suppliers on time, or early. We also saw companies invest in diversification of suppliers and investment in local initiatives. As we move through 2023, it will be interesting to see whether economic pressure will mean further investment or whether we’ll see a retreat.
Compliance and the rise of eInvoicing
In the past, automation was a choice. In the future, the need to invest in automation is likely to be at least partly driven from necessity. And that necessity may well be legislated. As mandated eInvoicing spreads across the globe, driven to some extent by tax revenue demands, organisations that haven’t already ventured far into automation in finance, will find themselves pulled into it by their cross-border touch points. As well as the existing Duty to Report and Making Tax Digital legislation and Prompt Payment requirements, organisations will also be affected by the upcoming UK SOX requirements in 2024.
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Fraud and Cybersecurity
All three pillars of fraud that enable it to thrive – opportunity, incentive, and rationalisation - have increased over the course of the last three years and are not about to disappear any time soon. The threat comes from both internal and external sources, such as supplier collusion and employees, as well as malware attacks and cyberfraud. During 2023, we expect to see an increase in investment in cyber security to protect organisations' sensitive data and software to prevent fraud attacks in real-time. In 2022, we found that more than half of the organisations we spoke to had suffered some form of fraudulent attack in the previous 3 years. On current trends, we expect this to rise in 2023.
Big Bang or Micro Automation?
Big bang, end-to-end implementation, or micro automation and best of breed? The decision an organisation takes is likely to depend to a large extent on what’s already in place, budget and the UX on offer. But the argument is also an ideological or cultural one. And as it plays out this year and next, those decisions are likely to have an impact on the framework and strategy of the providers. We expect to see more partnering and more consolidation across the space.
ChatGPT
There will always be new software. And there will always be new “cooler than the rest” software.?Once upon a time it was “Cloud.” Today it’s ChatGPT. A couple of years ago, at PPN, we got very excited about the reach and implications of what was termed “Conversational Commerce,” the use of chat software to purchase category items which could, in theory, feed into a company's ERP system. This new AI chat generation software has the capacity to write contracts, draw up supplier terms and write process and learn from them, for example. ChatGPT is just at the start of something new, which together with the wider reach of all AI, is likely to change our world. Perhaps not right now, but soon, and incrementally. But as with AI, it will work best when used in conjunction with human thought and intellect. Augmented Automation if you like.
Hybrid Working and Working Patterns
Since the heady days of 2020, we have all become used to working remotely and more recently, hybrid working. But is it still working for us? Do we properly understand the risks to our workforce and their mental health from working from home, or forcing a return to the office? Have we properly accommodated for those who began work, fully expecting a remote role, and now find themselves having to commute a distance that wasn’t in the initial contract? Will we risk losing the talent we took so long to find? Have we settled on a pattern of in-office and home working that suits most people and that allows maximum productivity? Might we move to a four-day week? During this year, and next – we believe these questions will remain at the forefront of thinking for employers, leaders and employees.
Diversity
A diversified workforce is one that creates innovative ideas. A diverse supplier base is one that offers the maximum protection against risk. A diverse team is one where ideas outside of the accepted norm are given freedom of expression. Organisations that understand and strive to achieve this are those that are going to be more able to weather any storms heading our way in 2023 and into 2024.
Find out more about each of these trends by joining us at our 9th Annual P2P Transformation Summit at The Hurlingham Club, London on 6th June. You can register here >>> https://www.p2pnetwork.org/events/p2p-transformation-summit.html