Ardent Partners has officially published the new State of Source-to-Pay Digitization 2024: Navigating Supply Challenges, Embracing Innovation” report, which explores current Source-to-Pay (S2P) technology market landscape for the purpose of establishing a valuable benchmark for the industry. To understand the significance behind such a report, we must acknowledge that, as procurement’s impact on organizational success has grown, the department’s priorities have also grown beyond a cost and efficiency focus to also include sustainability, risk management, compliance, and cash flow. This, like you can guess, has greatly increased the importance of technology. Expected to leverage the given importance are a set of new-age S2P solutions that can free capacity by increasing automation, improve decision-making through easy access to insights, and enable more efficient, effective collaboration with suppliers and internal stakeholders. Having said so, while most large organizations have digitized a portion of their S2P process, the report shows scope and levels of success vary from case-to-case. More on the same would reveal how adoption is higher for core P2P technologies, such as Electronic Payments (79%) and eProcurement (51%), thus showing a clear focus on transactional processes. On the flipside of that, though, the report deemed Big Data Management Solutions (17%) and Optimization-based eSourcing (15%) as component with low current usage but greater planned adoption. This, in particular, highlights ongoing efforts to address data management and supplier visibility challenges. Hence, going forward, nearly 30% of respondents expect an increase in S2P operations’ technology budget for 2024 compared to 2023, against those 13% who still anticipate a decrease.
Furthermore, the report went on to discuss how the most successful users of S2P solutions, often touted as“S2P Innovators”, would demonstrate the value that technology can play in helping scale a procurement operation and maximize its performance. Here, the findings showed a wide range of benefits for procurement organizations, with efficiency going up by 57%, and productivity shooting up by almost 49%. Notwithstanding, despite the broad range of advantages gained using S2P technology, plenty of organizations continue to face challenges when trying to capitalize on their investments. Expanding upon that would reveal how poor data quality and/or access within the technology was identified by nearly half (48%) of respondents as the main barrier. Apart from that, a clear lack of integration was  zeroed upon as another prevalent issue, both between S2P technologies and third-party systems (34%), as well as across different S2P processes (33%).
Moving on, among those who were surveyed, a surprisingly low 10% were found to place any importance on data architecture, quality, and access when selecting procurement and Source-to-Pay technology. Similarly, integration to back-end systems was also identified as a priority by a mere 5%.
“The disconnect between the need for high-quality data and the current reality of poor data management and process integration creates a significant hurdle for organizations aiming to extract the full value from their S2P technology. Without clean, standardized, and readily accessible data and the elimination of silos across S2P, automation is limited, as is the effectiveness of AI and analytics. The risk of missing the AI opportunity is too great for this problem to remain unaddressed,” said Vishal Patel, VP of Product Marketing at Ivalua.
Moving on, even with all the data disconnect” and data management challenges, more than 81% displayed anticipation of a dramatic transformation over the next decade, where 38% expect data’s impact to be massive and 43% calling it to be significant. Finally, the report’s last piece of highlight comes from a projection that said, by the end of 2024; over 74% of all procurement teams will be using AI.
