James Stirk, CEO at Tradeshift, lays out how procurement can move faster and be more strategic with a more digital approach.

Procurement professionals often express frustration that the value they deliver, the complexity of their role, and the difficulty of getting it right are not fully understood or appreciated. 

For years, Procurement has been considered a back-office function – necessary, of course, but not a strategic function. However, this perception is now shifting. Driving this sea change is a state of near-constant disruption that has come to define the global economy.

The New Imperatives for Procurement

The post-pandemic landscape has introduced new pressures on organisations, requiring agile decision-making in response to rapidly changing conditions. A more complex and fragmented macroeconomic environment now offers Procurement the ideal opportunity to demonstrate its strategic value.

From cost management and risk mitigation to regulatory compliance and sustainability efforts, procurement is increasingly central to executive-level priorities. Eliminating latency and friction from the procurement process has become imperative, whether sourcing alternative suppliers or adjusting production based on real-time insights. 

Additionally, procurement teams are tasked with controlling spending across a growing array of indirect spending categories due to a growing reliance on third-party providers for goods and services.

Challenges in Scaling Procurement Processes

Managing a diverse and multifaceted supplier base presents significant challenges. Procurement leaders frequently see their teams become overwhelmed by an expanding array of business-critical tasks. Stories of burnout are rising across the profession. 

A major hurdle lies in integrating procurement and finance systems, which are essential for managing relationships with an extensive supplier network. Traditional procurement tools, bogged down by outdated methods and manual processes, fail to meet modern business demands. Research indicates that more than half of all procurement processes are still conducted manually, leaving professionals burdened by inefficient systems. Experienced professionals spend days each month doing drudgery that could easily be automated. This represents a sad waste of human potential, especially when so many of today’s challenges require creative thinking and a renewed focus on human relationships between buyers and suppliers. 

This challenge is particularly pronounced for mid-market organisations, where growth often leads to a patchwork of disparate software and processes struggling to keep pace with expanding needs. A recent study found that 84% of mid-market organisations have outgrown their existing processes. A full 75% stated that their technology is not suited to their current business size.

Regulatory Pressures Driving Digital Adoption

As procurement teams navigate these operational challenges, they are also facing new regulatory pressures, such as the rising trend of e-invoicing mandates worldwide. These mandates, designed to enhance tax compliance and reduce fraud, require procurement professionals to swiftly adapt their systems and processes. However, this regulatory change should also serve as a catalyst for broader digital transformation efforts across the procure-to-pay process. 

Non-compliance with regulations can result in significant business and financial harm, including administrative fines, protracted audits, and loss of VAT rights. By contrast, those who adopt a joined-up, cross-border approach to meeting evolving regulations worldwide will reap the benefits of cost reduction opportunities and efficiency gains that stem from embedding digital at the core of every business transaction.

Ignoring this shift is not just a missed opportunity—it’s a risk that no forward-thinking business can afford. Companies that fail to act swiftly and strategically may find themselves outpaced by competitors in an increasingly complex and interconnected regulatory environment. 

Bridging the gap between Procurement and AP 

A pervasive challenge for many organisations is the disconnect between Procurement and AP. Ideally, these departments should work in tandem, yet they are frequently hindered by outdated, disparate systems that prevent effective collaboration.

The lack of an integrated P2P process forces Procurement and accounts payable (AP) teams to constantly play catch-up, managing an increasing workload with inadequate tools. Delays in invoice approvals, miscommunications, and lack of transparency lead to higher costs and increased compliance risks. Supplier relationships suffer due to missed invoices and payment delays, while employees become frustrated by cumbersome systems that take weeks for approvals, even on small purchases.

The financial impact of these disjointed systems is substantial. Errors such as missed invoices or duplicate payments disrupt cash flow and undermine financial accuracy. Studies have shown that manual processes can significantly extend transaction cycles, adding days or even weeks to invoice approvals. This affects supplier relations and leads to missed cost-saving opportunities, such as early payment discounts.

The Strategic Shift to Fully Digital P2P Systems

Adopting fully digital P2P systems provides a strategic solution, seamlessly integrating procurement and finance functions. These platforms automate routine tasks, improve visibility, and accelerate transaction cycles, reducing errors and inconsistencies.

Digital P2P systems break down silos between Procurement and AP, enabling more effective collaboration. With a unified system, procurement can track purchase orders, monitor supplier performance, and ensure timely payments. AP benefits from streamlined invoice processing, automated invoice matching, and better cash flow management.

Transforming Procurement Through Digital Integration

As Procurement and Accounts Payable integrate digitally, the benefits extend beyond operational efficiencies. The relationship evolves into a strategic partnership, aligning both departments toward common goals. Real-time data and analytics provide comprehensive insights into procurement activities, spending patterns, and supplier performance. As a result, they enable informed decisions and better anticipation of disruptions.

Integrated P2P systems also ensure timely payments, which help maintain strong supplier relationships and provide more opportunities to negotiate better payment terms, driving cost savings across the organisation. Moreover, these systems help ensure compliance with procurement policies and regulatory requirements, reducing the risk of fraud and legal issues.

A Call to Action for Strategic Digital Transformation

Investing in advanced P2P technologies will drive efficiency, foster innovation, and build resilience, positioning organisations for future success. Mid-market organisations that may view this level of sophistication as the preserve of large enterprises are benefiting from the emergence of a new breed of unified, cross-business procure-to-pay platforms. These platforms deliver the flexibility and scalability to meet their evolving capability needs while integrating seamlessly with their existing systems. 

Transitioning to fully digital P2P systems is not just a technological upgrade but a strategic necessity. Businesses need to integrate processes, break down silos, and utilise real-time data. By doing to, organisations can eliminate inefficiencies, increase agility, and make more informed decisions. 

Businesses’ struggle to adapt to recent disruptions in global trade has put the Procurement function front and centre. No longer a business backwater, the C-Suite is beginning to appreciate the role Procurement plays in the wider organisation. The new breed of all-digital P2P technologies are essential tools for saving time and reducing friction. Not only that, but they are the platform on which procurement can further build its reputation as a driver of business growth. 

Related Stories

We believe in a personal approach

By working closely with our customers at every step of the way we ensure that we capture the dedication, enthusiasm and passion which has driven change within their organisations and inspire others with motivational real-life stories.