1、IBM Institute for Business Value|Benchmark InsightsModernize purchase-to-payBoost performance with automation,analytics,and AI2We help transform finance organizations from improving the efficiency of their finance processes to creating smart functions with intelligent workflowscapable of finding,con

2、necting,and analyzing data to uncover deep insights that can inform intelligent decisions.Our financial consultants partner with clients to advise and manage end-to-end processes.To learn more,please visit IBM can help1Organizations with optimized platforms that automate purchase-to-pay have 33%fewe

3、r erroneous payments.They also experience 19%lower total process cost to order material and services per purchase order than peers who have not implemented a platform solution.52%of top performers in purchase-to-pay cost metrics use advanced analytics and predictive algorithms.They apply these techn

4、ologies in procurement decision-making to connect data from suppliers and stakeholders,improving working capital and helping reduce costs and risks.Organizations that have optimized AI in purchase-to-pay detect 50%more fraudulent invoices.They also process 33%more accounts payable invoices and resol

5、ve an invoice error 20%faster than those that have not implemented AI,helping streamline processes and enhance decision-making.Organizations optimizing exponential technologies are gaining efficiencies and cost savings.Key takeaways2IntroductionPositioned at the intersection of business strategy and

6、 value,the finance function within organizations is poised to help leaders navigate the difficult current environment of a persistent pandemic,geopolitical conflict,sustainability demands,and high inflation.Finance can spearhead the discovery of insights that facilitate faster,better decision-making

7、 and keep enterprises on track toward purposeful agility and rapid innovation.Yet nearly half of finances time is still spent on transactional activities.In fact,fewer than 10%of finance department activities are dedicated to analysis and actionareas crucial to supporting improved decisions.1 By tur

8、ning to exponential technologies,finance can transform its core processes and upskill the finance functionfreeing teams to drive greater value for their organizations.One excellent candidate is purchase-to-pay,a complicated system of purchasing and paying for the goods/services necessary to deliver

9、a solution to customers.2 Typically,purchase-to-pay faces several key challenges that restrict its ability to enhance business outcomes:Teams operate in silos,with fragmented processes spread across sourcing,procurement operations,and accounts payable.Process inefficiency and variability arise with

10、manual touchpoints in vendor payments and multiple duplicate entries in vendor masters.Transaction visibility is limited due to disparate enterprise systems coupled with lack of data access.High exception volumes coupled with unresolved queries and follow-ups on payments can arise from low process d

11、igitization and compliance.Vendor master data cleansing when done manually can be expensive and time consuming.3Often,these issues result in high procurement costs,suboptimal user experiences for buyers and suppliers,high costs for invoice processing,and missed sourcing savings.Any increase in effic

12、iency in purchase-to-pay can directly reduce overall process costs because one part of the process alone,accounts payable/expense reimbursement,represents 12%of all finance function FTEs.3 To explore the potential benefits of applying technology solutions to the purchase-to-pay process,the IBM Insti

13、tute for Business Value Performance Data and Benchmarking Program performed a statistical analysis of data collected from over 500 purchase-to-pay managers globally(see study approach and methodology on page 23).The results show a positive correlation between the adoption of exponential technologies

14、 and organizations outperforming their peers in a variety of purchase-to-pay performance measures.The advantages of automating data collection,gaining insight intelligence,and eliminating error-prone manual tasks can indeed free time for finance staff to spend on higher-value decision-making and str

15、ategic goals.Any increase in efficiency in purchase-to-pay can directly reduce overall process costs because one part of the process alone,accounts payable/expense reimbursement,represents 12%of all finance function FTEs.34Platform solutions deliver automation benefitsProcurementA procurement platfo

16、rm is an integrated system that fully or partially automates significant parts of procurement processes,including sourcing governance and category management,selecting suppliers and developing/maintaining contracts,ordering materials and services,and managing suppliers.Automating purchase requisitio

17、n and purchase order approvals delivers multiple benefits,including reduced manual intervention,decreased delays,and elimination of email processes.Additionally,vendor performance can be tracked,discrepancies can be identified,and historical information can more easily be compiled to improve decisio

18、n-making.However,only 33%of respondents report they are implementing,operating,or optimizing a platform solution in procurement.Those organizations that have optimized a platform solution in procurement have realized advantages over those that have not implemented a platform solution,including:A low

19、er total process cost to order material and services per purchase order(see Figure 1)The ability to procure 22%more of their total purchase value from certified vendors(see Figure 2).5FIGURE 1 Automation helps produce procurement efficiencies.19%lower$88.57Cost per purchase order$110.0067%55%Optimiz

20、ed a platform solution in procurement No platform solution in procurement implemented22%morePurchases from certified vendorsFIGURE 2 Automation helps increase procurement effectiveness.Note:Certified vendors are suppliers of goods and services with whom the business unit has prearranged purchasing a

21、greements that include the supplier being responsible for quality of incoming goods or services.6Accounts payableAn accounts payable(AP)platform is an integrated system that fully or partially automates significant parts of the AP process from invoice reception to payment.Invoice matching is automat

22、ed,simplifying the arduous tasks of extracting invoices from emails and matching them with relevant purchase orders.AP staff can also take advantage of favorable payment terms and maximize cash flow.However,only 35%of respondents report they are implementing,operating,or optimizing a platform soluti

23、on in accounts payable.Those organizations that have optimized an AP platform solution have experienced process improvements when compared to those that have not implemented one,including(see Figure 3):A lower total process cost for accounts payable per invoice processed 33%fewer duplicate or errone

24、ous payments.FIGURE 3Accounts payable platforms yield process improvements.16%lower$7.00$8.3333%fewer Duplicate or erroneous paymentsCost per invoiceOptimized a platform solution in accounts payable No platform solution in accounts payable implemented2%3%Note:Total cost includes fully loaded personn

25、el cost,system cost,overhead cost,outsourced cost,and any other costs.7Only 35%of respondents report they are implementing,operating,or optimizing a platform solution in accounts payable.8Case studyABB:Undertaking the procurement digital transformation journey4As part of its digitization journey,glo

26、bal technology company ABB is launching SmartBuy,an end-to-end employee purchasing program that matches the ease of online shopping with the intuitiveness and speed of a search engine.The solution also automates the process of finding,procuring,and managing ABBs supplier network with services such a

27、s self-registration and contract processes.SmartBuy is designed to provide ABB employees with a self-service method to purchase indirect materials and services,guiding users to preferred suppliers,processes,and policies.The solution provides around-the-clock support with an intuitive,single,self-ser

28、vice interface for ABBs employees and suppliers across the globe,creating a virtually seamless experience that also aligns with ABB corporate policies.8910Advanced analytics and predictive algorithms improve procurement decisions Procurement decisions fueled by poor data and analytics result in a si

29、gnificant amount of missing or misclassified spend data(up to 50%),and a lack of insights results in an annual average of$10 million in lost savings.5 Fragmented data sets and varying definitions make it difficult to synchronize information around spend.Rules-based classification of data leads to st

30、atic and inaccurate results.And spend insights are hard to generate and are usually based on sole-sourced data from static data sets.Applying advanced analytics and predictive algorithms makes a difference by connecting data from suppliers and stakeholders to improve working capital while helping re

31、duce costs and risks.For example,with working capital,payment analytics look at the compliance of payment terms and discount opportunities to the agreed terms with suppliers.These analytics can use internal and external data to recommend to what extent vendor payment terms can be extended.Analytics

32、associated with early payments look for invoices that have been paid ahead of contractual due dates.Analytics can also identify opportunities where contractual discounts have not been taken and where they could be introduced to suppliers that do not currently have them.In addition,organizations can

33、leverage dynamic discounting analytics.This is a form of supplier financing that puts an enterprises surplus cash to better use.Suppliers can take early payment in return for a discount by choosing which invoices to accelerate,according to its cash flow needs.They can take payment any time between i

34、nvoice approval and maturitybut the earlier the payment,the greater the discount.652%of top performers in purchase-to-pay cost metrics use advanced analytics and predictive algorithms in procurement decision-making.11Finally,advanced analytics intended to identify potential fraud and abuse activitie

35、s also help reduce other risks.This can include looking for duplicate vendors and analyzing spend below clip levels,for example,to see if suppliers are regularly sending invoices just below the clip.Procurement analytics can yield 1%in incremental savings to sourced categories from improved go-to-ma

36、rket intelligence and 5 to 20 times return on investment from the value of analytics and insights delivered versus the price of the solution.7More top performers in purchase-to-pay cost metrics(52%)have a procurement decision-making culture that includes advanced analytics and predictive algorithms

37、compared to their peers(39%).Top performers in purchase-to-pay cost metrics have much lower costs to order materials and services and to process accounts payable compared to other respondents(see Figure 4).Not surprisingly,most organizations with a procurement decision-making culture that includes a

38、dvanced analytics and predictive algorithms make relevant procurement data accessible in real time throughout the enterprise.FIGURE 4 Top performers use advanced analytics to help reduce purchase-to-pay costs.Total cost to order materials and servicesTotal cost to process accounts payable$5.81$12.07

39、$4.81$1.90Top performers Other respondents60%lower cost52%lower costCost per$1,000 purchases12Case studyMultinational chemical corporation:Transforming purchase-to-pay8Following a series of mergers and divestitures,this company sought a transformation partner to take over its purchase-to-pay operati

40、ons and drive innovation.The situation required the partner to focus on standardizing functional processes and increasing productivity globally,operating more visibly as a global organization,delivering value through integrated services and analytics,generating better business outcomes,and elevating

41、 the stakeholder experience.The company and the partner embarked on an organizational and operational transition in which they executed several innovation initiatives to improve the purchase-to-pay process:Automation to boost efficiencies and streamline existing operations Analytics platforms for in

42、voice prioritization and forecasting/identifying roadblocks Executive digital dashboards for real-time insights.The company achieved 0.7 days of overdue inventory against a target of one day,69%invoice automation against an industry benchmark of 67%,and 95%of invoices paid on time.121314AI streamlin

43、es the process and enhances decision-makingAn AI-powered workflow,underpinned by data models,can optimize touchless processing and provide a unified interface for buyers,suppliers,procurement,and finance staff.The resulting spend and pricing intelligence enables insights during sourcing.AI can also

44、help with procurement operations and manage inquiries from buyers and suppliers.9Yet,only 28%of respondents report they are implementing,operating,or optimizing AI in procurement,and only a few more,32%,say they have adopted AI in accounts payable.Within procurement,organizations that have optimized

45、 AI identify more fraudulent invoices compared to organizations that have not adopted AI (see Figure 5).FIGURE 5AI helps increase identification of fraud.Optimized AI in procurement Have not implemented AI in procurement3%2%50%moreIdentification of fraudulent supplier invoices15Within accounts payab

46、le,organizations that have optimized AI are experiencing several advantages compared to their peers who have not adopted AI.They:Process 33%more invoices per FTE(see Figure 6)Resolve an invoice error faster and are better able to manage invoice exception handling(see Figure 7)Decrease the percentage

47、 of purchase orders created after receipt of the associated supplier invoice by 40%(see Figure 8).40%fewer10%6%Purchase orders created after receipt of supplier invoiceFIGURE 8Using AI in accounts payable helps improve quality.FIGURE 6Leveraging AI in accounts payable helps increase output.33%more15

48、,30011,500Invoices processed per accounts payable FTEOptimized AI in accounts payable Have not implemented AI in accounts payable20%fasterCycle time to resolve an invoice error4 days5 daysFIGURE 7AI helps reduce cycle time to resolve invoice errors.16Case studyLarge electronics distributor:Driving i

49、ntelligent workflows in purchase-to-pay10The company had multiple ERPs,and the process was manual and broken for non-electronic data exchange(EDI)suppliers.The as-is process experienced missing invoices,delayed processing,and long turnaround.As a result,the time to process an invoice on average was

50、more than four days.To transform its purchase-to-pay process,the company implemented a scalable platform that included:An input module to automate receipt of paper and email invoices Intelligent extraction modules to extract invoice data Touchless transaction processing for business rules and matchi

51、ng services An interface to the ERP for posting of straight pass and exception invoices.The solution reduced the end-to-end cycle time for invoice processing by 90%,enabled 70%of invoices to be processed with zero touch,and prevented$2 million in duplicate payments.161718Key questions to askProcurem

52、ent Do you have category-level spend visibility across the enterprise?Is your sourcing strategy fragmented across business units/geographies?Do you have significant quality issues with your spend data?Are you concerned about the savings leakage due to buyers not leveraging preferred suppliers?Are yo

53、u getting a significant number of complaints and/or escalations from buyers?Have you optimized your discount strategy?PerspectiveDo you need exponential technologies in your purchase-to-pay process?Accounts payable Are your suppliers unhappy due to payments not being paid on time?Are you spending to

54、o much time and money dealing with exceptions and paper invoices?Is your accounts payable workflow cumbersome?Is your cost per invoice processed higher than your peers?1819Getting startedThe combination of automation and advanced analytics/AI is powerful for finance.These exponential technologies ca

55、n provide tangible business outcomes.For sourcing,100%real-time visibility of enterprise spend can be achieved along with 10%in sourcing savings.Procurement operations can provide more than 95%sourcing compliance,20%-30%savings in tactical buying,and 60%-70%process efficiency.And 95%on-time supplier

56、 payments can be generated in accounts payable.11However,it would be impractical to assert that a finance organization should jump directly into such technology investments.There are prerequisites with an emphasis on fundamentals.Before implementation,organizations need to invest in the required peo

57、ple skills,processes,and culture to take full advantage of these technologies.They also should establish process and systems commonality and standardize financial data.Once this foundation is in place,automation and AI can accelerate the purchase-to-pay process.Adoption of these exponential technolo

58、gies should also be done in conjunction with a more holistic review of other contributing factors that enable top performers.For example,an effective service delivery model that enables common technology and sound data management practices can make a crucial difference in the transformation.Finance

59、organizations also need to consider the current skill set of their staff and the underlying enterprise architecture required to support the technologies.20Action guideLay the groundwork for leveraging exponential technologies in purchase-to-pay using these steps to steer your efforts.01Use design th

60、inking Use design thinking to define and align around the current experience and pain points in purchase-to-pay.Determine the time and cost involved to perform each task within the lifecycle.In procurement,look at vendor onboarding,requisition generation and approvals,purchase order creation and dis

61、tribution,and spend tracking.In accounts payable,analyze invoice receipt,payment approvals,payment exceptions,and accounts payable inquiries.02 Prioritize potential solutions Prioritize potential solutions with an emphasis on buyer and supplier user experience.Solutions should include process change

62、s,service delivery model,technology implementation,talent/skill capabilities,and data management/governance.03 Develop a business case Develop a business case for the solutions,including spend assumptions,maturity assessment of the current purchase-to-pay process,and value that can be generated.Pote

63、ntial benefits should include process efficiencies,cost reduction,improved buyer/supplier relationships,reduced risks,and increased visibility.2104 Create an implementation plan Create an implementation plan for the purchase-to-pay transformation,including roadmap,business objectives,milestones,and

64、costs.Include pilots to rapidly achieve success and demonstrate the value of the solutions.05 Communicate with suppliers Communicate with suppliers about the purchase-to-pay transformation and gather and clean supplier data as input into new systems.06 Ramp up execution Ramp up execution and conduct

65、 formal weekly/monthly reviews with business stakeholders to understand roadblocks,critical path,and value realization.Adjust the implementation plan iteratively.22Sivakumar N LaP is Vice President,Global Procurement Services Delivery in IBM Finance and Operations.His prior role was Partner and Glob

66、al Offering Leader for Source to Pay in IBM Consulting.He has more than 23 years of experience in driving large-scale transformations in the finance and procurement functions.Siva has led a global cross-functional team in the development of an intelligent workflow platform using exponential technolo

67、giesincluding artificial intelligence,machine learning,and blockchainto enhance profit and loss,cash flow,efficiency,user experience,and controls.Spencer L is the CFO Lead for the IBM Institute for Business Value Performance Data and Benchmarking Program.She manages financial management benchmarking

68、 and regularly conducts benchmark studies on finance-related topics.Annette has over 30 years of experience in financial management and consulting.About the authorsSpencer is the Global CFO Lead for the IBM Institute for Business Value.He is responsible for market insights,thought leadership develop

69、ment,competitive intelligence,and primary research on the CFO agenda and trends.He is a co-author of the last eight IBM Global CFO Studies.Spencer has over 25 years of experience in financial management and strategy consulting.2223Study approach and methodologyIn partnership with American Productivi

70、ty and Quality Center(APQC),the IBM Institute for Business Value surveyed 529 purchase-to-pay managers in 2021.The study focused on current purchase-to-pay culture and organization,AI and analytics,along with other exponential technologies.FIGURE 9Survey demographicsAerospace manufacturing4%Life sci

71、ences6%Automotive manufacturing5%Media and entertainment4%Banking5%Mining3%Chemicals and petroleum refining4%Other manufacturing9%Electronics8%Retail9%Fast-moving consumer goods8%Services5%Government6%Telecommunications carriers7%Healthcare providers4%Transportation4%Insurance6%Utilities5%Industry d

72、istributionAfrica and Middle East5%Asia Pacific26%Central and South America11%Europe32%US and Canada26%Regional distributionThe global survey included 25 countries across the Americas,Europe,India,China,Asia/Pacific,the Middle East,and Africa.The surveyed enterprises represented 18 industries and in

73、cluded a range of enterprise sizes(see Figure 9).Data cited in this study is self-reported by study respondents.24Related reportsAIs quantified impact on the finance function“AIs quantified impact on the finance function:Improving process quality,cost,and efficiency.”IBM Institute for Business Value

74、 Benchmarking Insight.November 2022.https:/ibm.co/artificial-intelligence-financeSmart procurement made smarter“Smart procurement made smarter:5 ways digital intelligence drives value.”IBM Institute for Business Value.September 2022.https:/ibm.co/smart-procurementThe CFO Global C-suite Study:Strateg

75、ic Intelligence“Strategic Intelligence:CFOs as architects of action and champions of change.”IBM Institute for Business Value.January 2022.https:/ibm.co/c-suite-study-cfoIBM Institute for Business ValueFor two decades,the IBM Institute for Business Value has served as the thought leadership think ta

76、nk for IBM.What inspires us is producing research-backed,technology-informed strategic insights that help leaders make smarter business decisions.From our unique position at the intersection of business,technology,and society,we survey,interview,and engage with thousands of executives,consumers,and

77、experts each year,synthesizing their perspectives into credible,inspiring,and actionable insights.To stay connected and informed,sign up to receive IBVs email newsletter at can also follow IBMIBV on Twitter or find us on LinkedIn at https:/ibm.co/ibv-linkedin.The right partner for a changing worldAt

78、 IBM,we collaborate with our clients,bringing together business insight,advanced research,and technology to give them a distinct advantage in todays rapidly changing environment.About Benchmark InsightsBenchmark Insights feature insights for executives on important business and related technology to

79、pics.They are based on analysis of performance data and other benchmarking measures.For more information,contact the IBM Institute for Business Value at .25 Copyright IBM Corporation 2023IBM Corporation New Orchard Road Armonk,NY 10504Produced in the United States of America|January 2023IBM,the IBM

80、logo,and are trademarks of International Business Machines Corp.,registered in many jurisdictions worldwide.Other product and service names might be trademarks of IBM or other companies.A current list of IBM trademarks is available on the web at“Copyright and trademark information”at: document is cu

81、rrent as of the initial date of publication and may be changed by IBM at any time.Not all offerings are available in every country in which IBM operates.THE INFORMATION IN THIS DOCUMENT IS PROVIDED“AS IS”WITHOUT ANY WARRANTY,EXPRESS OR IMPLIED,INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY,FITN

82、ESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT.IBM products are warranted according to the terms and conditions of the agreements under which they are provided.This report is intended for general guidance only.It is not intended to be a substitute for detailed researc

83、h or the exercise of professional judgment.IBM shall not be responsible for any loss whatsoever sustained by any organization or person who relies on this publication.The data used in this report may be derived from third-party sources and IBM does not independently verify,validate or audit such dat

84、a.The results from the use of such data are provided on an“as is”basis and IBM makes no representations or warranties,express or implied.8VAMEARKUSEN-00Endnotes1“The CFO Study:Strategic IntelligenceCFOs as architects of action and champions of change.”IBM Institute for Business Value.January 2022.ht

85、tps:/ibm.co/c-suite-study-cfo2“Process is Key to Improving Procure-to-Pay.”APQC.December 14,2021.https:/www.apqc.org/resource-library/resource-listing/process-key-improving-procure-pay3 IBM Institute for Business Value Performance Data and Benchmarking,2022.4“IBM Helps Support ABBs Procurement Digit

86、ization with The Launch of SmartBuy:A New Program Using SAP Ariba Solutions.”IBM.December 3,2020.https:/ Based on internal IBM client information.6“Pay early,pay less with Dynamic Discounting.”Taulia.Accessed July 18,2022.https:/ Based on internal IBM client information.8 Based on internal IBM clien

87、t information.9 Halferty,Caitlin,Monica Proothi,Annette LaPrade,and Spencer Lin.“AIs quantified impact on the finance function:Improving process quality,cost,and efficiency.”IBM Institute for Business Value Benchmark Insight.November 2022.https:/ibm.co/artificial-intelligence-finance10 Based on internal IBM client information.11 Based on internal IBM client information.