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Procure to Pay Challenges and Solutions in Financial Services Industry


Procure-To-Pay (P2P) process begins with requirement of a good or service and ends with payment for such good or service. This process in the financial services industry is a non-core business function as it pertains to procurement of items used only to facilitate the core operational activities of the business. So the process is limited to indirect procurement only.

Procurement efficiency is the responsibility of the strategic sourcing and procurement department. The responsibilities of this department include finding the right supplier, negotiating contracts, minimizing spend on categories, and identifying ways to automate the purchasing cycle.

The financial services industry is facing several challenges in P2P space and is taking certain key steps to address them, which we will deal with in this document. This paper is based on our experience supporting P2P processes using SAP technology for leading international banks.



While financial organizations have made significant progress on adoption of procurement processes and technologies, they still face many challenges. Key challenges are discussed in this section.

1. Disparate Systems and Processes: Large business units within the organization have their own process and tools to manage procurement which makes data consolidation cumbersome. Sourcing, procurement, and accounts payable functions are usually run by different departments and these departments often optimize the process exclusively for their functions. Companies also use multiple ERP systems making it difficult to have a single and integrated source of truth for supplier and business data. These technological and departmental silos create inefficient processes that are mostly manual and error prone. In addition, several processes require manual intervention resulting in cost inefficiencies.

2. Management Apathy: Business unit management perceives procurement business processes as non-critical. This perception usually means focus on upgrading procurement processes and technology is low. Hence, any inefficiencies that creep in on a long term basis either due to outdated technology or process is not given the requisite priority. Also, key procurement processes such as spend reporting remain largely underutilized.

3. Lack of Compliance and Governance: Compliance and governance of procurement processes tends to be rigid and inflexible. Key governing principles such as ‘preapproval of spend’ is sometimes perceived as unwanted bureaucracy. This lack of compliance often results in ad-hoc purchases and non-contracted spend.

4. Change Management: Change management is understandably a difficult and complex proposition in large organizations. Users often complain that they are not consulted before changes are implemented in the system. So a post-implementation situation may result when the solution may not meet or solve key user issues. Requirements change frequently making it difficult for the technology team to ensure quality and timely delivery.

5. Lack of adoption: Users may find procurement systems difficult to use. B2C systems such as Amazon and Google have raised the bars of users’ expectation from B2B systems. Users expect simplified and intuitive experience in their business environment. As procurement systems are designed by purchasing professionals who have higher threshold for complexity, the procurement systems are often high on feature and low on usability. User training is inadequate and they are not rightly advised on procurement policies. All these factors frustrate business users resulting in poor adoption of P2P technology and processes.



We have witnessed many approaches are being taken to address challenges faced by financial services industry. Key approaches that have been successful in addressing challenges are discussed below.

1. E-Invoicing and Automation: To drive down operational costs and increase process efficiency, the financial services industry is focused on automation of routine tasks and e-Invoicing. Manual Invoicing has a high turnaround time and is error prone. Adoption of e-Invoicing solutions such as Invoice EDI, Supplier portal and Optical Character Recognition (OCR) has many benefits for businesses. Firstly, accounts payable team’s productivity improves that drives down cost. Secondly, purchasing team can focus on high value activities and add value to organization. Finally, the suppliers get paid on-time resulting in reduced/no late payment fees, discounts on future supplies, improved supplier relationships and efficient dispute handling.

2. User Experience: Organizations have realized the need to invest in technology and processes. The benefits include increased uptake of the procurement system, streamlined processes and reduced cost of operations. The investment is worth only if users use the system the way it is intended. If users find the system difficult to use, they would try to find easier workaround resulting in failed business case. This makes intuitive and responsive user experience critical to the success of procurement initiatives. We have observed that it often helps to conduct an assessment of system usability employing usability frameworks such as System usability scale (SUS). These frameworks provide an objective rating and subjective evaluation. The objective is to identify concrete areas to solve usability issues.

3. Design thinking: Organizations have started adopting human centric approach to designing and developing procurement solution. Design thinking is a disciplined approach that assists in development of new solutions by making users and usability the focus. In designing procurement solutions for financial services buying complex services is the norm. It is difficult to define the problem and the way forward becomes ambiguous. Design thinking, with focus on prototyping and iterations, is increasingly proving to be a better approach.

4. Mobility: Traditionally, procurement in financial service industry was only done via in-house P2P web portal or via e-forms. Increasingly now however, users are expecting their companies to provide anytime and anywhere access. So organizations are focused on developing mobile apps or websites that are not device specific. We see an increase in organizations adopting the ‘Mobile first’ approach to P2P application that further simplifies buying experience on the web. Such ‘anytime- anywhere’ access has amplified procurement experience while reducing the turnaround time for requests.

5. Cloud technology: Security concern is the main impediment. However, since cloud technology has matured, organizations are becoming more open to adopting cloud technology. Cloud technology has resulted in process standardization, improved efficiency and reduced operational costs. Change management is also simplified as changes and support packs can be applied quickly and efficiently.



In financial services industry, companies face many challenges. But we have seen that by applying design thinking, using new age technologies such as mobility & cloud, and increasing automation in business processes; these challenges can be overcome. We share few examples of solving pain points and delivering tremendous procurement benefits to the organizations.

Pain Point 1: Large volume of non PO invoices: In spite of having contracted spend and catalog set-up in the system, users were resorting to buying goods via other means. This behavior was causing issue in handling the non- PO based invoices.

  • Solution: Enforced “No PO No Pay” process across vendors which meant that the vendors for whom the requisition team doesn’t raise a purchase order would not get paid. This change mandated all requestors to create purchase orders for vendors
  • Benefits:
    • Reduced maverick buying.
    • Reduced cost of non-PO processing.

Pain Point 2: Lack of global spend visibility: Reporting on spend was quite cumbersome process as the data was being downloaded from multiple back-end tables and manual process was being used to generate the reports.

  • Solution: Reporting functionality implemented via business function enablement which helped managers and requestors view and track spend. Enhanced the reporting capabilities by creating custom reports and automated report generation.
  • Benefit: Auto generated no-touch reporting to senior management
    • Reduced manual effort
    • Increased turnaround time to generate reports.

Pain Point 3: Requisition screens and processes too cumbersome: End users were not happy with the current UI Screens and hence would avoid using the system for purchasing.

  • Solution: New user interface was implemented providing an intuitive user interface with self-explanatory steps to create the orders and track their end to end process.
  • Benefit
    • Uptake of the purchasing process via system increased
    • Reduced maverick buying

Pain Point 4: Ambiguity around usability problems and solutions: While everybody understood the usability of the P2P solution was not good, defining the problems and the solutions were proving to be a challenge.

  • Solution: A design thinking workshop was conducted with key client stakeholders. Then, SUS study and usability workshops were conducted to understand and prioritize the usability issues.
  • Benefit:
    • Clarity on what needs to solved in the system
    • Increased application adoption as users felt involved

Pain Point 5: High turnaround time for approvals: It was taking too long to approve purchasing requests. This delay in approving requests resulted in high turnaround time to process documents.

  • Solution: A new Mobile app was designed for approval requests keeping simplicity and usability at the core of solution. The app was designed keeping Mobile first principles in mind and was later launched as web version.
  • Benefit
    • Reduced turnaround time in approving requests and processing documents
    • Improved usability and increased adoption of P2P application



In the recent years, with the increased pace of development of new technologies, we see that financial institutions are keen to adopt these technologies for their solutions. Manual processes are being increasingly replaced by automated ones. Poorly designed user interfaces are being replaced by intuitive user interfaces. Heavily customized “on premise solutions” are being replaced by simplified cloud solutions. Also, all these changes are delivered using human centric approach and using ‘Agile’ methodology.

Financial institutions have started asking the right questions to their technology providers and procurement organizations:

  • What can be done to further simplify change management and improve user experience?
  • How can we further improve efficiency and drive down cost?

As a result, we expect the organizations will continue their movement to newer technologies with increasing expectations. New solutions will emerge to unlock the potential for next level of efficiency improvement and cost savings. Therefore, areas like artificial intelligence, machine learning and internet of things hold significant promise in the field of procurement for the financial services industry. We expect that powered by new age technologies, “Prescriptive Analytics” will drive changes at greater speed and efficiency.


This document is created by Srividya Ekkadu and Abhilash Gautam. The document shares our point of view on challenges faced and solutions adopted by financial services organizations in Procurement Domain.

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      Author's profile photo Former Member
      Former Member

      Nice read, Abhilash and Srividya. Thanks for sharing.

      Author's profile photo Former Member
      Former Member

      A perfect summary of P2P in FS domain. Thanks for sharing Abhilash and Srividya.

      Author's profile photo kiran C
      kiran C

      very informative

      Author's profile photo Former Member
      Former Member

      Well articulated and definitely a nice read.

      Author's profile photo Rajesh R
      Rajesh R

      The document is really useful. Can you please let me know What Business Function is activated for Spend report?