Collaboration is the beating heart of the procure to pay process, which aims to ensure all staff responsible for using, managing, paying for, and ultimately disposing of goods and services are part of one joined up process. The practice is generally underpinned by software, and a procure to pay system is a completely integrated solution to facilitate an end-to-end process that starts with the procurement of goods and services and finishes with the accurate and timely payment of them.
How is Procure to Pay Used in TEM?
Telecom expense management (TEM) is an excellent candidate for procure to pay, as the full enterprise telecom lifecycle consists of sourcing, provisioning, inventory management, invoice management, usage management, telecom invoice audit, invoice payment, and even dispute management.
The ultimate aim of a procure to pay solution is to sustain a closed-loop process that ensures your actual contracted terms are replicated in the invoice amounts you pay. It’s as soon as new and/or re-negotiated contracts come into play that an enterprise becomes at risk of overpaying – procure to pay solutions nullify this risk.
Contracts are stored within the system itself and terms and conditions are then translated into software business rules. These rules are the foundation for continuous telecom invoice audits, which ensure parity between amounts paid and contract terms.
What’s more, huge amounts of spend data are collected and presented as reports. These reports are a powerful tool in making informed future business decisions – for example, sourcing choices can be based on a precise picture of usage, costs, and other trends.
In addition to contract terms, other variables in the telecom environment that need to be accurately captured include the opening and closing of branches, employee wireless usage, and changes to the telecom inventory.
It's important to remember that the procure to pay software, while being an essential part of the process, is just one part. The data it captures and presents still needs to be analyzed, understood, and acted upon or its value is ultimately lost.
And this is where the knowledge and experience of a subject matter expert is needed – today's telecoms environments are complex, dense, and highly changeable, so, expertise (either in-house or from a service provider) is key in delivering maximum savings.
What are its Benefits?
We’ve already covered two key advantages of procure to pay – the elimination of overpayments and the improvement of business decisions – but there are actually several other powerful reasons for adopting a procure to pay service:
- Minimize shutoffs and late fees
- Makes companies more integrated and cohesive so they work more efficiently on the same business process rather than operating as disconnected silos
- Cut invoice payment and processing costs
- Achieve visibility, control, and accountability of all expenses
- Pinpoint unnecessary, unsanctioned, and unused services
- Set up and sustain an accurate telecom inventory
- Capitalize upon buying power and negotiate the best contract rates
Final Thoughts
Ultimately, the main aim of TEM is to reduce risk and spend, and this can be achieved most effectively when an end-to-end service is deployed. Auditing is intrinsically more successful when the TEM provider has also managed the procurement of devices and services.
With this approach, the vendor can then build and maintain a telecom inventory, and auditing is performed against an accurate picture of the enterprise’s assets.
Spend can also be drastically reduced when a vendor – drawing upon its significant market knowledge and expertise – successfully renegotiates contracts for the customer. In fact, that’s exactly what we did for a leading oil and gas giant – by renegotiating and consolidating five major telecom contracts, Cass delivered $6 million in savings. And with a procure to pay process in place, we’ve ensured that the pursuit of savings is just a day-to-day activity, and that renegotiated contracts terms are always honored.
To learn more about the support we offered throughout the procurement process and the cost-savings achieved, view the case study here.
