Process Mining in P2P – High Savings through Optimized Procurement

Michael Rahm, Director, Product Marketing
August 18, 2021

In virtually every industry, procurement is one of the most important business processes of any company. Nevertheless, the actual resource expenditure, and thus the true savings potential, of the Purchase-to-Pay (P2P) process is often underestimated. For this reason, P2P has become one of the central use cases for process mining. It is a classic example of resource-intensive processes that today run almost entirely through IT systems such as SAP, accumulating vast amounts of data that are seemingly invisible.

Process Mining software fills this gap and converts this system data into actionable optimization approaches for the company. Initial process analysis projects can help identify savings potentials and makes the P2P process more effective, more efficient and creates the basis for sustainable automation.

p2p process mining

 

More efficient processes: Resource consumption through rework

In theory, the P2P process has clear procedures: an order is placed, the invoice is received, paid and documented. In practice, of course, things are not always so straightforward. An order is adjusted again after it has been placed, or an invoice is changed, sent too late or there are payment discrepancies.

All these points delay the process and cost additional resources – time, money and manpower. With traditional methods, however, it is difficult to get to the bottom of these process deviations. They are often accepted as a natural part of procurement. But what if it is a specific supplier whose invoices are subsequently adjusted? What if there is a particular order category in which payment problems regularly arise?

Process Mining gets to the root of these factors. Process mining helps create a transparent and comprehensive model of the actual process where critical deviations are highlighted directly. The AI-supported root cause analysis goes to the root of these problem points. In this way, the issues that make the process inefficient and resource-intensive become directly visible.

 

Save time and money: discount and waiting times

Discount periods are a well-known concept in every purchasing department. But due to delays in the process or excessively long waiting times, these periods often elapse without making use of the savings offer. The reasons for this can be manifold, from bottlenecks in the invoice department to incorrectly issued invoices.

The consequence, however, is always the same: Saving potential wasted. What may seem insignificant for individual orders, however, accumulates more and more over a quarter or the whole year. Without a systematic overview of these key figures, however, such problems are rarely noticed.

With a process mining solution, this overview is created with just a few mouse clicks. The powerful filter functions not only make it possible to detect cash discount violations, but also to statistically compare processing times and wait times. Targeted optimization measures then ensure that the cash discount conditions are adhered to on time. And the practical example shows: This can lead to six-figure savings!

Learn how process mining can provide valuable insights into your processes.