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Source-to-Pay Technology Gaps Reduce Competitive Advantage

Source-to-pay technology Gaps make keeping your tech stack efficient and competitive more difficult. Identifying the changes needed to support your people and your processes can be daunting, but, done right, it can bring significant efficiency gains to your organization. We will explore how to identify gaps and seize opportunities in your S2P technology stack to drive efficiency, reduce costs, and enhance and leverage your supplier relationships.

In this Insight: 


Where do Source-to-Pay Technology Gaps Come From?

From spend analytics and category management to purchasing and AP, many moving pieces within the source-to-pay cycle exist. Each step along the lifecycle can have several different processes and technologies to enable them. The complex nature of source-to-pay can lead to several blind spots that create gaps in your technology stack.

Untransformed Source-to-Pay Business Functions

Organizations undergo digital transformation in different ways. Some companies take a holistic approach, implementing tools for the entire source-to-pay process at once. Other organizations focus on specific areas of need one at a time.

In the second approach, more often than the first, gaps occur between processes that have been automated. For example, suppose an organization has put in contract management and AP automation. In that case, there may be a gap in getting contracted items into a vehicle for users to purchase from the contracted supplier at the right price.

Unimplemented Source-to-Pay Functionality

Implementing technology can be a heavy lift depending on your internal resources and existing processes. Often, implementations are scoped to implement a portion of the overall module functionality based on a department’s current maturity and needs.

The additional functionality available from an already purchased tool is frequently forgotten as users return to their day-to-day jobs after implementation is complete. These unimplemented capabilities are seen as nice to have items during the implementation. Still, as processes and efficiencies are gained, these features become the critical missing components to further operational gains.

Unrealized New Source-to-Pay Features

In today’s technology landscape, almost all source-to-pay technology is implemented, and source-to-pay is software as a service. This allows organizations to stay current and not manage complex system upgrades. Software providers can focus on innovation and creating additional functionality driven by user requests, market trends, and new technologies (such as Artificial Intelligence).
Software providers typically have three or four major releases per year. Depending on the scope of the solution, it is not uncommon for a solution provider to launch hundreds of new features per year.

Many organizations have an internal gap in reviewing, understanding, and discussing these new features between IT and the individual stakeholder groups that could benefit from the upgrade. Sometimes, these features are automatically turned on, but users don’t know they’re there. Other times, new features have to be enabled by request.

Process Changes

As businesses continue to globalize and supply chains become increasingly complex, business processes are changing faster. Frequently, a process has changed rapidly to adapt to a new regulation or risk, but the full impact of that process change is not documented and implemented. This results in a deviation between the documented and actual processes and the way technology is configured to work. These deviations require manual steps outside of technology that can lead to data inaccuracy, decreased efficiency, and single points of failure.

Identifying Source-to-Pay Technology Gaps

Whether the processes in your S2P Stack are entirely digital, digitally assisted, or manual, a gap represents the space between what you do currently and what is both possible and desirable in line with your business goals. It’s in these spaces where opportunities can often be found. Identifying these gaps requires a comprehensive approach, detailed audit, and clearly defined objectives. Conduct a Detailed Audit by thoroughly auditing your current S2P processes and technology stack. This should include identifying inefficiencies, bottlenecks, and areas where technology can add value.

Conduct a Source-to-Pay Process Audit

According to Gallagher’s State of the Sector report, only 5% of organizations will maintain the same practices they had in 2020. Organizations should review their source-to-pay process maps at frequent intervals. This review should include the documented process and technology integration maps. Once this review is done, a conversation should be held with stakeholders to validate the findings and ensure the processes are still relevant and accurate.

Benchmark Against Source-to-Pay Industry Standards

Compare your processes and KPIs to industry best practices. For example, realizing that your contract review process is significantly longer than the industry standard points to inefficiencies in your contract lifecycle management process. Understanding the gaps between where you’re at and what other organizations have achieved can help bring light to areas for improvement.

Velocity Procurement uses the 9 Dynamics of Procurement Proficiency to help our clients understand their maturity levels in multiple areas. compared to industry best practices. This analysis helps to develop a plan and priorities to alleviate gaps in source-to-pay technology and improve processes.

Employee Source-to-Pay Feedback

Employee feedback is an invaluable tool in identifying gaps that are causing inefficiencies. When given an open forum, your employees can identify areas in their daily work that caused them frustration. Often these frustrations relate to manual labor, redundant processes, or data in which they need more confidence. Employee feedback should be gathered and compared against your internal process audit to identify additional areas for improvement.

Supplier Feedback

Source-to-pay technologies are continuously gaining functionality to improve collaboration between buyers and suppliers. This collaboration can be done through online portals or integrations between systems. As organizations see more value from enhanced collaboration and drive the use of these tools further, engaging with your suppliers to understand the benefits they see and the challenges they face from the tools your organization utilizes is essential. Ensuring that suppliers are not overburdened and see value from their engagement with your technology stack will lead to stronger supplier relationships and reduced friction in the buying process.

Technology Assessment

It is important to periodically review the existing technology that you have implemented in your organization. This review should include analyzing new features that have recently been released and assessing their potential impact on your organization. Understanding what additional add-on modules or optional capabilities have been offered since your implementation is essential. Source-to-pay technologies are heavily investing in artificial intelligence and system extensibility. These initiatives allow customers to be more proactive, gather better data, and have a better overall view of their supply chain and global risk. Organizations that do not regularly assess the available capabilities of their technology stack are often missing out on available features that can immediately impact their organization’s success.

Integration Assessment

It is essential to review your system integration architecture periodically. One of the most common causes of gaps in source-to-pay technology is missing data that exists in one part of the process or one solution that needs to be properly integrated into the rest of the process. A comprehensive data integration strategy leads to dramatically improved data confidence, better visibility across the organization, and increased efficiencies. For more information, see our “Critical Data Flow for Source-to-Pay” infographic.


Building a Business Case to Address Source-to-Pay Technology Gaps

Once you have identified your opportunities and gaps, a business case must be created to generate support, secure a budget, and allocate resources. Too many organizations focus on tactical pains that users experience in their business cases. A well-built business case will outline existing issues with quantifiable metrics and align the proposed solution to these problems, highlighting the benefits to the organization and the measurable expected results. There are five key steps to building a compelling business case; these are documented in detail in our previous insight, “Five Steps to an Impactful Digital Transformation Business Case.”

Continuous Source-to-Pay Improvement Framework

An effective source-to-pay strategy needs to account for the continuous changes organizations face. The areas we’ve identified where gaps in source-to-pay technology can arise are not singular events. These areas, if not proactively maintained, will continue to create gaps, and any progress made in improving your efficiency will be short-lived.

For example, if your organization does not have a plan to review, understand, and implement new features released within your existing technology stack, in as little as a few months’ gaps will begin to form. These may not be immediately identifiable, but as time goes on and more features are released, the gap will continue to widen.

In another example, if your continuous improvement framework does not include periodic process reviews, then one-off manual steps will begin to creep into your processes, eroding efficiency gains that may have been made. It is best practice to develop procedures to review process changes. These procedures should be managed by stakeholders throughout the source-to-pay process to ensure change in one area does not affect another. The needed process change, what departments and roles will be affected, and how your existing technology configuration should be modified to incorporate the new process into the configuration should all be considered.

Without a continuous improvement framework, efforts put into identifying and correcting gaps in your source-to-pay technology stack are short-lived. Oftentimes organizations struggle to build and maintain an effective framework. This is where services such as Velocity’s Tech Desk can benefit organizations.



In a world where technology constantly evolves, staying ahead in managing your S2P stack is vital. By identifying gaps and embracing technological opportunities, businesses can achieve greater efficiency, cost savings, and stronger supplier partnerships. In our next Digital Transformation insight, we will discuss the steps needed to take to action on your identified gaps, and how to build a culture of continuous process and technology improvement.

If you need help identifying the gaps in your current source-to-pay technology stack, reach out to us today!