Source to Settle
Procurement sourcing concepts have changed significantly over recent decades. Where we used to see the procurement (or purchasing) function as a stand-alone process—isolated, as it were—to essentially transactional activities such as issuing purchase orders and expediting deliveries, we now see the overall function as consisting of multiple interconnected services. Today, many organizations view this expanded concept of procurement as a start-to-finish process that begins with supplier sourcing activities and concludes when the supplier is paid.
Forward-thinking organizations are adopting a source-to-settle (S2S) strategy that streamlines processes and integrates sourcing, procurement, and accounts payable. Typically, this integration occurs through an enterprise application software (EAS) application (such as SAP) or business process outsourcing (BPO), but as a discipline, the concept can be implemented in almost any automated business process environment. Figure 17.1 shows the evolution of S2S.
Why Source to Settle?
There are a number of compelling benefits to employing an S2S operational strategy. As an integrated process, S2S enables an agile approach to fulfilling customer demand and moves the organization toward the full scope of managing the entire supply chain effectively, while at the same time improving compliance through auditable processes.
If you carefully examine the acquisition processes of most organizations, you will likely find ...