Optimising the Purchase-to-Pay Process with Process Mining

Procurement is a vital function for organisations, encompassing sourcing, purchasing, and payment for goods and services. Central to procurement is the purchase-to-pay (P2P) process, which spans from requisition to payment.

However, the P2P process can become complex and time-consuming due to its multiple stages. This complexity often leads to inefficiencies and bottlenecks, hindering organisational performance.

Fortunately, process mining technology offers a solution to these challenges. By analysing and visualising the P2P process, organisations can identify areas for improvement and streamline operations. This optimisation can lead to significant enhancements in efficiency and effectiveness.

In this article, we explore how process mining aids in optimising the P2P process. Additionally, we provide three practical tips for leveraging process mining software, such as QPR ProcessAnalyzer, to enhance P2P performance.

The Phases of the Purchase-to-Pay Process:

The standard phases of a purchase-to-pay (P2P) process typically include:

Purchase Requisition:

Request for goods/services, submitted for approval.

Purchase Order:

Creation of order for goods/services.

Goods Receipt:

Receipt and logging of goods in a warehouse.

Invoice Receipt:

Receipt of invoice from vendor.

Invoice Approval:

Review of invoice for goods/services quality.

Invoice Posting and Payment:

Approval and payment to vendor.

In reality, the process is more complex and prone to issues like incorrect step order, delays, and errors. This leads to longer lead times and higher costs.

What is Process Mining?

Process mining uses data from existing systems to analyse and enhance processes. It visually represents the P2P process, pinpointing bottlenecks and areas needing improvement. This deepens understanding, leading to informed decisions for better performance and efficiency.

Process Mining for Purchase-to-Pay

Events like “purchase order created” or “invoice approved” are recorded in your procurement, ERP, or invoicing system database with timestamps.

Using this data, process mining models show your procurement process in reality. QPR ProcessAnalyzer, QPR’s Process Mining software, draws data from your information systems directly using built-in connectors. It then visualises and identifies inefficiencies like bottlenecks, rework, Maverick Buying, and conformance violations.

Video: How to spot Maverick Buying in your purchase-to-pay process in less than one minute
How Process Mining Can Improve the P2P Process
Enhanced visibility:

Process mining offers a holistic view of the P2P process, enabling organisations to spot inefficiencies and areas for enhancement. This facilitates data-driven decisions for process optimisation.

Better compliance:

Process mining enables monitoring and enforcement of compliance in the P2P process, ensuring adherence to procedures and guidelines. This minimises errors and promotes consistent and efficient process execution.

Expedited payments:

Process mining identifies bottlenecks and inefficiencies in the P2P process, enabling streamlining and faster payments to suppliers by reducing lead times.

Improved supplier relations:

An efficient P2P process fosters stronger relationships with suppliers by ensuring timely and error-free payments, enhancing trust and satisfaction.

Enhanced efficiency:

Process mining optimises the P2P process, reducing lead times, eliminating inefficiencies, and enhancing overall performance. This boosts operational efficiency, saving time and costs.

Three Strategies for Improving Your Purchase-to-Pay Process Using Process Mining Technology

Maximize P2P efficiency with QPR ProcessAnalyzer:

Understand current processes: Spot bottlenecks and compare performance to internal standards.

Use root cause analysis to find reasons for issues like long wait times.

Continuously monitor and improve performance with key purchasing KPIs and automation.

1. Uncover Inefficiencies in Your Purchase-to-Pay and Compare Across Your Organisation

Process mining helps uncover inefficiencies and enhance processes. It uses flowcharts to pinpoint issues like missed steps or long lead times. By analyzing durations and case attributes, you can identify root causes and prioritize improvements. It’s essential for optimizing purchase-to-pay processes.

2. Uncover the Reasons Behind Issues in Your P2P Process with Root Cause Analysis

Root Cause Analysis helps understand reasons for process issues like repeated steps or long lead times in P2P. It identifies events causing problems and ranks root causes based on impact. Also, find “role models” in processes with fewer issues for internal benchmarking. Analyzing root causes forms the basis for improvement plans. Use ad-hoc analysis and Dashboards for further data visualization and long-term monitoring.

3. Continuously monitor and enhance performance of P2P with ready-made process mining solutions

With process mining software, gain insights into your P2P process, track improvements, and monitor changes over time. Real-time data-driven insights help monitor performance and identify areas for enhancement. Customized dashboards visualize critical KPIs like touchless order rates and process cycle times, facilitating improvement tracking. Continuous monitoring and analytics enable ongoing performance enhancement and evaluation of implemented changes.

Why Process Mining for P2P Insights and Not Traditional Business Intelligence Reports?

Process mining simplifies analysis with AI-driven tools and ready-made dashboards, eliminating the need for data scientists. QPR’s Purchase-to-Pay dashboards offer instant insights into Maverick buying and its causes, streamlining the process.

Process mining answers key questions like:
  • Time from procurement request to order?
  • Order processing duration?
  • Compliance with P2P model?
  • Ways to enhance compliance?
Identifying improvement areas helps focus efforts effectively:
  • Speed up purchase request approvals
  • Automate invoice approval tasks
  • Enhance fraud detection with dual checks 
Summary: What are the benefits of using Process Mining for the Purchase-to-Pay process?

The purchase-to-pay (P2P) process is vital for procurement, and it’s essential for organisations to execute it efficiently. Process mining provides insights into P2P operations, revealing areas for enhancement. By utilising process mining technology, organisations can streamline their P2P procedures, enhancing compliance, accelerating payment processing, fostering stronger supplier relationships, and boosting overall efficiency.

Incorporating process mining into your procurement strategy can lead to significant improvements in P2P performance.

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Get a quick overview so you can spend your time improving your processes.

You can easily define and set up processes according to your own needs using a convenient layout tool. In addition, since all types of workflow processes can be managed, you get all case management in one single system. 

Analyses, statistics and reports give you an unbeatable overview with real-time status and division of responsibility. Nothing has to fall through the cracks anymore and you always have an accurate and up-to-date base for decision-making.

CANEA Process is a tool that allows you to model and share business processes in an easy-to-use graphical web interface.

Seeing is understanding

Visualisation gives all employees an understanding of the organisation’s processes, activities, responsibilities and information flows.

Living processes

Identifying working methods while making it easy to update is the basis for continuous improvement of processes.

Create a complete picture

Linking together documents, information and tools with clickable process maps create an intuitive and comprehensive management system.

CANEA Workflow is an IT solution that automates, quality-assures and speeds up administrative workflow processes.

You can easily define and set up processes according to your own needs using a convenient layout tool. In addition, since all types of workflow processes can be managed, you get all case management in one single system. 

Analyses, statistics and reports give you an unbeatable overview with real-time status and division of responsibility. Nothing has to fall through the cracks anymore and you always have an accurate and up-to-date base for decision-making.

By creating executable processes in CANEA Workflow, you get both better control of the situation and smoother processing.

Streamlining the work

Ensure compliance and that handovers are done correctly and with the right information.

Correct decision support

You get an unbeatable overview of the processes in real time, with both clear reports and clear diagrams.

Improve processes continuously

Our process support can be constantly adapted to changing needs and requirements. In this way, we give you the best possible conditions for your daily work.

A document management system without complicated folder structures.

CANEA Document combines simple and intuitive search features with powerful features for managing documents from a life cycle perspective.

Maximum availability
Search and find information quickly based on what you need, not where it is stored.

High security
Ensure accuracy, changes and access to all information – with high traceability.

Fulfils requirements
Manage information according to standards, legislation and other requirements for document management.

CANEA Document supports everything from production, publication and modification to archiving and deletion – with full traceability and version management.

CANEA Document provides secure management of all types of documents – in one place. Tagging the information with metadata creates a virtual, multidimensional folder structure. This means that a document appears in multiple locations at the same time, with authorisation-controlled access. The right information in the right place for the right users at the right time!

You can usefully add your company’s process-oriented management system to CANEA Document. All production and distribution of documents is quality-assured and streamlined. In addition, your employees always have access to the most up-to-date version of the documents – directly via intranet, tablets and mobile phones.

Improve the performance of your project activities

CANEA Project is a comprehensive project tool with integrated support for all types of projects and parties– such as management, resource owners, clients, project managers and project participants. CANEA Project gives you an excellent overview of your entire project portfolio, including profitability and status, making it easier to prioritize and make decisions.

CANEA Project shares all important project information with both internal and external members.

Let your project manager focus on management rather than administration and distribution of the information.

Gather all project information in one place and make it available to both internal and external members.

Helps you with prioritization of projects, resource management and analysis of portfolios and programs.

Make reality of the strategy

CANEA Strategy makes it possible for organisations of all sizes to create a unique common thread from the strategic work to the daily operations. We do not just provide performance management tools but rather a completely new generation of IT support for strategy activation. The system guarantees and provides support throughout the chain from strategy to execution. You get no results without action. CANEA Strategy makes it possible in practise! 

CANEA Strategy ensures and provides support throughout the entire journey from strategy to execution.

Create a shared understanding of the strategy, the goal to achieve and how.

Gives management an unbeatable overview of what’s happening, how it’s progressing, and why.

Creates a clear common thread from the strategy to project, initiatives and actions.