Impact of Source-to-Pay Artificial Intelligence (AI) Applications Beginning to Grow

By Dennis Bouley

June 08, 2018 at 8:08 AM

AI.jpgThe way that most companies are deploying their source-to-pay process is changing.  While large organizations tend to push towards end-to-end automation of the process, mid-market and smaller organizations are still faced with a significant mix of automated and manual processes.  Even for the large players, the source-to-pay process has been automated over time, often pieced together by disparate systems that don’t link particularly well.  The impact on the business is a lack of efficiency that results in higher overall costs.  For example, many end users in organizations purchase goods on their own without leveraging the benefits of procurement-lead supplier contracting arrangements.

According to Sami Peltonen, Vice President of Purchase to Pay Product Management at Basware, a provider of network, financing and purchase-to-pay services, “Lots of folks are talking about automating all of their spend. In reality, most companies have multiple different providers that deliver upstream and downstream solutions for direct and indirect procurement.  As a result, their source-to-pay process is fractured and not tightly linked. We are encouraging people to consolidate all of these workflows into one cloud platform with AI capabilities where they can handle all of their spend,” he said.

When the source-to-pay is fragmented, it is difficult for procurement to gain full visibility. Even though procurement is responsible for optimizing the whole spend of the organization, they need to gather data from multiple sources. In some cases, they are trying to visualize downstream processes with upstream information.  Agility and flexibility are made more complex as a result.   

AI cloud solutions drive efficiency improvements

“There is now a good business case for consolidating source-to-pay via the cloud,” said Peltonen. “You can bring all of the data from disparate systems into a single platform. It can work much in the same way that large multinational companies grow through mergers and acquisitions.  They centralize core services like IT via the cloud and have a stable platform for consolidating all of the steps.  The cloud has made this work considerably cheaper that what was the case in the past,” he said.

Now the power of the cloud is supplemented by AI applications that help eliminate some of the manual work associated with the source-to-pay process.  According to Peltonen, three areas in particular are emerging as key AI application areas:  smart coding, predictive analytics and procurement chatbots.

  • Smart coding – In this case, AI tools analyze the history of invoicing data and create coding on behalf of the user so that invoice lines get assigned general ledger codes automatically.
  • Predictive analytics – These tools analyze invoices and can determine which accounts will have a high risk paying late. The system recommends actions to be taken with those particular accounts in order to avoid yet another instance of a late payment.  
  • Procurement chatbot – These tools make it easier for the casual end user purchaser (individuals or team that may purchase once every 12 or 18 months) to find order requests and purchase orders, enabling them to procure what they need to in the simplest, cheapest way. This greatly aids individuals who are tempted to buy outside of corporate contracts and encourages them to conform to corporate buying procedures thereby reducing overall purchasing costs.

Peltonen points out that the key to generating all of these AI-driven business benefits is to first begin by capturing all of the corporate spend data.  “Once you manage to have a system that captures the data, then you can start using all of the latest technologies like AI and you can begin to identify the best possible areas for savings across your source-to-pay process. The reward is then increased compliance, superior automation, enhanced businesses performance, and suppliers who be better enabled to deliver on time. It always starts by capturing all of that spend data,” he said.

Basware is the global leader in providing networked source-to-pay solutions, e-invoicing and innovative financing services. Basware’s commerce and financing network connects businesses in over 100 countries and territories around the globe. Find out more at

Tags: procure-to-pay purchase-to-pay Source-to-pay Procurement AI source-to-pay AI
Category: News Article

Dennis Bouley


Dennis Bouley is Editorial Director of and special advisor to MediaSolve Group, a strategic B2B marketing services firm focused on helping companies and institutions leverage the web and social media to achieve business goals. He spent 18 years at Schneider Electric as Managing Editor of Global Publications, and was responsible for cross-division management of the corporation’s white paper and customer success story processes. Prior to that, he spent 10 years working for IBM managing both small and large accounts. He holds a Bachelor of Arts in Journalism from the University of Rhode Island and holds a Certificat Annuel from the Sorbonne in Paris, France. 

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