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The ever-evolving Source-to-Pay landscape
The Source-to-Pay landscape is evolving rapidly, transforming both business strategies and the technology driving them. We’ve seen a significant shift from Purchase-to-Pay software to a broader Source-to-Pay focus, driven by new strategic priorities and demands. Where the focus used to be on transactional efficiency (sharp negotiations with suppliers and cost reduction), the focus is now on expanding accountability and embedding sustainability as a core element of the procurement processes.
Sustainability in Source-to-Pay
Sustainability is becoming more important in our source-to-pay processes, with new standards to play a crucial role in the coming years. On the one hand, you have European directives about sustainability, such as ESRS, CSRD and CSDDD. On the other hand, there are also national standards to keep in mind. For example, the recent introduction of the Norwegian Transparency Act has already made quite some impact.
While many organizations have ambitious sustainability goals, such as decarbonization, integrating these standards can feel overwhelming. Nonetheless, proactively aligning with these requirements now is a smart approach, as regulations are likely to become even tighter over time.
Key trends in the S2P software market
At S2P & More, we operate independently of software vendors, allowing us to provide an unbiased perspective on the Source-to-Pay software market. In recent years, the workload of purchasing professionals has increased (driven by regulations), yet the willingness to invest in additional staff has remained unchanged. Meanwhile, the S2P software market has seen an influx of niche players aiming to be acquired by ERP providers, eager to enhance their existing ERP systems with specialized P2P and S2P applications.
Here are some other key trends we’ve identified:
- Increased demand for intelligent solutions: There’s a rising need for solutions with built-in analytics that offer tailored improvements and benchmarking capabilities.
- Focus on sustainability and risk management: S2P applications are placing a stronger emphasis on these areas, and the influx of start-ups makes it increasingly complex to select the right solution for your business.
- Emergence of generative AI and predictive analytics: Advanced technologies like generative AI, predictive analytics, and recommendations are adding new value, supporting organizations in optimizing their S2P processes.
Procurement Hype Cycle: 5 phases of innovation
We also focused on Gartner’s Procurement Hype Cycle for 2025, which highlights the impact of emerging technologies on industry expectations. It helps procurement and finance professionals weigh the risks and opportunities of innovation. The Hype Cycle outlines five phases:
- Innovation trigger: This initial phase generates significant interest as new technology emerges, sparking excitement and experimentation.
- Peak of inflated expectations: The technology receives much buzz, often accompanied by high hopes and expectations. Currently, generative AI is in this phase: there’s rapid development, yet the tools and techniques still require some refinement.
- Trough of disillusionment: As early experiments yield mixed results, enthusiasm often dips. For generative AI, this may include concerns about reliability or unmet expectations. However, this phase is essential for improving quality and driving sustainable innovation.
- Slope of enlightenment: Demand stabilizes, with early adopters seeing initial benefits. Organizations start to grasp how best to integrate the technology, building trust and understanding around its potential for real value.
- Plateau of productivity: The technology matures, becomes mainstream, and it becomes clear which providers offer effective solutions. Organizations have a solid grasp of best practices, and adoption is streamlined.
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