A traditional process for a purchase request from a supplier catalog - Business Process Management

A user goes to the company internal catalog or punchout catalog, puts the item in a shopping cart and creates a request or requisition.

If the request meets certain criteria, like requisition total amount, number of items or even category, then an approval may be needed to convert the requisition into one or multiple purchase orders. The next step is to approve the receipt of items — say at a shipping dock or in an office — as it relates to the item(s) ordered. This may require multiple approvals if the items being received are being matched to separate purchase orders.

Requisition to Receipt

But this is only part of the picture — the diagram simply shows the workflow that allows a user to purchase items and for the approvers involved to facilitate the process. What about payments? What about the contract these items are purchased against? What about the budget or cost accounts this get allocated to? All this detail may not matter to a user, but the ability to connect the dots to other workflows and business processes is what constitutes business process management.

Under the hood.

As applied to manufacturing — an auto assembly line for example, each step further completes the building of a car. In “source-to-contract” or “procure-to-pay” (as illustrated below), it involves thinking beyond just moving a requisition from PO to receipt to include all the processes that are interrelated within the organization.

Business Process Management in procurement

In this regard, Diagram 2 shows the connection of additional approval workflows required to enhance and complete the workflow described in Diagram 1. These often include contract management, supplier management, invoice management, financial and asset/inventory management. What enables all these workflows is the ability to connect users and processes through master data and metadata on a common platform for managing wider business processes within procurement.

In short, business process management integrates many workflows across the wider source-to-pay continuum to empower collaboration and achieve business success.

So, to answer the question, “Does it matter?” For the sake of clarity, yes. Especially for anyone who is in the market for a new procurement, contract management, sourcing, supplier management or other source-to-pay solution. You want to be sure that when comparing choices, you’re speaking the same language.

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