The global pandemic has accelerated a number of trends in the business world, from remote working to digital transformation organisations have been pushed into embracing different ways of working and to a certain extent, different ways of thinking. The world of finance and procurement has been no different with organisations having a much bigger focus on cost savings and managing risk. To what extent have organisations changed their views and embracing new concepts in finance and procurement? We took a look at Google Trends data to find out.
Source to Pay, Procure to Pay and Business Spend Management
We analysed 5 years worth of Google Trends data for three key terms which represent different viewpoints on how organisations view spending money:
- Procure to Pay – a more traditional view of managing how your organisation manages its spend, it has largely been focussed on financial compliance ensuring spend is pre-approved, that the business is paying for goods/services that they have actually received and that the right business is paid the right amount in the right time-frame.
- Source to Pay – a broader more strategic view of the whole purchasing process, considering not just to the approval of spend and receipt of goods but looking at who you are buying from and the price that is being paid for it.
- Business Spend Management – takes this process a step further, referring to a unified set of business processes, supported by software, that encompass procurement, invoice management and expense management—all the ways employees spend company money (Coupa)
The data analysis has been tabulated in the image above and the insights show a real change in business views towards these topics with interest for ‘Procure to Pay’ falling dramatically since the start of the pandemic whilst interest for ‘Source to Pay’ rising dramatically and actually overtaking Procure to Pay in Q3 last year and continuing to rise. Business Spend Management on the other hand has also seen a sharp rise since the pandemic, doubling in interest but still far behind searches for Source to Pay and Procure to Pay.
What does the trend look like?
Using the data we were able to take this one step further by applying trend lines to the data to forecast what interest in these terms might look like over the next 18 months. For transparency we used a Polynomial trend line with an order of 2, we have also published the the R2 number represents the coefficient of determination. ResearchGate explains that For exploratory research, using cross sectional data, values of 0.10 are typical. In scholarly research that focuses on marketing issues, R2 values of 0.75, 0.50, or 0.25 can, as a rough rule of thumb, be respectively described as substantial, moderate, or weak.
The trend lines suggest that interest in Source to Pay will continue to rise, interest in Procure to Pay will continue to fall and interest Business Spend Management will continue its slow increase.
What does this data look like in Australia?
There is less data available for Australia but the available data paints a different picture in Australia compared to the rest of the world:
Interest in Source to Pay not gotten close to Procure to Pay since in 2019 and has never overtaken Procure to Pay in the past 2 years whilst interest in Procure to Pay has steadily increased. Interest in Business Spend Management remains very low and unchanged over the same 5 year period. This could represent an area where Australian businesses are lagging behind their global counterparts in focussing their attention on not just the compliance side of spend (Procure to Pay) but starting to focus in on who they are buying goods/services from with and how much they are spending on it.
Should your organisation be focussing more on Source to Pay and optimising the buying process? Are you keen to understand how your finance and procurement operations compare against others? Try our free online benchmark assessment today!