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P2P Process Optimisation using Process Simulation and Digital Twins after Process Mining
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P2P Process Optimisation using Process Simulation and Digital Twins after Process Mining

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  1. This is it.

The Procure-to-Pay (P2P) process is a unique process in its own right that involves almost all departments across an organisation and can quickly become overwhelming for Procurement and Payment teams if not given the attention and maintenance it deserves. Ensuring their P2P process is optimised is critical for a company as it can yield massive benefits; otherwise, it will negatively affect profits, customer satisfaction and the reputation with suppliers.

Optimising a P2P process starts with making sure the process is as streamlined as possible, removing any backlogs and moving cases through the process as quickly and accurately as possible. Any errors or re-work required will add further time and cost to the process and delay outcomes, not just in the P2P process but across your organisation.

Process mining enables organisations to identify process problems and undesired activities  in historical data. However, it does not facilitate testing proposed changes to your process structure and cannot determine how these changes will impact your business objectives. Business Process Simulation (BPS) steps in to alleviate these challenges, enabling organisations to test process changes and future scenarios and immediately see their impact on commercial and operational objectives.

What are the benefits of optimising your Procure-to-Pay process?

Shoring up your P2P process can minimise time and costs, improve sales and customer satisfaction, and improve supplier relationships, overall contributing to your world-class organisation.

A first benefit of optimising your P2P process is reducing processing time and costs. Optimising your P2P process can alleviate the strain on your Procurement and Accounts Payable teams. With streamlined processes, the capacity of the existing teams can be increased, and optimisations may unlock cost and cash flow improvements by reducing maverick spending and allowing companies to hold on to funds longer.

A second benefit of optimising P2P processes is unlocking the large amounts of hidden revenue that your company might leave on the table. Let’s look at a simple example. Imagine you require an item and find it online. You add the item to your basket just to find out it won't be in stock for another 10 weeks. This delay will put customers off ordering, who may go elsewhere for the required item. In a world where everything is only a click of a button away, many people do not have this patience anymore.

Lastly, by running a forward-looking stock and supply simulation, you can foster better supplier relationships, providing a view of future supply challenges well ahead of time and improving the procurement journey, further helping to reduce operating costs that could arise due to ordering stock inefficiently.

Where is the Procure-to-Pay process left after process mining?

Process mining helps understand a process's current state but often leaves users wondering what's next. The example below shows that a purchase requisition can go through many stages before it is processed correctly and the P2P process is completed. Process mining will present a user with several pain points, or “undesired activities”, which can then be explored and solutions implemented.

Although this gives us a clear picture of the retrospective health of the as-is process, it makes it challenging for organisation leaders to plan for possible future scenarios and test decisions such as process improvements. These limitations of process mining also extend to continuous improvement teams, who often struggle to easily analyse and validate that the changes they make are having the desired impact across their organisation.

How Digital Twins can optimise your Procure-to-Pay process beyond process mining?

Once process mining has been performed on a P2P process, it is ready for the next step, Business Process Simulation (BPS), to uncover and unlock further opportunities hiding in your business.

Scenario Planning: BPS allows users to see how their process performs with different scenarios in mind, such as a growth in demand on certain product lines or changes in FTE capacity. BPS will simulate these process changes and performance into the future, so the organisation can understand what will happen if this situation arises and how well prepared they are for it.

Test Process Improvements: Simulation can also help you expedite the cost-benefit analysis of potential solutions. It allows you to weigh the potential benefits of a solution against its costs, ensuring that any changes you make will positively impact your commercial and operational objectives. These changes can be designed as flexibly as you would design your process changes, including entire redesigns of processes.

Monitor and Control: After implementing changes, you can use Business Process Simulation to monitor and control the process in real time, ensuring that the process changes bring the desired impact and adjusting your strategy if required. Thereby, you can intervene proactively and ensure that you achieve stakeholders' expectations and targets and maximise the business impact of the transformation.

What value is added by a Digital Twin of the Organisation?

Because P2P processes affect other areas of your business through knock-on effects, for example, on inventory levels and production processes, a more holistic view may be required. A Digital Twin of the Organisation (DTO) is a digital replica of all the significant aspects of your organisation's processes, including your Procure-to-Pay (P2P) process. However, it connects the P2P process to other processes and wider outcomes, providing a comprehensive, real-time, and dynamic representation of your entire organisation. This can provide several advantages on top of optimising your P2P process using Process Simulation.

Holistic view of changes: A DTO can help show the impact of P2P optimisations on the P2P process and other parts of the organisation. For instance, reducing costs in the P2P process might lead to increased efficiency, but it could also potentially cause disruptions in other areas, such as supplier relationships or stock control. With an improved view, you can avoid negative side effects and truly deliver for your organisation.

Resource Allocation: DTOs provide a clear overview of all process tasks and their resource demands, helping to identify tasks which are over or under-utilising resources and allowing more effective distribution and cost savings within your organisation.

Supply Chain Optimisation: DTOs can help model and understand your supply chain, identifying potential disruptions, optimising logistics, and improving overall supply chain efficiency.

Embark on the journey beyond process mining and optimise your P2P process with Silico

P2P optimisation using Digital Twins takes you to the next level after process mining, providing a holistic view of your organisation and enabling simulation of future scenarios. Business Process Simulation helps you to understand the full impact of changes in your P2P process and guides informed, data-driven decisions that optimise your P2P process with your entire organisation in mind.

If you are interested in learning more about the impact of Business Process Simulation in your P2P process, book a Silico demo below.

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