Don’t Delay Source to Pay Technology Value for ERP Implementations and Upgrades

Don't Delay Source-to-Pay Technology Value for ERP Implementations and Upgrades

Many organizations today face a critical decision: prioritize the implementation of source-to-pay (S2P) technology now, or delay implementation until their enterprise resource planning (ERP) systems are live or upgraded. This decision has strategic consequences, as the sequencing of these systems can accelerate value or slow down transformation and Gen AI adoption in S2P.

Implementing S2P ahead or alongside of an ERP or ERP upgrade program is not just a tactical decision, it's also a strategic imperative. Delaying S2P technology in favor of ERP completion carries a significant opportunity cost - one that businesses cannot afford in today's competitive landscape.

In this blog post, we will explore why accelerating your S2P implementation is essential and how to strategically sequence S2P and ERP projects. We will also look at the critical success factors for ensuring these systems work together seamlessly.

Why implement S2P before or alongside ERP?

Organizations that choose to implement S2P technology ahead of ERP can unlock a variety of strategic advantages. Let's examine six key reasons why prioritizing S2P early in the transformation journey can make a significant difference.

1. Time is money: Don't let your ROI slip away

Did you know that the payback period for an S2P technology implementations is approximately one-year post-implementation with an ROI exceeding 5x?¹ Every day you wait to implement your S2P technology, you're losing days of potential ROI. Why hold off on reaping these benefits while you're waiting for ERP completion? Early implementation can accelerate digital transformation and savings.

2. Aligning S2P and ERP: Driving informed joint decisions

Pulling forward your S2P implementation allows you to make decisions that impact both technology platforms jointly, which enables a more scalable design. Key joint decisions involve your supplier data structure and procure-to-pay (P2P) processes. Making joint decisions about both technologies helps build synergy between systems now and avoid costly rework later.

3. Accelerate Gen AI deployment in S2P

Leading S2P technology platforms leverage embedded Gen AI features that drive process efficiency and savings. Recent embedded S2P Gen AI features include fraud detection; intake and orchestration user-experience enhancements; supplier management, performance and risk monitoring; and category management accelerators. Delaying S2P deployment will delay opportunities for leveraging rapidly evolving Gen AI capabilities native to S2P platforms.

4. One process change, one disruption

Why undertake organization-wide change management efforts twice? By tackling S2P first or in parallel with your ERP, you streamline P2P change management and minimize stakeholder disruption. Less disruption means smoother transitions and faster adoption across your organization.

5. S2P enables broader transformation

Transforming your S2P function isn't just about technology - it's about empowering your business to adopt best practices and deliver sustainable long-term success. Implementing S2P technology earlier sets the foundation for wider-reaching improvements.

6. S2P saves more than it costs: Fund your future projects

The savings generated by your S2P technology can help fund your ERP implementation or future projects. S2P creates a virtuous cycle of efficiency and savings that pays for itself and more, so why delay?

Determining the optimal path: a strategic decision-making framework

To decide when to implement S2P and ERP, companies should consider the expected timing of their ERP projects. Here's a decision-making framework to guide your approach:

• ERP starting within the next 12 months:
  • Implement S2P and ERP in parallel. This approach ensures early returns and avoids unnecessary rework.
• ERP starting in 12-24 months:
  • Implement S2P first. This strategy allows you to capture early value while preparing for the ERP implementation.
• ERP starting beyond 24 months:
  • The choice here is clear: move ahead with S2P now. Waiting will only postpone the benefits of procurement optimization and efficiency.

Considerations for S2P technology implementation and ERP change

Due to the dependencies between eProcurement solutions and ERPs, the decision to implement S2P technology in advance of (or in parallel with) an ERP project affects your S2P implementation approach.

Keep the following considerations in mind, based on the approach you pursue:

1. Implementing S2P technology in advance of an ERP change

If implementing S2P technology in advance of an ERP, some changes will be required to your recently implemented S2P technology in order to ensure data structures and integrations are aligned during the ERP implementation or upgrade. The S2P technology team should be involved early in the ERP design process to determine what changes will be needed in your S2P.

The following elements may need to be modified in your S2P platform to fit the ERP data structure:

• Key master data elements:
  • Data elements dependent on the ERP provider, such as accounting and suppliers, typically must be restructured in S2P to align with the ERP. Other master data elements present in the ERP may also need to be revised in S2P (e.g., payment terms, spend categories and units of measure).
• Other S2P data elements impacted by the above:
  • Some S2P data elements rely on master data values, and thus may need to be updated or restructured to align (e.g., approval chains dependent on supplier or accounting values).
• Integrations impacted by the above:
  • Most integrations will need to be revised to align with modified data structures and values. Some integration updates will be large (e.g., accounting data), and some will be small (e.g., approved invoices).

Updating S2P technology after it's live can be complex. Companies pursuing this route should consider the following:

• In-flight transactions:
  • Ensure a plan is in place to manage any transactions (e.g., POs, invoices) in-flight in your S2P system at the point of ERP cutover. This could include a blackout period to reduce the number of transactions in-flight and/or a programmatic/manual update to existing transactions to align with the new data structure. Plan for this early in the project to ensure the team has sufficient time to avoid challenges while managing in-flight transactions during cutover and after go-live.
• Supplier numbering:
  • Keep supplier numbers the same, if possible, to avoid needing to create new supplier records, and thus reduce supplier enablement rework for the S2P platform (e.g., relinking with suppliers on the supplier portal).
• Instance management:
  • Consider the number of S2P platform instances needed during this time. Some companies choose to set up an extra test instance to ensure they have one production replica when designing updates for the ERP.

2. Implementing S2P technology in parallel with an ERP project

If you're implementing S2P technology in parallel with an ERP project, it's important to ensure the program timeline is appropriately aligned to account for dependent activities across design, build, testing and deployment.

Keep the following planning elements in mind:

• S2P project timing:
  • Ensure that the S2P design work starts during ERP design such that there is sufficient time to design, build and test integrations. Do not wait until ERP design and build is complete to begin S2P design and build.
• Design:
  • While S2P technology is largely dependent on the ERP design, there are several S2P design elements that should inform ERP design. It's important to consider S2P technology functionality to ensure you leverage the most effective design in the ERP for these elements.
• Implementation team engagement:
  • It is critical to foster an open dialogue between S2P technology services and ERP teams to ensure that dependencies and risks are communicated in a timely fashion across teams.
• Project cost:
  • Implementing S2P in parallel with an ERP can be costlier than implementing in advance of an ERP project. For example, if the ERP project is delayed, resources supporting the S2P program are typically extended to manage changes to the S2P program and to the process and the technology elements that are dependent on the ERP project.

Prioritize and coordinate S2P with ERP to drive early value

Determining the optimal sequencing of S2P and ERP implementations is not a trivial decision - it is a strategic lever that can drive faster value and maximize your transformation. By pulling S2P forward, you'll accelerate time-to-value, expedite the use of Gen AI in S2P, and unlock crucial savings to fund the broader transformation. What's more, you'll ensure that S2P capabilities are effectively embedded in your ERP design from the outset, positioning you for long-term impact and growth.

The bottom line? Don't delay. Prioritizing S2P now can unlock significant lasting benefits, aligning your organization for success in today's fast-paced, competitive environment.

The Hackett Group^® offers comprehensive sourcing and procurement transformation services, including process design, organizational restructuring, technology implementation and strategic sourcing support. Partner with us to accelerate your transformation and drive measurable results.

¹ Proprietary analysis, The Hackett Group^®, 2025