From business case to KPIs: when is your Source to Pay project truly successful?

Many organisations consider a Source to Pay implementation a success if it goes live on time and within budget. But does that mean the project is truly successful? The real question is: how do you know it’s working? “Many organisations start out full of ambition, but forget to define exactly what success means and how to measure it,” says Lonneke Goei, Senior Consultant Source to Pay at Spendlinq. “Without clear goals and course correction along the way, the return on investment often stays invisible.”

Start with a business case

“If you really want to know whether an investment pays off, you start with a sharp business case,” Lonneke advises. “A good business case gives direction and makes sure everyone shares the same picture of what you want to achieve. It helps you set priorities, make choices in the configuration and assess the results afterwards.”

More than just financial benefits

“It’s important to realise that a business case goes beyond financial benefits alone. Savings on processing costs or better contract compliance are naturally taken into account, but the qualitative objectives are at least as important. Think of a more user-friendly process, better data quality, higher supplier satisfaction or improved compliance. These goals are sometimes harder to measure, but they’re just as important for the success of a Source to Pay transformation,” Lonneke explains.

No success without a baseline measurement

To be able to assess whether you’re making progress, a baseline measurement is crucial. “It gives you insight into the starting position: how long does it take to process an invoice? How many invoices can be matched automatically? What share of spend has no purchase order raised in advance? By getting a clear picture of this up front, you create a realistic starting point against which to test improvements. Without a baseline measurement, you can never really determine whether you’re doing well,” says Lonneke.

The right KPIs make the difference

During implementation, it’s important to look not only at whether the system works well technically, but above all at whether the desired behaviour and results are being achieved. That takes good KPIs that give insight into how the process is working.

Lonneke continues: “One of the most important indicators is the percentage of invoices that are matched automatically to an order or contract. It shows to what extent the process is genuinely automated and how much manual work is still needed. Another valuable indicator is invoice processing time (from receipt to approval), which says a lot about efficiency and internal alignment. The share of invoices that arrive with a correct reference is also an important KPI, because it says something about data quality and the discipline of the ordering processes.”

There are also valuable measuring points at the front end of the process. “Think of the percentage of spend that is preceded by an approved purchase order. The higher this figure, the better the organisation’s grip on commitments, budgets and contract compliance. The share of maverick spend (spend that takes place outside the procurement policy or outside framework agreements) indicates the extent to which policy is actually being followed. A decrease is often a direct result of better processes and governance,” says Lonneke.

Look beyond the numbers

But numbers don’t tell the whole story. Qualitative insights are essential too. For example, how well users adopt the system, how satisfied suppliers are or how easily budget holders can access up-to-date information. “Digitalisation is only effective if people want to use the system and can really do something with it,” Lonneke stresses.

“We know from experience that user adoption, among both requesters and budget holders, is higher when critical users are asked early on to contribute to the process and system design. They can then play an important role not only in the testing phase, but also in explaining the new way of working to their colleagues. This increases the chance of actually achieving the intended objectives.”

Keep improving

The strength of KPIs lies not in measuring alone, but in continuously reflecting and improving. During the critical period after go-live (the so-called success phase), KPIs are evaluated against both the business case and the baseline measurement. Based on this, processes are adjusted, users are retrained or the set-up is modified. Sometimes workflows are simplified, sometimes they’re extended with extra controls. It’s in this phase that you see whether the implementation has the desired impact.

Defining success

Lonneke still sees Source to Pay projects approached as purely technical implementations too often. “The emphasis is then on systems, integrations and deadlines, but not on the effect in practice. The success of a project is then measured by the go-live, when that’s only the beginning.”

“Organisations that define up front what success means can steer more precisely, evaluate more realistically and better account for what a digitalisation project actually delivers. It prevents decisions from being made along the way on the basis of assumptions or snapshots. Instead, there’s a shared framework that everyone can fall back on”, says Lonneke.

From ambition to result

Lonneke concludes: “If you determine up front what success is, translate that into measurable and tangible goals, and keep actively adjusting along the way, digitalisation becomes something that contributes to the organisation, not just something that works technically. And that’s exactly what Source to Pay is all about.”