Keywords: procure to pay, P2P, public procurement, e-procurement, eprocurement, anti-corruption NGO, prurchase to pay

Could purchase to pay help tackle corruption?

Anna Bowsher | News | 20 June 2012

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Automating the procure-to-pay process is already improving transparency for many private sector organisations, and it could do the same in the public sector.

According to Supply Management a new report by Transparency International shows that public procurement in the European Union is worth around 15% of the bloc's overall GDP.

Corruption within purchasing processes could easily eat into this, which is why the NGO is championing automated systems to shed light on any malpractice, starting with e-procurement.

It notes that in the Czech Republic, for example, large contracts have on a number of occasions been broken down into smaller ones, ensuring that overall projects do not exceed the threshold for large procurements under EU law.

By introducing online systems for procurement, such corruption would occur less frequently, as there would be much more transparency from the moment the need for a product or service is identified to the moment contracts are negotiated.

The group's calls come after the European Commission said earlier this year that it was aiming to make e-procurement the standard method of procurement across the EU by the middle of 2016.

Commissioner Michel Barnier said it represents a "significant untapped potential" for the EU economy, emphasising the cost-saving benefits of automation.

"It can simplify the way procurement is conducted, reduce burdens and costs, increase the participation of SMEs and deliver better quality and lower prices," he remarked.

Of course automate the entire purchase-to-pay process, from procurement to payment through e-invoicing, and the cost savings could be even higher, not to mention the processes much more transparent.

Another benefit of widespread e-procurement in Europe could be greater levels of interoperability between vendors. Speaking to Supply Management last month, Paul Henty, a solicitor at Speechly Bircham, explained that successful automation will depend on how well the "current divergence in technologies fragmented along national borders" is addressed.