Are you still managing your procurement process from within the ERP or accounting system? Studies have shown that 80% of businesses still use manual or semi-digital procurement methods. With increasing competition and the need to build resilient supply chains, these businesses will be looking to outsource and leverage technology in the end-to-end Procurement business process outsourcing. This will bridge procurement and finance for a 360-degree view and generate greater value for the business.
End-to-end procurement outsourcing standardizes source-to-pay execution under a governed operating model, so procurement and finance can reduce cycle time and exceptions without losing control. The objective is predictable outcomes—compliance evidence, fewer disputes, and more reliable cash flow—not simply shifting transactions to a third party.
What is end-to-end procurement management?
Medium to large businesses often have hundreds of suppliers providing goods and services to different departments. End-to-end procurement is a continuous process of identifying the need, as well as finding and getting suppliers onboard and managing them efficiently.
- Identify the need for a product or service: Departments within a company identify the requirement and its business benefits. For example, the factory floor in a manufacturing unit identifies the need for a new machine or replacement parts for existing ones.
- Create a purchase requisition: The department creates a paper or e-requisition and sends it to the purchasing department where it undergoes a series of approvals depending on the need and business benefits.
- Approve it with the purchasing department and create a purchase order (PO): The purchasing department approves the requisition and raises a PO. In case of a rejection, the department provides the necessary reason.
- Get budget approval from the accounting department: The purchase order then goes to the accounts department for budget approval.
- Float a tender and request quotation: Once the budget approval arrives, the purchasing department floats a tender to request quotations and an assessment of the product or service offering from different suppliers.
- Negotiate the terms and sign the contract: The company receives multiple tenders, shortlists the ones that are suitable, and negotiates the terms of the contract. This includes prices and terms of quality and delivery.
- Start receiving the goods and services: The goods and services start arriving as per the terms of the contract. The quality team inspects the delivery time, total cost of ownership, and overall supplier performance.
- Perform three-way matching: The accounts department does three-way matching of purchase orders, packaging slips, and vendor invoices before clearing the payments.
- Inspect and approve the invoices and release payments: Once the three-way matching is complete, the accounts department releases the payments within the agreed timelines.
- Maintain records for auditing: The purchasing and accounts departments maintains all the records for future auditing.
This is an ideal scenario with no disputes or mismatches. In case of a dispute, invoke an appropriate resolution process. For a semi-automated or manual procure-to-pay end-to-end process, this usually takes days or even weeks, which places the cash flow under stress. In fully manual processes, invoices can get lost in transit or go unnoticed, which damages the relationship with the supplier and keeps the purchasing and accounts departments in a state of never-ending confusion and uncertainty.
Source-to-pay (S2P) vs. Procure-to-pay (P2P)
| Model | Scope (typical) | Best used when |
| End-to-end procurement outsourcing | Source-to-pay across governance + execution | You need standardized controls + measurable outcomes end-to-end. |
| Source-to-pay (S2P) | Sourcing + contracting + P2P integration | You want end-to-end visibility and stronger category governance. |
| Procure-to-pay (P2P) | Requisition-to-pay execution | You need speed, compliance, and invoice/payments efficiency. |
For enterprise environments, the differentiator is not the list of steps , t’s control design: approvals, segregation of duties, exception handling, and audit-ready records created by default.
- Approval matrix by spend band and category risk.
- Segregation of duties across vendor creation, PO approval, goods receipt, and payment.
- Exception workflow (price/quantity mismatch, missing GRN, duplicate invoice) with aging SLAs.
- Audit evidence pack generation (who approved what, when, and why).
Why outsource end-to-end procurement?
Outsourcing end-to-end procurement allows you to get the required technology and skill onboard for automation and management. Businesses can scale up or down their procurement to optimise their spending. You can get access to a global pool of talent, which is impossible to maintain in-house. Transactional activities such as PO creation, invoice verification and payments, and vendor management are best fit for outsourcing. It also includes outsourcing strategic activities such as contract negotiations and pooling in with other businesses to procure goods and services at competitive rates. From the strategic point of view, businesses stand to gain:
- Better time-to-value
- Wider visibility of their spending
- Improved transparency and compliance with the rules that apply to their industry
- Lower cost of operation
End-to-end procurement outsourcing is most effective when the constraint is operating capacity and control—not category strategy. It works best when the goal is to industrialize execution, reduce exceptions, and standardize controls across business units.
- Best fit: High transaction volumes, fragmented processes, recurring invoice exceptions, compliance pressure, working-capital focus.
- Not a fit (until fixed): Unstable approval policies, poor master data, unclear ownership between procurement and finance.
KPIs to baseline before outsourcing
Baseline KPIs with finance before transition so benefits are measurable and audit-ready.
| KPI | What to measure | Why it matters |
| PR-to-PO cycle time | Median time + outliers | Business velocity and stakeholder experience |
| First-pass match rate | % invoices matched without rework | Dispute reduction and close stability |
| Exception aging | Open exceptions by reason + days | Risk + working-capital predictability |
| Contract compliance | % spend on contracted channels | Savings protection and governance |
| On-time payment rate | % paid within terms | Supplier trust and continuity |
For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.
How Infosys BPM can support end-to-end procurement outsourcing
The advanced AI-based capabilities for procurement transformation enable faster decision-making within a business. Read more about end-to-end procurement outsourcing at Infosys BPM.
FAQ
No—end-to-end procurement outsourcing typically spans source-to-pay, while P2P focuses on requisition-to-pay execution. End-to-end includes governance touchpoints like sourcing and contracting integration, not just invoice/payment operations. Scope must be explicit to protect approvals and segregation of duties. The outcome is clearer accountability and fewer control gaps.
CFOs should require segregation of duties, approval evidence, and exception controls before transition. Define who can create vendors, approve spend, confirm receipt, and release payments, and ensure controls are continuously monitored. Require audit-ready documentation by design, not retrofitted. The outcome is reduced compliance risk and more defensible reporting.
Operational improvements usually appear once workflows and data standards stabilize—not on day one. Cycle time, first-pass match rate, and exception aging typically improve first; savings and working-capital impact follow as compliance rises. Agree baselines and measurement rules with finance upfront. The outcome is credible value tracking with fewer disputes.
The biggest risk is loss of control due to unclear scope, weak master data, or inconsistent approvals. Mitigate through explicit scope boundaries (S2P vs P2P), segregation of duties, standardized approval matrices, and exception SLAs with governance cadence. The outcome is stable execution with reduced supplier and audit risk.
