How AP Automation Stalled – and How We Can Fix It

We've all seen it - the dreaded "trough of disillusionment." The point where a once-promising technology comes crashing back down to earth, seemingly written off.

Are we at that point in AP Automation? The latest report from Gartner®, the 2025 Hype Cycle™ for Procurement and Sourcing Solutions 2025 states "Procurement can accelerate its key value propositions by investing in emerging technologies to optimize and automate across processes. Procurement technology leaders should use this Hype Cycle to understand the

maturity, adoption and benefit of sourcing and procurement technologies." 

The report states that Accounts Payable Automation technology "is not new, but AI technologies, increasing government invoicing regulations and workforce expectations have changed the scope of customer expectations." According to Gartner®, Accounts Payable Applications have a “Market Penetration: 20% to 50% of target audience” and are classified as having “Maturity: Early mainstream.” 

From our perspective, many existing solutions are piecemeal and fail to address complex enterprise compliance requirements and use cases. Gartner recommends investing in these technologies, "as part of a larger AP or even a procurement process transformation strategy, which includes invoice capture through payment." They also recommend that AP teams work with treasury departments to "develop cash management programs that allow the organization to take advantage of early pay discounts."

Our takeaway at Direct Commerce is this: while AP Automation has matured, its outdated model no longer works for today's modern enterprises.  

But we at Direct Commerce believe hope is not lost. We believe these issues are not disparate – they are interconnected. And the root of all these issues is that suppliers – and their place in the AP process – have been overlooked and neglected for decades. 

Let's take a step back. 25 years ago, the AP Automation platforms promised e-Invoicing, a digitized workflow, an optimized process. The goal was a streamlined workflow and improved working capital. 

Early payments become a part of these solutions shortly thereafter, enabling suppliers to accelerate payments on their invoices at a time of their choosing – in exchange for a small discount. This optionality and quick access to capital was attractive. Buying organizations benefited by paying less than the full invoice amount on accelerated invoices.  

But the AP Automation platforms wanted a piece of the pie: they started taking a cut for themselves off each early payment – in our industry we call this "gainshare." This skimming caused buyers to increase their rates of discount in order to compensate. As early discount rates were increased, suppliers ended up footing the bill and lost their access to affordable capital. 

These platforms also only catered to the large buying organizations – which was a detriment to these enterprises and their suppliers. Since the supplier wasn't paying the technology providers their huge annual subscription fee (like the buyers), they were the forgotten stakeholder. The software was designed for the buyers. Suppliers fell by the wayside.

And they reacted like anyone does when they don't have a seat at the table, or a voice: they disengaged. They stopped accelerating early payments, with it being too costly. They never fully onboarded because the platform wasn't user-intuitive, and there was no incentive for them. 

The result was weak adoption, lower early payments, and increased back and forth from suppliers who were not only not self-sufficient in using the platforms, but oftentimes hostile to them altogether.

The technology wasn't broken, but the system was – because suppliers had been forgotten.

As a result, the AP Automation promise took a nosedive, ending up in the trough of disillusionment.

But there is good news: there is a way out. There is the slope of enlightenment in our future.

But we're not going to reach that slope through doing things the same old way, layering new technology onto a broken system. We need to tear the whole system down to the studs and rebuild it from scratch. 

It's going to take a different model to get on this path. It's going to take a Supplier-First™ approach. 

Read more about our approach and philosophy in our Supplier-First™ Manifesto.

Source: Gartner Report, Hype Cycle for Procurement and Sourcing Solutions, 2025, By Kaitlynn Sommers, Micky Keck, etc, June 2025.

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its

affiliates in the U.S. and internationally, and HYPE CYCLE is a registered trademark of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved.Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.