Bringing P2P Investments to Zero

Bringing P2P Investments to Zero

If you are a first adopter to Procure-To-Pay (P2P) technology or decide to further optimise your capabilities, the main challenges for any business, being small, medium or large are:

  • Finding dollars to invest
  • Building a strong business case
  • Getting buy-in from stakeholders
  • De-risking the implementation

Considering the above challenges and the ongoing pressure to deliver cost savings, increase efficiencies and improve compliance within a secure environment, businesses seem to end up in a stalemate. Whereby typically businesses do not want to make the investment, lack time, deal with conflicting priorities and are concerned about the implementation effort. This often results in minor or highly critical changes only, as there seems to be more reasons not to do things, then to do things.

Finding dollars to invest

You can only spend a dollar once. But what if you do not need to spend a dollar to get you going? With new cloud-based P2P service providers, a shift in the market is happening to a pay-as-you-go model. Avoiding upfront costs and only pay when you actual use the P2P services.

Building a strong business case

Conducting a spend analysis on your key purchases and developing a baseline analysis of your current P2P process is fundamental – even though there is minimal visibility on spend data or It resides in different systems. A holistic business case will allow businesses to quantify the direct cost savings, process efficiencies to gain and addressing the intangible benefits associated with spend visibility, control, compliance and security.

Next to outlining the tangible and intangible benefits, it’s critical that investments can be phased. This means the P2P service provider needs to be able to support zero upfront investments, instant access for and users and a modular approach to get your business going and reap the benefits of a P2P technology.

Getting Buy-In from Stakeholders

Implementation of P2P technology requires early involvement from different stakeholders, Key stakeholders to consider are purchasing requestors, procurement team, supply chain team, accounts payable and management. Often all these stakeholders need to be involved and are expected to make the implementation just happen, next to the daily operational activities. Therefore, early engagement and open communication is vital.

 

De-risking the implementation

When you start an initiative, you need to have clarity on the target state, be able to finish and deliver outcomes. Often businesses see the beginning and understand the benefits but are more concerned about the risks associated with the implementation. But what if you can use a proven P2P service instantly and complete a purchase order to payment with end users without or minimal implementation. This will likely allow any business leader to de-risk the implementation for each function within the value chain.

The Recommendation

Decision makers responsible for improving the P2P capabilities through technology should focus on the following:

  • Minimise upfront investments
  • Expose end users to immediate outcomes
  • Implement technology that is modular
  • Engage a provider that can augment your procurement capability

 

Minimise upfront investments

To improve and get a different outcome, businesses need to change. With new cloud-based solutions and pay-as-you-go models, businesses could bring its investments to zero and focus solely on changing behaviours of end users. Although this seems an easy task, often leaders do not make these behavioural changes happen. If end users are given the opportunity to experience the benefits at an early stage in the process, it significantly accelerates the required behavioural change.

Expose end users to immediate outcomes

The most powerful way to obtain buy-in from stakeholders is to demonstrate and expose end users to the immediate outcomes. Having a P2P service provider that is already integrated with suppliers with pre-negotiated content, highly configurable, easy to use and accessible is the key to success. Long P2P implementation and adoption projects of standard software packages is something of the past.

Implement technology that is modular

Important to take one step at a time, to increase acceptance and adoption of all stakeholders. Having the ability to ‘switch on’ different modules will lead to better buy-in and allow stakeholders to ‘settle in’. Trying to do too much or too fast will result in lack of adoption and underutilisation of the P2P technology. Ultimately meaning the planned benefits are not realised or delayed. Your P2P service provider needs to be able to support a modular approach allowing businesses to deliver against its planned benefits and accelerate adoption.

Engage a provider that can augment your procurement capability

Typically, engaging a P2P software provider provides you an enabler, but not per se the business outcomes you are after. As the industry is shifting towards software as a service, it’s important that your service provider can augment your procurement capability. For example, by providing immediate access to a wide supplier network in Australia, pre-negotiated product catalogues, ready-to-go APIs to your accounting system (e.g. Xero, MYOB, Quickbooks and SAP), single screen user experience, fully integrated payment gateway and local procurement experts that can negotiate on your behalf, manage product catalogues and suppliers.

Ultimately, embarking on a P2P solution is a journey that needs to be taken by the entire business. Obtaining buy in across all stakeholder levels is imperative to ensure a smooth and effective implementation and execution. Technology itself in not the panacea, but an enabler that sits alongside and enhances the procurement team.

For more information about how think’s P2P platform can help your procurement team get started on their procure-to-pay journey – get in touch here.

2018-11-29T08:18:20+00:00Cost Savings|