Procurement organizations are investing considerable resources to transform their operations. One area that has attracted a lot of interest in recent years is Purchase-to-Pay (P2P). The traditional players such as SAP (Ariba) and Oracle have made a livelihood on selling their software with recent entrants such as Coupa and Wax Digital challenging the formers’ near-monopoly. Yet, many organisations are only just starting off on the Procure-to-Pay journey. So, what should business and technology leaders do to de-risk their P2P deployment?
Successful procurement transformation is a major and long-term business improvement. It requires a new vision centered on adopting technologies that digitize the manual and repetitive processes for procuring goods and services.
The expectations are high, too. According to a survey from The Hackett Group, 85% of senior executives report that digital transformation will fundamentally change the way procurement services are delivered over the next 3-5 years, though only 32% have actually developed a strategy for getting there.
Perhaps not surprising, P2P transformation projects are risky. The costs are high, the change is tough and the return on investment can be slow and difficult to achieve. The good news is there are ways that procurement leaders, working with colleagues, can ensure a successful transformation with an on-time and on-budget P2P deployment.
It all starts by taking a data-centric approach. Without accurate data, your new (and existing) technology won’t provide you with the visibility and insight you require to generate the expected business outcomes and value.
Here are our recommendation to help you de-risk your upcoming P2P project:
- Postpone your P2P project until you get your data in shape. This is controversial but it’s vital that you have the right data foundation in place before you embark on an expensive and lengthy P2P deployment. Understand the data and related information (not just inside but outside of your intended P2P system) at each stage of the cycle will also enable you to map and enact the necessary workflow processes.
- Leverage P2P analytics for insight. Detailed visibility into how you spend will help you to create the important foundation of information that will assist you in prioritizing which processes in your P2P are “broken” and which will generate the highest and quickest value. Spend analytics is a follow-on activity that will generate savings that can add another layer of value underpinning this strategic company-wide program. From speaking to business leaders, they estimate that P2P analytics halves deployment times and accelerates return-on-investment.
- Determine the sequencing of your P2P modules first. Let the data do the talking – not the P2P sales professionals. Instead of deploying all modules over the entire purchase to pay cycle at once, go live with only those modules that will deliver the quickest value.
- Transform your procurement organization. Transformation means continuous business improvement, looking at better ways to deploy people, processes, data and technologies to support your business objectives. The persona of your company is going to change and no doubt keep changing. Data is a vital ingredient to not just navigating through this complexity but assisting the great people in the team make sense of the changes and their evolving role in the enterprise.