There are many paths to Procure-to-Pay (P2P) excellence and many starting points. A P2P automation project may start with a focus in one area within either accounts payable (AP) or procurement or it may pursue a “big bang” strategy; no matter the initial project approach or budget, one unifying characteristic of Best-in-Class P2P organizations is the holistic, long-term view of P2P that they take from the start.
A Design for Success
The results of Best-in-Class organizations show that an investment in P2P can pay large dividends, while the relentless pressure on bottom-line performance makes a P2P investment all but necessary for most groups. Yet, the speed and level of returns from a P2P initiative can and do vary widely. Competing short-term initiatives from distinct organizations within the enterprise can result in parallel projects that have no contemplation of the others; while a fragmented technology landscape can often trap organizations that focus solely on short-term requirements from ever realizing the far-greater, long-term value that a cohesive and comprehensive P2P program can deliver. There are numerous other obstacles and risks to achieving P2P excellence; but, with proper planning, most can be avoided or, at minimum, anticipated, and minimized.
Where and when a P2P project begins are ultimately less important to realizing long-term success than the development of the strategic plan that is designed to support it. For enterprises that are just beginning a P2P project, it is important to understand that the approach does not have to be “all or nothing.” In fact, many organizations take a phased approach and then look to extend their project footprint and increase the value of their initial investment. For those that have already begun, it is not too late to revisit or develop and/or modify the original plan. Wherever an organization lies in its quest for P2P excellence, taking a holistic view and having the right project plan to adopt is imperative to a successful outcome. Even if current budgets and general orientation focus in on one area of the P2P process, Best-in-Class performers understand that automating the entire process is inevitable. The most direct and effective path to P2P excellence begins with a plan that looks holistically across the entire process and incorporates and prioritizes the requirements of all P2P stakeholders.
Strategies for Success
As a P2P program advances and matures, the benefits gained from an expansion of the initial P2P program including investments in additional resources and technology can deliver accelerated returns and help enterprises ultimately achieve P2P excellence. Enterprises that craft the right P2P blueprint and build the right foundation increase the speed and likelihood of their success. Ardent recommends the following strategies and approaches for P2P leaders to improve their designs for success:
1. Place the current initiative(s) in the context of a larger P2P initiative and vision – Groups that forego any view of a longer-term, cross-functional process for short-term gains in a project may be doomed to repeat and redo their efforts.
2. Engage early and often – The initial returns of a P2P program are largely impacted by the level of user buy-in and adoption. Engaging key stakeholders early in the process and incorporating their voice is a key strategy to getting it right the first time.
3. “Give, to get” – The P2P process has a sum that is greater than its parts. Groups in procurement and accounts payable achieve greater benefits when they realize that they are managing two parts of the same transaction and two parts of a holistic process. Each group should be ready and willing to compromise its interests for the greater good.
4. Seek CFO sponsorship – The powerful cash management benefits that operational excellence and agility within P2P can drive and the general reporting structure of procurement and AP make the CFO the ideal executive to sponsor and oversee the P2P process.
5. Develop a P2P blueprint that considers all of the following:
- Process efficiency and savings goals
- System capabilities (requirements and desired)
- Integration Requirement
- Visibility and reporting capabilities
- Business user engagement, requirements, and adoption
- Functional user engagement, requirements, and adoption
- Supplier enablement
- Strategic sourcing, contracts, and category management
- Payment & cash management strategies
- Process, contract, and regulatory compliance
The development of a Best-in-Class P2P program takes, among other things, sponsorship, effort, collaboration, vision, expertise, and a supporting technology infrastructure. Superior program design also remains a critical element in the speed and level of P2P excellence and financial agility that is ultimately achieved. Ultimately, the commitment to see P2P expansion to its completion is what separates the dreamers from the doers.