Today, I am pleased to welcome Vishal Patel back to these pages. Vishal will be a more frequent contributor to CPO Rising in 2013, which is good news for everyone. You may recall that Vishal is the research director in charge of all ePayables research at Ardent Partners. He is also the editor-in-chief of Payables Place, a site that is dedicated to covering the AP automation space (with articles like the one yesterday that analyzed the new partnership between Intuit and Tradeshift). Any of our readers tracking the ePayables landscape or having even passing interest to the AP space should subscribe to the Payables Place feed and keep an eye on Vishal. You’ll be glad that you did. – Andrew
Stop, Collaborate, & Listen
Collaboration in today’s corporate world is much more than a buzzword, especially for those that have been able to successfully encourage and foster collaboration between various groups. Today, we are going to focus on the collaboration between two of our favorite constituents – Procurement and AP. These two groups are already linked by two parts of the same transaction and while the performance of each group, at a high level, can certainly drive value for the larger enterprise, it is only after both of these processes are well managed and tightly linked that a P2P organization can begin to realize its full potential and become a truly strategic operation that supports key business objectives.
Although most enterprises lack a “collaboration mandate,” the potential benefits of successful collaboration are undeniable. The extent to which collaboration is approached in a more formalized manner (e.g., monthly meetings between AP and procurement) the better the combined results are likely to be. One goal of collaboration is to bypass the functional silos that plague many corporations. Some of the potential outcomes of a more tightly linked P2P process and increased collaboration between the various parties can be:
- Optimization of working capital across the P2P process by developing proactive payment strategies and pursuing dynamic discounting opportunities
- Improved supplier relationships by being able to pay suppliers on time (or early) and more accurately, having fewer inquiries and improving response times.
- Better identification of sourcing opportunities through more accurate spend data via invoices and payments
- Improved contract compliance and reduce maverick spend by linking invoices and payments to contracts
- Better success with supplier enablement by leveraging a ‘one-time’ on-boarding process for procurement and AP requirements
Barriers to procurement and AP working together
The challenge is that in many companies procurement and AP are completely distinct groups with different reporting lines, different goals and objectives – so, they’re measured differently. If we compare the two groups, procurement has come a long way over the last decade and although AP may have their own transformation initiatives they traditionally lag behind procurement.
Another part of the challenge is that many organizations may not have considered the entire P2P process when implementing a solution to automate a sub-process; so, as a result there are disconnects from a system standpoint AND a process standpoint. However, organizations are starting to change this and are beginning to think about the processes and technologies in a more holistic manner. As a result, more groups are starting to look at technology suites instead of applications; this change will help to ensure that technology can support and more tightly link all of the P2P processes.
Collaboration and supplier enablement
Supplier enablement is perhaps the single biggest challenge to a successful eInvoicing program, but why is this? Part of the challenge for some suppliers is having to deal with multiple systems, one (at least one) to receive the customer’s PO, and another (at least one other) to submit invoice. Additionally, suppliers are often left managing many different platforms for their different customers. One way ease this supplier pain and improve enablement results is to get procurement and AP to collaborate on a single system and thereby leverage a single enablement onto the platform. Of course, leveraging a network can improve and expand these efforts significantly and increase overall electronic activity
Key technologies that foster collaboration
Thinking about the entire P2P process is key, whether you’re automating one part of it or the whole process. Collaboration is a big theme at present throughout the business world (As Andrew just pointed out, collaboration is a top strategy for Chief Procurement Officers) and we have believe that AP has a tremendous opportunity to collaborate with other groups; to get there, it will come down to the linkage between processes and systems, sharing information, sharing visibility across the groups and with their common denominator, the supplier. Some of the key technologies that enable collaboration include eInvoicing, supplier networks and self-service portals. These particular technologies create a platform for receiving, processing and managing information accurately and easily with all the checks and balances that are required.
