A good procure-to-pay process brings the ability to cut costs, but a world-class procure-to-pay process? That brings value to every level of an organization.
According to The Hackett Group, a world class procurement function can deliver:
- 30% higher margins
- 22% lower operating costs
- 47% faster requisition-to-purchase-order cycle time
- 36% less lost due to maverick buying
- 5x greater cost benefit from supplier collaboration
And that’s just the beginning (you can get their full report here).
However, you have to be willing to put the work in and not expect a magic bullet.
Good things don’t come easy, but the world-class results will make it well worth the effort.
Building a Blueprint
While you can’t have an excellent procurement function without embracing a digital solution, that’s only half of the story.
If you’re looking at building a world-class procure-to-pay function, you have to incorporate your P2P process into your blueprint. You can’t focus entirely on the technology side.
You have to be clear about your priorities: “A lack of true prioritization can lead to a lack of focus both in the selection process, and then again in the implementation.” – Aileen Busi, Partner Alliance Manager, JAGGAER
Your priorities could be savings, spend reduction, faster delivery times, operational performance, user satisfaction – it’ll vary from company to company, but you must be clear about what you want.
That starts with identifying organizational goals to make sure you’re aligned with the big picture. The last thing you want is to spend a ton of time creating a new procurement strategy or picking a vendor, only to realize that the company’s goals lie elsewhere.
Next, you should perform Benchmarking against industry best practices, so you know you’re putting yourself in the best position for success. While innovation should be the ultimate goal, best practices are equally as important, especially when creating your blueprint early on.
Once you have your blueprint set, you can then look into improving your processes with some out of the box thinking.
Finally, it comes down to picking a vendor.
“Looking at business process capabilities, it’s not just the features and functions of the application, but what partners are available, what content do they have that’s relevant to your industry, and what consultation can they bring to the table?” – Aileen Busi, Partner Alliance Manager, JAGGAER
There’s a lot that should go into your vendor selection process. Is the solution strong? Does their roadmap align with yours? Will they go beyond being a vendor, and become a true technology partner?
This is an incredibly important decisions and shouldn’t be taken lightly!
Meeting your Technological Needs
A vendor should be more than a technology. It should be a business partner. Someone who will help guide you in the right direction, be flexible enough for your needs, and able to grow with your business organically as your roadmap develops.
Furthermore, you need a vendor who has innovation at their core, pushing the limit when it comes to AI, augmented analytics, NLP & OCR, and striving for what we call autonomous procurement.
Only by embracing innovation can you elevate procurement to become a core strategic business function and truly have a world class P2P process.
It’s also important to keep in mind the integration capabilities of a vendor.
Even in an end-to-end platform you need a number of integrations to things like your ERP, accounting software or other point solutions.
Consider more than just today’s needs. Think about where your organization is headed, what is on the technology roadmap? What kind of systems will you need to integrate with? Involve other stakeholders to ensure you aren’t missing anything!
It’s All About the Implementation
Your implementation has to be built around your business processes. Technology change and process change can go hand in hand because of the change management that accompanies both.
In order to have a successful implementation, you must bring other stakeholders and end-users into the discussion.
Your processes are no good if your users aren’t bought in and taking advantage. In other words, technology is no good if no one is using it.
In fact, JAGGAER SVP of Customer Engagement Michael Roesch specifically called out low user acceptance rates as one of the top pitfalls of SaaS implementations!
You need to communicate at every step, think about many potential use cases and train people on how to get the most out of a new process and technology.
Want to boost your user adoption? Take advantage of our new JAGGAER Adopt!
It’s also important to consider your individual company culture.
“When you think about your requirements, you need to think about company culture and change management. That can be as simple as, ‘do we want to open up requisitioning capabilities to everyone in the organization?’” – Chetan Rangaswamy
Some organizations are more resistant to change, or sometimes it won’t make sense for everyone to be able to access a tool – you have to find what’s right for your organization and users.
