Different Approaches to Global Process Owner Design in Purchase-to-Pay
Utilizing an organizational design that includes the role of the global process owner for an end-to-end process area, such as Purchase-to-Pay, is considered a best practice by many companies. However, the manner in which global process ownership is configured and carried out can vary significantly between companies, with such issues as the level of involvement in day-to-day operations and the ability to create and enforce policy being two major ones that need to be properly addressed.
Recently, Peeriosity held back-to-back PeercastsTM on the topic of global process ownership in the Purchase-to-Pay area, which featured two member companies with significant experience in this space. It was interesting to note that both companies looked at the role of the global process owner from the same three dimensions – strategic, transformational, and operational. The following lists some key aspects of those three dimensions as shared by the companies:
1) Strategy & Capability Development, 2) Optimize Working Capital, 3) Optimize Operating Costs, 4) Risk & Compliance Management
1) Robust Cross-Geographic Organization Structure, 2) Global Standardized Process Design & Implementation, 3) Enhanced Digital Footprint (Futuristic Technology Focus), 4) Hybrid Operational Model, 5) Competency & Talent Pool Management
1) SLA & KPI Management, 2) Continuous Improvement Initiatives, 3) Governance & Sustainability
Both companies are also similar in their Shared Services geographic design, with major regional hubs for Purchase-to-Pay activities in EMEA, the Americas, and the Asia-Pacific region, including a primary processing location in India. However, when drilling down into the responsibilities of the P2P Global Process Owner at each company, the leader at one of the companies has oversight for policy and technology, while at the other company that same role also includes oversight of the day-to-day operations for that process area. There are certainly merits to both approaches and either design can be optimal for a company depending on a variety of factors, including company culture, overall organizational design, and geographic structure.
A primary focus for the role of global process owner going forward for both companies is the implementation of advanced technology, including extensive use of RPA (Robotic Process Automation), Cognitive BOTS (document processing), and AI (Artificial Intelligence).
iPollingTM Results Review
In conjunction with these PeercastsTM was the creation of a poll using Peeriosity’s iPollingTM technology. The first poll question looked at the status of utilizing a global process owner for Purchase-to-Pay, with a significant percentage (64%) of the companies indicating that the design has been implemented. Another 9% of the companies are currently evaluating this design, with 5% responding that they evaluated this approach and decided to not go forward with it. Surprisingly, a noteworthy percentage of companies (22%) have not yet evaluated this design.
The second iPollingTM question focused on the responsibilities of the global process owner role at the surveyed companies, with the most popular design being that the GPO has responsibility for policy and systems only. This was followed by the approach of having responsibility for all aspects of the operation, which are policy, systems, and operations.
Some of the comments made by Peeriosity members regarding this poll include the following:
Manufacturing Member: Our global process owner role has responsibility for only the Accounts Payable portion; for Purchase to Order it is shared within the Supply Management function. The GPO-AP has direct responsibility for U.S. AP operations, plus policy and systems globally in a matrix, liaison approach.
Computers & Electronics Member: We have a P2P global process owner by title, but in reality, this person only has responsibility for AP, not Purchasing. Purchasing is divided into direct and indirect procurement and there are multiple owners depending on the division and region. As a result, this somewhat limits our ability to drive full standardization.
Consumer Products & Services Member: The GPO role at PepsiCo is responsible for influencing policy and systems.
Healthcare, Pharmaceuticals, Biotech Member: P2P process owners are separate in Global Sourcing (Procure) and Accounts payable (Pay) organizations. We have a global SOX P2P owner, however operationally each function has its own process owner that manages processes and policies in its area.
Manufacturing Member: I guess it goes without saying, but responsibility for the process as well.
Healthcare, Pharmaceuticals, Biotech Member: Our Purchasing and AP functions do not report up to one individual, but we try to collaborate to achieve common goals.
While the overall approach to global process ownership can vary somewhat between companies, the benefits of having a single leader focused solely on the effectiveness of the Purchase-to-Pay process can provide significant benefits. This has been well demonstrated not only by the two companies featured in this research but dozens of others across the globe.
What is the status at your company with respect to the implementation and utilization of the global process owner for Purchase-to-Pay? Are you satisfied with the current organization design for this critical end-to-end process?
Who are your peers and how are you collaborating with them?
“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion. Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content. Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member. Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPollingTM.
Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers. Membership is for practitioners only, with no consultants or vendors permitted. To learn more about Peeriosity, click here