With companies increasingly moving to Shared Services or Global Business Services to provide Accounts Payable services, and with Purchasing activities (both indirect and direct) typically split between either centralized or decentralized organizations that are almost never part of Shared Services, coordinating an end-to-end design for Purchase-to-Pay can be a significant challenge. Fortunately, software providers are becoming increasing sophisticated about providing solutions that benefit more than a single functional area.
One cloud-based software solution gaining a lot of attention from Peeriosity members is the use of Coupa to help them manage transactions across Procurement, Accounts Payable, and Supply Chain.
A Peercast discussion in our Accounts Payable (P2P) research area featured a large company with 20,000 employees dispersed across more than 1,000 locations, processing over 1.2 million payments with 75% processed using paper invoices, with roughly a 50/50 split between PO and non-PO invoices.
Their vision was to upgrade, streamline, optimize, and simplify the P2P process by leveraging advanced technologies. The primary call to action was because their current P2P platform subscription was expiring and the price was expected to increase for a technology that wasn’t changing fast enough, was not intuitive, and was difficult to use for end users and the back office. The initiative was also part of a strategic direction alignment that included transforming work processes, reducing risk by promoting compliance to contracts and process discipline of Good Manufacturing Practice, and for ISO9000 compliance.
The transformation was significant, impacting how field operations requisitions supplies and services, how Procurement buys supplies and services, and how Accounts Payable pays for supplies and services.
The benefits were also significant, reducing processing costs in Accounts Payable, but more significantly reducing overall spend by increasing contract compliance, allowing for supplier base consolidation, and the writing of more favorable contract terms. These benefits were all directly tied to the Coupa implementation.
iPolling Results Review
Peeriosity’s iPolling was used to provide insight to the status of Peeriosity member companies with respect to implementing an end-to-end process transformation for Purchase-to-Pay, with additional insight to the biggest inhibitors to the transformation of the Purchase-to-Pay process.
The polling results indicate that 44% of Peeriosity member companies have a status with respect to implementing an end-to-end process transformation that is strong, with many of the pieces in place and with specific plans to continue in process, and an additional 31% reporting they are in process, where they are making progress and working on a long-range plan to transform P2P. The remaining 25% of Peeriosity member companies are either starting to work on plans for an end-to-end design or moving this direction isn’t something in their current plans.
With regards to the biggest inhibitors, technology issues were cited by 52% of responding companies, with 32% having difficulty finding the right solutions, 13% being resource constrained to implement the solutions, and 7% having difficulty related to multiple ERP platforms. Other inhibitors cited were organization issues, and specifically difficulty in bringing different functional areas together to improve the end-to-end design (27%), the lack of clear leadership making end-to-end a priority (14%), and finally the lack of a compelling business case to secure funding (7%).
Here are some of the comments from Peeriosity members:
- Technology- we are on different finance systems. We are in the process of implementing one system.
- I think the challenge is always finding the balance between cost of anything new and having a clear business case where there is a return. Then managing all these portfolio ideas against all the other non-discretionary projects as well as managing the day to day too.
- Prioritization of resource (tech, money, time) investment against other initiatives.
- Our process management organizations are split between Procure to Receive and Invoice to Pay. There is some level of collaboration between them, but no end-to-end transformation is taking place.
Transforming a process end-to-end can drive improvements and lower costs in ways that focusing on individual work processes within a single function will never achieve. 75% of Peeriosity member companies have either strong results in this area, or they are in process and making progress. The best news is that with new technologies available for purchase that include end-to-end process transformation as a deliverable, the barriers to pursing this strategy are significantly reduced.
What is your company’s status with respect to implementing an end-to-end process transformation for Purchase-to-Pay? What are the biggest inhibitors to transforming the Purchase-to-Pay 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 to 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 iPolling.
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.