6 P2P challenges (but they’re solvable!)
Revamping your P2P processes can seem like a monumental undertaking. The good news is that chief procurement officers have a real opportunity to make step-change improvements across the procurement agenda. They can break down data silos that exist, develop an end-to-end strategy, set up their teams to be successful in any market condition, position procurement to be more strategic in the long term, and more.
But first, you’ll need to get a grip on your legacy processes and technology, including:
1. Multiple stakeholders
P2P crosses more silos and business functions than any other process stream. Consequently, your stakeholders should all be involved in developing a business case for touchless P2P and evaluating platform options. This can be challenging if no one group steps up to lead the initiative, your organization is too bureaucratic, or snarled processes anchor stakeholders in the status quo. The bottom line is that siloed processes and systems keep teams from collaborating effectively.
2. Too many tactical issues
Manual processes are at the heart of your P2P issues. You lack the insights you need to evaluate organizational performance, costs, and your current state. Long cycle times between purchase orders and invoicing lead to issues such as price changes, increasing exceptions and the need for human intervention. And manual processes don’t scale—especially when siloed systems are connected by “swivel-chair” processes. As a result, it’s difficult to rise above low-value activities; effectively leverage assets, such as your skilled staff, contracts, and suppliers; and use digital processes to spur faster growth.
3. Current systems of record
You have deployed systems of record, such as enterprise resource planning (ERP) and supply chain management solutions, first on-premises and now in the cloud. Often these systems cross business units or geographies and create disconnected processes. For example, it’s not uncommon for global companies to manage catalogs and purchase requisitions in one platform and invoices in another. This makes it difficult to drive sustained improvements or to pivot fast when conditions change, as they have during the pandemic. You’d also like to adopt simple digital workflows that make it easy for your staff to collaborate and be productive, rather than forcing them to learn the complex features and processes of proprietary solutions.
4. Increasing your supply chain agility
Your business has likely struggled to navigate pandemic-related supply chain issues. Consequently, increasing data visibility has become an urgent priority. You’d like to see and manage global supplier bases more easily, using analytics to identify inefficiencies and being able to move to new suppliers when issues arise.
5. Improving spend management
Without global supplier controls and processes, confusion reigns. Your business functions may notch their own deals but aren’t able to take advantage of volume discounts, better finance terms, and other types of preferential treatment. Suppliers may also struggle with this complexity, resulting in failure to deliver goods, double-billing for merchandise, or violating procurement policies. Similarly, your company pays fines when you fail to pay taxes and other required fees on time.
6. Reducing costs
Enterprises that adopt multiple business spend management best practices can typically reduce costs by six percent, versus traditional cost-cutting practices. These touchless processes also enable current teams to focus on customer service, rather than task-oriented, redundant processes.
These challenges don’t have to hold you back. Touchless P2P can change everything—read our eBook to find out how.