Procure-to-pay (P2P) automation solutions can improve cash flow, manage data on all points through an order from a vendor, keep costs in plain sight and enhance a company’s bottom line. But when implementing a procurement solution, many companies have trouble deciding to change their entrenched way of doing things. Here, we’ll look at two of the top procure to pay challenges standing in the way of companies transitioning to a P2P service provider, and how you can turn those challenges into opportunities to increase your revenue and streamline your supply chain P2P process flow.
P2P Challenge 1: Lack of data visibility
There is a fear among companies they will lose track of their information when switching to a procurement solution. Key staff in the procurement department may be comfortable with the spreadsheets and paper files they have used for years, and they worry that a new P2P process flow will be difficult to follow. The bonus here is that preparing and implementing procure-to-pay automation systems can offer better visibility into your current data.
Here’s how to get maximum value and visibility from your transition:
1. Get a good picture of where you are now
“Health checks on ‘what do we have’ and envisioning ‘what do we need’ from any P2P tool are executed way too little,” according to Doede van Haperen of LAKRAN Procurement Professionals. This includes your requirements on your current P2P cycle.
Preparing to implement a new procurement solution is a perfect time to take stock of what data you now have and where it is coming from. Once you’ve developed that baseline, look for gaps in the current data and work with stakeholders throughout the P2P cycle to decide what data you wish you had available.
2. Design your new P2P cycle to maximize cash flow
Many experts agree that poor data is responsible for as much as 70% of all payment delays in the P2P cycle. Bad information will cause invoices or payments to hit a standstill, costing time and additional resources to fix the snags. Even with these problems, companies rarely put enough effort into solving these bottlenecks by cleaning and merging their vendor data collection.
Use your new procurement solution implementation as an opportunity to streamline your data collection. Take advantage of the procure-to-pay automation your solution provides to do the automatic data collection your current P2P cycle may be missing. This will increase your cash flow and speed inventory through your system.
P2P Challenge 2: Poor cooperation
Often, the biggest problem facing any company’s P2P process flow is a lack of communication and cooperation between different departments in the P2P cycle. Preparing to implement a new procurement solution or P2P service provider is a great opportunity to get everyone involved in the P2P solution steps needed to provide all departments with the data and information they need and begin a regular habit of communicating on the process. Two key steps will help you achieve success:
1. Get executive-level buy-in
Nothing gets all management on-board for your new P2P service provider like approval from the c-suite. When executives help build the new P2P process flow and get excited about the savings a well-designed solution can bring the company, managers from all departments will feel better about devoting the time needed to implement any new procurement solution. This is a great opportunity to cement this new working relationship between the various departments and look for ways to bring executives in as occasional touch-points in the communication going forward.
2. Maximize reduced workload benefits
Who doesn’t like to do less of the day-to-day tedious work of filling out reports and do more analysis on data to find new solutions? Your new P2P solution steps should include encouraging all stakeholders to think big about what repetitive jobs they would like to eliminate in procurement roles. Work with your P2P service provider to implement those wishes and sell excitement for the new system in eliminating much of their mundane workload.
Take this opportunity to look at how you can use the increased data management to collaborate on improving your P2P cycle. Contact one of our solutions specialists for a free demo of ProcurePort’s procure to pay systems.