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AP Transformation: Revolutionizing the Business World

While recently participating in several AP and Shared Service network conferences, I was frequently reminded of a Henry Ford quote:  “If you always do what you’ve always done, you’ll always get what you’ve always got.”

Now, comparing AP transformation with a Tin Lizzie might be a stretch, but taken in context with bringing real innovation and change that truly disrupts business norms, they both could be viewed in a similar fashion.


The Ford Model T in particular not only provided an affordable means of transportation, it was ultimately a revolutionary end product of ingenuity, efficient fabrication and assembly line production.

Quickly gone were the days of unaffordable and inefficient automobiles…..or in my grandfather’s case, the beloved family draft horse, Charlie.

Now, a similar story could be written about Accounts Payable organizations and their long journey towards real AP transformation.

Not too long ago, AP was thought of as simply a cost center to the business.  Procurement and AP often operated in silos with a lack of synergy between the two organizations.  To focus on more value-added tasks that were critical to a company’s success, AP needed to transition from simply paying an invoice.

With companies continually striving to do more with less, a strategic shift to turn AP into a profit center quickly gained momentum.

Today, many organizations are tapping into the Networked Economy to collaborate, drive immense value and cost reductions within their processes.  Furthermore, greater value in procurement and payables is being realized by enhanced collaboration as partners to establish policies that enforce compliance and help better manage spend.

Aligning AP to more critical functions such as, process improvement and supplier enablement can generate tremendous value.  There are numerous paths that companies can take towards best-in-class AP transformation. Ardent Partners for example, highlighted in a recent study, that the following recommended strategies be taken for true AP transformation:

  • Create a roadmap for AP transformation
  • Have the right marketing and execution plans to drive widespread adoption
  • Establish or enhance key performance indicators
  • Map AP metrics to top business objectives
  • Think globally (P2P), act locally (AP)
  • Develop regular and proactive supplier communication and engagement plans
  • Track staff productivity from the bottom up
  • Consider outsourcing tactical, low value activities
  • Develop a strategy to capture supplier discounts

Ultimately, no matter which road you take, aligning Accounts Payable to more strategic needs within the business and collaborating with procurement functions are critical for success and expanded value to the business.

Somehow, I believe that even old Charlie could hitch a ride to that notion.

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