Pulling the Source-to Settle Family Together
Tis’ the season for bringing loved ones together. And for many of us, family time during the holidays is a joyous event with fond memories…unless you’re the Griswolds.
Oh, how Clark Griswold struggled to make Christmas an unforgettable occasion for the family. To this day, I still peer into every purchased Christmas tree for an ornery squirrel. That cinematic memory remains, “the gift that keeps on giving” every year.
Hopefully, the rest of us can enjoy a little less drama and frustration during this holiday season.
With that said, we do all have second families at work and pulling these individuals and organizational silos together for common corporate goals might often seem as challenging as the Griswold’s holiday endeavor. For companies that are or will be implementing end-to-end Procure-to-Pay (P2P) processes in particular, the specter of varying swaths of chaos is not only possible, but quite likely.
So, how do organizations planning on implementing new P2P processes come together and avoid potential pitfalls that can ruin successful deployments?
No matter the internal structures within an organization, there often tends to be a “what’s in it for me mentality” when it comes to change management, collaboration, cost savings, etc. And whether you’re talking to the executive suite, corporate management team members, or strategic stakeholders, everyone has a significant stake in a successful P2P deployment. Furthermore, if one takes a look at the income statement and balance sheet effects of a best-in-class P2P rollout, the benefits are quite impactful.
Let’s take Accounts Payable. What’s the impact to your organization of Full-Time-Equivalent (FTE) reduction savings and reduced supplier inquiries? In Treasury, what’s the impact of payment terms extension, discounts, offering supply chain finance options? What about Procurement and pricing terms traceability, line level visibility, a seamless buy-right, pay-right process? Even I/T, what kind of Total Cost of Ownership reductions can you realize with a single, integrated platform?
I assume quite a lot and we are not even mentioning the I/T services and potential help desk assistance to the organizations mentioned above. Cost reductions, process improvements, risk aversions and greater efficiency are but several, out of many significant value adds for corporates.
Speaking of efficiency, or lack thereof, what is generally happening now within organizations not utilizing an integrated platform to bring these processes together? Often times, someone is buying a horrible Purchase Order (PO). A supplier then fills the PO incorrectly, therefore, the invoices are also invalid. AP now sits there trying to figure out what’s wrong. Meanwhile, AP’s calling Procurement and Procurement typically doesn’t care and just tells AP to make it right and pay. The Treasurer is now all ticked off because there’s no working capital window. Then I/T and the supplier have no visibility into what is going on, and the supplier is wondering if they are going to be paid or not.
If so, a compelling key to maximizing the full financial impact of an integrated platform, is to avoid disparate systems and processes mentioned above that inefficiently connect those processes and systems. Take a look instead towards building a sound strategy around buying-right, paying-right that seamlessly ties your Source-to-Settle processes end-to-end. By buying-right on the front end of sourcing processes, this enables companies to accurately pay-right on the back end of their payment functions.
As with many companies, there lie gaps, but also collaborative opportunities to reap dividends and value throughout organizational silos. First, take time to understand what’s important to the company, your particular organization and to other entities within and outside of your area of responsibility before embarking on a best-in-class P2P journey. It’s a task worth pursuing.
Understanding culture change, aligning internal colleagues, managing supplier on-boarding & enablement and selecting an appropriate technology provider will help in navigating potential pitfalls of a P2P deployment.
And as the saying goes, “it takes a village,” which aptly applies to a successful Source-to-Settle rollout. Have a workable plan, execute and adjust accordingly and always remember to collaborate often with others.
Your extended work family will appreciate the effort, and perhaps remain in the holiday spirt and pitch in to help make the endeavor successful one.