Anti-social corporate behaviour and the price of poor P2P compliance

Anti-social corporate behaviour and the price of poor P2P compliance

Posted by Pete Loughlin in Purchase to Pay 22 Nov 2013

Would you impose purchase to pay policies on people in your organization if those policies, whether followed or not, have no real consequences? Think about it – if someone goes off piste and buys some stationery from a non-preferred supplier and expenses it – a few dollars in a few billion dollars of spend – are you really going to crack down on them? They’re going outside of a policy and they know it. Interpreted strictly, they’re breaking the rules and they could be disciplined for such behaviour. Should we develop a sense of perspective? What difference does this behaviour make?

Purchasing Insight logoAsk your self these questions honestly:

1. If possible, would you decline to do something in your business day if you knew that it would have little or no measurable effect?

2. Do you prefer not to be bound by rules in your professional life if they are largely or entirely irrelevant to you or your work?

3. Would you choose not to go out of your way to comply with a rule that is a waste of time because you don’t believe in compliance for compliance’s sake?

4. Do you drop litter?

I had this dilemma personally recently. I was irritated at the social pressure on me to recycle and to constantly think environmentally. While China is building coal fired power stations at a rate of one per day how much of a contribution does the standby light on my TV really make to the early demise of the planet? But I don’t drop litter.

Litter put things into perspective for me. It’s true that my standby light makes no measureable impact but a society that collectively buys into recycling and conservation of energy is a more sustainable society  One cigarette butt or a single chewing gum wrapper dropped in the steet would go unnoticed but a community that agrees not to litter is a cleaner community and its members are better off for it. There’s a social contract that we buy into that allows people to enjoy  a clean and sustainable environment as long as they reciprocate and play their part.

Dropping litter is antisocial and society, quite rightly, ostracises and punishes offenders. In the same way, refusal to comply with corporate purchasing policies is anti-social corporate behaviour. Transgressors offer credible excuses. They claim they can buy cheaper themselves or they may say that a local supplier offers a better service and while these claims may be true, their motivation is usually more to do with the high value they place on autonomy – the freedom to make their own decisions. They don’t like being told what to do especially if it’s different to what they’re used to.

The impact of low level non-compliance may well be minimal but the impact of wide ranging non-complaince has a massive cost. It is very common for local requisitioners and buyers to point to lower priced deal compared to the preferred supplier list but proper procurement is about more than price. Perhaps the local supplier does offer service with a smile but great care needs to be taken to ensure that objective due diligence determines how the business engages with suppliers and that there are checks and balances in place to ensure that business relationships are not being sustained for the sake of satisfying local convenience or resistance to change.

It’s true that the purchase to pay police need to sell P2P more effectively to get the message across (see this piece) but it’s also true that everyone in an organisation makes a difference in everything they do – not just the job that they do – the way they represent their business. Generally speaking, people have no difficulty signing up for that but they need to understand that playing their part and being a good corporate citizen includes playing along with P2P policy.

Pete Loughlin can be found on twitter @peteloughlin

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