Purchasing Insight

Purchase to Pay, Purchasing & Procurement Process, Electronic Invoicing

Browsing Posts published by Pete Loughlin

Everyone thinks they’re at the centre of the universe. In a business it’s the sales guys who claim all the credit for growth and profit. After all, how would the business thrive without customers? The R&D people will argue that without great products the sales guys would have nothing to sell. The CEO claims credit for leadership without which the business would have no direction. The founders want to be recognised for the bright idea they had in the first place that started the company. They are all right of course in the sense that all parts of a business play a critically important role but it is also true to say that some functions struggle more than others to gain recognition. Perhaps it’s because no-one really understands what they do or maybe they do understand – it’s just that it’s boring.

Working within a a business function that, to the outside is not really that interesting makes it very hard when it comes to securing budget or priority over other competing departments. Purchase to pay is about the least glamorous and least understood back office function that I can think of and so it’s a constant challenge to position P2P as a priority but there’s one tip I’d like to share that I’ve used to get attention and secure budget.

The problem with P2P is it’s boring. But it’s also critical especially to large businesses. Trying to explain why something that is a little arcane and dull is more likely to send people to sleep than to get them excited enough to support you. My recommendation is not to explain it at all – instead talk about something people do understand. continue reading…

One of my favorite Einstein quotes is this: “If you can’t explain it simply, you don’t understand it well enough”. It is quite likely that, like many other quotations attributed to Einstein, he never actually said it but I prefer to believe that he said something at least a bit like it. There are various forms of the quotation: “If you can’t explain it to a six year old, you don’t understand it yourself” or “It should be possible to explain the laws of physics to a barmaid”. I studied Astrophysics at University and I seem to recall testing that last one out quite a bit.

This valuable aphorism doesn’t just apply to explanations of complex issues – this also applies to products – simple design nearly always reflects an intimate understanding of user requirements – the kind of design that makes you think “why didn’t I think of that?” One of the best examples of this is Taulia. They address what is actually a fairly complex set of business issues but they’ve turned their solution into something a kid could explain. Look at this very cool video illustrating their dynamic discounting tools.

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I went into a supermarket recently and helped myself to £50 worth of food. Rather than going to the tills to pay, I approached a security guard and told him I had no intention of paying and unless he allowed me to leave the store without paying, I would do my weekly grocery shop somewhere else. Oddly enough, he didn’t appreciate my position and I was forced to leave the store empty handed. And it is odd that he didn’t understand the point I was making because this same retailer does exactly the same thing with its suppliers.

It has become common practice amongst some retailers to demand cash from suppliers or insist that outstanding debts are written off in return for a continued relationship. Only this week, the BBC reported that Premier Foods, one of the UKs biggest manufacturers, has been asking suppliers to pay to continue to do business with them. You can read the full story here but it was the wording of a letter to suppliers that the BBC claim to be from Gavin Darby the CEO of Premier food that I found quite shocking: “We require you to make an investment payment to support our growth” he apparently wrote. It isn’t even subtle.

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A few weeks ago, Tungsten, the e-invoicing people, announced a ‘simplification’ of their tariff structure for suppliers using their network. The change follows a successful pilot in the UK during which one major buyer reported that supplier adoption of Tungsten e-Invoicing increased from 55% to 64% in three months as a result of this new pricing model. That’s quite an impressive increase – which begs the question – why stop there? continue reading…

The nearest I’d ever been to Las Vegas was reading Fear and Loathing by Hunter S Thompson. A place were money can buy you virtually anything. Where the rules and standards of behaviour adopted by contemporary western civilisation are suspended. Clearly, the perfect location to convene a summit to discuss best practice in purchase to pay.

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New technologies always promise to disrupt – it’s nearly always hype or enthusiastic futurology manifesting itself as over excitement that hasn’t really been thought through. But it’s not always hype and it’s great to see optimistic expectations actually being delivered in the real world.

I tell you what you want what you really really want – Doritos!

It was 1995. Monica Lewinski was in the White House, Windows 95 was launched, the Spice Girls were becoming the biggest girl group ever and last but not least, the internet fridge was launched. Don’t believe the nouveau geeks who swear that the internet of things is something new. The Internet fridge has been breaking it’s promise to disrupt the world of chilled groceries for nearly two decades. It seemed like a good idea but no one really thought it through.

Many of us consider internet marketing to be intrusive. We shouldn’t complain. We know what the deal is it when we sign up for “free” services in the full knowledge we’re inviting the marketers into our inbox and onto our desktop. But if you thought internet marketing was intrusive, try inviting the marketers directly into your fridge to manage your snack inventory. You might believe you’re buying into the internet of everything but, believe me, let an internet fridge into your kitchen and within weeks it will be full of nothing but Tortilla chips and salsa dip. continue reading…

I’m growing increasingly uncomfortable about disclosing how many years I’ve been consulting in the P2P space but spending many years doing the same sort of thing does give you a rich store of anecdotes and war stories. Something I do take a quiet delight in is finding exotic or unusual items within a spend analysis. I know a bank that bought an elephant. Working for what I thought was a boring, innocuous government agency I found ammunition as a spend category. Working in the aerospace and defense industry there are things I’ve seen procured (that I can’t disclose) that would make your hair stand on end.

But all of that diminishes to nothing today.

I feel very privileged to add to my consulting client list an organization that has procured the components of the first man made object to land on a comet.

Congratulations ESA – a magnificent achievement The best space mission since Apollo 11.

And it is relevant to purchase to pay. When implementing e-procurement and purchasing process best practice it is common to confront those people that believe they’re special – above the process. They can’t possible comply with a standardized policy because what they do is ‘special’.

Well, from now on, my benchmark of ‘special’ has changed. Landing on a comet is special – anything less is now ordinary.

Pete Loughlin can be found on twitter @peteloughlin