Purchase to Pay Process

It’s quite easy to “get” the benefits of e-procurement – electronic catalogues linked to a purchase approval workflow. It’s a no brainer and it was one of the most successful B2B technology of the 1990s as the opportunity was seen to emulate the ease of buying that amazon, Dell and eBay offered. But it was never as straightforward as the B2C equivalent. You don’t need to account for everything you buy on eBay and apply GL codes and cost centres and we don’t need a 3 way match. That’s why Amazon is easy. (How many times have you heard someone in business complain about their ERP purchasing module asking why it can’t be like Amazon?) And what about e-invoicing? That seems like a compelling proposition until you try to automate Accounts Payable in an environment where the purchasing process is out of control.

The purchase to pay police aren’t naturally an attractive bunch of people. Like auditors, they only bring ugly messages about compliance and process. And they don’t make their lives easier by tarnishing further their image by moaning about their lot. So how do you get the perfectly rational P2P messages across effectively? How do you prevent it from being perceived as a pointless dictat from an area of the business too remote to understand commercial realities?

It’s astonishing! At a time when we have Sarbanes Oxley and a culture of control, in the climate of transparency and scrutiny and a fetishistic focus on finance – how is it that fraudsters have been able to get away with a more than 50% increase in procurement related theft? But it’s not that astonishing really. A cursory glance at the procurement practices and purchase to pay processes in any organization will reveal opportunities to defraud and while we should never forget that it is the fraudster that’s to blame, the responsibility is shared with the executives who choose to turn a blind eye and underinvest in proper P2P.

On the back of the extraordinary announcements over recent weeks , MasterCard and Basware have just declared another supply chain finance deal. It's a big deal and it's another sign if we needed it that products and services providing working capital support to business is one of the faster growing areas in B2B. I chatted to Esa Tihilä, CEO of Basware and Hany Fam, President, Global Strategic Alliances at MasterCard last week about this new partnership. It's good news for Basware - they now have an important new string to their bow, but I think it's even better news for MasterCard who couldn't have chosen a better partner.

Please forgive the contrived alliteration but it had to be done. Today, Basware and Bravo solutions announced a partnership that appears to create a powerful synergy from their individual strengths. Both best-in-class P2P solution providers. BravoSolutions' key strengths are in spend analysis and eSourcing while Basware are best recognized for their supplier network and the application suite aimed at automating procurement and AP. By combining both technologies the pair believe that they can "extend the value delivered to customers and plug the 'savings gap.” The press release issued today explains the detail:

A few years ago, I was walking down the street in Rugby, England when I heard a load voice shout "Pick that up!" The voice coming from a loud speaker high up on a lamp post. Some kids were hanging around and one of them had dropped litter. I didn't know until then that the CCTV camera footage was being monitored in real time. This is in the UK and I had thought, naively it seems, that CTV cameras in the street were there to help find missing kids and catch rapists. I abhor litter louts as much as anyone but a surveillance state seems like a bit of a heavy handed approach to keeping the streets clean. A few months later, I was in a cab in Oslo, Norway. There was a small camera pointed at me throughout the journey. I asked and the driver explained that all cabs have these cameras. The video footage is never looked at unless there's an incident - in which case, relevant footage will be examined. Seems like a great idea to me. Now you may ask, why am I bothered about a camera in the street but not a camera in the cab? Actually, it's for the same reason that I have a problem with Sarbanes Oxley and the growing cult of transparency.

I recently made some comments about Basware that were somewhat critical. It was positive, constructive criticism. I wanted to point out that Basware was ideally placed to become a monster. With one of it’s largest competitors sidelined somewhat by their acquisition by SAP, Basware could fall into the trap of becoming complacent – indeed, I have , from personal experience seen hints of this on the horizon. But I overlooked something – something that to an observer from outside of their organization could go unnoticed. It is the astonishing turn-around that Basware has performed, the foresight they have shown making that change and the energy and determination they have exhibited in completing it.