Purchase to Pay

When implementing Purchase to Pay, the strength of the objections to change can be surprising. People prefer paper. They don't want to change. They want things immediately and they refuse to follow new processes. They think they can get a better deal themselves compared to the prices offered on a supplier catalog. It's been the same for years - decades even - and it's that last objection: "I can get a better deal myself" that can be the most difficult because it is - or more precisely appears to be - a valid objection. So how do you overcome it?

This week I had the pleasure to support a seminar session run by Canon promoting their P2P offering. This is the transcript of my presentation P2P has always been important - important in the sense that it has always been important to ensure that the correct approval is given before something is bought. It’s important in the sense that it has always been important to ensure that suppliers are paid according to contractual terms - and important in the sense that it’s important to ensure that the details on an invoice sent by a supplier match what was asked for and what was delivered. But P2P has taken on a greater importance in recent years and there are three things that have put P2P in the spotlight
  • Visibility
  • Accountability
  • Automation

One of the issues that procurement professionals complain about is respect. Or status. "Procurement isn't taken seriously". "They only involve us when things get difficult". It's a very common issue for procurement in many organizations. I've seen it at it's most extreme in financial services where procurement is so far removed from core business that it really is difficult, for what is considered by many as the the most boring of back office functions, to be taken seriously at a strategic level. But is this really any different from any other part of business? Perhaps procurement people need to take a look in mirror and frankly, get over themselves.

No PO No Pay is often thought of a means to "train" suppliers providing them with a somewhat negative incentive to comply with their customer's purchase to pay processes. "No PO No Pay No Exceptions" - I've said it myself - but in practice not only does it not work, it's directing effort in the wrong direction.

One of the key reasons to implement tight controls within purchase to pay is to ensure that people can’t steal. But when I talk to businesses about the need to mitigate against the risk of fraud in finance departments - about how it’s possible for staff to collude with suppliers or to falsify information for personal gain - I hear this response again and again: “But who would do that?” What they’re actually saying is: “We’re all trustworthy here. I don’t know anyone that would do such a thing.” But regrettably,  the truth is a little different. The reality is that there are only two types of people – those that cheat and those that cheat more.

I have a great deal of respect for Gartner and pay close attention to their insights and futurology. Despite that, I get a great sense of satisfaction on the occasions when I see what’s what before them. It’s not news to me that Nipendo are cool but it’s great to see their coolness recognized by a firm as august as Gartner. Nipendo have been named as a "Cool Vendor" in Gartner’s new report “Cool Vendors in Integration, 2014” by Keith Guttridge, Massimo Pezzini, Paolo Malinverno & Jess Thompson. It means that, in the authors’ opinion, Nipendo are “Innovative, Impactful and Intriguing”.