Purchase to Pay

I've been working with e-procurement in a wide variety of guises and in many different organizations for nearly 20 years. Before the widespread use of the internet there were some proprietary on-line purchasing systems that were, by and large, the same as a modern incarnation of a web based e-procurement system. And they all have one thing in common - they don't work. To be fair, they're getting better but still, most implementations are an expensive set of broken promises. It's not always the technology that's at fault - sometimes it's the promises that are wrong - expectations are set unrealistically. Or its the functional design that's wrong - business requirements ignored or misunderstood. And it's such a shame because e-procurement was such a good idea. So what's gone wrong?

I'm a big advocate of KPIs and I'm a stickler for a sound business case. I don't do anything without a plan and there's no resource more valuable than a good project manager. To invest resources, whether it's time, money or both, without understanding and quantifying the expected outcome, without understanding your route map and without measuring results against a plan is a sure route to disaster. No-one plans to fail - they just fail to plan. This is what the rule book says and I've always told myself that this is the way it should work. In all honesty, I'm just repeating what I've been taught by others. It's what older, more experienced people always said - it seemed to make sense. It's the received wisdom that has become a part of the way I do things - but I've never believed it. Not really. And here's why.

New York - the lights, the excitement, the glamor, the Post Office. A compelling argument for electronic invoicing. [caption id="attachment_7294" align="aligncenter" width="540"]This Post Office in the heart of Manhattan is open for business This Post Office in the heart of Manhattan - one of the busiest and commercially vibrant cities in the world - is open for business. I stood in line for 45 minutes to buy a stamp.[/caption]

Over the years I’ve had some great ideas. I’ve had some pretty dumb ideas too. I’ve followed through on some – both the good ones and the dumb ones but most, I have to admit, have been left as just ideas. But it still gives me great satisfaction when I get to see one of my great ideas executed perfection – by someone else. A number of years ago, I had the great idea that smart phones could be used as purchase to pay tools. I wrote about it here. The problem of process compliance in some situations like construction sites it that it has, historically at least, been difficult to put IT solutions in place. Purchasing Cards have been tried but rather than helping to support a robust purchase to pay process they tend to remove the process entirely – the “Nuke” option. But now, everyone carries a smart phone and it’s perfectly feasible to put purchasing software in the hands of everyone, regardless of their working environment. It’s not just possible – it’s delivered, and a few weeks ago, I had the great pleasure to speak to Patrick Hopkins, CPO at Coca Cola Bottling Company to understand how they’ve implemented a Coupa solution to do just that.

How much does it cost to implement purchase to pay best practice? Having spoken to many senior finance and procurement people, I get the impression that many of them think more about how much they can save by ignoring it. Sure, they value the basics but the whole nine yards is seen as an expensive luxury. So how much does best practice cost to implement? How long is a piece of string? It depends of course on the size and scale of the organization and it may be better to ask an alternative question: How much does it cost not to implement best practice? There’s some really interesting research that’s just been published by OB10 that can help answer that question.