Purchase to Pay

I wonder if it's just me that recalls that embarrassing teenage episode when one of your friends declares their new membership of the biker club. Proudly carrying their full face helmet, they don't volunteer that they haven't actually managed to save enough money for the bike yet. I cringe when think of it the same way I cringe when I hear CPOs claim their savings.

I like and admire good sales people. I would even go so far as to say that I enjoy being sold to - when it's done well. Taking the time to understand me and my situation, my objectives, my likes and dislikes. Adding value to the purchasing process by overlaying technical expertise to help me refine my requirements. Being respectful of the competition and respectful of the constraints on my purchasing process that at times can make me appear to be a difficult buyer. This is what I like. I'm a sucker for a good, professional sales pitch. Which is why I was so disappointed recently to come across one of the worst sales pitches I have ever witnessed from a company - a software vendor in the P2P space - who really should have known better.

There are few that would disagree that Ariba sits firmly amongst the best in class procurement vendors. Its heritage goes back to the pioneering days of e-procurement and it has continued to innovate successfully ever since, diversifying its portfolio of solutions across the P2P spectrum. But while its procurement credentials are impeccable - the first P - how credible is Ariba at addressing the second P at the payment end of the spectrum?

Purchasing is a complex set of interconnected and dependent people, processes and technology. - market knowledge; benchmarking information; purchase to pay and accounting systems and processes and last but by no means least - data. Data - your procurement organization's Achilles heal.

I knew somebody a few years ago who ran a small, very successful business. When it came to negotiation he had a unique closing technique. Right at the end, when contacts were to be signed and hands shaken he'd go along to the final meeting with a briefcase and before he signed the contract he'd ask for one final reduction in the price. The reaction was predictable. After weeks, perhaps months of selling, discussing and fine tuning the deal, to be asked for a further discount on top of what was already agreed, the seller would invariably be perplexed and disappointed. Then the briefcase would be opened. Cash. The full amount in cash, now, if they'd take the revised offer. Did they accept the offer?

Holistic P2P delivers synergy but you need to take a step back to see how.  By embracing the whole of the end to end process across finance, procurement and the supplier’s organisation, benefits can be unlocked that remain hidden when these elements operate in isolation. Apparently unconnected projects within the purchase to pay spectrum can be joined together to deliver better results. The following examples illustrate the point.