TweetAsk anyone who’s worked in more than one purchasing organization. When it comes to technology, they’re not normally what you would describe as model implementations. Supplier data all over the place, catalogues out of date, Heinz 57 varieties of purchasing system. Purchase to Pay processes are very rarely joined up and if purchase to pay really is the plumbing of your organization, you’d be drowning.

But before you beat yourself up about your role in this chaos, ask yourself the question: Why is it that everything is always a mess? continue reading…

TweetOB10 can make some great claims. They might like to claim to be the biggest and they’d certainly want to claim best. I think they can legitimately claim to be the first. But these superlatives are very much double edged. “First” also means oldest and “biggest” can mean least agile.

So how can OB10 maintain their leading position? Last week I had the great pleasure of meeting Luke McKeever, their new CEO, who told me. continue reading…

TweetThe purchasing card is a great business tool. It empowers people to make purchases without the need for a complex and often expensive purchasing process. When a low value item costs less than the cost of the purchasing process itself, it makes sense to cut through the purchase to pay red tape.

But the purchasing card is beginning to show it age.  It hasn’t really kept up with technological change surrounding it. The merchant fees are excessive, in a low interest rate economy the business case makes no sense and as far as reporting goes, purchasing cards have been trumped by electronic invoicing. Is it the end of the road for the purchasing card? continue reading…

TweetMathematics is fascinating,  not simply because of its mystery – detailed understanding of modern mathematics is beyond most of us – but also because of the amazing theoretical journey that mathematicians go on to reach practical destinations. So called “imaginary” numbers had been described in the 16th century but not taken seriously, even within the mathematics community until the 19th and today we would not have aeroplanes, TV or even computers if theoretical mathematicians had not made the leap of faith to continue to develop what appeared to be a field of mathematics without practical purpose. Sometimes we need to make that leap of faith even when the ROI seems less than compelling, in order to get to a place where we can see the big wins clearly.

Sometimes, it best to work backward – build the sky scraper from the top down – because from the top you can appreciate the view which justifies the effort of building it.

Put this in P2P perspective. 15 years ago we were all using paper requisition pads with manual sign off. Technologies like purchasing cards and e-Procurement offered a compelling ROI. Today, advanced techniques like supply chain finance and dynamic discounting offer similarly compelling business cases but they are advanced techniques and require some serious infrastructure to be in place before they  can be effective in a large organization. You have to be pretty confident about walking before you can run. This may mean that organizations may have to continue to build and strengthen their P2P infrastructure in the face of limited ROI for further development.

The fact is, to justify further investment in P2P – particularly in order take advantage of advanced techniques – requires a leap of faith.

TweetThis is the 21st Century.

The secure, ubiquitous global network that is the internet is established as an essential business tool that supports mission critical business processes on an industry wide scale. Messages of all kinds are transmitted between organisations: demand planning information, stock availability, real time commodity pricing, purchase orders, request for quotation and  yes – invoices.

Purchase to Pay (P2P) Relies on a Common Understanding of Format for Invoice Processing

It is true that after the initial investment in implementation that eInvoicing gives a supplier a means to reduce the cost of invoice processing by eliminating paper and giving their customers a value add by allowing them to automatically reconcile invoices by offering them in an electronic format. And it’s the format that is key. The “f” word of eBusiness. Which format should the supplier use? CSV; Excel; Word? 97;2007? OB10 or Ariba? All of the above?

I think you’ll find that all of the above is your only option if you’re a supplier that wants to offer electronic invoicing. Which is not good news for you if you are. You see, you can’t dictate the format of your invoices in the eWorld. Your customers dictate it. And so that small implementation cost that was supposed to give you cost reduction on your invoices becomes many implementation costs and quite soon, your business case becomes like dry sand in your hands – unless of course you select an invoice format that is universally accepted.

Purchasing Cards may be a little overpriced – particularly when interest rates are close to zero – but don’t dismiss them. Whether they use the VISA or MasterCard format or the American Express standard, the transaction format is recognized world wide and has been for decades.

Take advantage of new ways of doing things. Embrace change and modernity – but don’t let anyone persuade you that the new wheel is a good idea.

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Purchasing cards are used to manage high volume low value spend. Right?

Wrong! Well – not wrong exactly – just not as right as it can be. Over the last 15 years or so, purchasing cards have been quietly evolving from the useful tool to manage high volue low value spend to the highly sophisticated business solution that we have today. Problem is, nobody’s been telling us – or if they have we haven’t been listening.

Take this product for example from RBS. It’s a card product A2B – Approval to Buy and it generates a new card number for every transaction. Marketed as a product to give added control and flexibility it looks to me like a solution waiting for a problem.

But there is a problem that A2B can solve and it’s not the one that RBS were thinking of – interoperability and systems integration.

Consider this business problem. A medium sized company made its ERP investment over 10 years ago. Systems are looking archaic. The requiisition process and supporting systems aren’t properly joined up to the ordering systems. There a very few successful electronic trading relationships with suppliers and although the accounting system is fully integrated to the ordering sytem, the quality of data on orders and invoices is so poor that most invoices don’t match first time. Sound familiar? This is where A2B comes in.

Imagine all of the important documents in your P2P value chain as seperate scraps of paper all different shapes and sizes. There is supposed to be common data that connects them all. A purchase order makes reference to a requisition number. An invoice and a goods received note make reference to a P.O. number. In an ideal world they would all match but in the real world they don’t. If the requisition was created using A2B, A2B acts like a piece of string threaded through each seperate document so that when you pull the string tight – they all match – and match uniquely and exactly. It doesn’t matter if the P.O. number on the GRN was wrong or the description in the P.O. is different to the invoice.

For the medium sized company – or a large one for that matter – that can’t contemplate a major systems investment in P2P, A2B could be the solution.