Purchase to Pay – easier said than done

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Purchase to Pay – easier said than done

Posted by Pete Loughlin in Purchase to Pay 10 Jan 2010

Whether you call it P2P, Purchase to Pay, Req to check, or some other buzz wordy name, the business of optimising the procurement and settlement processes remains a hot topic. But the panacea that that can streamline the end to end procurement and financial supply chain process remains elusive – and it remains, for many organisations, some way off.

So why has the promise of P2P perfection not been delivered? Why, when the business case for taking a full, holistic end to end view is so compelling, does it so often prove to be unachievable?

The reason is simple. P2P optimisation attempts to unify people and process at opposite end of the purchasing spectrum. The common goal is efficiency, reduced cost and increased shareholder value. But they way in which each end of the spectrum contribute to the common goal is a country mile apart. That cultural gap has to be narrowed, and for some organisations, that will never happen.

There are plenty of exceptions of course but generally, procurement people respond to the needs of the core business, reacting to the commercial requirement to deliver top line benefits. They’re commercially savvy, aggressive and, indirectly, very customer and market facing. In contrast, the payment end of the spectrum are desk bound supplier facing and focus on bottom line benefits. Attempting to get a unified approach between such diverse communities as like herding cats – they all have their own agendas and it’s not P2P. You may be able to get them in a room and nod their heads and say all the right things. You may even get them all in the same room together feigning enthusiastic agreement. But the moment your back’s turned, they be back to their day jobs.

So next time you hear a consultant’s presentation about how much impact on your business an optimised procure to pay process will deliver – believe the technology promises and believe the case studies, but just consider whether you can realistically envisage your procurement people and your finance people being comfortable bed fellows.

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