Purchasing Card – the P2P Nuke option

Purchasing Card – the P2P Nuke option

Posted by Pete Loughlin in Purchasing Card 14 Feb 2013

It is depressing that whenever there is conflict brewing  somewhere in the world – a political or diplomatic tension that escalates to point where otherwise peaceful countries contemplate military action – there’s always someone, somewhere who says “Nuke ‘em”. The Nuke option – the answer proposed by the person that doesn’t understand the question. Instead of solving the problem, they want to destroy the problem – that way, they don’t have to worry about how to solve it. It’s not just war of course. There are circumstances in business that present hugely complex issues when it can be tempting to reach for the red button.

A few years ago I provided some consultancy support to a construction company. When I began working for this particular client, they were just recovering from the consequences of pressing the red button. They had implemented a Purchasing Card program.

Purchasing Insight logoTo be fair to them, they had a massive challenges. They needed effective purchase to pay processes but, like any construction company, many of the stakeholders in the process were not office bound. They were on construction sites, sometimes in inhospitable places, remote locations or underground, working outside in the wind, rain and snow. IT network? There wasn’t even a phone network on some sites.

An organization with a mobile or remote workforce has to have a purchasing process that fits those specific circumstances. Purchasing Cards (PCards) are often seen as the solution. But a PCard program implemented without a complimentary spend management tool is the Nuke option – it doesn’t address the complexities of the  purchasing process, it removes the purchasing process. The consequences can be dire and can include maverick spend,  lost visibility of spend and fraud. In other words, you lose control.

It would have been futile to attempt to put in place a proper PCard program with appropriate management tools to control the spend. It was too late. Some fingers had been badly burned already and the battle for hearts and mind had been lost. So my challenge was to develop a strategy to overcome the specific P2P challenges that exist in a mobile environment.

For a few years, the idea of putting mobile devices in the hands of remote workers had been explored but for many situations, handheld devices where considered too expensive. They need to be robust, enough to withstand knocks, being dropped and getting wet. A typical device would cost upwards of $2,000. It simply wouldn’t be cost effective to use this approach for P2P. But everyone carries a mobile phone and increasingly, everyone was beginning to carry smart phones. What happens when we drop one of them in a puddle? We get a new one. Why should we get hung up about hand held devices and their ability to withstand a few knocks? And why should they be highly customized proprietary devices? Why not use an iPhone?

This was 2008 and the procurement system used at my client was barely functional on a windows PC never mind a mobile device so it remained a nice idea that I didn’t put much thought to – until a few days ago.

To be continued …

Pete Loughlin can be found on twitter @peteloughlin

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