The 3 Ps in Purchase to Pay Process

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The 3 Ps in Purchase to Pay Process

Posted by Pete Loughlin in The Rest 09 Jan 2010



It depends on how effective you are at communicating and how effective your CEO is at listening but getting P2P firmly on the corporate agenda can be quite a challenge and keeping it there can be equally difficult. It’s not their fault. The true benefits of an optimized Purchase to Pay Process is subtle to the uninitiated and subtle messages are the most difficult to understand and retain.  To the initiated, it can be easy to forget what your audience doesn’t know. The three Ps, the critical P2P concepts, are vital in developing a sustained commitment to Purchase to Pay Process excellence.

The 1st P – Position

Position P2P as a key strategic initiative – a critical element to help baton down the hatches when times get tough and a key competitive tool during times of growth.

The Purchase to Pay Process should be seen an important “bottom line strategy”. Unlike sales initiative and marketing campaign designed to impact the top line, P2P saving hit the bottom line directly and immediately. During tough economic conditions P2P is very much part of the solution and it’s a short sighted CEO that sees investment in P2P as part of the problem. Saving on a P2P budget is the business equivalent of throwing the baby away with the bath water.

Until P2P is positioned strategically, it will not have the right sponsorship to be successful.

The 2nd P – Prioritize

A n optimized Purchase to Pay Process can have an immediate and marked impact. Use Spend Analysis tools to get detailed views on your spend profile in order to identify the big wins and the low hanging fruit. Good spend analysis is one of the most important factors in P2P success

Don’t treat P2P as an academic exercise – it is a crucial commercial approach that will help your business to thrive. And don’t treat P2P as an IT project – it isn’t. P2P is about process and you IT will support it. The priority is to get processes right and to use IT to enable them. Don’t let the IT tail wag the process dog.

The 3rd P – Perform

Establish and agree the right KPIs. Make them commercial savvy so that you measure the things that count – headcount cost, $ savings etc. Avoid KPIs that can’t be translated to you company accounts as savings. Once the KPIs are established – deliver, deliver, deliver

Remember, perception is reality.  Savings delivered and not claimed might as well have not happened.  Communication is key to ensure that you retain sponsorship.

Purchase to Pay Process

Purchase to Pay Process

Purchase to Pay Process

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