06 Dec 2019 Get the experts in to keep your P2P programme on the road
Hands up – who services their own car? I don’t mean topping up the oil washing it once in a while – I mean changing the oil and … well, doing whatever they do when they service cars. You can tell that I don’t!
If I took on the servicing of my car it wouldn’t be long before it stopped working. And if a business wants to perform their own supplier enablement, I can tell you, it won’t end well.
If I was asked to make one recommendation for a successful P2P program it would be to invest properly in supplier enablement.
These days it’s harder to do any form of servicing on a car because modern engines are made from sealed units that require specialist tools but I’m sure some people do and especially those that maintain an older or vintage set of wheels. But what about in a corporate sense? Does your business manage its own fleet – or does it outsource that work? I can’t actually think of a single business (apart perhaps from armed forces) that would even think about managing and maintaining a fleet of cars themselves. Unless it’s your core business, why would you even consider it.
Of course, the idea of outsourcing non-core activities is hardly ground breaking. In the procurement and P2P worlds it is common place to use cloud software, to facilitate outsourced deals and master supplier arrangements – even outsourcing tail management and indirect procurement to expert third parties.
There’s a stack of things that are best done by third party specialists. Cloud solutions fit perfectly into the P2P space and today, it’s difficult to find credible contemporary on-premise solutions. Some specific tasks like scanning of invoices can be done efficiently and at low cost by using an outsourced service but there’s plenty more that can be done like that but I’m continually perplexed at the number of organisations that implement P2P software that think of supplier enablement as a necessarily in-house activity.
I absolutely get why supplier enablement activities are kept in house. Even though in the P2P world we are more often than not dealing with indirect suppliers, that doesn’t mean that these suppliers are not strategically important. Online collaboration is an important part of a strategic relationship and something to be guarded. Contractual terms are often sensitive and the whole business of supplier management is what the indirect procurement team does.
I’m continually perplexed at the number of organisations that implement P2P software that think of supplier enablement as a necessarily in-house activity.
And for these good reasons, supplier enablement is kept in house but regrettably, the decision to manage in-house usually precedes almost complete lack of action. Sure, a few catalogues get set up and suppliers are asked to send invoice electronically, but success is usually very limited. It’s a bit like buying a new car and deciding to service it yourself before allowing it to grind to a halt on the highway and crumble to dust for lack of regular maintenance. The mistake isn’t so much that the maintenance wasn’t done it was buying into to the foolish notion that you’d do it yourself.
You think this is a bit strong? I’ll go even stronger. Not only have I seen this mistake made at first hand many, many times, I would go so far to say that I have never seen an organisation implement a new P2P system that has approached supplier enablement with adequate resources. They were told what to do; they’ve had the sales pitch and probably even built a business case predicated upon the assumption that suppliers will adopt – but just as you can lead a horse to water, you can lead suppliers to a comprehensive supplier enablement methodology but you can’t make them follow it.
I have never seen an organisation implement a new P2P system that has approached supplier enablement with adequate resources.
Think about it. Supplier enablement isn’t just about communication or change management – you need to sell P2P to suppliers. They’re not all going to embrace your shiny new P2P system especially if they get regular requests to do the same from numerous others all asking for something different. You need to understand the technology. Do you have the skills or resources to set up punchout catalogues? What about user support? Like any community, there are new users who will contact you in a panic asking how to send an invoice. Who will filter the dumb user queries from the serious technical questions and then, how do you escalate the real technical problems? Are you going to build a full support unit for this? What are your supplier adoption aspirations? If you want high percentage adoption you need a pretty hot team, well-resourced and technically competent. It could be a great investment but how much of this could be outsourced? Do you want valuable (and expensive) procurement professionals performing activities that require an expert but commodity skill set?
If I was asked to make one recommendation for a successful P2P program it would be to invest properly in supplier enablement. High levels of adoption won’t emerge by magic. You will only get out in proportion to the effort you put in. And don’t assume that it all needs to be in-house resource and don’t think that purchasing pros need to become IT support geeks. There’s a healthy balance between strong in-house people who will protect and maintain your supplier relationships and outsourced skills who can take to supplier support noise away.
If you really want your P2P programme to thrive, get some experts in while you get on with what you’re good at.