17 Mar 2014 P2P, perfectly packaged
Quite some time ago now I came across a P2P provider, Nipendo. I have to say, the case studies that they presented on their website were quite astonishing. I’ve seen companies brag – quite rightly – of getting very high levels of PO compliance or impressively high e-invoicing stats but when a company boasts of well over 90% straight through processing – that is over 90% PO compliance with electronic POs matching e-invoices with receipt confirmations – it’s more than astonishing. In fact, I didn’t believe it.
Some of the largest and most sophisticated businesses in the world have spent years and hundreds of thousands, even millions of dollars on supply chain process and they’ve not been able to achieve this. So what is it about the Nipendo approach that allows them to achieve such impressive results and let’s be frank about this, are their claims actually true?
I like to think I know my way around P2P and I’m very familiar with the challenges of achieving high levels of compliance to an idealized P2P process. In order to achieve the very high levels that Nipendo customers achieve, there must be something very different about their approach but from a distance, it is far from obvious what that difference is. The only way for me to understand what was going on was to see it – and I don’t mean slideware – I mean see it in action on a client’s premises. So, last month, I visited a number of Nipendo customers, buyers and suppliers. I saw Nipendo software in action and now I understand what makes Nipendo different.
There’s clever technology in the Nipendo system and there’s been lots of hard work getting it into their growing customer base but it’s not really the technology or the functionality that delivers the difference, it’s the whole approach.
Nipendo would describe it very differently but I prefer to think of the Nipendo approach as “Packaged P2P”. Conceptually, I find the Nipendo approach somewhat difficult to explain so I’m going to use an a couple of analogies.
There are those that like to cook. It can be very satisfying to buy all of the ingredients and hand craft a delicious meal. Alternatively, you could simple book a table at a restaurant. I don’t wish to denigrate the efforts of the enthusiastic amateur cook but if your goal is to enjoy fine dining, buying the experience packaged by experts in a good restaurant is a much safer bet than doing it yourself.
Technology is similar. There are those who love to get at the innards of a PC and who take great pleasure in building their own but if you are running a business, why would you want to buy in the components if you can have your business tools packaged by experts and delivered via the cloud. Forgive me for being simplistic but this is what the whole cloud proposition is – it’s about packaging IT so that all you get is the benefits of the functionality without the hassle of building and maintaining the infrastructure that delivers it.
Could you do the same for P2P?
Look at just one small component of the P2P process – accounts payable. Think about what an AP team does today. They receive an invoice then attempt to match it with a confirmation of receipt and a purchase order. It’s not always simple – an invoice could have many lines and refer to many POs. There only needs to be a single discrepancy and the invoice payment goes on hold. That’s in no-ones interests. It crease work for the AP team and could cause late payment for the supplier.
But what if you never received any invoices unless they did match with a PO? Suppose instead of receiving invoices, you received your Purchase to Pay documentation pre-packaged. All matched. All lined up correctly.
What if you are a supplier and instead of waiting until an invoice payment is late to query why there’s an issue, you get to understand potential problems and discrepancies the moment you submit an invoice?
What if, instead of there being multiple documents in the supply chain, multiple different perspectives on a transaction, multiple different interpretations of the same thing, you have a single version of the truth? A version of the truth that everyone agrees with even as it changes in real time? This is what Nipendo delivers.
You have to see it to understand how powerful it is and what is really interesting is the questions it raises about supposedly leading edge P2P solutions. For example, “why on earth do I want electronic invoices?” – not a question you would expect me to ask but think about it – even if the invoice is electronic, I still need to do something with it.
In todays post web 2.0 world where we’re all potentially connected, I don’t want to receive a document that I have to do something with, I want it delivered with what needs to be done complete. P2P on a plate. I don’t want to cook it myself.
Nipendo isn’t just another P2P provider. Although they have much in common with the other leading vendors, Nipendo have some unique variants that I believe make them stand out from the crowd. It’s fair to say that it isn’t quite clear from their literature what makes that difference. That’s why I’m glad I went to see their solutions in action. Their success claims are impressive – very impressive – and I admit, I was skeptical, but sometimes, seeing really is believing.
Pete Loughlin can be found on twitter @peteloughlin