Everywhere you look in today’s business environment you will find two words ‘Digital Transformation’.
Going digital is the primary route to keeping pace with demands on all aspects of individuals and organisations. These two words which can, do, and in some instances have placed a measure of fear in many of us, will continue to radically change they way we approach and carry out business in both B2B and B2C daily.
The way in which goods and services are bought and sold today is continually changing. Contactless card payments, are a prime example. Who would have imagined these in the days of signing a bank cheque and writing your bank card number on the back of the cheque to guarantee its issue to the supplier?
Internet payments on the move, let alone from your tablet or pc at home. Cash has become a word of the past, and its presence reduced with the eliminations of some different value coins and notes.
This basic requirement of buying and selling, has not changed. The way in which we carry out these transactions and create the necessary approval steps through to final payment has and continues to travel in the fast lane of ‘Digital transformation’.
Hence the evolution of the digital purchase to pay process.
To operate efficiently in both B2B and B2C markets this digital transformation has become virtually a necessity for all companies.
The resulting benefits of transparency across the Procure-2-Pay (P2P) process includes: complete automation of ordering and purchasing transactions, creating an overview of supplier spend and their individual relationships; the matching of the supplier invoices to the generated PO’s, the handling of discrepancies, enabling touchless, paperless solutions that offer very cost effective and efficient processes.
Having a digital purchase to pay solution today is not an option; for companies to be able to keep pace with both their supply chain and customers, it’s a necessity
The result falls under the umbrella of ‘Digital Transformation’.
Easy to say – slightly more difficult to implement. Gaining the buy in of senior management, departmental heads, and colleagues requires a strong case both on an economic and cultural front.
The building blocks required to digitally enable the purchase-to-pay process are key, ITESOFT believe that the starting point for a digital transformation should have P2P as the pivotal function as it reduces manual intervention, enhances the view over their supplier relationships, and vastly increases transparency, increasing efficiency that is essential to any financial department.
Implementing a P2P solution is important, and within this blog I would like to bring to your attention an understanding the key factors you need to consider before, and during, implementation.
Is P2P a necessity or an option?
With the present disruption around our economic environment being quite volatile, creating processes and solutions that deliver both savings and efficiencies within companies is difficult.
The internal and external challenges that businesses face today are numerous. Areas that include, but are not limited to, are; Changes in regulations, lack of the correct internal IT structures that result in manual process for the capture and input of invoices data, reduced visibility of the supply chain, poor internal workflow and approval systems, late payment, and the risk of fraudulent and duplicate payments, all which effect and impact on business strategy.
With the advent of cloud technology, P2P solutions are now not just a consideration for large corporations with extensive supplier bases with the associated level of purchase complications.
Implementation has become easier and with that a prior justifiable business case. P2P solutions provide high levels of automation that will alleviate tedious manual tasks.
The development of P2P software has opened the market of providers into mid-sized companies, who themselves have and are recognising that investing in utilising the technology available is essential to remain competitive.
The business case for a new P2P solution?
Depending on the company, the invoice processes will no doubt differ, and this in turn will affect how each of them will reach the end results and how reaching those will impact the organisation.
Forecasting the impact both internally and externally is not an easy task, and ultimately predicting the path of how events will transpire, will require companies to consider all the scenarios that could be an extension from the initial business case.
These could include the length of your selection process for potential suppliers. Once selected, how long is the implementation programme? Do you have a planned training schedule for the system, for both your customers and your staff and at what point do you “go live”?
Organisations will need to factor in scenarios that could make an impact and that will lie outside of their primary business case.
Creating a robust business case will of course be a company’s first port of call in the journey to P2P implementation. The business case should define how the new P2P solution will impact and play its part in making up the jigsaw of the transformation strategy. The benefits of bringing what could possibly be a paperless solution will not just improve the P2P team, but the business as a total entity.
How the creation of a seamless and possible paperless solution will highlight and demonstrate the planned objectives and the positive impacts on the P2P team, department, and ultimately the business.
What to consider when developing a P2P Business Case?
- Strategy – P2P operates to the benefit of the whole organisation, and therefore the business case should offer the necessary consistency with the overall business strategy. The benefits the new platform will bring to the business should be clearly stated
- Value Driven – The P2P department will need to understand the value generated by the adoption of a new P2P solution. The key here is this value needs to be communicated to both internal and external stakeholders: The resultant reduction in operational costs the improved level of fraud and risk management, how it will make the supply chain more efficient and ultimately the impact on that supplier’s relationship with your organisation.
- Benchmarking – when deciding to implement a new system into your organisation it’s important to build your business case on solid data. Hypothetical scenarios can help set your objectives, but company and stakeholder data combined with industry benchmarks are going to help paint a more accurate picture.
- Project Management – Introducing a new P2P system will impact on various departments. This will necessitate a cohesive approach to enable integration with any existing systems operating or that may need to be phased out within those departments.
Key areas that should be visible to all include
- A project plan / timeline with key dates/ Critical Path Analysis/ and impacts across the full implementation period
- A time line for the company to see the ROI on its investment and associated benefits of implementing the P2P system
- A detailed breakdown of the programmes training
- Details of the company supplier on-boarding requirements and timings.
- SWOT analysis – When embarking on P2P projects, the implementation plan may not always pan out as it was initially thought. It is vitally important to develop a plan of action to address potential ‘what if’ scenarios. Having the option of an element flexibility and can help you adapt and minimise any potential impact. Identify those skills and resources that you do and don’t have within a SWOT analysis across the areas that will be impacted by the implementation of a P2P project.
Finally, but a vital ingredient to remember, that maximum benefit is not achieved by system change alone, maximum benefits are achieved when it is combined with behavioural change.
Communicating at all stages and involving those most affected will create a positive approach and buy-in to the business case, and maximise the benefits to individuals, departments and ultimately the business.