Over the last few years there’s been a shift towards creating a centralised P2P function, connecting AR, AP and Procurement in a way which would have been unthinkable until relatively recently. It’s a journey which has had mixed results along the way.
There are several reasons why some P2P program implementations are more successful than others. Yet, if you look at some of the more successful organisations, it soon becomes apparent that regardless of any disparity between industries, the process they followed on the path to a successfully integrated P2P programme is often very similar.
As David Morrison, P2P Program Manager, Rentokil Initial pointed out in a recent presentation – if you set out some key rules to follow, the implementation is far more likely to produce the necessary results. He identified seven key points:
Develop and sell a clear and simple vision
This really is key to the program’s overall success. Get this part wrong, and it’s unlikely your project will ever get off the ground – let alone be successful. It’s all too easy to get bogged down in complexity, but that isn’t what sells. CFOs and CEOs need to know the fundamentals - what’s being used - to get what done - by when – which will save how much? An over complicated message, lacking clear goals or strategies is unlikely to win the right kind of buy-in. Above all, it’s essential that targets are clear and achievable.
Establish Executive Support
This goes hand-in-hand with the first point and again is essential in achieving the project’s success. Once you get the key members of staff on board, it’s much easier to present the solution to everyone else who’ll be affected. Get board members and key staff to sign up for the business case based on the clear vision already outlined.
Define the Metrics & Report Regularly
Have a clear list of metrics you intend to capture and report on them on a regular basis and at defined intervals. The provision of measurable, previously undocumented metrics is one of the key advantages in setting up an overhaul of any P2P process. The added visibility and efficiency ultimately leads to cost savings which can also protect the organisation against fraud and errors. So prior to any implementation it’s imperative to take the time to make a detailed analysis of existing systems, outlining strengths and weaknesses, listing which metrics are key to the organisation’s success and needs.
Establish waves based on best practice
Rather than roll out the whole function across the entire organisation and network, break it down into waves. The solution is far more likely to have long lasting effectiveness and a more rapid success rate, if people are not looking at a whole range of functionality at the same time. Once the selected areas are achieving results, it’s possible to move forward. However, it’s important to remember that just because you can, doesn’t necessarily mean you should. In other words – if you don’t need certain elements of the functionality, or to automate certain procedures, then don’t. Operating a streamlined function that works and produces the results you need is more important than using a solution to maximum capacity and having functions which are not used or which are confusing.
Visibly manage change – both internal and external
Any change takes time to come to terms with. However, if those who will be most affected understand the benefits of that change, know how to work within the new procedures and have been given the opportunity to have their opinion listened to it’s far more likely to be well received. For example Rentokil organised a series of one-to one training programmes, training manuals, group workshop sessions and on-going internal webinars, maximising buy-in and understanding.
Leverage the Suppliers
In the past, this was one of the main stumbling blocks to successful implementation of a more automated P2P solution. It’s one thing to adopt new policies or automation such as e-invoicing for example, it’s quite another to expect all your key suppliers to follow suit. However, with the rise in the availability of supplier portals, suppliers are able to plug straight into the cloud solution - paid or otherwise, increasing their supply chain management along the way. The organisation needs to look into what's likely to work best for them - in terms of compliance, cross border transactions, size of network etc.
For organisations like Rentokil where suppliers can range from global corporations to one man in a van – this network opened up enormous opportunities and cost savings. Again, effective communication is essential. Put in the effort prior to rolling out the solution to make sure that it works for them first time and suppliers won’t even try to get around the system. To be a success, it needs to be easy and accurate for the suppliers. Nevertheless, it’s important to close off all loopholes and to not allow for exceptions or opt outs which would have a negative impact on metrics and visibility.
In theory, an organisation’s P2P process is simply a series of what should be relatively straightforward transactions – and yet the reality is that it’s a process which can be mired with error, fraught with inefficiency, mostly due to a large volume of manual transactions, and in some cases subject to overpayments and fraud. Therefore, outlining and implementing a new P2P process makes keen business sense, and the potential is enormous. In terms of leveraging supply chain management, having an effective P2P system can add real value to an organisation’s bottom line and as David Morisson pointed out having an effective P2P solution can be the “catalyst for change opportunity”. As organisations become leaner, it’s the strategic thinkers who’ll be best placed to take advantage of opportunities with the agility needed to respond to them.