P2P and Working Capital Compass
A Foundational Look at P2P Technologies
The history of the purchase-to-pay (P2P) technology market, while relatively short in duration, has certainly seen its share of fireworks and fire drills over the past decade and a half. This Spend Matters Compass paper explores the market state of P2P platforms from basic, hosted e-procurement capabilities to broader deployments combining both best-of-breed and ERP technology components. The analysis starts by looking at common pitfalls and challenges in P2P implementations and then covers the range of benefits that companies can expect to achieve through different types of technology deployments.
As part of our investigation into the topic, this Spend Matters Compass report provides a short list of vendor recommendations. In the paper, we also touch on enabling technology areas that companies should consider in the context of deployments, including supplier enablement strategies, catalog and content management, vendor management, and P2P reporting and analytics. The study is designed to help users to create business cases based on a variety of different criteria.
The report also includes an approach to create vendor shortlists based on unique organizational requirements (e.g., “Compliance Now”, “Don’t Get Fired for Choosing Us”, “Renewal Price Pressure (Price Pressure in General)”, “ERP with Caveats”, “Don’t Mess with My Suppliers”, “ERP or Bust”, “Asset Management Integration”, “Geographic and Industry-Specific Expertise” etc.).
Without question, companies that focus on the A/P and P2P areas achieve the best returns by first addressing and automating as much of these processes as possible. When they succeed, the benefits can be material. Hackett benchmarks suggest that world-class P2P efforts yield significant results for companies (compared with average performers). Moreover, P2P solutions can enable companies to enhance purchasing and payment controls, drive company-wide and supplier compliance and can even serve as a foundation for companies to profit from supplier relationships through advanced discounting and supply chain finance strategies.
The paper ends with specific recommendations to take into consideration in selecting P2P systems including:
- One solution size does not fit all — identify what type of buyer you are to understand the specific vendors that are most likely to help address your top concerns and opportunities
- Look to achieve significant value from deployments in less than six months. If returns do not begin until 12 months or more given long deployment cycles, look elsewhere in the interim—or permanently
- Make collaborative decisions with finance (including accounts payable) to address both the up and downstream components of the P2P lifecycle
Whether you’re selecting a P2P system for the first time or looking to upgrade, replace or supplement existing solutions, this Spend Matters Compass report can provide a useful foundation, serving as a worthwhile starting point before creating final provider shortlists and embarking on a selection process.