When it comes to procurement technology, compliance has to be among the least sexy but most important rationales for investing in any type of system, from eProcurement to contract management. Specifically within the P2P sector -- which by our definition comprises transactional purchasing (eProcurement), invoice automation/management, discounting/payment and supplier enablement -- compliance represents perhaps the most important decision factor for making the right set of investments. Over on CPO Rising, Andrew Bartolini recently penned a useful three part series looking at the future of P2P technology. In the third installment, Andrew suggests that we'll see improvements in four areas of compliance capability in the future.
One of these areas is process compliance, which Andrew suggests is "not as elegant" as it could be today in many systems. In the future, Andrew believes that "simplifying approval set-ups, improving notifications and messaging, and creating more features for mobile workers" are areas we'll need to see additional improvements within, although "ultimately," he suggests, "process compliance is not a major challenge today." I'd argue differently -- I think process compliance is a big deal today in many eProcurement and services procurement implementations -- but I'll save that analysis for another post.
The second area Andrew says we need to examine is regulatory compliance, including "jurisdictional, tax, labor and reporting" issues. In the future, we'll need to turn to what Andrew describes as solutions that enable "greater configuration or extension of fields to capture the necessary compliance information at the transaction level that will flow back to the supplier profile information or vice versa." I'm in complete agreement with Andrew here and I'd argue that we're in only the elementary stages of looking at what is possible in terms of regulatory compliance with these systems.
For example, I'd extend Andrew's case example of an independent contractor's W-9 submission and suggest that compliance systems in the future could very well automatically link back not just to issues like who is allowed to have access to export-controlled information that could fall under ITAR (based on citizenship, visa status, etc.), but also tax related information that could create an audit trail and build a case that a 1099 contractor is not co-employed.
Stay tuned or Part two of this post as we examine the other compliance areas that Andrew suggests we consider.