In late August, I got my hands on a preview copy. While Zycus is clearly still getting both feet planted on the ground when it comes to the visual display of quantitative information in the study results, the sheer volume of information is useful in and of itself. And it's fairly easy to understand once you get into it. The research itself a bit audacious in scope, covering the broad analyze-to-source-to-pay lifecycle (inclusive of supplier performance management as well). I'll be sharing some of the highlights from the report that I find either valuable or surprising in the coming weeks, starting today by examining some of the P2P-specific areas Zycus looked at (surprising given Zycus does not currently offer a P2P product). One broader observation I'll make first is that some of the findings from the study, especially when it comes to tying technology usage and adoption of specific solutions to procurement maturity and success, are fascinating indeed.
For example, for companies reporting savings of over 30% on average from procurement efforts (the highest level), take a gander at what technologies they're most likely to employ and adopt? Contract compliance/management is first (tied with spend analysis). That one surprised me. EIPP follows second with supplier performance management, e-procurement, e-sourcing, supplier information management (SIM), and auctions rounding out the rank order for technology adoption. Interestingly, lower performing companies at the very bottom of the scale are most likely to have adopted technology in the following order: EIPP, e-sourcing, spend analysis, contract management, SPM, eProcurement and supplier information management. In short, the greater adoption and use of contract management and supplier performance management solutions among the very top performers certainly provides validation of the importance of these toolsets.
On the P2P front, the survey results indicate that success is directly linked with adoption (at least if you define success as process compliance). 69% of high performing organizations (on a scale of high, medium and low) in the area of P2P process compliance report high technology adoption and usage. This figure drops to 24% for mid-tier performers and 0% for low-tier performers. No surprises there. But what does stand out are the favored tactics of top-performers. In this regard the number one tactic of top performers (45%) is to "monitor and report". In other words, keep careful track what's transpired within the system and then analyze and collaborate with stakeholders and front-line users to share the findings. Next on the list of top tactics is "compel with policy" with 38% of top performing respondents leveraging this tactic.
Following these top two are making the "preferred P2P process the easiest way to spend" (31%), "compel using automation and workflow technology" (30%) and "compel with performance objectives and metrics" and "communicate benefits & business" case tying at 26%. From these findings, it would appear that technology use is just the ante for P2P success. Rigorous and consistent monitoring of usage and enforcement of policy as well as using tools that make approved buying simple and straightforward matter significantly more than simply compelling frontline users through the use of P2P toolsets.
Later this week, we'll continue our analysis of Zycus' comprehensive study. I'm sure that when it's made available to the public, readers will find themselves potentially overwhelmed by the magnitude of information (and in some cases, by the slightly unorthodox ways in which it's presented). But I believe that Zycus has done a huge public service to our sector by daring to be more audacious than even the analyst firms whose research is almost always far more constrained in scope. Not to mention the fact that Zycus releases such a study for public consumption vs. just for paying subscribers. My hat goes off to them (even if I needed a new cup of coffee in the middle of the report to make sure I was not missing anything). I'm sure that if Zycus continues with such an effort next year, that the presentation and display of quantitative information will become even clearer in the presentation of the results.
- Jason Busch