Spend Matters welcomes a guest post from Shannon Lowe and Mark Schaffner of Verian.
So it's time to consider purchasing and AP automation software as a way to enhance visibility into near term financial commitments and help drive savings. There are of course case studies where purchase-to-pay (P2P) automation really turned things around for companies struggling with maverick spending and long AP cycle times. But there are also horror stories about companies that attempted to implement P2P software initiatives and things didn't go so well. Perhaps you've listened to your peers complain about rollouts that took forever, and clunky systems that still don't work right or truly meet their needs. While it's true that P2P automation can produce multiple organizational efficiencies resulting in substantial year-over-year savings, selecting the right software vendor and the right technology doesn't come without its fair share of risks.
The good news is that these risks can be reduced. In Part 1 of this series, we'll identify the major sources of risk so you can see them coming. Then in Part 2, we'll provide some proven strategies to help you reduce these risks during your evaluation process.
The three major sources of risk most organizations face when selecting P2P software are supplier risk, software risk, and project risk:
Supplier risk results from a poor cultural match. How can you be sure the supplier will support you in the future? Are they just interested in their own business success? There's a joke that goes, "How do you make a software salesperson go away? Buy something!" But it's really no laughing matter. Companies need to have confidence that their vendor of choice is plugged in to a long-term vision for improving purchasing and invoice processing, and feel good about their level of continuing support.
Software risk results from a poor product fit. Does a chosen supplier offer a broad product footprint or are they a one-trick pony? Can they handle potential expansion? Do they offer multiple modules, with the choice of adding others over time? Also, consider the reverse. Do you have to buy a lot of things you don't need to get what you really want? Can the system be deployed to individual hosting preferences? Is there an intuitive user interface that will speed user adoption? Is data easily available for reporting and analysis?
Project risk results from poor project management. This is where implementations can really break down. Does your supplier have a defined and proven implementation methodology? Are they subject matter experts, experienced in providing guidance for setting up your system based on best practices? Are they responsive to unique procurement and invoice processing needs? It's critical to be sure they've been down this road before, because once a given system is in their hands, it may be too late.
We'll explore ways to reduce or avoid these risks in Part 2 of this series. Stay tuned.