A Simplified P2P Maturity Model: Stage One — Now You’re Getting Somewhere! (Technology/Systems)
Click here and here for the first and second posts in this series. And if you’re looking for a broader primer on purchase-to-pay systems, tips and organizational maturity models, you can download our recent Compass research brief on the subject, A Foundational Look at P2P Technologies, for free today.
In the last post in this series, we considered what Stage Zero maturity looks like for organizations sizing up how effective their P2P environment is. Drawing on a political analogy, we might describe Stage Zero as the equivalent of what Herman Cain’s campaign organization looked like when running for the Republican Presidential nomination. While well intentioned, the execution was, well, we’ll point to the fact he’s no longer in the race and you’ve probably already forgotten his 9-9-9 plan already — a great lesson in and of itself for catchy P2P adoption ideas that lack the next level of fleshed out detail (not to mention on-the-record executive support)!
Now, moving onto how we defines Stage One P2P maturity (on a three-stage model), we begin to see a number of technology analysis, deployment, integration, usage and elements begin to come together. It’s important to remember that even getting to Stage One P2P maturity is not something that a good number of companies that implement and adopt procurement technology have achieved. In fact, Stage Zero companies should take note of all the different elements that Stage One maturity companies tend to exhibit in technology and systems.
- Supplier on-boarding and enablement programs that tend to favor “low-hanging” vendor fruit, focusing on the 80/20 rule rather than broader enablement (especially for e-invoicing). Many of these organizations have had material “fall-out” from suppliers initially going through an on-boarding with those who are actually electronically wired-in for P2P activity and connectivity, but at least have realized some initial success with enabling some suppliers
- A typical mix of hosted and installed applications that deliver different P2P functional elements (e.g., basic eProcurement/transactional buying, catalog management, e-invoicing, supplier connectivity) but often with limited, point-based integration efforts that are detached from a broader IT strategy and architecture. IT may, in fact, only be superficially aware of some of the P2P investments that procurement and AP have made at this stage of maturity
- Roll-outs that are generally limited across the broader organization (or in process) with often a focus on specific categories of suppliers, geographies, business units/divisions, etc.
- Taking a targeted category-based approach to bringing spend under management (e.g., office supplies, IT hardware) with limited technology and process integration beyond basic sourcing and transactional enablement (e.g., limited or no capabilities to focus on demand management, broader supplier compliance)
- A focus on the basics of simple P2P use cases, but not on the deeper plumbing involved in areas such as broad-based supplier enablement, supplier self-service for catalog and content management, e-invoicing (matching, connectivity, workflow, etc.)
- E-invoicing as an extension of eProcurement rather than as a stand-alone initiative with often limited coordination of A/P and procurement technology and systems orchestration efforts
- When it comes to services procurement, these organizations have often targeted low-hanging categories and areas, usually as one-off efforts with hosted applications* that have limited integration into third-party tools and systems (e.g., P2P, e-sourcing, asset management, badging/credentialing, supplier management, risk management). Oftentimes, these investments are focused primarily on contingent-based spend and driven by MSP relationships
Stay tuned as we investigate what Stage Two maturity within P2P systems can look like as companies begin to move up the maturity curve. Spoiler alert: it’s this stage where the step changes really begin to occur in earnest.
* more advanced companies at Stage Two and Stage Three maturity almost entirely use SaaS/hosted applications in the services procurement area as a rule as well.