This post is based on the following Spend Matters research paper: Procurement Systems Integration Within the Enterprise: Exploring Integration In The Cloud. Readers can download this paper (registration required) for free in the Spend Matters research library.
In one organization that Spend Matters interviewed recently, a primary objective of P2P integration was to drive more granular and accurate cost accounting and chargebacks to stores on a location-by-location basis while simultaneously enhancing visibility into overall spending and tying orders to delivery. This organization drove its primary P2P integration objectives to focus on three system types: financials, warehouse management system (WMS) and logistics.
By enabling real-time linkages across these platforms, the procurement and IT teams were able to enable ordering, tracking, visibility and goods receipts through a single interface. The integration data interchange is tied to P2P workflow that can split orders between different providers and internal inventory.
In splitting orders between suppliers, the workflow and physical movement of goods following an order is completely dependent on the type of goods. For example, office supplies are sent directly to a store from the office supply vendor, but janitorial and cleaning supply orders are routed to a specific vendor that maintains inventory at their warehouse. After an order, they palletize all of the SKUs desired by the individual store and send it on a truck to the store. In contrast, another party handles orders in the case of customer-branded SKUs (bags, gift wrap, etc.), and yet another party handles the fulfillment after the appropriate integration routing.
All of the heavy lifting happening in the back-end through the integrations is transparent to users. Moreover, this organization created a simple 15-page training manual that became the basis of the entire training program to get users up and running on the system regardless of the order routing, logistics and accounting reconciliation happening across internal and supplier systems on the back-end.
What is the key lesson learned? Advanced P2P integration use cases, be they simple or more complicated, must be business driven. Let your vendor and IT organization focus on making it work, not driving the ultimate business case or value.
Download the full analysis on cloud-based P2P integration here: Procurement Systems Integration Within the Enterprise: Exploring Integration In The Cloud.