The thought hit me the other day during a presentation to a bunch of consultants, many of whom were much more expert than me in the nuances of specific Ariba, SAP and Oracle procurement systems: what ever happened to the second “P” in P2P? We often prioritize eProcurement and e-invoicing investments and generally think of these two distinct product and modular areas as the individual halves of the P2P whole. Yet the second “P” in P2P stands for payment – not invoicing.
I was further reminded of this when reading a column by IBM consultant, Sohaib Masood, in EBN: Transferring Sourcing & Payment to the Cloud. In his analysis, Masood observes that “the potential benefit of the cloud moves beyond sourcing … In the payment world, checks continue to have a significant volume in the overall corporate payments in the US. These check-based payments present problems, not just for the buyers, but also for the sellers. For sellers, of course, check-based payments are time consuming and expensive. For sellers, the inability to track payments and know when payments will arrive is a trial. When payment arrives, reconciling payments against shipments can be confusing.”
You’re preaching to the procurement, A/P and treasury choir, Sohaib. Checks are bad for so many reasons, and we don’t need to outline them here. But even with ACH and wire payments, we don’t necessarily capture (or tie) specific payment information to underlying transaction inputs. This is in part the saving grace of p-cards, given the level of detail that’s available on vendor payment tied to specific line-items.
The future of payment is in the cloud – but it must be tied to eProcurement, e-invoicing, T&E and related transactional procurement areas. Indeed, if the future of supply chain lies in a globalized, networked world, then most likely, the future belongs to those providers that can integrate all aspects of payment with broader buying, selling and connectivity rather than just focusing on transactions that lead up to dollars (or Euros or RMB) exchanging hands.