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Purchase-to-Pay System Implementation: The Good, the Bad and the Ugly

This sponsored Viewpoint article has been provided by Wax Digital
The content below does not express the views or opinions of Spend Matters.
Visit https://www.waxdigital.com/ to learn more.
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Rising costs and lack of control over purchasing activities are just two of the key reasons that drive many businesses to implement professional procurement for the first time. Of course, a purchase-to-pay (P2P) solution has clear benefits to any organization — we’re talking about controlled spending, reduced maverick spend and improved, automated processes. So, why not?

Yet we often only see the benefits and forget to evaluate the impact. For instance, your procurement team is going to benefit from the brand new, shiny system, but how about other departments? Is your AP team carried along the journey, and are people going to make full use of the system?

So, before you start jumping right onto the P2P bandwagon, have a look at this quick guide, which takes you through the good, the bad and the ugly of implementing a P2P system so you can understand what steps you need to put in place before and during the project to ensure success.

Step 1: Understand Your Situation

A good starting point would be to conduct a thorough analysis on your current situation. Where are you on the procurement lifecycle journey? Is your department new, invigorated or old, established? And how does your business portray your procurement function? This is all going to affect the change management process, as the more rooted your old practices, or the bigger the business, the more difficult it is to alter people’s behavior.

In this case, starting “small” with electronic invoicing before migrating to the full P2P suite maybe a better option. Alternatively, you can start outsourcing your procurement and let the experts consolidate your supplier base, leverage your supply chain, streamline your processes and improve your supplier relationships, before bringing your procurement activities back in-house.

No matter which path you choose, it’s always a good idea to outline your objectives and goals, then review it and see if your plan can answer all your problems.

Step 2: Change Management

It’s always a good idea to map out your “change journey” and present it to your stakeholders to get their buy-in before you start implementing your software to avoid any future policy issues. You should include the following in the plan:

  • Training plans
  • Adoption plans
  • Supplier communication plan

According to our experience, having a dedicated project manager, with a proven track record, of course, is going to make a huge difference to your success rate.

Step 3: Migrate Your Data

Data can be one of the biggest causes of delay during the later stage in your project lifecycle. Make sure you have your data, including your supplier data and catalogue data, all cleansed and ready before you commence your project, as this can really speed up the implementation process. This is also a fantastic opportunity to address the data issues that your organization has weathered.

Step 4: Supplier Engagement

Don’t expect all of your suppliers to change their way of working with you in one single day — it’s not happening. We believe that the less change for them, the better, and therefore a higher adoption rate. So, the best approach is to pick a platform that’s going to work best for them. Ease of use should always feature at the top of the list.

Start with segmenting your suppliers. By splitting suppliers based on criteria, such as level of trade with them and their importance to your organization, you can highlight which suppliers should be targeted to use the portal first. Once you have your more critical suppliers on board, you can turn to those suppliers whose trade isn’t quite as significant and so not as critical to the early success of your P2P system. There are a few things you can do to improve adoption rate:

  • Brand your web portal, along with content and tutorials to guide your suppliers
  • Create a set of templates that you can use to communicate and engage with your stakeholders
  • Create branded marketing packs to help promote system benefits
  • Provide technical documents

In summary, invest in education, guidance and also a dose of gentle, or occasionally firm, persuasion. It’s all about the hard yards.

Step 5: Educating Your Employees

The ultimate goal is to make sure everyone uses the system so that you can bring as much spend under management as possible. You’ll need a plan to go with the initial launch to help you make sure buyers use the system.

Try building a target list of departments and requisitioners who are responsible for the lion’s share of non-compliant buying. We’ve found that in many cases, Pareto’s Law applies: 80% of the hard-to-shift maverick spend will come from just 20% of buyers within the business, usually those using smaller niche services suppliers.

Once you’ve got your list, target the area heads, offer to meet, find out their barriers to adopting and offer to work with them to get their main suppliers into a tendering process. Or, just get them into a direct award and a priced contract.

As I said, change is not easy, so it’s important that your P2P vendor that’s just as interested in making sure your system is actually adopted by your employees and suppliers, as it is with selling you the features of its tech. We offer an Accelerate programme with our Purchase to Pay software to ensure a smooth and efficient supplier on-boarding process, and you can find out more about Accelerate in our web3 Purchase to Pay product guide.

About Wax Digital

Wax Digital is a global provider of cloud-based e-procurement software, delivering spend management solutions to large and mid-sized organisations in 102 countries worldwide, managing £23 billion of spend annually.

For more information, visit: www.waxdigital.com

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