Archives

Why Platforms Need to Monetize Their Supplier Ecosystem

Because P2P solutions started giving away supplier portals, cash flow optimizers, analytics, support, etc., they closed a revenue door. Trying to build a sustainable business model when half your ecosystem is not monetized is very challenging, even as P2P platforms add features and functionality. Sure, many platforms are trying to figure out payments, and that is something that scares the bejeebers out of them due to regulations and compliance rules. (Don’t pay that blacklisted vendor or person, or else.) But payments is not a profitable business for platforms, it’s a service.

Beyond A/P Alone: Summarizing the Core Benefits of Finance and Procurement Alignment

So far in this series examining finance and procurement alignment, we noted that the coordination between the two functions, especially within the accounts payable and transactional purchasing areas, can bring greater savings opportunities that can be achieved with each individual function pursuing its own initiatives. In particular, we observed that when procurement and accounts payable had aligned systems, processes and goals (ideally in that order) they achieved savings significant beyond what each function can deliver individually.

Change Management and Foundational Alignment for Finance and Procurement

Beyond process and systems integration, the real need is in aligned goals between procurement and finance. If procurement sees the key to success as getting as much spend as can be identified under management as soon as possible, it will prioritize the identification of savings options (strategic sourcing, inventory reduction, vendor managed inventory, etc.) and implementing new contracts as quickly as possible. Under this scenario, activities like invoice verification and supplier scorecard monitoring will not be a priority.