Emerging Trends in Source-to-Settle – Nick Bacon at eWorld

Another highlight at the recent eWorld event was Nick Bacon, partner at EVR, a specialist in eProcurement system selection and implementation, telling us how to implement P2P systems successfully. (EVR is a Basware partner, and the firm sponsored this session). He started his career as a procurement practitioner in firms such as SmithKline Beecham and Goldman Sachs, but for some years has been advising organisations on procurement change and capability development, often with a technology component to that.

His session was titled The Transformation of Procurement – Emerging Trends in Source to Settle, and he covered a huge amount of ground in his 30 minutes or so.

He immediately made the point that to make the business case for advancing form P2P to “S2S” (source to settle), you need to go both broader and deeper into the organisation’s spend. You must address the big spend areas – not just the long tail of smaller transactions. But, he said, you have to tailor your message to the audience. The COO will get very excited if procurement offers a 2% saving on factory costs; the Marketing Director is not interested in that outcome, it is the results of the spend that matter.

So understand that the stakeholders who control the big spend areas have very particular ways of spending money, and a system needs to be able to handle high / low strategic value and high / low commonality items (that was a nice four-box model)!

He then talked about the “journey to transformation”; systems can take the organisation from automation through optimisation to transformation. The three key steps he proposed are from savings to control to visibility.  Savings includes cost avoidance, aggregation and compliance. Control includes regulatory requirements, approvals, error reduction and auditing, and finally, visibility means having that view of spend, suppliers, contracts, assets etc.

Ultimately, he suggests that a transformed procurement organisation enables:

  • Transparent Spending
  • Intra-Enterprise Competition
  • Behavior Modification through Positive Reinforcement
  • Corporate Social Responsibility
  • Employee Crowd Sourcing of Savings Opportunities
  • Learning Environment

Bacon then moved on to more specific recommendations on an S2S implementation. Purchase order compliance does not happen on day one, so plan for that, be pragmatic, and don’t rely on having a PO. You can make a rapid shift to automated invoice management anyway. That can lead on to supply chain finance and dynamic discounting options too.

But importantly, outcomes are “determined by organisations’ capabilities”. Organisations should understand their capability in procurement and finance when they assess readiness for change and “plan the journey from automation to optimisation and excellence”.

To support that, Bacon and his colleagues have developed an online tool – complete some questions and it will give you a view on your readiness. You can create your own capability assessment – contact ViewPoint@EVResults.com  for more details!

His final slide was about the benefits that can be included in as business case; that itself could be a topic for a whole article or more. As we said, plenty of useful content, based on real-life experience.

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