A Simplified P2P Maturity Model: Stage Zero — You Have to Start Somewhere (Technology/Systems)

Click here for the first post in this series. And if you're looking for a broader primer on purchase-to-pay systems, tips and organizational maturity models, you can download our recent Compass research brief on the subject, A Foundational Look at P2P Technologies, for free today.

Even before you get on the capability/maturity map for purchase-to-pay systems and processes, you have to start somewhere. And for a surprising number of companies (still today) that somewhere is what we call "Stage Zero." Stage Zero is nothing to be ashamed of. Nor does it imply that an organization has done nothing around processes and systems.

In fact, many Stage Zero companies are likely be able to show a list of investments they've already made in P2P technology throughout their companies. But upon further questioning about the usage and adoption of these systems, the famous Wendy's "Where's the Beef?" will quickly surface. Many of these companies have already overspent on the P2P systems bun with little or nothing to show for it in between.

From a systems perspective, companies at Stage Zero maturity:

  • Are likely to have spent as much or more on specific technologies compared with average users while realizing an ROI to date significantly less than what was originally forecast in the business plan justifying the original investment (e.g., in an earlier version of SAP SRM, Ariba Buyer or Oracle eBusiness Suite)
  • May or may not have an organized eProcurement deployment. If such a deployment exists, it is likely limited to automating and enabling buying processes and approvals for only a handful of categories or suppliers
  • Have deployed e-invoicing only when forced by local regulatory and tax compliance requirements to do so (and have pursued such an implementation by putting the payment, reporting and regulatory needs of AP first without integrating a broader procurement or P2P/finance led effort)
  • At best, have silos of vendor management system (VMS) adoption for contingent procurement which are separate from -- with no integration linkages to -- other procurement, credentialing, asset management and related systems
  • Have not begun to link transactional buying systems with category management or buying/negotiation processes (e.g., strategic sourcing) and tools (including spend analysis, auditing, e-sourcing, etc.)
  • Have not begun to implement the surrounding technologies they will need to successfully deploy and manage P2P programs on a consistent and sustainable basis (e.g., supplier management/onboarding tools, catalog management/search capability, supplier network/connectivity, etc.)
  • Do not actively benchmark their P2P systems performance and related metrics with other peer companies or groups

A great litmus test -- I know it's unrelated to P2P, but there certainly appears to be a strong tie-in -- for Stage Zero companies is that when asked what they're with procurement technology, they respond by noting their use and success with reverse auctions. I can't tell you how many times I've heard this one over the years only to dig further and realize that such organizations often have a very long way to go to even reach technology adoption parity across the P2P spectrum with their peers.

Stay tuned for the next post in this series as we explore the technology and systems characteristics of companies at the Level One stage of maturity for P2P as they begin to move up the maturity curve.

- Jason Busch

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