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Cloudy Issues: Misconceptions About P2P Solutions .

procurement technologyPurchase to Pay

In this guest post, Procurement Leaders invites Doede van Haperen to apply his experience as a software consultant to scrutinise the P2P system and ask whether cloud-based platforms are delivering on the hype. 

 

Are the big software firms following a trend by investing heavily in cloud, and are they creating a illusory environment for purchasers by investing this way? SRM tooling, specifically solutions for sourcing and purchase-to-pay, seems to be a front-running field of application that is suitable for cloud, considering the vast amount of suppliers which is active at different global and local levels. But, looking at P2P, the danger is that everyone is blinding themselves to the reality of the 'new promise' that we were told would come from cloud software.

 

Let us zoom into this 'promise': Is it the case that cloud brings you less maintenance, best of breed that fits yòur need, lower level lock-in, higher supplier enablement, etc.? In the end it all comes down to vision and approach; a complex P2P scope in an international environment requires a complex P2P tool, cloud or not. Still, there is no magic potion that will absolve organisations of the need for a mature, nuanced approach. Moving to a niche SaaS-tool here because the catalogue is flashy will indeed simplify your life, but mainly because it will encourage you to waive 90% of your ambition and not because of cloud advantages per se. Instead, we need to look more closely at what the added vaue of the cloud really is. 

What's new is old

Maybe the fight of on-demand versus on-premise has opened up new potential that earns more attention than it gets through marketing so far. Let's look at a similar cycle of hype: Why was there a blog post on this same website not too long ago about electric vehicles not boosting sales enough? Simple, because there are hybrid cars (plug-in's, full-hybrids, range-extended-ev's), which are, I believe, the more logical choice to make. They represent ‘the new', but still adhere to what we know.

With an infrastructure that is mature, costs that can be better estimated and they are less vulnerable to the problems around the standardisation of connectivity. With P2P tooling, some of the same rules apply. Yes for sure, we feel that the lifecycle for classical on-premise tooling and individual supplier connectivity is on a declining curve, but we should be more open to stretch investments by adding on-demand components instead of just switching to cloud completely and without careful scrutiny.

 

To support this, let us have a look at the top three cloud-P2P lessons learned so far:

  • Standardised integration: Over 90% of projects run into (significantly) higher costs than expected.
  • Functionality: There is often too little leveraging of cloud value-add. Full-function tools often mimic ERP-driven predecessors, getting too complex in the process, whereas niche tools with nice gimmicks are too thin to compete on an organisation-wide fit.
  • Requirements: Health checks on 'what do we have' as well as envisioning 'what do we need' from any P2P tool are executed way too little, undermining the value of cloud P2P.

Most of these takeaways seem to be maturity-issues which will grow over time. For now it just requires creativity in mixing and matching to make sure you will get the most out of your P2P project. Where to find that creativity? Well, mostly from within! Procurement teams need to pick their fights carefully and don't get caught up in the excitement and go in too deep without careful thought. Think about cars again; hybrids will create demand for a proper set of standardisation over time, so full application of the new thing is matured in about ten years' time. P2P-hybrids may take a similar route.

 

Doede van Haperen has been involved in P2P solutioning for more than 14 years. He runs the business consulting firm LAKRAN Procurement Professionals and software consulting firm AGAIN by LAKRAN.

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