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Five Questions You Need To Ask About P2P Optimisation

procurement technologyPurchase to Pay
p2p optimsation.jpg

In this guest post, Procurement Leaders invites Doede van Haperen to apply his experience as a software consultant to scrutinise the Purchase-to-Pay (P2P) system. Following his previous post, van Haperen looks at the challenges of getting middle management on board with P2P optimisation.

There are so many factors to take into account when it comes to establishing P2P, but how to combine them into a proper project setup? Middle management in most companies consists of people that do not necessarily see the bigger business-finance picture, but yet they are the most important layer to buy-in on your P2P journey.

The widely used consulting adage, "think big, start small and scale fast" certainly applies in the land of P2P, no question, but when everyone involved wearily accepts that this is the most obvious way to bring about change, why is it then that still so often P2P implementations follow the course of ’thinking big, acting too fast and scaling down eventually’?

To answer that, and to get the heart of a successful implementation, we need to answer these questions:

What does "think big" mean in P2P?

Purchase to pay optimisation is, like any other business optimisation in modern times, a combination of changes in organisation, processes and technology. When you are drafting your plans, ambition should never be restrained; do not be afraid and do not hold back. Break all barriers in achieving a fantastic business case and change what needs to be changed on those three fields. Outsourcing of operations? New systems and tools? New balance of power between centralised and decentralised decision-making?

 

Having a vision is where the money starts to be earned, so go ahead.

What does "start small" mean in P2P?

It is all about change. From experience we can say that changing a P2P landscape does not stop with organisation, process and technology alone. Be sure to keep the informal organisation in check: human relations. The moment that there is impact in the way people deal with each other or with suppliers (think about the primary actors from “who gets mad” in my previous blog) resistance to change might lead to rebellion.

 

To keep things manageable, just follow this simple ground rule: in the starting phase of your project, never implement two Human Relation changes at once. When your ambition is to implement a new formalised and automated process with less local authority, while in the meantime, you’re aiming to offshore your operations desk, then do not attempt to wheel in the tools and strange colleagues in one go and try to get buy-in from a defensive position. Better to start with the smallest step for the human experience, build a success and grow from there while having the buy-in as a catalyst instead of fighting it as a brick wall.

What goes usually wrong?

It is very important to really understand here, that "starting small" is a change impact concept and has nothing to do with the organisational scope of your roll-out schedule. Start with one department at a time, and one that has a direct relation with the size of your project team and the skill of your project- and service managers.

What does "scale fast" mean in P2P?

From here on do not be afraid to follow a full-power business change program. When your first steps of buy-in are generated from the baby-steps while starting small, there is a foundation to start introducing the more bold changes to impact the informal organisation.

Your biggest challenge?

Keeping pace! P2P optimisation involves cross-company stakeholders which - and I know this is hardly a revelation - usually experience procurement and their P2P change as a burden that seems to endanger their own targets. The aim of this approach is getting the Dilberts of middle management on board without letting them execute their too narrow views and slow your project down. This requires you to be able to sell your vision, secure the buy-in to manage it and unlock the performance to get it to the finish.

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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