The document summarizes a debate on whether procure-to-pay (P2P) systems are critical for delivering value. While P2P systems can provide benefits like cost savings, improved spend tracking and process automation, they also face challenges in implementation. Some argue P2P costs often outweigh benefits and that cultural challenges are underestimated. Effective change management and a robust benefits case are needed. Before a full P2P rollout, alternatives like improved governance and purchase order policies should be considered. The debate attendees ultimately voted against P2P systems being critical for value delivery.

1. 4C P2P Breakfast Debate
April 2012
Procure to Pay Systems - Critical for CPOs to Deliver Value?
With businesses constantly on the lookout for tracking of goods. Moreover, for Finance, there are
innovative ways to cut costs, procure to pay, or P2P, substantial headcount benefits associated with
systems are often touted as possible cost saving automating the processing of invoices.
solutions. There are, however, those who believe
their implementation is a waste of money. We Many P2P projects fail due to ineffective
brought together a wide selection of professionals implementation. 4C have identified four pillars of
from various industries to debate this issue. successfully introducing a P2P system. Firstly the
solution has to be user friendly and easier than
Industry expert, Mike Crowley, argued that the cost of picking up the phone. The system must be built
most P2P solutions did not outweigh the benefits, around quality content, delivered by Procurement.
whereas Phil Joss, Senior Manager at 4C Associates, There must also be a policy in place to provide support
debated that P2P systems are critical for delivering for users and finally there is no "one size fits all"
value. The session took place at The Paramount, approach. Not every requisition should go through
Centre Point, London. Procurement and a range of controlled channels, e.g.
purchase cards should be available.
The Case For P2P System Implementation
The benefits of a full P2P system are vast. Efficiently Before an implementation strategy is laid out, the case
implemented P2P systems deliver a wide range of for change needs to be made internally. A robust
cashable and non-cashable benefits and should form Benefits Management method must be employed to
an integral part of any successful business. Amongst ensure benefits are quantified and made cashable
these, and the most useful for procurement, is access where possible. This entails understanding the current
to accurate and up-to-date spend data. This ensures operation, baselining key metrics, such as Requisition
greater control of company spending by enabling the and PO cycle time, and forecasting improvements.
enforcement of contract compliance.
The cultural challenges associated with implementing
Additional benefits for users of P2P systems, include any IT system are often underestimated. A well
user searchable e-catalogues and enabling the planned benefits case will allow finance teams to
Release cash Reduce cost Manage risk Improve ROI
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2. proactively reduce budgets to Q&A
ensure budget holders are The floor questioned Joss's description of a P2P system.
incentivised to deliver against Many felt that what was described did not reflect what
clear targets. was available on the market. Joss responded that
although current systems are not as user friendly as
“It is difficult to argue they could be, providers are looking to produce more
against P2P systems, once functional interfaces. Oracle was mentioned as one
company working in the domain and looking to
implemented they offer Amazon for inspiration.
many benefits.”
When asked where he had gone wrong when
Organisations must guard against complacency when implementing a P2P system in the past, Crowley
introducing P2P systems; the cultural change and explained that the cultural aspects of the corporation
impact across the business should never be and the scale of the change required should have been
underestimated. The deployment of a robust Benefits given greater consideration. As it turned out, in the
Management method should be part of the overall case described, manual governance was actually easier
change management strategy. to implement and procurement instigated a process
which required board approval for certain levels of
The case against P2P Implementation spending. Crowley found the best practice was to first
On paper, procure to pay makes sense and can deliver get the governance in order and then implement P2P
a range of benefits. A properly implemented system as a natural extension.
reduces cost, drives compliance and generates
engagement, however, in reality implementation is
problematic and expensive. A full P2P
implementation rarely delivers benefits in excess of its
high costs. Procurement will often find itself in a
situation where logic gives way to corporate culture
and much time and energy will be used trying to win
over the organisation.
Numerous elements need to be taken into
consideration before deciding to force a system on an
organisation. These include inflexible company
culture, the difficulties of linking P2P and finance, and
general indifference.
Results
Interestingly, in a room of mainly procurement
"A great Procurement team won't need a professionals, the majority of attendees voted against
P2P system and you wouldn’t want a "P2P Systems, Critical to Deliver Value?".
mediocre team trying to implement it."
4C Associates has the insight, technology and
Before deciding to implement a full P2P system,
businesses should consider less disruptive strategies. experience to drive rapid profit improvement.
Procurement should look at ensuring financial We offer specialist consulting, technology and
support, securing governance over the commitment or managed services to transform your costs. We
ordering processes, enforcing the need for apply industry and functional expertise to deliver
procurement references for payment requests and exceptional benefits.
making purchase orders mandatory, before even
considering implementing a blanket change. Our team works with leading organisations across a
range of cost categories including Direct Materials,
"P2P can add value but the difficulty lies in Services, Marketing, IT, HR, Logistics, Supply
bringing the company culture round to Chain, Property and FM. We apply deep practical
seeing it." knowledge, combined with process and change
skills, to deliver reduced costs and increased profits.
P2P is not an answer in itself and implementing a full-
scale process in one move will often prove more To discuss how we can transform your costs please
problematic than beneficial. The best way to increase contact us at:
efficiency is to work through the identifiable issues
before attempting a general restructure. Logically P2P Tel: 0207 605 1600
should work, however, organisations are rarely built Web: www.4cassociates.com
on logic and each has a unique way of working. Email: Petra.urhofer@4cassociates.com
Release cash Reduce cost Manage risk Improve ROI
T: +44 (0)20 7605 1600 E: info@4cassociates.com W: www.4cassociates.com