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Top P2P Trends in 2016

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The P2P landscape is changing. The significant developments in technology that have been widely adopted in B2C environments are now changing the game in B2B environments and shared services.

The way businesses buy, pay, manage data, and leverage increasingly agile technology is changing in P2P.

In 2016 P2P organizations are going beyond transactional cost and concentrate on supporting the overall enterprise objectives: digitalization of information, process automation but also internal customer centricity and a balanced efficiency/risk/control approach are key practices in this new era.

Hosted by: Sharedserviceslink, The Hackett Group, Tradeshift

Published in: Technology
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Top P2P Trends in 2016

  1. 1. Prepared for: Procurement Advisory March 2016 Six Top Trends in P2P in 2016
  2. 2. Presenting your speakers Susie West CEO sharedserviceslink Mélani Flores Practice Leader, Procurement Advisory EMEA The Hackett Group Vishal Patel Head of Solutions Marketing Tradeshift
  3. 3. Prepared for: Procurement Advisory March 2016 Six Top Trends in P2P in 2016
  4. 4. Procurement Advisory | 4© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. The Hackett Value Grid™ defines P2P Top Performers based on overall efficiency and effectiveness Hackett Purchase to Pay Value Grid™ Example Effectiveness Drivers  First Pass Match Rate  On Time Payment Rate  Level of Spend Visibility  Streamlined Transaction Strategy  Level of Centralisation  Training Investment  Compliance to Preferred Suppliers  Guided Buying Effectiveness  Supply Base Consolidation Example Efficiency Drivers  Cost per Transaction  Transactions per FTE  Span of Control  Order Cycle Time  Invoice Processing Cycle Time  Percent of Electronic Transactions  Level of Automation
  5. 5. Procurement Advisory | 5© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Purchase-to-pay Is An End-to-end Process And An Enabler To Effective Sourcing And Supplier Management Purchase To Pay End-to-End Of Peer Of Top Performers60% 44% Strong Alignment Is Key: Designated “P2P" owner accountable for "end-to-end" process Have a designated end-to-end P2P Owner (e.g. single accountability or “high- level” of coordination between Purchasing and Payables) Source: 2015 Hackett P2P Performance Study
  6. 6. Procurement Advisory | 6© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Are Faster At Placing Orders And At Processing Invoices Order Cycle Time Peer Top Performer Source: 2015 Hackett P2P Performance Study Invoice Cycle Time 5 hours 6 days 15 hours 11 days 72% 60% PO-Based Invoices
  7. 7. Procurement Advisory | 7© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. While Purchasing Costs Continue To Go Down, AP Costs For Top Performers Have Flattened As The Focus Has Moved To Effectiveness And Value Delivery Source: 2015 Hackett P2P Performance Study & Procurement Benchmark
  8. 8. Procurement Advisory | 8© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Changes On The Outside... Analytics Robotics Big data Mobility New Models Cloud New Competition Hyper Competition Extreme Volatility Disruptive Innovation
  9. 9. Procurement Advisory | 9© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. …Require Changes On The Inside Purchase To Pay So, How Do We Align And Support An Agile Enterprise Hyper Competition Extreme Volatility Disruptive Innovation
  10. 10. Procurement Advisory | 10© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Six Key Trends in Purchase To Pay • Enhancing process efficiency • Optimising processes • Driving visibility with analytics • Anticipating requisitioner needs • Creating dynamic scorecards • Rationalising supplier data • Establishing S2P channel strategies • Monitoring supplier contract compliance • Addressing internal policy non-compliance • Guiding and supporting requisitioners • Enabling self service • Streamlining policies • Defining payment strategy • Delivering value beyond cost reduction • Customising supplier onboarding • Identifying fraud
  11. 11. Procurement Advisory | 11© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.  Enhancing process efficiency  Optimising processes P2P Best Practice Tactics Process Automation Supporting Business Agility
  12. 12. Procurement Advisory | 12© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Leverage Electronic Transactions Far More Than Peers, With The Greatest Gap In E-invoice Receipt Source: 2015 Hackett P2P Performance Study
  13. 13. Procurement Advisory | 13© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Are Leading The Transition To More Advanced And Web-based Solutions For AP Connectivity
  14. 14. Procurement Advisory | 14© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Poll  How mature are you today:  We use 3rd party networks, EDI, portals today  We use mainly paper, fax, and email today but are looking to change this  We use mainly paper, fax, and email today and are not looking to change this
  15. 15. Procurement Advisory | 15© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. • Driving visibility with analytics • Predicting spending patterns • Anticipating requisitioner needs • Having dynamic scorecards • Rationalising supplier data • Identifying internal policy non- compliance P2P Best Practice Tactics Digitalisation of Information Taking Advantage Of Big Data
  16. 16. Procurement Advisory | 16© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Have Higher Levels Of Visibility To Spend At The Line Item Level, A Key Contributing Factor To Spend Management Effectiveness Source: 2015 Hackett P2P Performance Study
  17. 17. Procurement Advisory | 17© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Have The Benefit Of A More Concentrated Supply Base And A Cleaner Supplier Master File Source: 2015 Hackett P2P Performance Study
  18. 18. Procurement Advisory | 18© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. The P2P Process Should Enable Savings Capture The Savings You Negotiated Are Leaking From The Current Process
  19. 19. Procurement Advisory | 19© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. • Establishing S2P channel strategies • Monitoring supplier contract compliance • Streamlining information gathering • Addressing internal policy non- compliance • Customising supplier onboarding • Streamlining information gathering • Identifying fraud P2P Best Practice Tactics Balancing Risk And Control With Efficiency Protecting The Business from Risk Making Compliance Work
  20. 20. Procurement Advisory | 20© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Use A Blended Channel Strategy Based On Commodity Risk, Balancing Spend Control With Efficiency Source: 2015 Hackett P2P Performance Study Optimal Efficiency Optimal Efficiency Optimal Efficiency Optimal Control Optimal Control Optimal Efficiency Optimal Control Optimal Control Minimise Travel, Pcard, Debit/Pay Cards Evaluated Receipt Settlement (ERS) 2-Way Match Recurring Payment 2-Way Match Invoice Only Assumed Receipt 2-Way Match 3-Way Match Contract/ PO Contract/ PO Contract/ PO Contract/ PO Invoice Invoice Invoice Receipt Receipt Invoice Credit Card
  21. 21. Procurement Advisory | 21© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Are Leading The Transition To More Integrated Solutions For Fraud And Error Detection Source: 2015 Hackett P2P Performance Study Top Performers recover twice the value through AP recovery audits
  22. 22. Procurement Advisory | 22© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. The Supplier Onboarding Process Should Leverage A Custom Checklist Of Controls And Validation Points Source: 2015 Hackett P2P Performance Study Traditional Vendor Master File Focused primarily on ERP fields needed to place POs, pay invoices, and analyse spend Supplier Lifecycle Management • Customised data gathering based on category and supplier profiling • Organising and managing all key supplier information more efficiently and effectively Tying information into knowledge, intelligence, and analytics Supplier Lifecycle Management (SIM) solutions are helping to integrate onboarding validation with broader risk and supplier management goals
  23. 23. Procurement Advisory | 23© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. • Delivering value beyond cost reduction • Defining payment strategy P2P Best Practice Tactics Value Contribution Contributing To Cost And Cash Objectives
  24. 24. Procurement Advisory | 24© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. As P2P Organisations Mature And Deliver High Levels Of Performance, The Value They Deliver Evolve As Well
  25. 25. Procurement Advisory | 25© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Collaborate And Use Technology To Optimise Cash And Cost Savings Derived From Payment Strategy Initiatives Early Payment Discounts Taken as a Percent Of Available Days Payable Outstanding Source: 2015 Hackett P2P Performance Study At Top Performer 94% 70% At Peers Standard Terms Applied 7% Top Performer Peers 23 Days Top Quartile Bottom Quartile Difference Difference
  26. 26. Procurement Advisory | 26© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Poll  Which of the following are you doing:  We are using our own cash to fund dynamic discounting  We are using 3rd party cash to fund SCF  We are using one of the above and stretching terms too  We are not using one of the above but we are stretching terms  We are not doing any of the above today, but are planning to
  27. 27. Procurement Advisory | 27© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.  Guiding and supporting requisitioners  Streamlining policies  Enabling self service P2P Best Practice Tactics Internal Stakeholder Centricity Becoming Customer Centric
  28. 28. Procurement Advisory | 28© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Top Performers Guide Requestors To Preferred Sources Of Supply Using E-procurement Tools Indirect Requisitions Supported by Catalog Content vs Free Text Source: 2015 Hackett P2P Performance Study 54%38% Of Top Performer85% 61% Organisations managing compliance by monitoring the use of proper channels 83% 44% Of Peers Effectively drive requisitioners to the preferred & channel, supplier, price Of Top Performer Of Peers
  29. 29. Procurement Advisory | 29© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Tracking Invoice Inquiry Response Times Drives The Right Behaviors By Creating A Strong Stakeholder Focus Source: 2015 Hackett P2P Performance Study
  30. 30. Tradeshift Overview Vishal Patel Head of Solutions Marketing
  31. 31. 31 | Confidential Connect to all your suppliers Single, unified and trusted company profile Easily connect, collaborate and transact with 100% of suppliers No 1:1 siloed interactions - Information shared across the networ RISK PAY BUY APPS Network
  32. 32. 32 | Confidential All supplier processes & interactions in one place Ability for 3rd-party developers to build tightly integrated apps quickly and easily Seamless user experience for users across all supplier interactions Unified backend integration PAY BUY APPS Platform RISK
  33. 33. Procurement, payables, supplier management. Radically nimble and connected Supplier Management Business Apps AP Automation All your suppliers. All in one place eProcurement PAY BUY APPS Platform RISK
  34. 34. | Confidential Supplier Managed Information 34 RISKRISK Suppliers choose what data to keep private or make public Data goes through approval workflow, then flows directly into your ERP
  35. 35. 35 | Confidential BUY from your suppliers BUY Virtual store across all your suppliers and product categories. Search, browse, compare, and check-out with all the products & services available to you. Combine products, a service request, a free-text order or even an item from any online store.
  36. 36. 36 | Confidential Collaborate and PAY suppliers PAY Internal stakeholders, outsourced resources, suppliers, managers, and requisitioners can chat and collaborate together within Tradeshift during the entire buying process Communicating information and feedback that could easily be missed means you get the right order from the beginning – and lightning-quick processing times
  37. 37. 37 | Confidential Extend Capabilities with APPS Easily and quickly extend the value you get from Tradeshift as your business changes No more disconnected systems and lengthy integration projects PAY BUY APPS Platform RISK
  38. 38. | Confidential Software built for change, designed for people Connected. Collaborative. Agile. Data-driven.
  39. 39. Thank you! Vishal Patel Head of Solutions Marketing Email: vpa@tradeshift.com Twitter: VishalP_

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