Achieving
Competitive Impact in the Procure-to-Pay Arena
The continuous effort by organizations to create or maintain a
competitive advantage touches on a variety of business activities and looks at
both cost and revenue. The prevailing
trend of Digital Transformation, seen as a way by which to convert manual or
otherwise inefficient processes into advanced digital processes that remove
cost and improve efficiencies, also includes procure-to-pay (P2P) interactions
between organizations and their suppliers.
The challenge in selecting appropriate solutions to fulfil the need for
Digital Transformation in the P2P arena, is, as always, to determine which of
the myriad of solutions is best suited in terms of immediate and long-term
cost, ease of implementation, continuous maintenance and support, and of course
– value proposition.
The complex set of challenges and available solutions, coupled with
organizational constraints, such as the availability of time and money and the presence
of organizational politics and other such influential factors, cause
organizations to make tactical decisions rather than strategic ones and to
focus on discrete solutions instead of looking at improving overall business
outcomes.
For example, implementing robotic process automation (RPA) technologies
in an effort to automate repetitive manual processes and make better use of
personnel, could reduce associated long-term costs and remove errors, but would
more often than not cause a significant short-term disruption to the business
and ultimately operate on a limited scale.
P2P is far more than just a set of highly structured, highly repetitive
throughput of digitized data that can be easily automated – it is far more
dynamic and complex, requiring a greater level of intelligence and varied
decision-making capabilities.
To digitally transform P2P in a way that allows the organization to
extract optimal business value, it would need to adopt a strategic view that
accounts for both near and long-term, minimal business disruption and an
attractive margin of financial benefit (low cost of implementation, long-term
cost reduction, increased productivity, removal of errors and fraud, etc.). An ideal solution would be simple to
integrate, allow the organization to maintain existing resources and minimize
organizational change, yet offer cross-functional and multi-parameter value
through process automation that is intelligent enough to replace human thought.
Such a solution would make better use of personnel by allowing it to
focus on the exception that arise when interacting with suppliers, which brings
us to the final piece of the puzzle: any P2P process automation solution,
exceptional as it may be, will be useless if suppliers do not use it to the
tune of a spectacular adoption rate. For
that to happen, they too must gain practical value from it – minimal barriers
to implement, access to new business opportunities, better working capital
management, improved payment processes and more.
Ilan Friedman
