Optimising financial processes

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Procure to Pay – The Big Six Current Challenges

Are our Source to Pay (S2P), Purchase to Pay (P2P) processes fit for purpose? 

Are our transformation strategies working? 

What are the prevailing challenges and opportunities?

I recorded a livestream discussion on these theme from recent experience on Wednesday this week. 

There are seismic shifts in spending / buying patterns as the secondary waves of the past years pandemic experience buffet businesses and consumers around the globe.

We all know the BIG SIX strategic aspirations for Source / Purchase to Pay;

  • Control spend and eliminate the “maverick” element
  • “Make Buying Simple” and reduce cycle time
  • Optimize the cost/value contribution of goods and services
  • Simplify to reduce effort and cost of process operation
  • Optimize working capital
  • Manage risk (supply, vendor, financial, fraud, corruption, environmental, reputation . . )

Digitization has a critical role in these aspirations.

But the devil in in the detail!

The operational issues that challenge these aspirations are on the increase and generate their own crisis responses, which divert effort and cash from strategic intent.

These are just some of the topics testing the mental and physical agility of your own teams today;

  • Pay on Time challenges and Vendor Credit Holds
  • No PO / No Pay Policy & Exceptions
  • Price variances
  • Invoice backlog
  • Query management
  • Goods receipting
  • KPIs and SLAs
  • Supplier reconciliation
  • P2P suites & e-invoicing – delivering on the business case
  • Vendor Master Data
  • Digitization expectations vs reality
  • Behavioral impact on process performance
  • Driving continuous improvement
  • Data, Reporting & Analytics
  • Global Process Ownership & Service Delivery models

Maybe we need to take a step back from the symptoms.

“Think Different” as Steve Jobs used to say.

Here are a few of the big unhelpful trends that we are seeing. Take the opportunity to nip these in the bud. You will be the better off for it.

  • The digital “TAIL” wagging the process “DOG” . . . We have all been there. You know it. “Automation makes BAD WORSE, FASTER”
  • Lack of understanding of the global process and the various journeys that are needed to fulfill it – “WHAT” we do. Not “HOW””. It is easy to confuse them
  • Failure to explore, understand and agree the “WHY” of process or digital change. Sounds obvious, doesn’t it? The WHY tells us everything we need to know about “What Good Looks Like” and the real performance measures we should care about.
  • Confused performance management, KPIs and metrics. Lagging indicators show how well, or badly, we are doing, but do little to help us improve. Leading indicators, the key measures of “Defectivity”, drive process change, transformation and continuous improvement.
  • Unrealistic expectations of DATA. We are constantly told that we have the technology and the AI that can solve the data problem and make valuable, visual business process insights available to stakeholders in seconds. This is misleading at best. Understanding the role of data, the questions we need to ask, the habits required, the insights necessary and the actions to take is a business problem. And it is a hard nut to crack.

There are no QUICK FIXES or EASY HACKS, just the perseverance to sustain the hundred small steps that must go right.

We had some great questions in the recorded LinkedIn session below. You can sample and consider these thoughts and more in this video or add it to your weekend Netflix stream here..

Thanks for reading . . .