Tag Archives: collaborative

How P2P will Become the Technology of the Future

Discover the value that a procure-to-pay (P2P) system can deliver to your business today and over the next five years.


The evolution of procure-to-pay (P2P) has accelerated dramatically over the past few years. And we can expect the pace to pick up further over the years to come. Originally, procure-to-pay / purchase-to-pay technology was seen as a way to connect procurement to finance via accounts payable, and as such it started life in the form of expensive and rather inflexible bolt-ons to on premise enterprise resource planning (ERP) systems. No wonder that for many years, P2P did not have the greatest of reputations, even among procurement professionals.

In the early 2000s, dedicated eProcurement systems emerged. Yet, many large enterprises still do all their purchasing and accounts payables through their ERP systems, even though this leaves much of the process highly dependent on paper in the handling of purchases orders, requisitions, goods receipts and invoicing. Or, in one word, routine. Many ERP implementations even lack a requisitioning facility and a means to communicate electronically with suppliers.

As to accounts payable, in many organisations that do not have a dedicated, built for purpose procure-to-pay solution, vendor invoices still arrive by mail or email and the data must be keyed manually into an ERP or other finance system. If the benefits of touchless invoicing were not already apparent, they have certainly become so in the wake of the Covid-19 pandemic.

The other major issue that continues to plague many organisations is our old friend, maverick spend (or off-contract buying), which is especially likely to occur when anyone looking to purchase items needed for everyday use is confronted with bureaucratic obstacles. Shopping online and submitting an expense report is much easier than submitting a requisition or purchase order that takes ages to process. Without a dedicated P2P system, maverick spend is difficult to monitor effectively. It results in lost money as employees buy at retail prices when you should be securing handsome bulk or wholesale discounts.

(Although worse than that, it forces happy-go-lucky procurement professionals into the role of jobsworths …)

And heaven knows, after years of online shopping with the likes of Amazon, corporate buyers expect the option to order online and enjoy an e-shopping experience comparable to the one they enjoy as private consumers. They expect an experience that is user-friendly, intuitive, and frictionless. Running low on stationery? Simply pick items from a catalog, review the shopping cart and place the order. And maybe pay with a V-card (single user account) number.

This can all be done via a procurement department’s P2P solution – against contracts negotiated with preferred suppliers. The P2P solution allows end-users to shop and track orders as easily as if they were shopping online, with the added benefit that all the information the procurement department needs is captured too, giving greater transparency. Plus, if the P2P solution is integrated with upstream processes such as contracts management and sourcing, the ability to monitor supplier performance against negotiated terms and non-price terms and conditions.

What you should look for in P2P now

A few years ago, people were still asking if procure-to-pay automation is worth it. I think that case has now been definitively answered. Especially if you wish to demonstrate the value of procurement – your value – to the business.

A P2P software suite integrates and automates the entire back-office lifecycle of requisitioning, purchasing, receiving, paying, and accounting for indirect goods and services. By creating standard workflows between buyers, procurement and accounting departments, a P2P solution should provide more transparency into, and control over, indirect spend and should create a more congenial relationship between all stakeholders. SaaS technology accessed in the cloud, such as the JAGGAER ONE suite, has made affordable, flexible and technically versatile solutions P2P available. A major advantage of SaaS is the ability to update functionality and innovate continuously without affecting the normal day-to-day operation of the core solution.

What you should look for in future 

Over the coming years P2P will increasingly leverage artificial intelligence, natural language processing and robotic procurement automation to deliver an even better buying experience on the one hand, while further cutting costs, increasing efficiency, reducing risk and improving governance and insight on the other. Generally speaking, you can expect P2P solutions to be more open, network-oriented, autonomous, collaborative and intelligent.

Here are seven trends that I think you can reasonably expect to reshape P2P not in some distant future but between now and 2025.

·   It will be a more collaborative environment for all stakeholders (internal and external) with full compliance, validations and approvals. P2P and MRP systems will collaborate through direct material order and fulfilment; P2P and corporate treasury will collaborate to support cash flow planning and optimize working capital

·   It will be more autonomous by taking charge of routine tasks such as all forms payment management and processing, improving the productivity of the payment process and the financial health of the supply chain

·   It will empower open business networks bringing together the entire community of buyers and suppliers, integrating and accessing external services and market intelligence feeds

·   It will be interactive with smart assistants assisting you through guided buying, vendor management and other chores

·   Enhanced intelligence will enable P2P systems to act proactively on behalf of users learning from and using all data sources and knowledge to make improvement recommendations to all stakeholder activities and the P2P process

·   It will deliver win-win finance programs to buyers and suppliers, for example dynamic discounting and supply chain finance programs

·   The focus of P2P will shift further from savings to value, reinforcing procurement’s profile as a strategic partner to the business

Conversational systems for guided buying and vendor management

Let’s stop calling them chatbots! Digital or smart help organizations will increase efficiency and achieve high levels of P2P user adoption because of their easy interfaces and clear answers. AI combined with natural language processing (NLP) has opened the door to new, more natural, and more intuitive interfaces that stimulate conversation with humans. There are many uses for digital assistants in procurement – too many to list here. However, the central issue is that procurement specialists are increasingly dealing with vast quantities of data, which means that a lot of their time is spent looking for information rather than using it. They will enable procurement specialists to converse with their AI-powered procurement software, which will do the heavy lifting involved in finding the relevant information and making intelligent suggestions as to what actions need to be taken in specific situations.

Through machine learning the digital assistant will be able learn about your preferences and your organisation’s policies and procedures. A good example is guided buying, whereby a person who needs to buy something will interact with procurement via a conversation conducted by a digital assistant. Based on the procurement strategy (preferred suppliers, preferred items, contracts in place, history of purchases, etc.), the digital assistant will propose solutions, perhaps looking through huge volumes of catalog entries to identify specific products or suggest alternatives.

Digital assistants can also be deployed for handling queries from suppliers, avoiding a lot of back-and-forth correspondences. I think they will become more engaging and human-like in their interactions with you. That, after all, was the original promise of artificial intelligence. But nobody’s perfect, so if the digital assistant cannot find the right answer, it can of course direct the user to a genuine flesh and blood procurement professional (you, for instance).

What innovations would you like to see, or expect to see, in procure-to-pay over the next five years? Let us know in the comments below! Keep up with the latest innovations at the 2020 Global Big Ideas Summit.

9 Ideas To Reduce Costs Using Supplier Relationship Management

At a time when costs need reduction but healthy Supplier Relationships are paramount, here are 9 ways to reduce costs using Supplier Relationship Management.


There isn’t a procurement pro on the planet right now who isn’t looking at ways to reduce costs.  But this comes at the end of a year where we’ve all been sorely reminded that strong supplier relationships are paramount … especially during a crisis.

Common practice is to look at procurement categories with large amounts of spend and start searching for ways to reduce that spend. One of the more routine approaches is to run an RFP, inviting incumbent suppliers along with potential new partners to help drive competition for your business, with the end-goal to ultimately reduce cost.

But what if your cost base has already bottomed out? What if you are buying a good or service that is difficult to come by, thereby putting the power in the suppliers’ hands? How are you able to reduce your spend in a category where all the signs are pointing to a cost increase?

In order to answer these questions, we must start at the beginning by looking at Supplier Relationship Management.

What is Supplier Relationship Management (SRM)?

Supplier relationship management is the discipline of strategically planning for, and managing, all interactions with third party organisations that supply goods and/or services to an organisation in order to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers to uncover and realise new value and reduce the risk of failure.

Getting back to the initial goal of cost savings, the question becomes ‘when cost savings is a critical driver in supplier selection, how do you balance the collaborative relationship with low cost?’

The key is internal alignment between procurement and the business units. Supply Chain leaders must be able to explain why vendors who may not be the low-cost option for reasons like customer service, on-time deliveries, payment terms, reporting, etc. are actually the best overall value option for the business.

Category leaders must be able to explain how new suppliers versus incumbent suppliers will impact the company. There are too many cases where the grass appears to be greener on the other side. Sometimes, by selecting a low cost, new supplier, operational differences get lost in the shuffle and the transition becomes a disaster.

Why is Supplier Management Important?

In plain simple terms, it creates a competitive advantage. Whether you are the procurement or the supply chain leader for your organization, having a strong supplier management system will maximise cost-reduction opportunities, value driven services and overall systematic efficiencies, which otherwise would not be achieved. 

Supplier Relationships

As stated previously, a critical component to any company’s success is their ability to maintain strong working relationships with their suppliers and vendors. Supplier relationship managers should always look to avoid complacency. You should never be satisfied with the idea of “if it’s not broke, don’t fix it” and be always be looking for opportunities to improve the relationship, streamline processes or procedures, or change costing models. Relationship Managers should always be looking to challenge the status quo.

Another key to strong supplier relationships is to open the lines of communication and not be afraid to ask the question, “what we can be doing better?” Here are some quick ideas how you, as a customer to your key suppliers, can help enhance your relationship and make those suppliers want to compete for your business.

·   Trust and Loyalty (treat them as more than just vendors)

·   Improve technology and automation

·   Adhere to payment terms

·   Develop communication plans

·   Differentiate between price versus value

·   Have a dedicated Supplier Relationship Manager (SRM)

·   Internal alignment between Procurement and Supply Chain Category leaders

Putting Supplier Relationship Management to Practice

Now let’s look at a specific category – supply chain and logistics – and see how we can apply some of this thinking.

How to Become a ‘Shipper of Choice’ within your Supply Chain and Logistics Network

Logistics spend often plays a role in a company’s effort to reduce costs. Logistics spend can be a substantial percentage of accounts payable, at both the direct and indirect categories. When looking to reduce spend in shipping, taking the low-cost approach can potentially cause more headaches than the savings are worth.

What are some key goals of the shipper?

·   Avoid Disruption

·   On-Time Delivery

·   Low Cost

·   Damage Free

What are some key goals of a carrier?

·   Finding the right shipper

A carrier has a valuable commodity and finding the best shipper to partner with to utilize that commodity is very important for maintaining a good operating ratio. There is a finite amount of space within the global logistics network. What would make a carrier want to move your products versus someone else? Prior to any cost negotiations, a shipper should be looking for ways to make their freight something a carrier wants in their network. They will fight for your business because they value you as a partner, and vice versa.

What can a shipper do to ensure carriers will want their freight?

·   Effectively label freight

·   Safely and adequately package freight

·   Provide accurate descriptions of the freight

·   Use standardized dimensions when possible

·   Use quality pallets

·   Provide ample lead-time when possible

·   Be flexible on your end while remaining consistent in your process

·   Provide a clean, safe and overall attractive driver facility

Achieve Supply Chain Savings: Cost Reduction Negotiations

Once the proper groundwork has been laid and a solid foundation is in place, the relationship developed between a procurement and supply chain organization and its suppliers is now, finally, ready to discuss cost optimisation. By going through the Supplier Relationship Management process, you are now well equipped to conduct cost negotiations. Here’s 9 talking points to reduce costs and build the relationship with your suppliers:

·   Contract length

·   Reduced future cost increases with caps

·   Better discounts or incentive tiers

·   Rebates

·   Volume Thresholds

·   Delivery Costs

·   Payment Terms

·   Ancillary Charges

·   Everything Else (Better reporting, more transparency, communication plan)

One of the keys to entering these negotiations is to come to the table prepared to discuss these types of cost savings opportunities. If your main goal is to just hammer down the unit price, then there is a good chance your supplier will not be overly receptive to that approach. Listen, collaborate, compromise and develop a partnership that will ultimately be a win-win for all those involved.

In conclusion

Top suppliers are always looking to do business with companies who value the partnership and are willing to make improvements in order to make the relationship smooth and efficient.

This type of partnership will lead to your suppliers offering the best possible discounts and pricing and give you the peace of mind that you are getting the most out of your supplier.

Supplier Relationship Management is key to developing a long-term PARTNERSHIP with your key vendors!

What key insights and strategies have you taken from 2020? Share your experiences and hear from the most innovative thinkers on the planet at the Global Big Ideas Summit on November 18.