The final and perhaps most important step in any source-to-pay process automation exercise doesn’t focus on the business case and the implementation of new source and procure-to-pay processes. Why? Well, if you’ve followed the previous steps correctly, the implementation of any new processes or technology should be based on a deliverable roadmap that can be effectively implemented and monitored on an ongoing basis.
The most important step in any source-to-pay transformation happens once the implementation of the project is completed. Unfortunately, this is also the stage where we see most projects fail because most people treat the transformation as a project with a defined start and end date.
We’ve all seen over-hyped transformation projects fail to deliver on their initial promise as quickly as everyone expected and subsequently struggle to get the wider buy-in and cross business support they require. Many professionals also struggle to measure the ROI on their investment.
That is a real shame because procure-to-pay transformations are one of the few projects a business can undertake that is completely measurable on an ongoing basis.
All too often the focus of a digital transformation project is on the technology itself, and once it’s been implemented, everyone goes back to what they were doing before. Technology is only ever an enabler rather than a complete solution, unless you drive adoption and make people’s lives easier, no one is going to use your chosen technology.
Remember to ask yourself the following key questions once your new system is in place and any after care from the solution vendor has run out:
· Is the process working as you expected it to? Are you getting the process improvement costs you identified in the business case?
· Are suppliers being consistently reviewed to ensure they are effectively onboarded into your processes to drive the greatest level of automation
· Are you on track to deliver the procurement related benefits from the business case?
· Is the business case holding up? What areas are under and over performing?
So, what should you be doing differently?
Given the effort, detail and accuracy that has gone into your business case, it should now be used as a tool to track the progress of your transformation. Shift your focus from considering the project completed when the system goes live and treat it as a key milestone in your transformation. The next milestones should be at set intervals after going live to track progress against your expected benefits in your business case.
Establish a working group of key stakeholders to review progress against your business case and agree any actions required to ensure you remain on track to deliver on your benefits.
Selecting the right solution in the first place
With a range of different technology solutions, it can be hard for businesses to know which source-to-pay solution is going to be right for their business. Understanding exactly what you want to achieve and taking the steps outlined in this series of articles will help you to select the solution that works for you.
Here is a quick recap of the steps you need to take before making any purchasing decision:
1. Understand current processes
You need to understand how your current processes are working and what requirements your stakeholders have. Conduct an in-depth analysis of current business requirements through key stakeholder interviews and current process reviews. This delivers valuable insights and resources such as:
- Key insights into current procure-to-pay processes
- Identification of key pain points
- Identification of key levers to drive user adoption
- Identification of key areas and drivers for financial return on investment
- Identification of quick wins and longer-term development areas
- Current state technology landscape map across source-to-pay processes
2. Map out future processes
Utilising the insights and resources from the current process review, you can then start pulling together a clear and articulated vision of what the future processes will look like to inform resource and business planning processes. You should also be able to produce clear and articulate technology requirements. Typically, you should be assessing the following functional areas:
· Supplier Information Management
· Manage Supplier Performance
· On/Off Board Supplier in System
· Compliance Management & Audits
· Supplier Enablement
· Track Service Delivery
· Vendor Master Maintenance
· Assess Category
· Determine Category Plan
· Prepare & Conduct Market Assessment
· Prepare & Conduct Sourcing Event (RFX)
· Conduct Evaluations
· Select Supplier
· Manage Project (in system)
· Prepare & Conduct E-Auction
· Create Contract
· Execute Contract
· Author Contract
· Administer Contract
· Negotiate Contract
· Approve Contract
· Terminate Contract
Spend Analysis & Reporting
· Spend Analytics
· Benefits Measurement
· Exception & Compliance Reporting
· S2P Process & BPO Performance Reporting
· Identification of Spend Reduction Opportunities
· Raise Purchase Request (PR)
· Category Enablement
· Approve PR
· Approve Purchase Order (PO)
· Create PO
· Spot Buy & PR to PO Conversion
· Confirm PO
· Receipt PO
· Change PO
· Open PO Management
· Capture Invoice
· Invoice Resolution
· Match Invoice
· Create Ready to Pay
· Approve Invoice
· Receipt Non-PO Invoice
· Create Credit Note/Memo
· Create Financial Accrual
· Process FX Invoices
· Create & Release Payment in ERP
· Authorise Payment in ERP
· Manage Payment Status
· Update Financial Records
· Release Financial Accrual
Assessing source-to-pay technology solutions against these functional capabilities, then mapping them against your future processes will ensure that you are selecting the right technology solution for your business.
CLICK HERE to read Part 1.
CLICK HERE to read Part 2.
CLICK HERE to read Part 3.
CLICK HERE to read Part 4.
CLICK HERE to read Part 5.