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SCRC Article Library: Best Practices in Procure to Pay Cycle: Conclusions and Observations - Part 10

Best Practices in Procure to Pay Cycle: Conclusions and Observations - Part 10

Published on: Mar, 08, 2006

by: Rob Handfield, SCRC Kevin McCormack, and Wolfgang Steininger

Virtually all of the hypotheses identified at the beginning of the research project were validated by the suppliers and subject matter experts interviewed in the study. A confluence of respondents each arrived at much the same conclusion: the P2P cycle truly needs to be re-designed if improvement is to occur. A suggested approach that is evident is shown in Figure 7. The rollout for improvement includes the following:

  1. Secure top management support for the initiative and budgeting for the project. Develop a list of key benefits and deliverables that will occur as a result of the improvements. Document the cost of leaving the system “broken” in its current state.
  2. Map existing processes and problems with the P2P cycle. Identify where the breakdowns are occurring, and why they are occurring.
  3. Understand the needs and requirements of the user groups. Many of the people involved – maintenance, planning, project management, suppliers accounts payable, buyers, etc. – have specific issues that prevent them from using the existing system. Also, many of the specific sites may have issues that need to be considered in designing the new system.
  4. Team Redesign Workshops should be used to bring together key subject matters experts from each of the business units. Suppliers should also be invited to attend and participate, as they may have solutions they have adopted with other customers that may prove to be efficient and simple to use (e.g. “why re-invent the wheel?”)
  5. Explore existing technology solutions with SAP, as well as bolt-on applications. Map out the business requirements, and ensure they are aligned with the technology solutions that are available. Begin to estimate cost of deployment, and ensure that adequate planning and due diligence is taken at this step.
  6. Following the workshops, define the new process and begin to pilot using a planned technology. Ensure that it takes place in a “real” environment, with actual non-trained users involved in the pilot before cutting over to the next process.
  7. Train and deploy other users based on the new processes and systems. Be sure to make the training appropriate to the specific functional unit and user groups.
  1. Monitor, update and improve the system, ensuring that catalogs are kept up to date. Hold periodic meetings with suppliers and user groups to solicit input and identify problems with the systems.

Figure 7 – Improving the P2P Cycle

The primary differences between basic and advanced levels of process maturity for the P2P Cycle are shown below.

As technology and business requirements evolve, the P2P cycle will probably need to be re-visited from time to time to ensure it is meeting the needs of internal customers, and that suppliers are satisfied with the system.

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