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Best Practices in Procure to Pay Cycle: Subject matter expert insights into the P2P process – Part 4


A number of senior executives from a variety of different industries were also interviewed to understand their responses to the same problems associated with the P2P cycle.

These included the following:

Director Energy Company
VP Procurement ContractedPharmaceutical Services Provider
CPO Consumer Packaged Goods Manufacturer
CPO Pharmaceutical Company
IT Process Owner Energy Company
Director of EProcurement Electronics Manufacturer
Consultant Big Three Consulting Company
VP SCM Composites Manufacturer
CPO Chemical Company

Each of these individuals provided a different perspective on how to improve the P2P process, but when combined resulted in some common themes that validated many of the vendors’ suggested recommendations as well. These responses are organized around the six hypotheses initially identified in our model, and validate that problems associated with the P2P process is indeed a function of multiple sources.

Common Themes

  • Robust processes and training
  • On-site relationship managers to allow field maintenance to focus on doing their job
  • Robust technology using single point of contact – supplier portal
  • Improve forecasting for maintenance and planning for emergencies that can “flex” with different situations that arise
  • Reduce complexity in catalogs and buying channels to streamline procurement
  • Top management support

Each of these themes will be the focus of subsequent articles in the series.

Robust Processes and Training

Another critical element identified by all of the subject matter experts was the need to develop standardized processes and training around the P2P process. Specifically, roles and duties of the different people involved in the process must be clearly defined, and training should emphasize how invoices and requests should be processed, and the reasons why deviation from the process is unacceptable and the consequences involved with deviating from the process. This ensures that everyone is not only compliant, but understands the need and rationale behind the compliance. Part of the process redesign effort should also focus on simplifying processes to reduce complexity. If there is no need for a specific channel for purchasing, then eliminate it.

Some of the comments are shared below:

One of the most important discoveries we made is that we did NOT have a technology problem; we had a people and process problem. The technology wasn’t working the way it was supposed do, because we did not have a robust process to use it. We did not want to invest in a customized Graphical User Interface, but decided then that the simplest way for us to get maximum ROI for what we had was. Once we started down that path, we recognized that the design of the interface that we had was not user friendly, and users didn’t really have training. They had a LOT of training on SAP that was not useful in terms of what they did in their jobs! So we asked the question – if a requisitioner only needs to know 3 things about SAP in this function, do people really need a week-long class? Instead we re-tailored the training to the function that the people had – and we also used our website portal – to put in “help screens” on HOW to input a requisition. We provided step by step instructions for material or for services that utilized a decision tree that was very straightforward. We actually put in the actual screen looks and feel so that when they clicked on the link – it would look like their PC! It was a very common sense approach, but very practical!

_Good data analysis and firm processes will greatly reduce the number of frustrated invoices. This begins by negotiating contracts/PO’s with a firm NTE price for the job. A best way to treat these buys is to analyze the yearly spend in the commodity and then find supplier solutions that will enhance the suppliers services and reduce the extra administration to a companies internal processes. Most likely the suppliers have ideas and systems that will reduce the paperwork side of things. A second task is to reduce PO’s being input internal legacy systems: Do we need to put PO’s in the system for low dollar commitments? If we leverage the commodity with a supplier then we should let the end user either call in for services or get on line with the supplier to request services based on a master agreement. Of course the process would be to get a name, department number and charge number from the end user prior to any work being done. _

At our company we had problems getting the requisitioner to put in a proper requisition according to the standard we had in the system, and getting it routed to the right person within SAP so that it matched all the key elements, and going to accounts payable. The problems were multiple: whether it had an appropriate requisition in SAP, that procurement had done the right thing with it, that the supplier had put in the right invoice, and that AP was able to match it properly, and that the whole activity was done correctly and the supplier could be paid. One of the things we did was to work with the different business people to look at the AS IS process, and work to a Should Be. This helped us understand what you “think” is happening, what is really happening and mapping it out. Then we asked questions such as what culture is there, what kinds of things DO they want to have happen, and how detailed is their SAP system? What does the system design look like – and does it match users’ expectations! What we discovered of course is that our design did NOT match our expectations! We thought we had spent money that would do req to pay simply – but we found instead that it doesn’t work that way. We had a problem getting work paid because work wasn’t getting requisitioned appropriately, and invoices weren’t being put in properly. One practical solution we used upfront was to have the user groups send out their expectation in writing – this is what we want to have happen – and we responded that we respect you and your organization to work with your team to make it happen.