Procure-To-Pay Problem Solving

Nov. 15, 2006
Re-engineering the P2P cycle saves money and makes suppliers happy.

A recent study indicates that companies are challenged when it comes to procure-to-pay (P2P) cycles involving contracted services, especially facilities management and onsite contract management.

The CAPS Center For Strategic Supply Research, a Tempe, Ariz.-based think tank sponsored by the Institute for Supply Management and Arizona State University, also found that companies need to make procurement managers available to manage invoices and service entries -- thus expediting payment to suppliers.

In re-engineering the P2P process, CAPS recommends companies:

  1. Secure top management support for the initiative and budgeting for the project. Map existing processes and problems with the P2P cycle. Identify where the breakdowns are occurring and why they are occurring.
  2. 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.
  3. Bring together key experts from each business unit for a P2P workshop. Suppliers also should be invited, as they may have solutions they have adopted with other customers that may prove to be efficient and simple to use.
  4. 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 untrained users involved in the pilot.
  5. Train and deploy other users based on the new processes and systems.
  6. 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.

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