Three Main P2P Challenges in Procurement
Having an automated system to carry out procurement tasks and efficient spend control is great. But one also needs to have the right procurement consultants and CFOs in place who know how these automated systems work. On one hand, the right knowledge about these solutions can leverage P2P (procure-to-pay) operations and on the other hand, the wrong applications of these solutions can escalate the cost that might even lead to timeline delays and out-of-control operations.
In an ideal condition, most organizations can live up to two months with the proper P2P solutions in place. But in a realistic world, it takes almost twelve months to have the right procure-to-pay solutions in place, where the P2P managers implement these solutions to bring results. This requires huge investments and most of the projects die after investing such huge amounts.
The common challenge involved with putting P2P solutions to action is the integration of data with the system. Inevitably though system integration is not at all a complicated process, the problem arises because of a lack of data governance and poor master data. Apart from this, there are three other challenges faced by organizations that put P2P solutions into action.
1. Unable to enable suppliers
Most of the organizations that put procure-to-pay solutions in actions, stumble with handling the outcomes of the solutions. The data derived from the solutions are not effectively handled by the procurement consultants and put to place by the respondents. The managers struggle to integrate and onboard the population of their suppliers in any meaningful way. According to a study, procurement managers who used P2P solutions could not effectively connect with their suppliers depending on the data derived from the solutions. Only 19% of the managers could connect and the others failed to establish any sort of connection with their suppliers. The ratio was far worse considering the factor that the supplier is the most vital cell in any organization.
2. Lack of data governance
Data governance is an important factor procurement agents in UK need to consider when dealing with P2P solutions. Even if the ownership of the organization is clear, as it starts with controlling the finance if the data is governed properly and in purpose, the use of P2P solutions will not bear any fruit. The data produced by these solutions need to be circulated within the organization and everybody involved in the process must have the knowledge to deal with the available data. If the data is not maintained properly, it won’t become fit for the organization and this would affect the organization negatively. One needs to know how to use the data to implement it to bring results.
3. Lack of ownership
Most organizations admit that they lack ownership. Such organizations fail to maintain good master data on the available suppliers. This mainly happens when there is a lack of ownership between the finance and the procurement. There is a lot of garbage in the vendor master and there is no one who can tackle the clean-up process.
These are the three main challenges faced by procurement agents in UK who put procure-to-pay solutions in use. Solving these challenges can help organizations deal with the processes.
