The 4 Less Talked About P2P Challenges in procurement

Most blogs on the internet that cover P2P challenges focus on the tactical ones such as invoice processing time, low accuracy, and high cost of processing an invoice, etc. These are surely important factors to consider while making an investment for a P2P technology, but there are overarching strategic issues that a procurement leader needs to address before getting into the more tactical ones.

In this blog, we look at four less talked about P2P challenges that hamper the effective adoption and implementation of a P2P solution.

These are:

1. Building a business case that gets approved by Finance

2. Convincing IT to do the initial heavy-lifting

3. Internal buy-in from procurement users

4. Getting suppliers on board

Let’s look at each of these in detail.

1) Building a business case that gets approved by Finance:

As a procurement professional and leader, you know that getting the CFO’s or Finance Head’s buy-in is the most critical step when it comes to investing in any new technology. You might be well convinced of the value of adopting a P2P suite, but if you are not able to justify the return on investment, certainly, your proposal will never see the light of the day.

CFO’s love to believe that bolt-on procurement solutions on ERP’s can do the trick. While such a solution may work for a small organization, the complexities involved with mid to large-sized organizations, especially those following a centralized procurement set-up, are too vast to solve using an ERP-backed procurement solution.

You probably already know that ERP solutions aren’t the best fit for procure-to-pay activities in today’s hyper-competitive world. What’s more, with rising risks, it is all the more important to have an integrated solution-backed by cognitive abilities-which can help you mitigate contractual and supplier performance risks on a real-time basis while ensuring ease of use for your buyers and on-time payments for your suppliers.

While, in theory, these all may seem reasonable, the finance heads obviously would want to look at hard facts, especially the $ value savings. You can check out our P2P savings calculator for starters, which will give you a high-level estimate of the savings potential based on the inputs you provide. You can check out the savings calculator here.

2) Convincing IT to do the initial heavy-lifting

The second biggest P2P challenge is getting your IT team’s buy-in. There are several reasons why your IT team isn’t always keen on replacing the existing system or integrating a new system on top of the underlying ERP.

Here’s a quick look at a couple of the top ones:

a) Security:

IT teams and heads are extremely sensitive when dealing with financial data, especially when 3rd party vendors are involved. Unless a system is fool-proof and follows all the latest security protocols, IT won’t give its nod to go ahead with the implementation. As a procurement leader, you must ensure that you focus on security parameters while doing your due diligence to shortlist P2P vendors.

b) High effort, low benefit:

Whether you are replacing an existing system or implementing a new one on top of your ERP solution, there’s a considerable amount of effort required to be put in by the in-house IT team. However, many a time, there’s very little to no impetus given to IT teams by their procurement counterparts to accelerate this process.

You can deal with this in two distinct ways:

One is obviously to create an internal rewards program where you reward the IT team and members who are willing to take up the challenge of pulling off a complex project.

The second is to push out the heavy lifting part to your new procure-to-pay vendor. Zycus’ iSaaS model serves the latter.

It takes care of the integration part and significantly reduces the total cost of ownership (TCO) for the customer. Also, it considerably reduces the implementation timelines.

3) Internal buy-in from procurement users:

Humans inherently resist change. This is a known fact, and businesses worldwide are taking extra efforts to counter this while implementing transformation projects in their departments. Procurement is no different. However, while you may be convinced that a new P2P solution is the best way forward, your investment will draw zero returns if the end-users won’t use it at all.

Suppose you’ve been using a homegrown or ERP system for many years. In that case, the chances are that your buyers would have spent a considerable amount of time trying to understand the workings of the system, and over time would have gained the confidence to use it efficiently. Now, the prospect of adapting to a completely new solution while unlearning the earlier set practices draws apprehension from them.

Therefore, you must keep your end-users and their experience at the center of your evaluation criteria while looking for a best-in-class procure-to-pay solution. Luckily for you, modern P2P systems like Zycus do not require users to undergo any special training due to its intuitive UI Dew Drops.

Any novice can log on to the system and search for products or services on the catalog. For off-catalog items, users can create requests through simple forms and get the ball rolling without having to wait for further clarification or instructions from their respective bosses.

With cognitive abilities and guided user features, the Zycus solution helps users take precise decisions backed by data. In addition, it can alert them for any anomalies or risks and ensure that they follow the right processes while ensuring compliance.

4) Getting Suppliers on board

Managing so many internal stakeholders can be an overwhelming task. This may result in you overlooking the 4th pillar of your P2P transformation success. Yes, we are talking about your suppliers. Like your procurement users, you won’t get enough benefit from your swanky new software if your suppliers don’t use it.

While it is common for organizations to look inward and find out the best solutions that will benefit the organization, procurement teams and leaders like you need to also look outward towards your suppliers and highlight the benefits they will receive with a new system in place.

Three primary things that will strike a chord with your suppliers are:

a) Effort reduction: No multiple sign-ups, contracting delays, manual follow up on emails, or invoicing errors

b) Faster payment: With modern e-invoicing solutions, organizations can ensure on-time payment for suppliers and can also offer shorter payment-terms as an added benefit for using the latest technology

c) Rewards Program: You can set up a supplier rewards/acceleration program for suppliers, based on how quickly they migrate/start using the new system. This gives them confidence, transparency, as well as an added incentive to adopt the technology.

These were some of the measures to overcome P2P challenges. Use these to get them on board and start reaping the benefits of using a modern-day P2P solution.

In Conclusion:

Transformation projects in today’s day and age cannot be accomplished in silos. Any organization, function, or department looking to do it on their own will invariably falter at getting the true value out of their projects.

Implementing a Procure-to-Pay (P2P) solution comes with its own set of P2P challenges. While a vast majority of organizations spend their time trying to fix tactical issues, it is the strategic ones around finance, IT, procurement users, and suppliers that will eventually make or break their initiative.

Suppose you want to derive maximum value out of your P2P transformation project. In that case, it is imperative that you take these four key stakeholders along, and highlight benefits for them, which they may fail to foresee underneath the garb of it being a procurement transformation project.


Mahak Khushalani

Published by
Mahak Khushalani

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