Unifying Procure to Pay: A Leadership Challenge for the CPO - Procurement News

Big Ideas Summit | by Gabe Perez on 23/03/2016 01:14 | 0 comments

It might seem obvious, but removing silos in the procure to pay process can ensure spend optimisation. But it’s people, not technology, that hold the key.

Imagine you were just elected mayor of your city, with a mandate from the voters based on an ambitious agenda that includes cutting costs. You’ve promised to streamline programs, increase transparency and work to a set of measurable success criteria which you laid out in your campaign.

You know there will be challenges. But, when you roll up your sleeves and get to work, you start to have some rude awakenings.

You realise there’s a section in the city that has its own budget and runs its own services, because it’s in a special tax jurisdiction. And there’s a powerful labour union that dictates wages, job duties and hiring across the city.

You also find you can’t get accurate reports because data resides in separate systems that don’t talk to each other – and neither do the people who run them. You realise that, more than anything, the bureaucracy and the politics that have grown up around it are what shape how business is done.

The success of your initiatives, and the city as a whole, are your responsibility, and you’ll be held accountable. But you don’t have full visibility into, or control over, what happens. Accomplishing your goals under these circumstances is going to be a real leadership challenge.

Mayor of Spend Management

That’s what it’s like being the head of a procurement organisation today. You lead the official buying organisation, but the employees in your organisation will buy based on the easiest process available to them. If there’s a contract in place and you make it easy, they’ll buy against the contracts you’ve negotiated. If not, they’ll buy what they need on their p-card or credit card, and expense it. Or they’ll go out and make deals on their own and an invoice will just show up.

But spending is spending, no matter how it happens. It all ends up in accounts payable (AP) and the bills get paid. When it comes in through the front door, you have the opportunity to manage and optimise for cost and compliance. But there are also side doors – multiple independent buying processes – for things to get bought and paid for without you knowing it in advance.

This is also a leadership challenge, and one that most procurement leaders face. There’s no one who is accountable for all of the company’s spending. Everything goes through AP, but by the time it gets to them, the money’s already been spent, so they’re just focused on effectively managing the payment process.

The whole spend management process – invoicing, expenses and procurement – should be united under one leader responsible for optimising all of the company’s spending. This head of procure to pay, or chief spend officer, would manage the spend management organisation to a shared set of KPIs.

The Missing P: People

This is not a new idea and it makes sense to most of us. We now have the tools – modern, easy to use spend management suites – to streamline the process from end to end and enable data sharing to make each part more efficient. For example, everybody’s expensing the new iPad? Procurement gets an alert: Hey, maybe you should source that.

What has made this such a tall mountain to climb isn’t the lack of technology to support a unified process. It’s that most organisations don’t have alignment of their people. Even the best technology won’t fix everything if procurement and AP aren’t working together and aligned to the same goals.

Bringing the people together is a perfect leadership challenge for procurement to take on.

Think about it. Over the past few decades, the profile of the procurement profession has been rising. The average level of education and certification has been rising. The amount of spending that they’re managing is increasing. Procurement departments took centre stage during the great recession—not just cutting costs, but leading new strategic initiatives for their companies.

There’s a feeling in procurement that the profession hasn’t yet achieved the status it deserves. There’s still a lot of talk about striving to be seen as strategic, and to have a seat at the table with top leadership. Striving to ascend, as Tim Cook did at Apple, from procurement to CEO.

Executive Level Challenge

Here is your chance. We know there’s huge business value that companies can achieve from uniting procurement and AP in the procure to pay process – value far greater than the sum of automating each separately.

The world is changing faster than ever, and becoming more connected. In the consumer world, we have visibility and data everywhere; in the business world, not so much. You can see your Uber approaching on your smartphone but you can’t see where your invoice is in the payment cycle.

Your watch or wristband can tell you how many steps you’ve taken today, but you can’t tell how many orders have been placed against a contract. Your dishwasher can order its own soap from Amazon, but employees in many companies can’t even figure out the best way to buy a stapler.

Businesses need to achieve the same levels of visibility, efficiency and control in every area of their business in order to meet rising expectations and to stay competitive. A unified, automated spend management operation does that for spending.

If procurement wants to ascend to the heights it aspires, it can show leadership by spearheading the effort to tear down the silos between buying and paying so that someone, a chief spend officer, a head of procure to pay, a head of business services – it really doesn’t matter what you call them – can finally be responsible and accountable for making sure all of spend is optimised. Someone can finally be mayor of spend city.

Coupa are one of the sponsors of the Big Ideas Summit, to be held in London on April 21st. If you’re interested in finding out more, visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.


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Author

Gabe Perez

Vice President, Strategy & Market Development

As Vice President, Strategy and Market Development, Gabe Perez draws on his experience in sales, implementation and solutions consulting to develop go-to-market strategies across Coupa's solutions portfolio. He is also responsible for emerging market development and analyst relations, evangelizing for Coupa across the globe. Gabe has deep knowledge of Coupa’s products and the customer consideration process, and he combines the two to speak directly, authentically and compellingly to their needs and concerns as they make what for many is a bold decision—purchasing cloud software from a relative newcomer to the enterprise space. He is a futuristic thinker willing to challenge the status quo, and skilled at emboldening others to do the same. He is good at rooting out the hidden assumptions and unstated fears that prevent organizations from moving forward with positive change. Gabe is well positioned to help people see the bigger picture of how Software-as-a-Service is changing the way companies do business and how Coupa fits into that picture. It is not simply a replacement for current software. Like many software upstarts, it helps companies address areas of inefficiency that legacy software has left untouched. Gabe has been at Coupa for more than 5 years. He has held a many roles, from being a project manager to running our presales team globally, prior to that he worked at Ariba where he participated in many global rollouts of their software.


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