We discuss the Procure-to-Pay (P2P) process frequently on Payables Place because of its central importance to Chief Financial Officers and AP operations. We also see it is as a “Hot Button” issue for AP groups in 2014 and we see a its importance as part of larger trend of the convergence of finance and procurement.
In the first article we talked about the importance of a tightly linked P2P process in preventing savings leakage and capturing other missed opportunities. We also shared a couple of tips to get started on connecting the P2P process within your own organization that should begin with a collaborative approach between procurement and AP. In today’s article, we wanted to dig a little deeper into the management and the ownership of the end-to-end P2P process – is it a Procurement, Finance, or AP process? or is it its own function that should operate across all three?
In an effort to capture increased value from P2P, more enterprises are creating specific P2P job functions and teams that are responsible for the end-to-end process (this is especially true for groups that operate in a shared services environment). We like the idea. These positions are typically centered around process improvement across the entire enterprise and almost always require a strong analytical and technology/systems background. A major responsibility is ensuring standardization, efficiency, connectivity and optimization of the entire P2P process and creating value across this process. Additional strategic requirements can include collaboration with departments (e.g., procurement, treasury).
As an example, here is the introductory sentence from a Global P2P Process Owner job that I recently saw – “Lead the strategic vision for the global Purchase to Pay (P2P) by driving standardization of processes, aligning policies and investigating and selecting best practices and enabling technologies that will add value to the end to end P2P process.”
P2P initiatives are typically born within one of three departments (procurement, AP, or Treasury) or as a collaborative effort between two or all. In many cases, the goal of creating a new P2P role is to facilitate better collaboration between the three groups. The P2P process owner is responsible for developing the final process and ultimately rolling it out. The P2P pro will also be graded on the process’ efficiency, effectiveness, and level of adoption. By establishing an independent role that is not from procurement nor from finance, the organization may have a better chance of finding a middle ground among the preferences and best practices of the different stakeholders, to the benefit of all.
If your organization is thinking hiring a P2P process owner, below is a list of high-level skills and responsibilities that we believe will be valuable for that new hire to possess:
- Strong knowledge and experience within P2P, ability to develop strategy and establish global policy for the P2P process
- Accountable for strong stakeholder relationships and ability to collaborate with relevant stakeholders (e.g., Treasury, Procurement, IT) to evaluate and improve processes, adopt technology solutions, monitor performance, drive efficiency and service levels. Act as highest escalation point within the process area.
- Develop and manage Key Performance Indicators, monitor relevant P2P productivity and operational metrics. Metrics should be defined have goals and clear ownership. Example, of metrics include, invoice cycle time, paid on-time percentage, number of invoices without POs, early payment discount opportunities, etc.
- Drive continuous improvements within P2P and create and prioritize P2P roadmap.
- Understand the latest P2P technology innovations and methodologies. Drive technology adoption and changes to improve efficiency, effectiveness and quality. Roll-out P2P initiatives across the company.
- Competencies in the area of leadership, communications, negotiations and partnerships, problem solving and decision making
- Strong interpersonal skills, team building skills, and customer relationship skills
