It’s said that “a rising tide lifts all boats.” This is particularly true when it comes to standardizing and streamlining business processes; greater coordination between stakeholders results in situations where everyone the process touches wins in some way. This truth also extends to the procure-to-pay (P2P) process, which when improved accrues benefits to both internal and external stakeholders.
Speed, innovation, and agility have become crucial to building and maintaining a successful enterprise. Top-performing companies, in addition to recognizing this fact, also acknowledge that it’s functionally impossible for a single organization to keep up with the pace of the market.
The need for innovation now extends beyond mere products to sell all the way through core business processes and entire corporate models; the linkage P2P organizations have to so many stakeholders puts P2P in a unique position to find, farm, and proliferate innovation to all corners of the enterprise and even to external stakeholders. It’s this truth that drives internal and supplier collaboration to craft business success, and is expounded on in the new Ardent Partners report, “Collaboration and the Speed of Change: The New P2P Dynamic,”available for free (registration required) from Tradeshift.
Collaboration Inside the Enterprise
The P2P needs of an enterprise are now vastly more likely to shift in the middle of a business cycle; it’s for this reason that P2P teams require agile software and business processes. P2P results are also under much more scrutiny in recent years: media, industry analysts, and external investors have now joined company executives in clamoring for more details about P2P results. External stakeholders also increasingly link a company’s P2P agility and ability to execute with its brand and overall valuation, which means that P2P capabilities can have an impact on a public company’s stock price.
While procurement—the first part of the P2P process—still has savings as its primary focus, missing a sales window because of a supply gap or poor supplier performance are still not ideal situations. At the same time, accounts payable teams—the “pay” portion of P2P—driving process efficiencies and lowering costs are primary operating goals. However, as AP matures, they more and more often are asked to support strategic initiatives like cash management and supplier performance.
Smart P2P leaders recognize the opportunities presented by drawing a clear line through the entirety of the P2P process so that procurement and AP work hand-in-hand more often. As a result of this collaboration, P2P has become one of the most influential business functions across the enterprise, and 61% of AP professionals report that AP and procurement now work toward a set of common goals. This now leads us to collaboration with suppliers.
Collaborating with Suppliers: No Time to Waste
The English poet John Donne once wrote that “no man is an island.” The same applies to the modern enterprise, which must work with suppliers of all stripes in order to succeed. Despite this, the idea of supplier collaboration is something of a novelty for many P2P teams. Top-performing enterprises, however, already make a point to collaborate with their suppliers—these high performers recognize that no company is an island and collaborate with suppliers in order to drive greater process efficiencies inside their own enterprise.
Some P2P teams go so far as to engage in regular meetings with key suppliers to discuss ongoing challenges, corporate goals, plans, and priorities as well as how those same suppliers can support the organization’s objectives. Ultimately, this drives better relationships with key suppliers and allows for companies to drive business success through an enhanced P2P process.
Final Thoughts
The pace of business has increased tenfold in as many years. As this pace keeps increasing, collaboration both within the enterprise and outside it will become more and more critical over time. No company can succeed based solely on the merits of internal innovations any longer; collaboration with critical suppliers is the best—and perhaps the only—way to drive true business success in the long term.
Interested to read more? Download the new Ardent Partners report, “Collaboration and the Speed of Change The New P2P Dynamic,” available for free (registration required) via report sponsor Tradeshift.
Update (9/12/14)
Andrew Bartolini, Chief Research Officer and Founder of Ardent Partners, recently spoke with Tradeshift Sr. Marketing Manager, Vishal Patel, about the report discussed above, Collaboration and the Speed of Change Business: The New P2P Dynamic. In an excerpt from this discussion below, Andrew talks about how technology innovation is a driving force behind increased internal and external collaboration in the procure-to-pay cycle.
