Digitising the BtoB purchasing chain is both a necessary and attractive prospect. Procure-to-Pay holds great promise, but also presents its own challenges for procurement departments.
Well aware of the importance of Procure-to-Pay, the procurement industry community website Procurement Leaders brought together a group of experts as a project group to create a roadmap for use in the procurement profession.
Their first meeting allowed these procurement decision makers to reiterate the strategic nature of a P2P project based on their own individual experiences.
Future meetings have been already been scheduled, when the project group will continue drawing up a rigorous, functional roadmap that applies across the board.
Addressing two major challenges
In order to ensure that their digital transformation experiences were more comparable, the experts focused their discussions on two major challenges:
- Automating procurement processes which involves automating each and every step, from managing suppliers to settling invoices.
- Collecting and processing real-time data in order to optimise the entire purchasing chain.
Drawing up a digital strategy
Because of the involvement in a variety of projects, the experts have worked hard to identify the key components to consider when implementing a digital transformation plan for any procurement department.
The first fundamental component is simply to formalise a digital strategy. Without a doubt, setting the pace and ambition of a roadmap is the best way to manage a project on this scale.
Five priority actions from The Hackett Group
A recent study has already offered several guidelines for structuring a roadmap:
1 – Improving analytical capabilities.
2 – Aligning skills and talent with business needs.
3 – Leveraging supplier relationships.
4 – Enhancing agility.
5 – Achieving true customer centricity.
Assessing digital maturity
During their first meeting, the project group started by looking at how to define the key steps in a well-run P2P strategy.
To do this, they brought their attention back to a previous initiative instigated across the procurement profession: evaluating a company's digital maturity through a DRA (Digital Readiness Assessment). Based on the same principle as the Savin'side method, the DRA evaluation grid lists a certain number of items organised into four different areas. A diagram of the company's digital maturity is created from the resulting scores, and shows personalised priority actions.
For procurement decision makers, looking at the DRA again was an excellent starting point for drafting the P2P roadmap.
- One option would be to develop the four DRA pillars: people and culture, infrastructure and capabilities, governance and processes, and strategy and vision.
- Another option would be to create a roadmap using the current DRA that might help procurement departments accelerate their transformation. The group's idea is therefore to formulate their next steps and to identify any bottlenecks by evaluating their own departments against the DRA.
The working group will continue to reflect on this topic over the next few months, by which time, the result of their work will provide new benchmarks to guide the profession in the right direction. See you in September!