Despite the technical difficulties, this morning’s Zycus webinar about Uberizing Procure-2-Pay, generated some fascinating poll results as well as questions.
Given that I was addressing a European audience, the webinar’s 6:00 AM ET start time likely meant that you may not have been up when I went live. I was also made aware of the fact that there may have been some difficulty signing in for those who were available to attend. The good news is that by tomorrow, I should have the on-demand link, at which time I will share it with you.
In the meantime, here are the questions (and my answers) from today’s session:
1. On slide17 you made reference to the gap between technological capability and user adoption. What were the main obstacles that caused user adoption to lag behind technological capability?
Historically, innovative technologies like P2P that were capable of delivering almost immediate value for a significantly lower cost than what was achievable with traditional eProcurement applications within an ERP framework were dismissed or ignored. The primary reason for this is that having to explain why these new platforms were able to deliver results for a fraction of the cost, after sinking many millions of dollars into an ERP-based eProcurement solution that had failed to produce results, did not put initiative champions in an enviable position. As a result, the attitude that was adopted was that there is no way that these “bolt on” solutions could deliver. Fortunately, in the post-ERP era, as Gartner called it, there is now the open and general acknowledgment that you do not have to spend millions to get to where you want to go. The gap that presently exists between adoption and technological capability should progressively narrow.
2. Why do you say it “should” narrow instead of “will” narrow?
Because the traditional industry giants are not going to go silently into the night. When there is the realization – and this is happening now – that the organic development of these new platforms is not viable, the industry giants will look to either establish a relationship with service providers or acquire them outright. With the former, there is very much a potential for the tail wagging the dog scenario that may lead some organizations to reach the conclusion that the acquisition route is best. With this latter scenario, the question of assimilation and the loss of the innovative culture of the P2P service provider could get lost. If that happens, we are back to square one. Even in those instances where the industry giant decides to partner with P2P service providers the question this raises is what happens to their existing platforms – such as with IBM and Emptoris.
3. In one of the last slides, you indicate that one of the obstacles to “Uberizing” P2P is an unwillingness on the part of buyers to streamline the payment process, specifically paying suppliers faster. Why do you believe there is a reluctance to pay suppliers faster?
There have been many reasons given as to why buyers are slow to come around to the concept of paying suppliers faster including being put at a competitive disadvantage. However, studies such as the one referenced in one of the slides clearly indicate that those organizations that have the best relationship with their suppliers offer superior products at competitive prices and would tend to suggest that the opposite is true. Furthermore, as relationships between buyers and suppliers move towards a more collaborative and transparent framework, there is a greater understanding of the benefits of making certain that full value is achievable without creating a disadvantage for any stakeholder.
4. When you say that buyer – supplier relationships are moving towards a more collaborative and transparent framework, what do you mean, and how does P2P play a role in this?
Case studies such as the I-35 Bridge project in Minnesota clearly indicate that open collaboration between buyers and suppliers produce superior outcomes. Uberizing P2P means that stakeholders have more time to focus on the strategic elements of the relationship that make these outcomes scalable.
Once again, I would encourage you to listen to the on-demand version of the webinar when the link becomes available.
In the meantime, how would you answer the above four questions?
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Procurement Insights 
Fab
June 6, 2017
Regarding question 3: in my experience, it is more than often finance who wants to extend instead of shorten payment terms, not “the buyers”. I’ve only worked at one company so far where finance fully supported short payment terms, taking in a more sustainable view regarding suppliers.
Its always a bonus for the buyer when you enter the room and the supplier cannot complain about invoices having been payed too late.
piblogger
June 12, 2017
Interesting point. Do you believe that purchasing has the political clout to influence payment terms?
Fab
June 22, 2017
Not sure. In most cases, I’d say no. I mean, it means that you are really changing the (financial) strategy (what is the impact on cash flow, does it really benefit our shareholders, i.e. what do they really want) plus you’d need a CFO which is open for communication. So, without the financial knowhow to put fact based arguments on the table it very probably is impossible to influence.