Getting started

As with all other new platforms and tech, preparation is crucial to take better advantage of it and get the most value from day one. But it doesn’t need to be an exhaustive exercise requiring many months of preparation and headaches. Based on our years of experience and insight working with Procurement and the Purchase-to-Pay processes, we have gathered a walkthrough on preparing and utilising our platform while getting the most value from day one.

One crucial piece and lesson learned is: “Start small and grow from there”. This could sum up our advice to the clients we have worked with and our customers wishing to utilise the P2Connct platform in maturing and scaling - from only benefiting from using our platform for a short timeframe and scaling from there into another solution(s) or engaging in a longer-term collaboration. In both cases, we expect you to undergo a maturing process and get more insight into your processes while keeping cost and admin work low.

Let us go through 5 steps in preparing your implementation:

1. Selecting a starting area or scope
2. Preparing your needed data
3. Building in your procurement policy
4. Designing how approvals should work
5. Choosing and implementing with the first users

1. Selecting which area or scope to start with

Let’s start with our one piece of advice: “Start small and grow from there”. This might seem trivial, or you might have heard it before. Still, many companies try to implement too big a scope simultaneously, which often leads to more complexity and a more extended period to create enough value for the next steps. Additionally, plans typically need to be adjusted once the project moves ahead. The bigger the ship is, the better planning and management are required. Starting with a smaller piece of the cake, depending on your starting point will help you succeed in the long run rather than trying to push out too many parts of your organisation.

Consider going live with all categories in one go or targeting two or three categories. The first part will influence your data quality, what users are involved, and the (revised) procurement policy to cover everything about the indirect spending. And you might also need to consider the impact it will have on your suppliers and the potential questions coming your way from them. When working with a procurement or ordering platform, also like ours, we suggest starting with a smaller scope and scaling from there. As you begin using the platform, you also get more insight into your organisation and use of the platform, and you can mature as you go along. When the organisation starts using the platform, they will also get used to interacting with the process and hopefully start pushing you to add more content on the shelves. That is what we hope for in Procurement! And when that happens, you have also had time to prepare even more of your content (suppliers and contracts), so expanding your reach is just a click away. Additionally, using the platform to bring on board smaller countries or locations that so far haven’t been first in line due to the low value is the time to start looking at them - as it doesn’t need to take much of your time. Imagine that these smaller sites start to mature using a more structured ordering approach without too much hassle and costly implementations.

2. Preparing what data is needed

Whether you already have a good grasp and insight into your data or want to start building upon what you have, we recommend looking into a few areas - regardless of whether you are to work with us. Data management is, on its own, a detailed area in that you should invest time in, but we will not cover that here.

Supplier segmentation (preferred versus approved suppliers)

A part of what Procurement should do is to showcase and guide the users to which suppliers are bringing value to the company and which one of them has been contracted well - through Procurement or some other area in the company. The company users should be able to efficiently work with these suppliers, guide them without too much work, and see which suppliers benefit the company through more visibility of use and contractual information. While a company has difficulties restricting other than procurement-contracted suppliers, we are working with the segmentations: preferred and approved.

Getting these definitions right can help you save a lot of unnecessary discussions and dialogues with the business and bring more security into your legal liabilities. Still, it can also help route usage and spending into those negotiated contracts that Procurement is working hard on getting done.

Our definitions:

• Preferred supplier: A supplier or business interaction negotiated and contracted through a function in the organisation responsible for driving savings and value through proactive supplier relationships. Terms and conditions are mutually agreed between the parties.
• Approved supplier: A supplier or business interaction where terms and conditions are either not mutually agreed between the parties, no company formalised agreement exists, or the supplier is used ad hoc and not contracted through the formal organisational channels.

Using these definitions as a starting base, you can help define and structure your supplier data and base and benefit from the segmentation when uploading the suppliers in the P2Connct platform. A different way of looking at this segmentation would be to look at how a supermarket is structured. When you enter a supermarket, you will find a well-structured layout of aisles where the products are labelled correctly with prices and information, and some products might even be placed in eyesight for you to grab them more easily. These product aisles are the “preferred suppliers”. Now, in the back of the store or the aisles on the side, you will find shelves with random products, some clearly labelled with prices, some without and some with nearly no information. These are the “approved suppliers”; sometimes, they are okay to use but might not be suitable for your household or wallet and perhaps need to be returned with some hassle. In our case, we would like to bring the preferred supplier (and well-defined contracts/relationships) to the front of the users and let the approved suppliers be available in case of a particular need. With too much restriction and only allowing preferred suppliers, you could also push the users to go outside the approved systems, and you can end up spending time and money on those in-compliant spend and invoices coming in.

And to repeat our one piece of advice, you don’t need to get everything sorted and cleared before launching. Getting a few categories right and in control is better than spending weeks or months trying to control everything your organisation buys. If you try, you will, in any case, not succeed in the first many rounds unless you are willing to spend the time, effort and cost in managing your organisation. If you succeed with this, please get in touch - we would love to learn :)

Use of a commodity code structure and the impact on spend transparency

Getting transparency into cost and spending is a must when trying to improve the procurement area, considering which suppliers to contract or improve contracts and relationships with potentially, but also help guide the users into the correct information. We believe most of these choices should be relieved from the users and let them focus on them, providing more “relevant” information in the orders. Using the globally used commodity code framework, “United Nations Standard Product and Services Code”, or UNSPCS, allows you to build a structure of the products and services you buy and speak the same language as many other organisations worldwide. This supports your internal spending analysis and helps see what is bought from which suppliers, but it also eases the collaboration and work with your suppliers. The more structure you can build around your purchases, the easier it will be for your organisation to work with a procurement platform. As part of P2Connct, the commodity codes drive the guided buying experience, so they can be used with excellent outcomes if done right.

If you are unfamiliar with the UNSPCS framework or need to find specific commodity codes, we recommend looking at their website.

Using tags or keywords increases ease of use

Setting up tags or keywords improves the user experience and helps them find what they are searching for. This is also what most other procurement platforms deal with, but typically, it is an underestimated part of managing the content you add to your platform(s). The tags help identify what a supplier delivers more high-level, e.g., “lab service”, “marketing”, or “software development”.

The tags have two objectives (see examples in the pictures):

1. making searches for a supplier more specific and relevant for the users and
2. providing a better and more accessible overview of what a supplier offers in products and services

As part of our services, we occasionally give our customers suggestions on improving the content. In our roadmap, we are considering different ways of adding features to help you improve your content. If you need support in getting this done from scratch or in your initial phases, please contact our sales team on how we can help.

Supplier contacts and how to work with the supplier

When collaborating with your suppliers, depending on the supplier's size, you will quickly reach a point where more than one e-mail for a supplier will be needed. This is often seen as a small area in most e-procurement platforms and requires workarounds, e.g., creating a supplier with more than one entry or requiring the supplier to distribute the orders internally. In the P2Connct platform, you can define multiple supplier contacts and differentiate which contact should get which order. This means you can gain even more flexibility on your side of the setup, allow your users to select the relevant supplier contact, and even provide the organisation with the information when needing to contact the supplier for a specific topic. An example could be a supplier delivering laboratory services and equipment split into two different departments. By creating the supplier with the contact e-mail and contact person, you can use the same supplier entry for sending orders to both departments, depending on the need. Simple.

Additionally, defining how to work with a supplier is equally important. Do you want the organisation to send requests directly to the supplier? Should the request or collaboration be through an external URL? Or do you want to provide the users with collaboration guidance within the platform? You can do all of that where you need it. See this page for more information on expanding the guided ordering beyond requests and including internal services in the platform, like Facility Management.

Which users to start with

Regarding users, we can revisit our advice in starting small. This is not a way to limit the number of users using the platform but to start in a better defined area of your organisation and then scale from there. The more users are working on the platform, the more administration you would potentially have to do. But it depends on your organisation and how the requests should be made, e.g., centred in a few departments or allowing an organisational-wide platform usage. In all cases, you must consider the user structure on who should order and approve. The broader you go, the more people you need to manage.

• Requesters: A user typically does not manage a budget or is a part of the approval flow. It can be an employee of any department assigned to order on behalf of a department or area.
• Approver: The user is any employee in the organisation assigned a right to approve cost or spending within a certain threshold, e.g. a manager is allowed to approve within a lower threshold than the CEO.
• Cost owners: This user is an employee responsible for managing the budget and costs in a specific area. The cost owners don’t necessarily need to have been assigned the right to approve within a certain threshold but could, in principle, be anyone in the organisation. It would depend on your organisational structure and limits and can also allow a more reflexible setup when adding additional approvers to the approval workflow for a specific cost centre.
• Category Managers and Buyers: Who from your procurement organisation should be involved and be working with the platform. Depending on the size of your organisation and the maturity of your categories and company locations, assessing these users could be a part of not trying to get everyone using the platform. Getting them introduced to the platform and them working in the platform is two separate aims but both be done in parallel so everyone understands the value the platform will provide for the company - and your work to mature and scale your procurement department's reach.
• Who should be users, and which part of the organisation is needed in the first round? Consider starting small / with a narrower scope and scale from there.

The P2Connct platform is designed to lower the need for training as policies and process steps are built into the platform. Still, it doesn’t take away the management of the users and potentially additional needs they have. If you need administration support in shorter or longer periods to run our platform, we can support you - please look at our blog to see how we can help you with our Admin-As-A-Service add-on.

Cost centres and bringing more granularity to spending

Setting up cost centres is essential to working with our platform to manage your departmental budgets and spending. Suppose you use the platform to send requests to your suppliers. In that case, this allows budget owners - or cost centre owners - to keep track of their allocated budget, see what is left of a budget in the approval steps, and for Finance to help manage what the spending is used on. Depending on your maturity level, size or need, consider starting with fewer cost centres and splitting the budgets into more cost centres later.

3. Building in the Procurement Policy

If you have just started building your procurement policy from scratch or already have a policy in place, our platform is designed to help embed most elements from the policy. Policies are typically created with many good intentions covering the entire procurement scope for all categories and all areas in your business. This leads to having a document or documents, typically containing multiple pages, and targeting all kinds of scenarios, which is more complex to grasp for the majority of the users in the business. On top of this is policy training of your users, which needs to be repeated because, let’s face it, as human beings, we don’t remember everything unless we work with the topic frequently and with interest. So, you typically spend time trying to repeat policy messages or being frustrated about your business not following your extensively created procurement policy. The solution? Develop your policies into something more comprehendible for the many, split the areas into what is relevant, and point to the more “out of the ordinary” processes. Also, choose a platform that allows you to embed your policy into the process and platform itself. This will help guide the users when they need to remember what was on page 53 and focus on the essential parts of the policy. Who wants to remember a 40-page IT policy when working on the company’s computers or pages? Our best guess is not you. The IT department has been doing this for a long time without you even noticing it, and you are just following through and acting on messages and prompts being shown to you exactly where you are working. And if you need more detailed information, you can be linked to the policy - exactly where you need to read it.

Some of the elements to help embed your policy decisions in our platform include:

• Supplier segmentation - preferred suppliers are ranked higher in searches and selections
• Contract-relevant information and payment details
• How to work with a specific supplier
• Selection of commodity codes only used for the selected supplier
• Approval by the relevant person(s) - see more on approvals in the next step
• Link to or information about alternative ways of ordering/working with a supplier.

Thinking in your policy, either building the policy from learnings from the system or adding policy elements into the process, will allow you to have a more robust process while having your users focus on what is needed in that particular part of the process - leading them through the process and not relying on the users remembering lengthy generic training-sessions and multi-page policy documents. The more you can guide your users naturally, e.g., with system prompts of selections, compliance will improve and reduce the need to (re-)train your users.

4. Approval design

How you set up your approval workflows is one of the most important process steps to both manage what is being purchased and which suppliers are being used for what. The approval step is all about how and whom from the business should be required to approve - “financial approval” - and when your Procurement department needs to be involved. A direction to take is adding multiple approvals for everything, which can be a way to control everything your organisation is ordering. But it also comes with a cost, and a question should be asked: “What is the value of an approval?”.

We recommend limiting the number of approvals to a minimum, only requiring the involvement of business approvers and procurement where it makes sense and provides value. Through this, you will also be able to focus on areas that need special attention, e.g., approved suppliers within a certain threshold or ensuring orders to preferred suppliers above a higher threshold are getting an additional check to ensure contract elements are secured. As a starting point, our platform requires approval by the cost owner (budget owner) of the order raised, but other than that, you are free to set up your approvals as you intend to. In some cases, you could consider having tighter control in the first months and later work on simplifying the approvals needed. This will also support your maturity journey and focus more on retrospective controls and spend management.

Creating simple and easy-to-maintain approval flows is the best way to start if unsure. Avoid adding unnecessary layers that may slow down the process and where approvers are more bothered about the approvals rather than spending a few seconds validating the need and approving the cost. One piece to consider is which thresholds the approvers should focus their time on and perhaps push some responsibility into the first approvers, thus focusing on the more risky areas in the higher approval thresholds.

5. Choosing the first people

Now that you have done your preparations and initial setups, you will be well off involving the first users in the process and implementation. Who are the employees that need to be using the platform and order on behalf of your organisation? Are they already working with similar tasks, and are you starting from scratch? In all cases, you should prepare them for what is to come, get them involved in the implementation plans, how processes have been designed and what the policy is made up of.

These users can help shape your success in the next many months and gain additional value in your implementation, platform usage, and content maturing. So treat them well and include them as part of the inner team. You will gain from this by building up a strong ambassador team that provides additional route improvement feedback from the rest of the organisation. These users are to be considered in the end-to-end process: requesters, cost owners, approvers and procurement. And other relevant stakeholders not necessarily working in the platform(s) like your Finance department or even legal. This is all about getting people to understand how the new platform (or tool) will be used.

For a successful implementation, you need a plan and a dedicated team. While the platform can assist with certain implementation aspects, such as training and messaging, a well-structured plan and motivated team members who drive the implementation and make necessary corrections are essential. It doesn't have to be overly complex. Also, please take note of our recommendations regarding implementation and managing change. If you need support during your P2P change journey, we can provide experienced consultants to assist and advise you.

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Contact our team via the chat for more information and how we can support you - either with our platform or our advisory services.

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