It goes without saying … every company today is looking for ways to cut costs quickly.

Companies that still handle and process paper invoices are ripe for cost reduction.

Some companies believe that somehow scanning invoices will reduce manpower requirements in AP. Many have been disappointed with this approach.

That leaves automating the AP process with the right combination of eInvoicing, Invoice Portals, Workflows, and imaging … depending on Suppliers’ preferences.

These preferences can be heavily influenced by how fast Suppliers get paid and how much effort is required by you to process their invoices. Invoices sent and received electronically can, of course, be paid quickly and efficiently. Paper invoices, not so much.

The alternative is outsourcing.

There really are only two viable alternatives: outsource or automate. It’s up to you.

A mid-sized company recently told me that most of the application software they had evaluated lately did not make it easy for end-users to “get at the data,” much less write their own reports!

This is a common complaint.

Fortunately, there is renewed focus on new Business Intelligence (BI) Tools in the marketplace, and how they can be integrated with ERP, P2P, Budgets, etc.

A software platform needs to first provide meaningful standard reports and inquiries. As it relates to P2P, this means making reports available that help Buyers analyze Dollar Commitments, evaluate price trends, check on open order status, etc.

But that’s not enough. End-users are forever being asked by management for special one-time analysis of Purchases, Payments, etc. A tool is needed to perform these important analyses.

Providing a Data Dictionary is not enough. It must be easy to manipulate data and perform calculations that accurately portray spend data within a system. An enhanced capability would allow data residing in other systems to be incorporated in the analysis. This might include data from Accounting, Budgeting, ERP, etc.

At the end of the day, BI needs to provide Actionable Business Intelligence. This means the data is timely, meaningful, and accurate … not just accounting-oriented stale data from 6 weeks after Month- or Quarter-end.

Ultimately, Key Performance Indicators (KPI’s) must be determined and actual data compared to Best Practice Benchmarks. This will be the next phase of BI in the P2P world.

Recently, our “Carrot and the Stick” series was featured as a topic of discussion on Debbie Wilson, Research Director for Gartner Inc.’s blog (View Debbie’s post Not the Carrot, the Stick!) — as a follow-up, we would like to comment:

“We have customers and prospects that say things like, ‘We can’t dictate to our end users.’ The reason vary from ‘our people are very entrepreneurial’ to ‘we can’t make Partners do anything they don’t want to do!’

I do get your point that avoiding the Expense Reporting system is not an option in almost every company I know, so why should eProcurement be any different?

Here’s the difference…First, the CFO and his/her staff have tons of clout in every company. If the CFO wants something, it will be done. Unfortunately we run into many CFO’s who a) don’t have the Procurement organization reporting to them and/or b) don’t understand the complexities of Procurement and wish to stay ‘above the fray.’

Why is this the case? After all, the eProcurement system controls far more expense and capital dollars than the Expense Management system in most companies.

When CFO’s are truly committed to eProcurement and Procure-to-Pay systems, they pay tremendous dividends…and it all falls right to the bottom line.

Enlightened CFO’s understand this and can use the carrot or the stick, depending on their style, to achieve the same result.

If the CFO’s not committed, and the eProcurement Executive Sponsor lacks clout, the carrot may be the only viable option available.”