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.”

Using “The Carrot” approach is essential if you can’t get strong, consistent Top Management support for your P2P initiative.

The first thing you’ll want to do is figure out how to answer this end-user question, “If I use the P2P system, what’s in it for me?”

Benefits typically include faster delivery, self-service order/invoice status inquiries (No more need to call AP or Purchasing for status!), easier invoice approval, and/or better reporting.

One of our clients reports that in this bad economy, people are calling the Purchasing Department to get spend data. With pressures on budgets, actual vs. budget data is increasingly important. The P2P champion is using this fact to encourage people to use the system, and thereby get more accurate, comprehensive spend data on a timely basis.

Second, embark on an education and communications effort (PR) with internal groups and suppliers. These folks ought to understand the big picture. The company is doing this to save money and improve spend visibility — profitability, cash flow, and ultimately jobs are tied to this initiative.

Coffee mugs and tee shirts are not needed for this PR campaign! Tools like webinars, surveys, company web sites, and P2P Portals can be used to communicate with end-users (and suppliers).

Third, make it easy for people to use the system. This would include the ability to requisition/order anything and everything from one P2P system. This should handle ordering not only from a catalog, but free-form, and services. The objective is to make it so easy that you’ll capture all spend.

Other tactical steps might include using an Administrator to use the system on behalf of a group of unwilling end-users. Reducing the number of approvals should also be considered to make it easier to use the system. With comprehensive audit trails, it no longer should be necessary to get six approvals on a single Requisition, Order, or Invoice.

In addition to training courses, our clients have designed laminated “cheat sheets”, Computer Based Training courses, “Talking PowerPoints”, and incorporated “How to’s” on the Intranet site used by Purchasing or AP.

If it’s not easy to use and you don’t invest in education, training, and PR, the P2P system will eventually collapse.

Next: Using “The Stick” to force users to use the P2P system

One of the biggest challenges facing companies implementing P2P systems is increasing the number of people who actually use the system. This, in turn, leads to maximizing spend under management, contract compliance, etc.

There’s no question that some end-users are easier to convince than others. Certainly the Power-Users are relatively easy to get on-board. This would include Purchasing and Accounts Payable. If they “don’t get it,” you’re in real trouble.

The challenges typically lie with, (a) infrequent users, (b) departments such as Marketing, IT, etc., and (c) Approvers of Requisitions and PO’s.

One of the principles of successfully implementing any enterprise system is to “seek and gain Top Management commitment” for the project. With true Top Management commitment, it’s easier to get everyone to fall in line and use the new system.

Unfortunately, getting Top Management commitment rarely happens — most people are lucky to get approval to buy and implement a P2P system.

In 25 years, I would say I’ve seen this happen no more than 10 times. It’s a beautiful thing when it happens – but, what if it doesn’t?

First, this means you will need to avoid the “Big Bang” approach to implementation. You’ll need more time to fully implement the system because you will need a phased approach, where you bring on one group of users at a time. You simply won’t have the clout to influence everyone’s behavior simultaneously.

There are two basic approaches you can utilize to get users on the system and have them use it religiously; the first approach being “The Carrot,” the second, “The Stick.” Perhaps you can use techniques from both categories.

In my next blog, we will examine “The Carrot” approach in detail.

This will help you figure out how to communicate with your end-user community and to answer the question, “what’s in it for me?”