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Has ‘Procure-to-Pay’ Met Its Alter-Ego?

February 4, 2008

Overall, I have to say that Procurement has been far more organized in defining and describing its role and process than have those in sales operations. Concepts like ‘procure-to-pay’ have represented useful ways to ensure coherent definitions of activities and responsibilities – even if execution is sometimes lacking and measurements may be driving the wrong results (but that is a different issue and not my theme for today).

On the sales side of the house, if the transaction is b2b, the process is often far more vague. In the name of ‘flexibility’ and ‘customer responsiveness’, I still encounter many organizations where Sales seem to engage groups like contract management or Legal on a discretionary basis. This leads to all sorts of problems – poor commitments, shortage of time, the need to unravel badly constructed deals.

So I welcome initiatives like ‘quote-to-cash’, recently introduced at Pitney-Bowes, in the hope that this might indicate a similar disciplined approach emerging in the sales arena.

Of course, there are good arguments to avoid rigidity – and it would certainly not be helpful to mirror the negative ‘compliance’ mentality of some buy-side organizations with a similar approach on the sell-side. We already see far too much time wasted in these low-value confrontations over whose standards will win. But there are benefits from a better disciplined sales process. These include:

  • Greater clarity for Sales over roles and rules should mean better commitments
  • Earlier involvement of contracts and legal experts will often result in more successful – and higher value – deals
  • Less ‘fire-fighting’ will enable resources to be applied to more strategic management of offerings and relationships
  • Perhaps – and this is a big ‘perhaps’ – we might even see greater Sales accountability for the outcomes of their deals

As we face a world of increasing complexity, with relationships that have ever-greater strategic significance, the sales process must be more fully integrated with execution. A concept like ‘quote-to-cash’ certainly implies a much more holistic view that ensures commitments match capabilities. So I am looking forward to talking with Tom Fuchs, from Pitney-Bowes, on an IACCM ‘ask the expert’ call on February 14th.  The Role of Contract Management in the Quote-to-Cash Continuum is at 11:00 Eastern US time.

One Comment
  1. Hi Tim,

    You’ve made some great points around “Procure-to-Pay’s” alter-ego. In my role at Emptoris, I have seen the increasing importance of process improvement on the sales side of the business.

    Our customers have shared horror stories of spreading a sales contract, all its amendments and other associated agreements across a boardroom table in an attempt to simply identify their commitment to their customer. By consolidating all of those amendments to create a single view, they’ve saved time and now have a clearer understanding of those commitments. Not only are they better equipped to execute, but they can now use their conference room for its original purpose.

    I look forward to your discussion with Tom Fuchs on this topic.

    Regards,

    Mark Severns
    Product Marketing – Contract Management
    http://www.emptoris.com

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