7 Major Myths Business Organizations Believe When It Comes To Procure To Pay Software

Cutting down the major costs and driving drown to the supplier margins is what organizations have been expecting in terms of procure to pay software. And though the organizations have realized that procurement function is capable of doing much more than what is generally expected, it is still considered to be a strategy of marketing sales or finance. Given below are the 7 major myths business organizations generally believe when it comes to procure to pay software ensuring that procurement has always languished on the backbench of the organizational importance.

Procure to pay software helps in controlling the expenses and that their job but not a contributing strategy: We all have heard this before. When it comes to procure to pay software the procurement responsibilities are completely transactional, where you need to handle the requisitions, managing the on time deliveries of the requirements at the right place and at the right time. But when it comes to strategic decision making procurement strategy there has been no expertise that would help you contribute. Organizations who believe this should probably take a step towards the dark ages into the 21st century.

Individuals related to procure to pay software just get in the way and complicate things: Individuals related to procure to pay software make things happen in the right way and the right resource. This again takes a huge effort to upfront, and should be seen as an opportunity that would help you get things right. Complications would here continue to arise due to lack of consideration but again is not the case of procurement.

Direct procurement functions cannot be outsourced: While the major functions such as the vendor spend management and vendor relationship management are the two important things that need to stay with the customer organization, many number of other procurement activities to this have been deployed and outsourced. Functions like demand planning and forecasting, commodity price tracking, transactional purchasing and many more have been outsourced over the years.

Procure to pay software is nothing more than glorified outsourcing: Procure to pay software here generally means considering different options, and looking out for opportunities that would not just allow you think creatively but also forge in a new and better manner. Outsourcing here is considered to be a potential strategy that has its own appropriate uses and is not the only option available that is put to place.

Procurement recruits need to be good in numbers in order to manage the costs: Different kind of traits have been put forward when the requirements for all the procurement professionals are put forward during the job searches. Say for example when it comes to analytical he needs to be good in numbers and has to be a tough negotiator. And as mentioned above the role of procurement was logistical, clerical, with the only aim of getting the best cost saving and these traits would definitely do. The need here for now is for a new breed of having good procurement professionals.

Procure to pay software leads to the loss of control in strategy and processes: When it comes to procure to pay software, the procurement vendors are the one who are well integrated and act as a virtual extension of all the customer procurement functions starting from the adoption of strategic goals to the operational culture. The customer would then here continue to exercise his control over the different aspects of procurement function with the vendor.

They always run behind saving costs but forget considering the business they have been doing: Cost is a major factor when it comes to procure to pay software and is something that could be considered to be more than a dollar value. Procurement is considered to be good when it highlights the different perspectives and the cost benefits from the business decisions, with savings being one tangible outcome from looking at the situations in a different manner.

These were just a few but there are a lot more to go. So what are the other myths you would like to add when it comes to procure to pay software? How have you been dealing with them? Do leave your thoughts and comments below and we would be happy to add them to the list above.

Author Bio:

Shivli Ratul is a freelancer and has experience of over 5 years in expense and travel management softwares.She has in-depth knowledge about managing travel and different type of expenses incurred in business.she writes about Procure to pay software as a freelancer

PM Building Relationships: RESPECT

Mutual respect is one of the hallmarks of a successful relationship. To gain respect in a business environment, it is important that the two groups understand each other’s roles and responsibilities. One way of developing this understanding is to have members of the two groups work closely together. Depending on the nature of the project, the project team may benefit from having someone serve a “tour of duty” in the customer’s department. By functioning as a member of the department for a few weeks, the “tourist” will learn how the customers work and—just as importantly—why they do things the way they do. This can be invaluable, particularly when the project involves reengineering the customer’s procedures.

Although it is less common for customers to serve a tour of duty, they can benefit from a briefing on the team’s organization and the tasks that are involved in completing the project. Without that, they have no way of understanding the complexities of the typical project and may become frustrated with the length of time required to complete what they believe to be a simple task. 

Differences Between Staff Augmentation And Outsourcing

Characteristic	Staff Augmentation	Outsourcing
Company contracts for	Individual contractor’s work	Predefined service or product
Selection of staff to perform work	Company’s (company staff interviews prospective contractors)	Outsourcer
Day-to-day direction of staff provided by	Company	Outsourcer
Pricing	Time and materials; hourly rate or per diem	Fixed price, typically payable monthly or on completion of specific deliverables
Location of staff	Company site	Either company or outsourcer’s site
Co-employment concerns	Possible, if lengthy assignment	None
Measure of success	Individual tasks	Deliverables
Key to success	Individual contractor	Outsourcer

Characteristics Of Successful Leaders

The five types of power: coercive, reward, legitimate, expert, and referent.* Coercive power, as its name implies, involves forcing others to comply, normally by threatening punishment or penalties. Reward is the opposite side of coercive, in that it promises something positive if the individual complies. Legitimate power is based on the authority managers have through their position within the organization, while expert power resides in the manager’s personal experience or expertise. Referent power is the result of a person’s charisma. 

Risk Management Basic Steps

Risk management should be repeated at various stages of the project. Although the scope under consideration will vary with each iteration, the process remains constant. The four basic steps are:

1. Identify the risk.
2. Evaluate the potential effects and severity of the risk. 

3. Prioritize the risks.
4. Develop a mitigation plan. 

Tools For Determining Customer Requirements

Tool	Advantages	Disadvantages
Surveys	Relatively inexpensive to administer; require minimal effort from team	Unless carefully constructed, may not elicit important information
Focus groups	Provide opportunity to digress from agenda and discover underlying problem; group setting may encourage participation and “building on” another’s response	Require more time to conduct than surveys; group setting may intimidate some participants
Individual interviews	Excellent way to discuss sensitive topics and to obtain specialized information that might be boring to others in a group setting; ideal for people who are uncomfortable in groups	Most time-intensive method
Site visits	Excellent way to see the effect of problems and to meet customers who would otherwise be inaccessible	Can be expensive; customers may be unwilling to host site visits
Customer complaints	Lowest cost	Provides only one perspective; does not address problems that other customers have not expressed; unbalanced, since it does not include positive comments

Types of Customers

◾ External Customers. These are normally easily identified. In the case of GWC and IW, these were the companies who purchased their widgets. They were not, however, always the ultimate customers.

− Ultimate Customers. These external customers can also be classified as end users or consumers. If Great Auto, one of GWC’s external customers, incorporates GWC’s widgets on the cars it manufactures, the person who buys one of Great Auto’s cars is GWC’s ultimate customer.

◾ Internal Customers. These are the company’s departments and individual employees who use a product or service. In the relocation project, they are primary customers, since the majority of the work that is being done is for their benefit. Internal customers come in two varieties: immediate and intermediate.

− Immediate Internal Customers. These are the departments that are directly impacted by the project. For the relocation project, that includes all employees. If the project addressed the manufacturing process, with the end product being a finished widget, the immediate internal customer would be the Packaging Department, since it is the first department to use the widget.

− Intermediate Internal Customers. Intermediate customers stand between an immediate internal customer and an external customer. For the relo- cation project, there are no intermediate internal customers. However, using the example of the widget manufacturing process, the Shipping Department would be an intermediate customer. Shipping receives a product or service (a widget) from the immediate customer (Packaging). 

SMART: Criteria For Defining A Problem

• ◾  Specific—The problem must be quantified. Rather than attempting to cure world hunger, which—besides being unlikely to be attainable—is a vague problem, the goal could be defined as “Increase the annual food supply in Country X by 50 percent for each person.”

• ◾  Measurable—The results must be able to be measured. Using the previous example, unless the current per capita food supply has been quantified, it is impossible to measure the increase.

• ◾  Attainable—The goal must be realistic.It may not be possible to increase the food supply by 50 percent, particularly not within a short time frame.

   ◾ Relevant—The change being made must satisfy an important customer requirement. In this example, the goal is relevant if the citizens of Country X suffer from malnutrition but not if they have an obesity epidemic.

  ◾ Time-bound—The expectation must be that the change will be achieved within a specified time frame rather than being open-ended. In an ideal situation, the time frame is measured in months rather than years. To make it time-bound, the world hunger statement could be expanded to read, “Increase the annual food supply in Country X by 10 percent for each person by the end of the current calendar year and by 15 percent for each successive twelve- month period.” 

Pitfalls In Staffing A Project

Though few companies would deny the importance of the project team, there are a number of possible pitfalls in staffing a project. The most common are:

◾ No champion—Unfortunately, some projects are begun without a champion. This may not create major problems on a small, short-term project, but for anything of strategic importance to the company, it is essential that there be high-level sponsorship. Without it, the project’s chance of success is diminished. The champion, after all, is the one who breaks down barriers and obtains additional funding, if needed.

◾ An ineffective project manager—Champions should be vigilant when selecting project managers and should ensure that they possess the needed skills. Managers are sometimes chosen for political reasons, to give them experience needed for a promotion, or—worst of all—because they have more free time than anyone else. Although none of those precludes success, those should be only secondary considerations. What is critical is that whoever is chosen has the characteristics of a successful project manager discussed above.

◾ The wrong team members— The project manager may be the head of the team, but the individual members are its arms and legs. Selecting people who lack the needed skills and personal characteristics decreases the probability of success.

◾ Absence of the right people— This is acorollary to the previous point. Although the team might be staffed competently, if key individuals with unique knowledge and skills are not included, the project will suffer.

It bears repeating: projects do not happen without people, and — if the project is to be successful —it is essential that the right people be involved. 

Characteristics Of Effective Team Members

Commitment - The individual must believe in the project and be willing to do “whatever it takes” to make it successful. 

Bias for Action - The team member must have a sense of urgency and feel compelled to finish the project successfully.

Flexibility - Since the team’s charter is to recommend change, each team member must not only be able to adapt to change but must also embrace it.

Innovation - Successful team members are able not only to embrace change but also to initiate it by finding new ways to accomplish the goal.

Personal Influence - Since the team will become agents of change, it is highly desirable for all members to be well respected within their own communities. This is similar to the “personal clout” requirement for project champions and leaders.

Available Time - Individuals who are close to burnout because of a too-heavy workload should not be chosen for the team. Not only will they not be effective, but they may also create dissension within the team by missing meetings or failing to deliver on commitments.

Teamwork - No matter how creative and committed individuals may be, unless they can work successfully as part of a team, they should not be part of the core team. Key “individual contributors” who lack cooperative and collaborative skills may be called on to provide expertise at various stages of the project.

Support Functions For Team Membership In Project Management

Communication - To assist with development of communication plan and package. This is particularly important when the change will impact customers and suppliers. 

Customer Service - To provide a “voice of the customer.” This is especially helpful if actual customers cannot be involved.

Finance - To aid in developing benefit analyses.

Health, Safety and Environmental - To identify safety or other environmental issues that should be included in the proposed solution.

Human Resources - To provide assistance with change management, particularly when job functions will be eliminated or substantially altered.

Information Technology - To assist with identification of new technologies that may become part of the solution.

Internal Audit - To identify needed controls and ensure that company procedures are followed.

Legal - To identify any contractual issues that may result from proposed changes. If job functions will be eliminated or substantially altered, HR/legal counsel should be obtained.

Procurement - To identify potential suppliers and the impact of proposed changes on existing suppliers.

Critical Success Factors Of A Project Manager

Project Management Experience—This is one of the key differentiators between a successful and an unsuccessful project manager. The manager must understand the fundamentals of managing projects, from team dynamics and problem resolution to project schedules. While formal train- ing is important, there is no substitute for experience, and on a large or critical project, only managers with prior experience on successful projects should be considered. Note that “successful” was italicized. It is true that project managers may learn valuable lessons working on failed projects and that they can frequently transform those lessons into successes on the next endeavor. However, to minimize risk on mission-critical projects, proven success is desirable. 

Ability to Gain Consensus—More than any other member of the team, it is the leader’s responsibility to resolve differences of opinion. This requires an understanding of both general problem-solving techniques and what motivates individual team members. While technical skills may have been responsible for promotions earlier in a person’s career, interpersonal skills are essential for successful project managers. 

Ability to Conduct Meetings—Since meetings are typically the forum for accomplishing much of the team’s work, the leader needs to know how to run effective meetings. This includes establishing and publishing an agenda prior to the meeting, and ensuring that the meeting stays on schedule and that the correct players are invited and attend. While some of the respon- sibilities may be delegated—for example, a timekeeper may be appointed to ensure adherence to the agenda—the manager has overall accountability and is normally the person who conducts meetings. 

Verbal and Written Communication Skills—Project managers are normally the day-to-day spokespersons for the project. As such, it is important that they be effective communicators. They may be called upon to present the project to senior management or to workers on the assembly line and should be comfortable in either situation. They must also ensure that all decisions they or the team make are fully documented. Note that during meetings this responsibility may be delegated to a team member, typically called a scribe or recorder, but that the manager is still accountable. 

Respect—It is important that the project manager be well regarded through- out the company. As one of the project’s two primary spokespersons (with the champion), the manager must be recognized as an employee whose opinion is valued and whose skills are unquestioned. “Personal influence” is a key characteristic of successful project managers. 

Understanding The Stages of Poor Project Management

Because project management frequently have lengthy durations and are measured in months and years rather than days and weeks, they are often said to have a life cycle with predictable phases. Although its origin is unknown, one cynical version defines the stages of a project as wild enthusiasm, disillusionment, panic, and punishment of the innocent and reward of nonparticipants.

◾ Wild Enthusiasm—These are those heady first days of a project when every- one is excited about the goal and convinced that, no matter how many other similar projects have failed, they will succeed. It is easy to be enthusiastic, because no one has taken a reality check, and no one has worked on those pesky details of schedules and budgets.

◾ Disillusionment—All too soon, reality sets in. The project manager, or who- ever is in charge, discovers that the budget is not unlimited and that several of the key people he had counted on for the team are available only part time. Meanwhile, the customer’s initial excitement fades when she learns that not all the functions she had been promised will be delivered. The house she envisioned may have four bedrooms and two and a half baths, but on the date she had planned to move in, the project leader tells her there will be only one functioning bathroom, and the kitchen will not be completed until the second phase. Though no longer excited about the project, the team is still convinced that the goal can be achieved. It will simply take more work than they had expected. Lots more.

◾ Panic—This reaction ensues when the team faces the fact that, even if they could work 24/7, the project will not be done on schedule. Fearing that heads will roll, some team members quit, leaving the rest in a deeper state of panic. It is not uncommon at this point for senior management to bring in a consultant to rescue the project. Any remaining esprit de corps evaporates.

◾ Punishment of the Innocent and Reward of Nonparticipants—When the project ends, either by being canceled or delivered with greatly reduced functionality, the witch hunt begins. Team members who did their best in an impossible situ- ation are reassigned to less prestigious projects, their careers are stalled if not destroyed, while the consultants, who may have done nothing more than report the initial team’s recommendations, are paid hefty bonuses and publicly feted.

Unfortunately, while these descriptions may seem facetious, this is frequently the course of an unplanned project and is the reason why formal project manage- ment is so vital. 

Types of Project Management

When most people think of project management, they envision a formal process, one that follows a methodology. Although that variety of project management is the subject of this book, it is important to recognize that there are other types.

Unplanned—These are seat-of-the-pants ad hoc ,where a group of people does its best to accomplish a goal. Under these circumstances, success is unpredictable, and even if it occurs, it cannot be easily replicated because little or nothing has been documented. In a business environment, unplanned projects are undesirable because they lack predictability.

Informal—There are times when an experienced team may decide to run a project without utilizing the complete set of procedures and related documentation that would normally be used. Typically, these are projects of short duration that are very similar to other projects the same group has successfully completed. While success is more likely than in an unplanned project, the informality means that any lessons learned will not be captured for use by another project team. This is undesirable in a business environment, because the probabilities of success for future projects are increased when team members can learn from others’ experiences.

Formal—This is the most common and most desirable form of project management. An established process is followed; documentation is completed; project results are available as learning tools for future project teams. 

 

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