In this episode of the Business Excelleration® Podcast, which Purchase-to-Pay software solutions provide the greatest level of value to companies? A discussion of findings from our new Market Intelligence Service research, with The Hackett Group Principal and Global Procurement Advisory Practice Leader Chris Sawchuk, Director, Finance Transformation Rick Gardner and Market Intelligence Practice Principal Andy Warzecha.
Welcome to The Hackett Group’s “Business Excelleration Podcast,”where week after week we hear from experts on how to avoid obstacles, manage detours and celebrate milestones on the journey to world-class performance. This episode is hosted by Gary Baker, Group Global Communications director at The Hackett Group. Today’s episode will discuss which purchase-to-pay software companies have the biggest value through findings from their market intelligence research. Gary is joined by three experts in the field – Principal and Global Advisory Practice Leader Chris Sawchuk, Director of Finance Transformation Rick Gardner and principal in the Market Intelligence practice Andy Warzecha.
To begin, they start off explaining why The Hackett Group chose to do this study. They had the opportunity to look at what has already been done in the marketplace and take a new approach. The Hackett Group wanted to look at other areas and understand the performance impact of these solutions within their environments, along with determining the differences between the solutions. In addition, they wanted to see the impact of those who utilize the solutions and what drives those differences. They studied the actual performance impact on companies’ ability to execute the purchase-to-pay process in these organizations. Next, they discuss how their study is unique and different from studies that have been previously done. The Hackett Group looked at vendors and their capabilities, strategies and analysis, the value that the user clients achieved, and whether or not the employment was delivered on time and on budget. The Hackett Group also used performance metrics and benchmark studies to put things into context. They also looked at top providers and average companies in each section, determining where one should be focusing on their own deployments.
In addition, they describe the approach of these studies and the level of rigor involved. This was an extensive process that started at the beginning of the year. They had time and insights directly from the solution provider themselves, in addition to research they conducted. They looked at strategies, capabilities and where they’re investing in the future. A lot of companies had maturity but also a lot of change. They spoke to and surveyed over 130 customers, which included various leaders and experts in their field. They also helped them understand the journey they took, what their objectives were and were they getting value out of the solutions. They also got to hear areas of opportunities where they fell short and the reasons for that. This created a balanced view from the customer and teams on the ground that provided key inputs that fit into the analysis that drove the output that they looked at.
Next, they discuss the real quantification of value realization, including key metrics and takeaways there. There was a more significant population of customers for solution providers. They looked at the included value realized, but also insights on the return on investment. They asked about their target objectives for implementation and whether or not their company met those targets they set. In addition, they studied the speed by which these solutions can be implemented and deployed. There was a competitive differentiation between companies among the categories of speed-to-value, implementation time frames, training needed, actually adopting solutions, etc.
Then, they talk about examples of these differences in looking at the top performers compared to the other 75% of organizations. First, in supplied adoption, the top organization had a much higher adoption rate of 68% versus 48% in other companies. There were greater degrees of spendability, along with the quantity and quality of visibility. The higher degrees between that population also correlated to a 1.1% cost savings. They also looked into approval cycles for purchase orders, and the top companies had a cycle time of 1.3 days faster than the rest of the population. There was a reduction of 3.5 days in the top core performers, which suggests increasing accuracy ensures that you are paying your suppliers on time and building and developing relationships with suppliers. For top performers that have early-pay discounts, there was a 32% improvement. The adoption rate of utilizing purchase orders (POs) is within the environment of 92% vs. 76%. We also need to ensure that we’re not manually engaging in POs and creating a touchless process (73% vs. 48%). This looks at the cost of going through the transactions, and those costs are 29% lower than the rest of the population. Finally, they discuss how solution providers differentiated themselves by excelling in venues of spend within their channels and speed-to-value components, along with upcoming studies.
- 0:49 – Welcome to this episode hosted by Gary Baker.
- 1:47 – Why did The Hackett Group choose to do this study?
- 3:44 – How this study is different from those performed previously.
- 5:14 – The approach taken and the level of rigor involved.
- 7:43 – Real quantification of value realization in key metrics and takeaways.
- 10:47 – Examples of differences in top performers vs. other companies.
- 15:44 – The way the solution providers differentiated themselves from one another.
- 17:17 – Key digital enablement drivers.
- 18:39 – Upcoming studies.