How to Build a Business Case For a P2P Portal

Procure-to-Pay (P2P) Vendor Portal is a web-based platform that allows businesses to manage their procurement processes and engage with suppliers in a streamlined and efficient manner. These tools have since become popularized as a centralized platform for businesses to manage vendor onboarding, purchase orders, invoice processing, and payment reconciliation.  

Although the value of these tools is clear, getting approval for a vendor portal can be challenging because it requires a significant investment of time and resources from a business. Additionally, decision-makers may be skeptical of new ideas that could disrupt existing processes. Therefore, presenting a well-crafted business case that outlines the potential benefits, risks, and costs of implementing a vendor portal can help build support and increase the likelihood of approval. 

This blog aims to help businesses build a business case that will get approval. To help, you might find it helpful to download the business case workbook to follow along as we walk through the steps in this blog. 

Building the Business Case  

So, where should you begin? Consider the following steps. 

Defining the Business Objectives and Goals 

Defining the business objectives and goals for a P2P vendor portal is a critical step in building a business case for its implementation. This involves understanding what the organization hopes to achieve through the portal and what specific benefits it can bring. 

Here are some common objectives and goals that organizations may have when implementing a P2P vendor portal: 

• Reducing costs: Organizations may look to a P2P vendor portal as a way to reduce transaction costs, such as those associated with paper-based processes or manual data entry. This can also help reduce the need for manual intervention in the procurement process, saving time and resources. 
• Improving efficiency: A P2P vendor portal can help streamline the procurement process, providing greater visibility into spend and enabling better control over purchasing decisions. This can help improve efficiency by reducing the time it takes for your employees to process orders and invoices and improving accuracy in supplier management. 
• Enhancing supplier relationships: A P2P vendor portal can help foster better communication and collaboration between buyers and suppliers, allowing for more effective management of supplier relationships. This can include features such as real-time communication, supplier performance tracking, and self-service capabilities for suppliers. 
• Improving compliance: A P2P vendor portal can help ensure compliance with internal policies and external regulations by providing greater visibility into purchasing decisions and enabling better control over spending. 

In addition to defining the objectives and goals, setting specific targets for each objective is important. This will help measure the success of the P2P vendor portal implementation and demonstrate its value to stakeholders. 

Analyzing Current Procurement Process 

The first step in building a business case for P2P Vendor Portal implementation is to analyze the current procurement process. This involves understanding how orders are placed, invoices are processed, and payments are made. The analysis should also include an assessment of the current technology and systems in place to support procurement processes. 

Identifying Pain Points and Challenges 

Once the current procurement process has been analyzed, the next step is to identify pain points and challenges. This involves understanding where the current process is falling short and what problems are being experienced. Some common pain points and challenges include manual processes, lack of visibility, and lengthy approval processes. 

Estimating the Costs and Benefits of Implementation 

Once you've defined the business objectives and goals, identified the problem or opportunity, conducted market research, and recommended whether or not to pursue the P2P vendor portal initiative, the next step is to analyze the costs associated with the initiative.  

To do so: 

• Identify all costs associated with the initiative, including one-time and ongoing expenses. One-time expenses may include things like the cost of software licenses, hardware, implementation, and training. Ongoing expenses may include things like maintenance, upgrades, and support. 
• Quantify the costs: Once you've identified all costs associated with the initiative, quantify them in terms of dollars. This will help you develop a more accurate cost-benefit analysis. 
• Develop a cost-benefit analysis: A cost-benefit analysis compares the initiative's costs to its expected benefits. To develop a cost-benefit analysis, identify all expected benefits of the initiative, quantify them in dollars, and compare them to the costs. 
• Consider the time frame: When developing a cost-benefit analysis, consider the time frame over which the benefits will accrue. Some benefits may be realized immediately, while others may take longer to materialize. 
• Consider alternative scenarios: When developing a cost-benefit analysis, consider alternative scenarios, such as the cost and benefits of maintaining the current procurement process versus implementing the P2P vendor portal. 

Make a Recommendation 

After conducting a thorough analysis of the problem or opportunity, defining the business objectives and goals, and conducting market research, it's time to make a recommendation about whether or not to pursue the P2P vendor portal initiative. 

When making a recommendation, it's important to clearly articulate its rationale and provide supporting evidence. This evidence should include both qualitative and quantitative factors that support the recommendation. 

Qualitative factors may include things like: 

• Alignment with business strategy: Does the initiative align with the organization's overall strategy and goals? 
• Competitive advantage: Will the initiative give the organization a competitive advantage in the marketplace? 
• Ease of implementation: How difficult will it be to implement the initiative? Will it require significant changes to existing processes or systems? 

Quantitative factors may include things like: 

• Return on investment (ROI): What is the expected ROI of the initiative, and how does it compare to other potential investments? 
• Cost savings: How much can the organization save by implementing the initiative? 
• Increased efficiency: How much more efficient will the procurement process become with the P2P vendor portal in place? 

Based on the analysis and the evidence gathered, make a clear recommendation about whether or not to pursue the P2P vendor portal initiative. Be sure to explain the rationale behind the recommendation and provide supporting evidence to help stakeholders understand the decision. 

Achieving Business Impacts within the First 90 Days of P2P Vendor Portal Implementation 

Setting Up Clear KPIs and Metrics 

To achieve business impacts within the first 90 days of P2P Vendor Portal implementation, it is essential to set up clear Key Performance Indicators (KPIs) and metrics. These KPIs and metrics should be aligned with the business objectives and goals defined during the business case development phase. Some common KPIs and metrics include cost savings, cycle time reduction, and supplier satisfaction. 

Establishing a Project Timeline and Milestones 

To ensure that the implementation of the P2P Vendor Portal stays on track, it is important to establish a project timeline and milestones. This involves breaking down the implementation process into smaller tasks and setting deadlines for each task. By doing so, organizations can stay on track and ensure that the implementation is completed within the desired timeframe. 

Engaging with Vendors and Providing Training 

Engaging with vendors and providing training is an important aspect of P2P Vendor Portal implementation. At this stage, many companies find it helpful to work closely with suppliers to ensure that they understand how to use the new system. By doing so, suppliers will be better equipped to provide accurate and timely information, which will lead to better communication and collaboration. 

Monitoring and Measuring the Results 

Once the P2P Vendor Portal has been implemented, teams do well to monitor and measure the results. This involves tracking the KPIs and metrics established during the business case development phase and assessing whether the implementation has achieved the desired results. By doing so, organizations can identify areas for improvement and make necessary adjustments. 

Identifying Opportunities for Continuous Improvement 

Finally, it is important to identify opportunities for continuous improvement. This involves reviewing the results of the implementation and identifying areas where further improvements can be made. By doing so, organizations can ensure that the P2P Vendor Portal continues to provide value over the long term. 

By following these steps, organizations can achieve business impacts within the first 90 days of P2P Vendor Portal implementation. By setting up clear KPIs and metrics, establishing a project timeline and milestones, engaging with vendors and providing training, monitoring and measuring the results, and identifying opportunities for continuous improvement, organizations can ensure that the implementation of the P2P Vendor Portal is successful and provides lasting value. 

Kick Start Your Implementation the Right Way 

Implementing a P2P Vendor Portal can provide significant benefits for organizations looking to streamline their procurement process and improve supplier collaboration. However, to ensure the success of the implementation, it is essential to build a strong business case, identify pain points and challenges, define business objectives and goals, estimate the costs and benefits, and identify key stakeholders. By following the steps outlined in this blog, organizations can achieve business impacts within the first 90 days of implementation and continuously improve their procurement process over time.

What do you think is the hardest thing about creating a business case? Conducting the costs vs. benefits analysis? Aligning initiatives to business objectives? Other?