I’ve blogged before about the benefits hoteliers can expect from a good P2P system – but what exactly is P2P and why is it so important? Let’s take a closer look.
Procure-to-pay (P2P) is a business process cycle that begins by offering sourced products and services with the procurement of the products and services, including all of the various purchasing elements within operations, and ends with the payment (AP) for those services and products. The purchasing elements incorporate everything from checkbook visibility to recipe management to project management to capex management to business intelligence and reporting, and so on.
Why should hotels use P2P?
Electronic P2P systems connect all of the functionality between the time sourcing is launched through the time the products and services are procured, received and paid. An effective P2P solution will fully integrate and provide visibility and accountability for all functions and all users engaged in the process.
Companies that do not use P2P will frequently exhibit gaps that may impair efficiency, including a lack of compliance with hotel company operating procedures, missing data and a lack of business intelligence due to deficiencies in the collection and integration of critical data. These gaps create problems gaining real-time visibility into business costs and supplier performance – both of which are critical to stay competitive. Using an integrated P2P solution eliminates these gaps and improves efficiency and business processes, which results in higher net operating income (NOI).
In my next entry, I’ll discuss what specifically to look for when selecting a P2P system.