From Accounts Payable to P2P Mastery: A Story of Transformation at TE Connectivity

In today's dynamic corporate landscape, an optimized procure-to-pay (P2P) process has become essential. More and more large companies are no longer focusing on optimizing individual functions such as accounts payable or procurement, but are looking at the entire P2P process. This broader approach reflects a significant strategic shift as it emphasizes the interconnectedness of the individual process steps.

We had the privilege of speaking with Jakub Wojdat , the Global Head of Finance Shared Services at TE 中国 . With over two decades of experience managing shared services for multinational corporations, Jakub offers insightful perspectives from his extensive career.

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In this article, we will explore:?

1. The significance of focusing on the end-to-end process
2. Key lessons learned on the TE Connectivity's journey of P2P transformation
3. How to bring large-scale change into the organization
4. How to stay ahead of the curve

Shifting the Lens: Moving from Accounts Payable to a Holistic P2P Process

"When we talk about the end-to-end process, we look at the Procure-to-Pay or Source-to-Pay journey," Jakub Wojdat begins. He outlines the P2P process quite simply: a need for materials or services arises, a purchase requisition is created, procurement finds the right supplier, a purchase order is developed and approved, the goods are delivered, and the invoice is processed and paid.

"In a perfect world, everything aligns neatly. But in reality, that is only the case 80% of the time. In the other 20 % of cases, a link in the chain breaks, leading to considerable rework and effort. This is where companies traditionally focus their energy.

The allure of accounts payable automation

Jakub notes that many companies gravitate towards optimizing Accounts Payable (AP) because it's a straightforward first step. AP is usually managed centrally by the finance department, so there is only one main decision maker, the company's CFO or Controller. This decision always leads to centralization and provides a comprehensive overview of the AP process across different regions and legal entities.

The limitations of an AP-centric approach

While focusing on AP is attractive, it also has its limitations. "I can have my people working in AP 24 hours a day, but the problems that arise in the end-to-end process will remain if I do not focus on it," Jakub warns. Centralization may improve the process AP and bring cost savings, but it has its limits without broader process improvement.

The need for a common approach and a long-term strategy

Moving from accounts payable (AP) to a holistic procure-to-pay (P2P) process is not just a change in tactics – it is a strategic shift that requires a collective effort from all stakeholders.

"If your goal is to transform the business to achieve better supply chain management, better relationships with suppliers, better timeliness of payments and continuous improvement across the business, then everyone needs to work together as a team."

This alignment means that all areas of the business – finance, procurement, and supply chain – need to come together and coordinate their efforts.

Achieving this level of cohesion requires a unified, overarching strategy. Without such a strategy, efforts can be disjointed, heading in different directions and with unclear goals. The solution is to rally the entire organization around a clear, common, and forward-looking strategy.

In short, moving from AP to P2P is not just about changing processes, it is about making a strategic shift. It is about bringing different functions together, creating synergies between departments and getting everyone on board to achieve a common vision of continuous improvement and value creation.?

Navigating the P2P Transformation Journey: Lessons from TE Connectivity

Chapter one: the road to centralization

When Jakub Wojdat joined TE Connectivity about 12 years ago, the company was already on the road to centralization. With accounts payable centralized only in the US and China, they recognized the need to streamline processes in other countries as well.

But centralization is not easy, Jakub admits. Trying to find common ground with many legal entities is a real challenge. This experience has taught them that centralization must take into account the unique aspects of each region and team.

Chapter two: outsourcing

On the road to centralization, companies are usually faced with two options: centralize themselves or outsource. Each approach has its advantages and disadvantages.

"For those who want faster results, outsourcing is usually the better option, as outsourcing partners usually have the necessary infrastructure and expertise to help you to reduce the cost of the function quickly. However, they do not offer insight into internal process gaps and may not create sustainable value because their influence over the company's overall operations is limited."

After weighing the benefits, TE Connectivity decided to find an outsourcing partner. However, despite the initial cost savings, outsourcing did not bring significant value. This was mainly because the partner was not part of the company and could not influence the end-to-end process, Jakub adds.

Chapter three: the birth of financial shared service centers

This realization led to the idea of setting up financial solution centers around the world to centralize all functions. "Setting up shared service centers instead of outsourcing meant we could execute our strategy more efficiently because we had control over our processes." They set up three centers, which was an important milestone in their journey.?

The result? More transparency and control. When everything is centralized, you can better understand your end-to-end processes. By analyzing the data, you can uncover inefficiencies and try to understand the context behind them.

Chapter four: becoming the solution

With improved transparency and the ability to review their processes, our Financial Solution Center became the one-stop solution for TE Connectivity.

"The moment we set up Shared Services, we saw an increased business partnership. Our talent has stayed with us for five years. Business relies on us. So, we’ve become a solution for them, not just a shared service for finance, but the ultimate solution."

"We still have a long way to go and we need to improve every part of the process," Jakub admits. The company now has a culture of continuous dialogue and feedback that has been instrumental in driving change.

The Power of Collaboration in Implementing Change

Bringing about change requires a collective effort from stakeholders at all levels. "When I became Global Head of Finance Shared Services, I had two choices: Either I dictate a strategy for everyone to follow, or I ask my team what our strategy should be. I chose the latter," he recalls.

To bring this collaborative approach to life, Jakub took his organization through a comprehensive, three-week exercise involving about 30 people, including junior managers and team leaders. The process began with establishing a vision, followed by setting Strategic Bets for the next five years, and culminated in setting the " Wildly Important Goal" (WIG’s) for the year. "The idea behind WIG is that if you do not achieve it, nothing else you have done matters," Jakub explains.

The role of empowerment as a driver of change

For a new approach to really take root, team members need to feel empowered and know that they can influence the agenda. Jakub explains that changing attitudes was not easy: "People had to accept that they actually have an influence on the strategy <...> I wanted them to understand and live the strategy, but it took time for everyone to believe in it."

Introducing effective KPIs: customer satisfaction, talent retention, and continuous improvement

Clear expectations and measurable results are critical to driving change. Jakub lists his top three key performance indicators (KPIs), each linked to an important aspect of the strategy.

Customer satisfaction is his first KPI. "My first KPI is customer satisfaction, and it is part of my strategy... In five years, I want to reach the maximum level as part of our continuous improvement methodology."

Next, Jakub focuses on talent retention. "My goal is not to keep turnover low but to keep retention high. If you do not retain your knowledge, your customers will never be satisfied. One thing impacts the other."?

Finally, Jakub stresses the importance of a mindset focused on continuous improvement. "Teams need to have the mentality to improve, improve and improve."

Over time, the team embraced the strategy, which led to a sense of belonging and contributing to an organization committed to change.

"People enjoy it. After two years, they love it. They feel like they are part of an organization that is making a difference, and that was my goal."

Staying Ahead in the Dynamic World of Financial Shared Services

Jakub offers practical tips for managers who need to navigate the ever-changing landscape of financial shared services:

1. Embrace change as an opportunity for growth

Change is a constant in the financial world. Jakub emphasizes the importance of monitoring and critically evaluating these shifts. As Charles Darwin insightfully put it, "It is not the strongest species that survives, nor the most intelligent; it is the one most adaptable to change." This way you can look at trends as potential opportunities for growth rather than disruptors to your business.

However, it is important to consider carefully before adopting a new trend, as change can cause friction within teams. Talking to different people, exploring the market, and keeping an open mind to learning can help identify what works and what does not with these trends.

2. Choose technology wisely

The P2P landscape is teeming with new technologies designed to help achieve goals such as 80% no-touch in the process. While all of these technologies offer potential benefits, Jakub warns that not all of them are suitable for your specific needs. As a leader, it is your job to identify and select the best technology that meets your operational needs and ensures smooth business operations.

When a particular technology becomes prevalent in the market, such as SAP being the market leader in ERP systems, be prepared to follow the trend and make a strategic decision. However, remember that the ultimate goal is to keep the business running smoothly and the suppliers happy.

3. Involve stakeholders at different levels as early as possible

A new solution is only as effective as its implementation. To reap the full benefits of a new system or process, it is important to involve your team early on. Jakub stresses the importance of involving the team in the decision-making process and encouraging buy-in.

He warns that finance organizations, while key drivers of change, often look at new solutions only from their perspective without considering the whole business. This narrow view can lead to problems in change management and acceptance by others. If there is no team acceptance, the full benefits of the solution may not be realized and resistance to change may prevent organizations from making the most of the tools implemented.

4. Create a culture of curiosity

Technological change in the financial sector requires a shift in the skills required. As leaders, you need to foster a culture of continuous learning and curiosity in teams. This adaptability and willingness to learn will be critical to staying relevant in the face of change.?

Encouraging your teams to ask questions and look for practical examples can improve their understanding of complex processes and systems. This culture of curiosity can help identify challenges, develop more effective solutions and contribute significantly to the overall success of an organization.?

A New Path Forward

As companies adapt to the changing environment, it’s important to remember that the journey of transformation is just as important as the destination. The transition to a holistic P2P process is not just a business necessity, but an opportunity to elevate our organizations to new levels of success and value creation. Stay curious, stay engaged, and keep pushing forward. The path of continuous improvement awaits.

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