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Failure to Launch

How to identify and improve underperforming purchasing card programs.

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Twenty-eight years ago, a groundbreaking article in the Harvard Business Review articulated a novel idea for how organizations could “re-engineer” their business processes by using “bank credit cards” to make procurement of low-value goods work better, faster, and cheaper. Since that time, the use of purchasing cards (p-cards) has grown so rapidly that the cards now represent a new normal in the way North American businesses pay for low-value goods and services. Market estimates indicate that spending on p-cards has grown from near zero in 1990 to more than $350 billion annually.

Accordingly, commercial issuers have continuously upgraded card technology, including significant improvements in controls to support increasing demands for enforcement of spending policies. More recently, issuers and technology providers have promoted the concept of transforming accounts payable (A/P) from a cost center to a profit center, principally by improving liquidity, reducing manpower, and obtaining card-issuer incentive cash.

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