Search
 
Best Practices

Failure to Launch

How to identify and improve underperforming purchasing card programs.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

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.

These trends notwithstanding, our research over 25 years indicates that although the p-card value proposition remains true and valid, significant challenges to successfully implementing a p-card program continue to reduce the benefits companies are actually achieving. The overall p-card market in North America is robust, but a high proportion of that spending is conducted by only a small fraction of p-card adopters.

In general, in any industry or company size category, a small segment of card-using organizations comprise the bulk of spending. Across our 2017 survey, we found an 80:20 pattern. (See the sidebar About the Survey, below.)

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

Dig Deeper

Trending Stories

 

Recommended Stories

Covid-19 Supply-Chain Disruption

Covid-19 Supply-Chain Disruption

Nada R. Sanders |

What corporate treasury and finance teams need to know about dealing with their current challenges and preparing for future crises.

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.