Future of Sourcing - Procure-To-Pay (P2P) https://www.futureofsourcing.com/tags/procure-to-pay-p2p-0 en 10 Reasons to Use Purchase Orders https://www.futureofsourcing.com/10-reasons-to-use-purchase-orders <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/10-Reasons-to-Use-Purchase-Orders.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/10-Reasons-to-Use-Purchase-Orders.jpg" title="Learn 10 key reasons to use purchase orders, when other acquisition methods may also apply and get helpful tips for when the CFO asks &quot;why.&quot;" class="colorbox" rel="gallery-node-2203-iOEbpJRrGCA"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/10-Reasons-to-Use-Purchase-Orders.jpg?itok=7RGlZsYK" width="624" height="325" alt="Learn 10 key reasons to use purchase orders, when other acquisition methods may also apply and get helpful tips for when the CFO asks &quot;why.&quot;" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Procurement groups are often challenged by internal Line-of-Business (LOB) groups on requiring purchase orders says Mark Trowbridge CPSM, C.P.M., MCIPS, Principal with Strategic Procurement Solutions LLC. He outlines 10 key reasons to use purchase orders, discusses when other acquisition methods may also apply and provides helpful tips for when the CFO asks &quot;why&quot;.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/happening-now-5-important-procurement-trends">Happening Now: 5 Important Procurement Trends</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The CPO for a financial services company recently asked me for reasons to use purchase orders.&nbsp;Their procurement group was receiving pushback from the firm&#39;s Finance division, which was happy to issue payments merely based on internal management just &quot;approving&quot; supplier invoices (grrr).</p> <p>In my email to this executive, I put together a list of Top 10 Reasons&nbsp;to Use Purchase Orders which I&rsquo;ll explain in this article.</p> <h1>Top 10 Reasons&nbsp;to Use Purchase Orders</h1> <p><strong>Reason One</strong>&nbsp;- Online approval prior to PO issuance ensures the expenditure is budgeted and authorized&nbsp;<em>before</em>&nbsp;a commitment is made to a supplier. With invoice-only payment processing, an organization is already liable for the expenditure even though it was never approved by management.&nbsp;</p> <p>Today&rsquo;s e-enabled PO routing and approval process ensures that only authorized company representatives can commit to supplier expenditures. This focuses supplier relationships through the procurement organization.</p> <p><strong>Reason Two</strong>&nbsp;&ndash; If a PO is a requirement before a supplier can be paid, they won&#39;t start work for a business without it. Word travels fast in the supplier community, and can be aided by an email to each supplier reminding them that a purchase order number is required on all invoices.</p> <p>This will keep control in the procurement organization and prevent suppliers from shipping products or beginning work without prior purchase order approval being in place.</p> <p><strong>Reason Three</strong>&nbsp;&ndash; Use of purchase orders greatly-improves capture of payment term discounts (i.e., &ldquo;2% 10 &ndash; Net 30 Days&rdquo;) negotiated by the procurement team.&nbsp; Contrarily, invoice-only transactions often default to the supplier&rsquo;s invoice payment terms which rarely offer cash discounts. 11% to 12% of a typical company&rsquo;s suppliers will agree to discounted terms in payment &ndash; if they are strategically asked.&nbsp;</p> <p><strong>Reason Four</strong>&nbsp;&ndash; It has been documented in many studies that material errors&nbsp;exist more than 1.5% of invoice line items billed by suppliers.&nbsp;Most of the time the error is to the benefit of the supplier (hmmm, what a coincidence...). &nbsp;Having PO/invoice matching catches a majority of the errors and does not allow them to be passed through without review. &nbsp;</p> <p>When our firm performed a review for this same financial services firm, their Accounts Payable organization was processing around 55,000 invoices a year valued around $200 million USD.&nbsp;If we assume the average invoice contains two line items, that&#39;s 110,000 invoice line items being paid each year, indicating that there are about 1,600 (1.5%) line items having material errors. Dividing annual spending by 110,000 line items results in an average line item value of $1,818/line item, thus indicating $3.0 million of questionable charges that purchase orders would properly flag for investigation.&nbsp;&nbsp;</p> <p>It should also be noted here that even with purchase orders being used, a typical AP recovery audit still recaptures around 1.0% of errors in the payment stream. Interestingly, the &ldquo;disruptor&rdquo; provider in this space averages 50% higher recovery than their peers through some innovative techniques and especially for clients that link purchase orders to most invoice payments (you can <a href="mailto:MTrowbridge@StrategicProcurementSolutions.com?subject=Future%20of%20Sourcing%20Article">contact me</a> for the name of disruptor).</p> <p><strong>Reason Five</strong>&nbsp;&ndash; Use of a purchase order streamlines payment processing, since the processor doesn&#39;t have to enter line item details. They should pull up the purchase order and its line item description and insert the billed quantity. The other information fills automatically into the invoice record with much greater detail than allowing different AP clerks&#39; subjective one word summary entry of the transaction.</p> <p>For example, &quot;Metal&quot; rather than &quot;4&#39; x 8&#39; Sheet of 6061-T6 Aluminum.&quot;&nbsp; For non-catalog ordering, use of POs greatly improves spend analysis data quality.</p> <p><strong>Reason Six</strong>&nbsp;&ndash; Use of a purchase order ensures the charge goes to the GL account, charge unit and project number the PO was budgeted to.&nbsp;&quot;Creative&quot; budget owners can&#39;t shift the expense to a different GL account.</p> <p><strong>Reason Seven</strong>&nbsp;- A purchase order should contain legal terms that mitigate risk in transactions. Even if it does not occur under a contract, the supplier&#39;s terms don&#39;t prevail.&nbsp;In an invoice-only transaction, the supplier&#39;s proposal/quotation legal terms could control the transaction, thus exposing the buying organization to greater risk on issues like title transfer, risk of loss during shipment, payment terms, freight costs, warranty, third-party patent infringement, ownership of work product, limitation of restocking fees, etc.&nbsp;&nbsp;</p> <p><strong>Reason Eight</strong>&nbsp;&ndash; A purchase order causes an organization to clearly articulate what they wish to buy from a supplier. If the supplier questions a description, they will usually do that before shipment/performance. But without a PO, the supplier is open to interpret a telephone or email order incorrectly, resulting in a miss-shipment. &nbsp;That results in the business unit having to facilitate a return to the supplier, and procurement will usually end up having to clean up the mess. Returns are much easier when a purchase order has been utilized.</p> <p><strong>Reason Nine</strong>&nbsp;&ndash; A purchase order allows procurement to have visibility to backorders or partial shipments, thus facilitating follow ups and expediting. Without a PO, no one knows what hasn&#39;t been shipped, just what has been invoiced.&nbsp;</p> <p><strong>Reason Ten</strong>&nbsp;&ndash; When three-way matching is empowered, a purchase order facilitates&nbsp;formal &ldquo;receiving&rdquo; to validate received shipments. Without a purchase order, you have no formal receiving process except for AP to send an invoice to the business unit asking them for approval. &nbsp;The business unit often will not dispute slightly different quantities in an invoice and procurement never is notified payment has been approved for something that wasn&#39;t actually received.</p> <h2>The Bottom Line</h2> <p>Consistent use of purchase orders will optimize the entire Procure-to-Payment process. Even contracted expenditures will be better-managed through purchase orders by ensuring spending can be properly allocated to correct contracts, SOWs and projects.&nbsp;</p> <p>Of course, not every expenditure needs to be under a purchase order.&nbsp;Use of other techniques like pCards or Evaluated Receipt Settlement (ERS) can&nbsp;be similarly valuable when used optimally.&nbsp;But purchase orders are the preferred&nbsp;tool for the majority of procurement transactions; especially when automated though a Procure-to-Pay (P2P) technology solution.</p> <p>Even more exciting today, purchase orders used with rebate-generating Virtual Card (vCard) payment processes are more secure than ACH or checks (and eliminate the need for the buying organization to possess a supplier&rsquo;s private banking information).&nbsp; The &ldquo;disruptor&rdquo; in vCard payments is neither a bank or retail card issuer; yet processes more vCard transactions annually than the Top four U.S. banks combined.</p> <p>Failure to strategically use purchase orders can allow suppliers and internal departments to bypass procurement and thus executive management.&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/procure-to-pay-p2p-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procure-To-Pay (P2P)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="10 Reasons to Use Purchase Orders - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/10-reasons-to-use-purchase-orders"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Sun, 10 Jul 2022 17:00:00 +0000 Mark Trowbridge 2203 at https://www.futureofsourcing.com https://www.futureofsourcing.com/10-reasons-to-use-purchase-orders#comments 5 Key Factors for Adopting Best-of-Breed Technologies https://www.futureofsourcing.com/5-key-factors-for-adopting-best-of-breed-technologies <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/5%20Key%20Factors%20for%20Adopting%20Best-of-Breed%20Technologies.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/5%20Key%20Factors%20for%20Adopting%20Best-of-Breed%20Technologies.jpg" title="Learn five factors for supply chain and procurement professionals to consider when adding new best-of-breed solutions." class="colorbox" rel="gallery-node-2192-iOEbpJRrGCA"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/5%20Key%20Factors%20for%20Adopting%20Best-of-Breed%20Technologies.jpg?itok=RK3OqqTe" width="624" height="325" alt="Learn five factors for supply chain and procurement professionals to consider when adding new best-of-breed solutions." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p>As digital transformation accelerates, Costas Xyloyiannis, CEO of HICX, shares five factors for supply chain and procurement professionals to consider when adding new best-of-breed solutions.</p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/managing-supplier-risk-and-value-making-the-most-of-supplier-information">Managing Supplier Risk and Value: Making the Most of Supplier Information</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Extensive disruption at the beginning of the decade put resilience at the top of the agenda for most organizations. Now the focus is on how digital procurement solutions can be used to boost agility.</p> <p>But as <a href="https://futureofsourcing.com/leading-procurements-digital-transformation-three-steps-to-success" target="_blank">digital transformation accelerates</a> and procurement teams look beyond their established P2P or S2P suites to address particular pain points, this should not be done in a haphazard way. To be successful, organizations need an agreed plan to identify, select and implement new software.</p> <p>So, when it comes to adopting best-of-breed technologies, what should the procurement community consider? Here are five key factors:</p> <h1>1. Stop Comparing Best-of-Breed Versus Single Suite</h1> <p>One of the greatest advantages of developing a best-of-breed stack is that organizations can benefit from vendor expertise in a given area. With best-of-breed you are accessing specialized knowledge. This means that specific issues can be addressed more rapidly and with greater success, which also translates into better user experience and adoption.</p> <p>The large P2P suites, on the other hand, can feel disconnected from the day-to-day reality of users because they&rsquo;re often restricted to a core set of use cases that apply to the broadest range of companies.</p> <p>Of course, compared to an individual best-of-breed vendor, the suites clearly have considerably more capacity to invest and innovate. However, when taking the best-of-breed ecosystem as a whole, the combination of expertise, agility and resource makes this option very compelling for a large number of use cases.</p> <p>This is not to suggest that suites no longer have their place; they address core procurement functionality for many organizations exceptionally well and indeed are &ldquo;best-of-breed&rdquo; for several scenarios in their own right. It&rsquo;s not a question, therefore, of one or the other, but rather how to identify and select the best solution today, while maintaining flexibility to adapt to tomorrow&rsquo;s challenges.</p> <h2>2. Know the Benefits of an Environment That Enables Specialist Solutions</h2> <p>A best-of-breed enabled environment means that organizations can plug-and-play different solutions into large suites or other platforms that are provided by experts in their respective fields. They can empower users to self-serve even complex changes to forms, to adapt workflows or manage integrations, while providing an accelerated time-to-value and a superior experience for suppliers.</p> <p>The best-of-breed approach yields many other advantages. For instance, it enables focused investment in solutions that address particular requirements. The approach also offers depth and scale of knowledge. Because each best-of-breed provider tends to solve a relatively narrow set of business challenges, they have significant in-depth experience in their area.</p> <p>The approach also supports agility, because it&rsquo;s far easier to make changes to the overall technology landscape if an enterprise is not locked into one specific vendor. Incidentally, the combination of these advantages results in new solutions being brought to market more rapidly, which enables access to innovation.</p> <h2>3. Make Planning a Priority</h2> <p>The <a href="https://member.procurementleaders.com/wp-content/uploads/2021/10/PL-CPO-Compass-2022_03_Operational-Revolution_web.pdf" target="_blank">Procurement Technology Landscape 2021</a> report reveals that 59% of procurement functions are targeting a best-of-breed approach to technology this year. But while best-of-breed adoption is accelerating, experts warn that randomly buying multiple software is not a strategy. Be mindful not to get carried away with new solutions that address specific pain points in an elegant and user-friendly way.</p> <p>There&rsquo;s a tendency when implementing a suite to adopt the standard workflow and practices that the suite best supports. This can be fine if it meets your requirements. However, while a best-of-breed strategy requires more upfront planning in order to decide how to assemble the various components to work together, this additional prep results in a much richer and deeper solution that more closely meet individual business goals.</p> <p>Organizations that incorporate best-of-breed into the environment in a planned manner can realize the full benefits of the approach. To be efficient and profitable in the long run, it&#39;s important to be explicit about what the organization requires and select software accordingly, in a deliberate manner.</p> <h2>4. Put Data at the Heart of Your Strategy</h2> <p>Having a plan in place also helps to prevent data silos from occurring, which need to be avoided. Underpinning any procurement process is robust data that&rsquo;s accessible across different services and platforms. With this in mind, it&rsquo;s key to have the right centralized platform configuration to enable a best-of-breed landscape.</p> <p>The route to achieving good quality data is a single entry point for information. It is much simpler to funnel data through one entry point down into different systems rather than creating multiple different systems and then struggling to bring it all together. This helps to provide a single source of truth for supplier data, which makes procurement operations significantly easier and more efficient.</p> <p>The result is visibility which otherwise wouldn&rsquo;t be possible and a foundation from which digital initiatives or automation can be run. To further avoid creating silos, ideally data should also be consolidated, integrated and governed across systems.</p> <h2>5. Futureproof Your Approach</h2> <p>Something else to account for in a best-of-breed landscape is adaptability. With the best will in the world, no business can predict what their data needs will be in 10 years&rsquo; time. The environment should remain as useful in a decade as it is on day one. Therefore, it&rsquo;s worthwhile building a supplier data model that can evolve as new systems and use cases are introduced over time.</p> <p>It&#39;s also good to consider user experience in the landscape design &ndash; both from the perspective of internal teams and in particular the supplier. For example, avoid having multiple systems each with their own accounts and credentials to support a more positive supplier experience.</p> <p>Encouragingly, large mature organizations with <a href="https://futureofsourcing.com/procurements-increasing-csr-role" target="_blank">complex requirements across Source-to-Pay</a> have initially been driving the trend towards best-of-breed alternatives. As procurement moves forward, the potential for digitization is significant. With good planning, best-of-breed provides organizations with the best mechanism to support digital transformation and future-proof themselves.</p> <p>As organizations work to build supply chain resilience through best-of-breed, the procurement community should consider the value of big suites, specialist solutions, strategic planning and centralized data management &ndash; while adopting a forward-looking mindset.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/procure-to-pay-p2p-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procure-To-Pay (P2P)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/s2p" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">s2p</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="5 Key Factors for Adopting Best-of-Breed Technologies - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/5-key-factors-for-adopting-best-of-breed-technologies"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 24 Jun 2022 02:00:00 +0000 Costas Xyloyiannis 2192 at https://www.futureofsourcing.com https://www.futureofsourcing.com/5-key-factors-for-adopting-best-of-breed-technologies#comments The Executive’s Guide to Purposeful Procure-to-Pay Implementations https://www.futureofsourcing.com/the-executives-guide-to-purposeful-procure-to-pay-implementations <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/The%20Executive%E2%80%99s%20Guide%20to%20Purposeful%20Procure-to-Pay%20Implementations.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/The%20Executive%E2%80%99s%20Guide%20to%20Purposeful%20Procure-to-Pay%20Implementations.png" title="The Executive’s Guide to Purposeful Procure-to-Pay Implementations" class="colorbox" rel="gallery-node-2031-iOEbpJRrGCA"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/The%20Executive%E2%80%99s%20Guide%20to%20Purposeful%20Procure-to-Pay%20Implementations.png?itok=pyfL4D2d" width="624" height="325" alt="The Executive’s Guide to Purposeful Procure-to-Pay Implementations" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>The Executive&rsquo;s Guide to Purposeful Procure-to-Pay Implementations</h1> <p><em>By Tony Young &amp; Art Travis</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/strategies-to-drive-procurement-compliance-and-manage-rogue-spend">Strategies to Drive Procurement Compliance and Manage Rogue Spend</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Procure-to-pay (P2P), which involves the four key stages of selecting goods and services, enforcing compliance and order, receiving and reconciliation, and invoicing and payment, is a core business process that offers exceptional opportunities for optimization and integration.</p> <p>The best P2P software enables organizations to centralize and automate the process of purchasing materials in addition to maintaining an inventory of goods. In recent years, there&rsquo;s been a dramatic increase in end-use industries implementing P2P software solutions to collaborate with suppliers and other companies along the supply chain, get alerts, and track events as well as analyze business intelligence data. An important benefit of having the intelligence data is that it has made it possible for organizations to gain previously unavailable insights throughout the entire procurement process, thereby allowing for more informed future planning.</p> <p>The growing demand for centralized procurement processes, as well as the consolidation of supply chain management from various industries, is stimulating procure-to-pay market growth. According to <a href="https://www.reportsanddata.com/report-detail/procure-to-pay-software-market" target="_blank">Reports and Data, 2019</a>, the global market for procure-to-pay software was $5 billion in 2018, and it is projected to grow to $9.2 billion by 2026. This represents a compound annual growth rate (CAGR) of 7.6%. With such growth and ongoing technological advancements as well as user expectations, it is no wonder that P2P solutions have evolved to include better features to encompass more segments of the process.</p> <h2>Assess Your P2P Maturity</h2> <p>To this end, it&rsquo;s a great time to assess the maturity of your P2P operations to understand where you can make changes that will maximize efficiency:</p> <ul> <li>Does your purchasing team have a sourcing database in a system (not Excel)?</li> <li>How easy is it to buy from new organizations?</li> <li>Do you have a system to forecast demand (sales) beyond &ldquo;same as last year&rdquo;?</li> <li>Do you have a sales and operations planning (S&amp;OP) process to discuss the forecast, and turn it into an inventory plan (by month for at least 12 months), complete with agreed-upon service levels?</li> <li>Do you have a vendor portal to communicate with suppliers?</li> <li>Are you tracking vendor performance and, if yes, are your vendors improving?</li> <li>Do you track inbound shipments by product and lot number?</li> <li>Can you divert shipments without them ever crossing your dock doors?</li> <li>Are more advanced receiving processes (e.g., license plating) part of your process?</li> <li>How is quality maintained? When a customer calls with an issue? Or by established processes (e.g., receiving inspection)?</li> <li>Do you have an automated three-way match for accounts payable?</li> <li>Do you have a separate defined business process to work with drop-ship suppliers?</li> </ul> <h2>Create a Vision for the Future</h2> <p>Keep in mind that you may need to rethink and revise many of your business processes to adopt the latest best practices. This will require defining your current state and creating a vision of the future state. Following this process will help:</p> <h3>Build a Team</h3> <p>A successful business process transformation project requires a team of business process owners. This team determines the project scope, objectives and measurements of the project. Create a steering team and a project team, and designate process owners.</p> <h3>Evaluate Your Current Processes</h3> <p>Analyzing your current-state processes begins with detailed key performance metrics and their value. Examples include productivity (order processing time, for example), quality, overtime and inventory levels. The analysis continues with business process mapping, particularly for quote-to-order, order-to-cash and P2P. By documenting your business processes, and by creating visual maps, your team can easily identify waste and redundancies.</p> <h3>Know What&rsquo;s Possible</h3> <p>Before your team can define a future state, it needs to understand the capabilities a modern enterprise software solution offers, determine current industry best practices, and then map these best practices to enabling technology solutions to construct your future state.</p> <h3>Develop Your Future State Vision</h3> <p>Your team will naturally evolve into sub-teams based on cross-function value streams (such as order-to-cash), and each value stream team should facilitate workshops to develop your future state. The gap between the current state and the future state is where business process redesign begins &ndash; and where you identify ways (in addition to the opportunities already discovered) to eliminate waste, optimize processes and improve productivity.</p> <h3>Make the Business Case for Change</h3> <p>The business case is the justification for your project and the rationale for redesigning current business processes. It is a compilation of business value statements that are the goals your company is striving to achieve. The business case for change is important because it is used at every major milestone to confirm that decisions and actions are aligned with attaining project expectations.</p> <h3>Create a Plan and Roadmap</h3> <p>With all this information in hand, the team can create the first draft of a project charter. Your team can then forge a roadmap that will guide you to your future state and define the deployment strategy.</p> <h2>Pre-Implementation Processes Help Facilitate P2P Success</h2> <p>After completing this process, you are ready to put in place the enabling technology. Select a provider that is focused on streamlining the P2P process, and work with a solutions partner that demonstrates an understanding of your organization&rsquo;s needs and requirements and has the capabilities to meet them.</p> <p>The next steps are to clearly define your goals and objectives. This also should include new or updated key performance indicators that will enable your organization to measure project success.</p> <p>As P2P systems evolve to better automate and streamline processes, the benefits of upgrading to a new system are growing. Putting the right processes in place well ahead of implementation will help facilitate organizational buy-in, improve implementation configuration, ensure seamless integration with existing systems, and increase your organization&rsquo;s use of the new system following implementation.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/procure-to-pay-p2p-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procure-To-Pay (P2P)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/business-process-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Business Process Transformation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="The Executive&amp;rsquo;s Guide to Purposeful Procure-to-Pay Implementations - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/the-executives-guide-to-purposeful-procure-to-pay-implementations"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 21 Jul 2021 17:04:36 +0000 Tony Young 2031 at https://www.futureofsourcing.com https://www.futureofsourcing.com/the-executives-guide-to-purposeful-procure-to-pay-implementations#comments Online Collaboration is Needed Now More Than Ever https://www.futureofsourcing.com/online-collaboration-is-needed-now-more-than-ever <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Copy%20of%20FoS%20Header%20Images%20%2852%29.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Copy%20of%20FoS%20Header%20Images%20%2852%29.png" title="technology, automation and data acheives business continuity" class="colorbox" rel="gallery-node-1785-iOEbpJRrGCA"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Copy%20of%20FoS%20Header%20Images%20%2852%29.png?itok=_sJpTrNG" width="624" height="325" alt="technology, automation and data acheives business continuity" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>In <a href="https://futureofsourcing.com/the-need-for-online-collaboration-now-more-than-ever" target="_blank">Part 1</a> of this two-part article, we looked at what procurement and finance teams can do now to improve collaboration and effectiveness in the face of business disruption. Part 2 looks at technology, automation and data as critical components in making that happen, especially as organizations scramble to achieve business continuity working with remotely-based teams.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/the-need-for-online-collaboration-now-more-than-ever">THE NEED FOR ONLINE COLLABORATION — NOW, MORE THAN EVER!</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>We know that procurement is often a juggling act! We use decent supplier relationships, purchasing power, and any other tools in our belt to secure best payment terms, highest quality purchases at the lowest price, or indeed best value, to ensure vital continuity of supply against a backdrop of supply chains becoming ever more complex and volatile!</p> <p>All of this balancing is difficult while also trying to keep an eye on cash flow and keeping our friends in finance happy, who may not always appreciate the balancing act that&rsquo;s going on. While cash flow is their key metric, even early payment discounts can be seen negatively in terms of impact on available cash.&nbsp;</p> <h1>How can better collaboration help?</h1> <p><strong>A. Extend your payment terms</strong>. Sorry for pointing out the obvious, but if you don&rsquo;t know what your payment terms actually are and whether you&#39;re really working to them, the next steps are not going to be of much use to you!</p> <p>Extending payment terms frees up valuable cash flow, so it has a positive impact on the balance sheet to help fund investments. However, suppliers can&rsquo;t always accommodate very long terms. Pushing this out can not only damage the relationship and adds time to negotiations, but also ultimately drives up their operating costs, which will then get passed on to you.</p> <h1>What can we do to balance the cash flow needs of suppliers and buyers?</h1> <p><strong>B. Supply chain financing,</strong> or using a third-party funder, is an excellent win-win result to ensure your suppliers are paid early. But as a buying organization, you can pay when you like, on your finance-friendly extended terms. You benefit from holding onto the cash for the full payment term, but more importantly, the supplier gets paid when they need to. This can speed up pesky negotiations and ensure a happy CFO because cash flow is positive. Not always, but often the funder will perhaps take a small cut, but that can usually be paid for by potentially combining this with early payment discounts.</p> <p><strong>C.&nbsp;Early payment discounts&nbsp;</strong>- Buyers agree to pay suppliers early in exchange for a discount. These can be fixed discounts (e.g., 2% discount when paid on or before day 10 of a 30-day payment term) or on a sliding scale (dynamic discounting) up to the invoice due date. The discount can add to the bottom line and a small slice can be used to fund the factoring activity.&nbsp;<span style="font-size: 13.008px; font-weight: normal;">All of this requires slick processes for managing your procure-to-pay process. If you don&rsquo;t have an automated tool for managing this process, it will be challenging to ensure you are paying on time, let alone have the flexibility to change up the discounting process. Of course, technology will massively help here, to both reduce cycle times and control and implement dynamic discounting with your suppliers!</span></p> <p>A critical area to promote collaboration is that of&nbsp;<strong>risk management!</strong></p> <h1>Internal and External Risk</h1> <p>We can split risk (and associated data collected to support your understanding of it) out into two main buckets: Risk data that can be collected <strong>externally</strong>&nbsp;and that which lurks within &mdash; <strong>internal risk data</strong>. Either way, a perfect place to start is to correlate impact and mitigation at a supplier level.</p> <p>Once you have individual supplier risk assigned, with the right technology you can group this risk by any associated data that you have collected against the supplier to see compound effects or translate it to financial exposure. If you have data recorded for a supplier, then you measure, mitigate or report against it and start filtering into meaningful groups in the event of a crisis or during risk planning.</p> <p><strong>External Data </strong>&ndash; This may be as simple as automating and scoring supplier financial info in the form of data input from D&amp;B, or via feed from external risk services like EcoVadis and Resilience 360. You might want to extend this across digital risk, plugging into new technology offerings like Dark Beam &mdash; companies designed to test your cyber weaknesses or those of your suppliers. These tools are powerful and also help you understand up-to-date changes in risk profile without admin time for most of the checks that could happen manually.</p> <p>Unfortunately, even with technology, 65% of CPOs have limited visibility beyond their <strong>tier 1 suppliers,</strong> so more work may need to be done to unearth risk lurking further up the supply chain.</p> <h1>The Value of Your Information</h1> <p>A vast source of information that you can count on being <strong>relevant</strong> is your <em>own</em>. When you have a fully-integrated platform pulling from one master data source, you can start to do some clever things with pulling real data in from your own systems and see what&rsquo;s going on in other departments, without relying on lengthy meetings to keep everyone up to date.</p> <p>For example, what if a supplier is always late paying &ndash; or worse, they&rsquo;ve gone into insolvency? You want your buying team to know about this asap in order to reach out to them and consider the impact on the supply chain and make alternative supply arrangements and stop placing orders.</p> <p>It&rsquo;s that viability of dispute flags or translating this back to a negative score on the supplier&rsquo;s scorecard that brings value. Once an automated way of flagging risks is implemented at a supplier level, you may want to implement methods of tracking improvements to measure trends. Again, difficult to manage if you&rsquo;re relying on manual processes or human judgment!</p> <p>Ongoing Supplier Performance should be a careful balance of automatically-collected data pulled in from both internal and external sources. That doesn&rsquo;t mean removing the need for human understanding of the data; you just need everything in one place to enable people to make informed decisions, quickly.</p> <h1>What&rsquo;s In It For You?</h1> <p>It may seem obvious, but collaborative working leads to a whole host of benefits for the organization! Aside from the fact that we now don&rsquo;t have a choice but to pay attention to how individuals and teams interact with each other, we really can measure the benefits of finance and procurement teams working together.</p> <p><img alt="Ways Procurement and Finance Can Work Together" src="https://futureofsourcing.com/sites/default/files/Procurement-Finance-Working-Together.png" style="width: 452px; height: 182px;" /></p> <p>What have we learned?</p> <p>Working from home restricts our ability to continue with the status quo when the status quo is a manual, disjointed process. Maybe one thing to emerge from the Coronavirus crisis will be the prioritization of automated and collaborative ways of working as a fundamental requirement of our businesses. One thing is for sure, those that do have the tools to collaborate easily online certainly recover faster than those without.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procure-to-pay-p2p-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procure-To-Pay (P2P)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/finance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Finance</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supply-chain-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/risk-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Risk Management</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Online Collaboration is Needed Now More Than Ever - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/online-collaboration-is-needed-now-more-than-ever"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Mon, 01 Jun 2020 17:54:36 +0000 Sophie Pope 1785 at https://www.futureofsourcing.com https://www.futureofsourcing.com/online-collaboration-is-needed-now-more-than-ever#comments Strategies to Drive Procurement Compliance and Manage Rogue Spend https://www.futureofsourcing.com/strategies-to-drive-procurement-compliance-and-manage-rogue-spend <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Copy%20of%20FoS%20Header%20Images%20%2851%29.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Copy%20of%20FoS%20Header%20Images%20%2851%29.png" title="Procurement Compliance and Spend Management" class="colorbox" rel="gallery-node-1782-iOEbpJRrGCA"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Copy%20of%20FoS%20Header%20Images%20%2851%29.png?itok=dE33L-8x" width="624" height="325" alt="Procurement Compliance and Spend Management" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/third-party-and-supply-chain-risk-management-then-and-now">Third Party and Supply Chain Risk Management: Then and Now</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Compliance is a critical purchasing success factor. Aside from the tremendous amount of financial impact, compliance has other positive outcomes. When employees comply with purchasing through designated supplier programs, it significantly streamlines the supply chain, allowing your organization to be agile and flexible.</p> <p>&nbsp;Pairing the right supplier with their areas of expertise enables employees to quickly connect the right program for their needs at a discounted rate. It helps reduce unnecessary steps, deliveries, downtime and eliminates unneeded time searching for products. Additionally, it provides a line of sight into the supply chain to ensure that suppliers are properly vetted, reliable, and deliver quality products on time.</p> <p>When higher compliance rates are achieved within purchasing, there are benefits throughout the entire company and continuous savings. However, regulating company spend and managing rogue purchasing is an ongoing, and at times daunting, task for procurement professionals.</p> <h1>Ways To Drive More Compliance</h1> <p>When strategizing ways to achieve more compliance within your company, there are some essential components at a category level that enhance adherence to your new program. While it is likely you are already making some effort at each one of these steps, it is critical to have a comprehensive approach to manage rogue spend and achieve greater compliance.</p> <h1>Communication</h1> <p>Communication is key in driving purchasing compliance, not only at the corporate level but companywide. You will not have full cooperation without properly conveying the importance of company and category goals. Aligning purchasing habits within a new supplier program will help address rogue spend. However, communication efforts shouldn&rsquo;t begin and end with the supplier implementation process.</p> <p>Every employee who can impact compliance should be kept up to date beyond the launch of the program. That means your C-Level contacts and the end-users at the facility level should all receive communication and follow-ups throughout the life of the program. We begin well before a program has launched by pulling in necessary stakeholders and notifying all category users that the program launch is imminent. Most companies communicate the program launch well, but then consistent communication and additional educational content for end-users quickly tapers off. Instead, an advanced communication approach continues category education over the entire life of a program.</p> <h1>Program Design</h1> <p>Understanding the critical needs of users today and three years from today is quite a task. Pulling input from as many stakeholders as possible upfront will aid in understanding why they will (or won&rsquo;t) fully utilize a program. Every category is different. Are a few essential items critical? Or is the category going to consistently churn? Your agreement needs to ensure that the first time an item is priced, that has never been purchased before, strikes users as the right option. Seeing a bad price on an item, no matter how insignificant in the overall scheme of the category, can have a deleterious effect on compliance in many categories.</p> <h1>Reporting</h1> <p>The best way compliance goals can be tracked and measured is through clean data and advanced reporting. In order to get a full line of sight into the supply chain without straining your own resources, is to tap your supplier for solutions to provide inventory management specialists or seek third party assistance from a GPO which can provide enhanced analytics and streamline supplier data. These resources will reveal spending patterns, inventory issues and rogue spend that should be designed back into the program.</p> <p>There are two types of reporting, which are essential post-launch: compliance reporting and long-term savings reporting. Compliance reporting should be frequent, start soon after program launch, and create visibility to both site and subcategory purchases relative to expected activity levels. Reports should be frequent early in the agreement, but should also be revisited periodically throughout the agreement. Savings reporting should occur regularly, and users should see the actual savings on a regular basis over the entire course of the contract (not just the first year).</p> <h1>Non-Category Level Compliance Drivers</h1> <p>There are several other factors that apply to the entire purchasing regime that also aid in the path to compliance nirvana.</p> <h1>Technology</h1> <p>The technology used when purchasing can make a significant impact on compliance. Whether it&rsquo;s a P2P system integration or portal on the supplier website, it is vital for employees to understand the preferred path when purchasing. Make it easy by having the supplier&rsquo;s eProcurement solution integrated with your P2P system to increase compliance. Provide information companywide about supplier changes or post purchasing guidelines on your company&rsquo;s intranet for all employees to access.</p> <p>If purchasing systems are not cohesive or vary at the site level, consider utilizing a login portal for the supplier site for purchasing. Provide employees with an easy user-guide, host a webinar, include information in an internal newsletter and highlight the supplier&rsquo;s mobile app to make it easy for employees to use it on the go. Harness technology and get employees connected digitally to create a smooth user experience and more adoption of your supplier program. To achieve greater compliance, some companies go to the extent of blocking outside supplier websites to ensure that rogue spend is controlled.</p> <h1>Executive Support</h1> <p>While we cannot expect to have unflapping co-communication throughout our supply chain, there are a few key areas that we have identified to get everyone on the same page. Develop and communicate clear compliance expectations to everyone involved in the purchasing process. Ideally, this message comes from the right executive in your organization. Another key point for sponsorship is right before category launch having at least one executive sign-off or even send the communication that a new program is on the way to gain companywide support.</p> <p>Incorporating these essential steps into your business model will help address rogue spend at multiple levels within an organization. Keeping employees well informed, utilizing technology to streamline purchasing and advanced reporting capabilities are critical components to driving compliance, managing rogue spend, and building lasting savings for your company.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/spend-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Spend Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/compliance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Compliance</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procure-to-pay-p2p-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procure-To-Pay (P2P)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/category-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Category Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/spend-categories" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Spend Categories</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Strategies to Drive Procurement Compliance and Manage Rogue Spend - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/strategies-to-drive-procurement-compliance-and-manage-rogue-spend"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Mon, 01 Jun 2020 14:54:09 +0000 Dan Anzevino 1782 at https://www.futureofsourcing.com https://www.futureofsourcing.com/strategies-to-drive-procurement-compliance-and-manage-rogue-spend#comments Rising Star Interview: Zachary Greenberger https://www.futureofsourcing.com/rising-star-interview-zachary-greenberger <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Zachary%20Greenberger_FOS%20Individual%20Award_Interview%20Graphic.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Zachary%20Greenberger_FOS%20Individual%20Award_Interview%20Graphic.png" title="Rising Star Interview: Zachary Greenberger" class="colorbox" rel="gallery-node-1601-iOEbpJRrGCA"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Zachary%20Greenberger_FOS%20Individual%20Award_Interview%20Graphic.png?itok=IVxRWdh4" width="624" height="325" alt="Rising Star Interview: Zachary Greenberger" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p>This October, the&nbsp;<a href="https://futureofsourcingawards.com/?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1570547502174.1570550578443.637&amp;__hssc=215510152.4.1570550578443&amp;__hsfp=2721840510" target="_blank">Future of Sourcing Awards</a>&nbsp;will celebrate individuals newer to the industry whose thought leadership and expertise have shown promise that is likely to have a lasting impact on the industry. Below, read about Rising Star Finalist Zachary Greenberger.&nbsp;Zach currently leads global sourcing and procurement operations at Lyft.</p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div> <h3><em>How did you get into this field &ndash; was it purposeful or by accident?</em></h3> </div> <div>A bit of both &ndash; my career started with a heavy interest in supply chain, and the desire to dive deep into and resolve complex business issues. After my first experience in strategic sourcing, I very intently pivoted to pursue a career with that focus. I felt there was a really unique ability with this type of role to influence critical decisions, develop a wide range of relationships and continuously expand my business knowledge.&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>In what ways do you hope to influence or transform the industry?</em></h3> </div> <div>I have aspirations to better incorporate innovative tech into supply chain and procurement systems. The industry has certainly made strides, but there is a lot more that can be done to innovate on the Source-to-Pay process. I see a pretty consistent gap between stakeholder experience and the oversight and reporting desired from a P2P system. I remain convinced more can be done to transform this space given the range of emerging technology we have available today. &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>Who are the mentors or role models who have guided you in your career?</em></h3> </div> <div>My father is my biggest role model and mentor. He&rsquo;s always been a great support system and sounding board for me to bounce ideas off of. He&rsquo;s helped keep me focused on the right priorities and objectives in achieving my career goals. Without his guidance I certainly wouldn&rsquo;t be where I am today. Other notable role models of mine are Liam O&rsquo;Connor, the COO of Zipline and a former supply chain executive at both Lyft and Tesla, as well as the Co-Founders of Lyft, John Zimmer and Logan Green.&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What is something you wish more people knew about the sourcing and procurement industry?</em></h3> </div> <div>There is a common misconception that sourcing and procurement professionals are difficult to work with, and don&rsquo;t have aligned interests with their stakeholders. Truth is we desire to be trusted business partners, and only have the companies&rsquo; best interest in mind when providing feedback on a certain supplier strategy or transaction. It&rsquo;s important for those who aren&rsquo;t familiar with the industry to see us as business operators that can help them build successful strategies and navigate issues that may come along. &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>Looking ahead, what trends do you think will emerge in the sourcing and procurement space?</em></h3> </div> <div>I think we will start to see a more aggressive shift in the skill sets of sourcing and procurement professionals. It seems companies have always tended to seek out professionals with deep knowledge of certain commodities. Of course there nothing wrong with that, but I am finding that some of the best sourcing professionals are those that are generalists by nature, and just have exceptional business acumen which enables them to negotiate unique deal structures, influence stakeholders, and be a valued partner to the business regardless of the commodity. &nbsp;</div> <div>&nbsp;</div> <div>I am also starting to see procurement/supply chain play a more critical role in bringing business strategies to life. We will definitely continue to see sourcing and procurement move from a supporting function, to a critical decision maker.&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What advice do you have for those who are considering a career in sourcing or procurement? </em></h3> </div> <div>If you are interested in a role that brings constant excitement, unique challenges, and the ability to never stop learning, you are looking in the right place. You will excel if you continuously apply previous learnings to each deal, and you will feel fulfilled to see each deal and relationship come to life and drive value to the business. There will be challenges as there are with any role, but your attitude towards those challenges will dictate the success you have in developing relationships and delivering results.</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/strategic-sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Strategic Sourcing</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/source-to-pay" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Source-To-Pay</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procure-to-pay-p2p-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procure-To-Pay (P2P)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/stakeholders" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Stakeholders</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/future-of-sourcing-awards" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Future of Sourcing Awards</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Rising Star Interview: Zachary Greenberger - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/rising-star-interview-zachary-greenberger"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 13 Sep 2019 16:10:22 +0000 Zachary Greenberger 1601 at https://www.futureofsourcing.com https://www.futureofsourcing.com/rising-star-interview-zachary-greenberger#comments Innovations in Third Party Management: DBS Bank Ltd https://www.futureofsourcing.com/innovations-in-third-party-management-dbs-bank-ltd <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/FOS%20Header%20Image_Innovations%20in%20Third%20Party%20Managemnent_1.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/FOS%20Header%20Image_Innovations%20in%20Third%20Party%20Managemnent_1.png" title="Innovations in Third Party Management: DBS Bank Ltd" class="colorbox" rel="gallery-node-1588-iOEbpJRrGCA"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/FOS%20Header%20Image_Innovations%20in%20Third%20Party%20Managemnent_1.png?itok=tcn_x1yG" width="624" height="325" alt="Innovations in Third Party Management: DBS Bank Ltd" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p>This October, the&nbsp;<a href="https://futureofsourcingawards.com/?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1569422747581.1569427810662.603&amp;__hssc=215510152.11.1569427810662&amp;__hsfp=3079266627" target="_blank">Future of Sourcing Awards</a>&nbsp;will celebrate organizations and individuals that have shown innovation, leadership and transformation in categories that are critical to the sourcing industry. Interviews with the finalists provide helpful insight about their projects, the problem they sought to solve and the impact to their organizations. Procurement fraud is one of the most common frauds across industries. Read how DBS Bank Ltd created rulesets for automation of transaction surveillance so that monitoring of transactions could be carried out more efficiently and regularly.</p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div> <h3><em>Can you outline why your team embarked on this project and the problem that needed to be solved?</em></h3> </div> <div>According to PwC&rsquo;s Global Economic Crime and Fraud Survey in 2018, procurement fraud is one of the most common frauds across industries. As such, DBS Group Procurement &amp; Services (GPS) recognizes the need for constant vigilance and the importance of enterprise wide anti-fraud controls. Year after year, we challenge ourselves to revisit and enhance our anti-fraud controls. With the migration to our new Procure-To-Pay system (P2P) completed in 2018, spend management is on the uptrend and more procurement transactions are now electronically captured through P2P. As our procurement data accumulates, we started to analyze them for anomalies, albeit manually. This led to the creation of rulesets for automation of transaction surveillance so that monitoring of transactions can be carried out more regularly. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>In the past, our procurement operations team spent 170-man hours (or about 0.1 Full-Time Equivalent) monitoring transactions using spreadsheets, scrutinizing anomalies to prevent purchase order splitting and creating a variety of reports for management and stakeholders&rsquo; review. Through the automation of transaction surveillance, we are now able to achieve 81% reduction of employee toil and to redeploy manpower to new projects.&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>How were things done originally and what was the inspiration to innovate the process?</em></h3> </div> <div>We realized that staff may not be fully aware of the requirements of the Group Procurement Policy, Standard and the procurement process which resulted in the following challenges:&nbsp;</div> <div>&nbsp;</div> <div>a.) No contracts signed for procured goods and services&nbsp;</div> <div>b.) Maverick spend (non-PO backed invoices or outside of P2P &ndash; no spend control)&nbsp;</div> <div>c.) Same staff sourcing and approving&nbsp;</div> <div>&nbsp;</div> <div>To compound on these problems, there were two additional challenges: (i) in the invoicing or payment phases, duplicated invoices detection was not systematic; (ii) there were risks of data input errors in the P2P. &nbsp;</div> <div>&nbsp;</div> <div>Embracing DBS&rsquo; digital and sustainable culture; and with the blessing of our Regional Head of Procurement (Donna Trowbridge), we decided to build this capability internally ourselves. GPS Risk Team got excited and attended trainings and self learnt Qlikview, PowerBI, R &amp; Python. We selected Python due to its flexibility and portability. As we gained success and momentum in the use Python, we provided showcases in our Agile sprints to key stakeholders. These drew interests in our capability which we can deploy to other use cases such as automation of key processing areas. &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?) </em></h3> </div> <div>i.) Through time and motion study on employee toil, we measured staff productivity (employee hours) saves. &nbsp;</div> <div>ii.) Through performing regular user surveys (3 x &lsquo;U&rsquo;s: Useful, Usable and Used), we sought to enhance the employee journey and experience &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>How you plan to ensure that the new model remains relevant and adapts to the future needs of the market?</em></h3> </div> <div>In partnership with our Group Compliance control function, we keep close tabs with the latest fraud trends globally. We will continuously add on and refine the rules into our data model. Future roadmap covers the expansion to include account payable and expense data. Over time, we will correlate the procurement end to end data to more effectively surface outliers for Case Management with stakeholders. Through such outreach efforts, we progressively educate our internal procurement users and continuously seek opportunities to reduce our fraud risk exposure.&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What advice do you have for those who may want to implement this innovative approach in their own organizations?</em></h3> </div> <div>i.) &nbsp; Be data &ndash; driven. Adopt the 4A approach for data management: Ask -&gt; Acquire -&gt; Analyze -&gt; Act &nbsp;</div> <div>ii.) &nbsp;Be bold to experiment, make mistakes, iterate/pivot&nbsp;</div> <div>iii.) Engage your stakeholders in this employee journey as early as possible (listen and incorporate their feedback)&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>How did your team assess the risks/potential for your third party management strategy?</em></h3> </div> <div>Several options were evaluated for transactions surveillance:&nbsp;</div> <div>&nbsp;</div> <div><strong>Option A</strong>: Partnering with DBS Technology Support unit to build in-house &ndash; this process helped clarify our requirements but was going to cost us several hundreds of thousands SGD to build a platform from scratch to meet 100% of our specifications&nbsp;</div> <div><strong>Option B</strong>: Looking outwards to buy an established procurement analytics tool (Tool A) from a market leader &ndash;this tool can meet 50% of our requirements but will cost us almost double of Option A&nbsp;</div> <div>Option C: Exploring adding a module to our existing P2P system &ndash; which was cheaper than Option A &amp; B but was only able to meet 10-20% of our requirements &nbsp;</div> <div><strong>Option D</strong>: Do-It-Ourselves (DIO) &amp; building our own procurement analytics capability&ndash; using available open-source analytic tool to build rulesets to identify outlying procurement transactions and trigger notifications to procurement users and approvers and work with them on remediations (Case Management)&nbsp;</div> <div>&nbsp;</div> <div><img alt="" src="https://futureofsourcing.com/sites/default/files/DBS%20Bank%20LTD_Table.png" /></div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/automation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Automation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/fraud" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Fraud</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/third-party-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Third Party Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/risk" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Risk</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procure-to-pay-p2p-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procure-To-Pay (P2P)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/spend-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Spend Management</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Innovations in Third Party Management: DBS Bank Ltd - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/innovations-in-third-party-management-dbs-bank-ltd"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Mon, 12 Aug 2019 19:18:53 +0000 Future of Sourcing Awards 1588 at https://www.futureofsourcing.com https://www.futureofsourcing.com/innovations-in-third-party-management-dbs-bank-ltd#comments