Category Archives: Procurement Innovation

Are Your Invoices Out of Control? Want To Do Something About It?


Paper, paper everywhere
all the desks did warp.
Paper, paper everywhere
enough to fill a thorp!

Despite the recent appearance on the market of some modern solutions that can revolutionize invoice management and automation at even the largest Fortune 500 and Global 3000 companies, the state of e-invoice and AP Automation today is dismal. The 2012 AP Automation Survey Report found that 9 in 10 organizations still deal with paper invoices and that 90% of invoices are paper-based in half of the organizations that responded!

Moreover, Aberdeen’s 2012 study of of 180 organizations, reported in AP Invoice Management in a Networked Economy, found that laggard organizations, which represent the bottom 30% of organizations, require an average of 16.3 days to process an invoice from receipt to approval. The good news: this is a significant improvement over their 2009 study on E-Payables: Invoice Receipt and Workflow that found laggard organizations required an average of 32.9 days to process an invoice. The bad news: it’s still a very large amount of time, especially if an organization wants the opportunity to take advantage of early payment or dynamic discounting.

As a result, the average organization spends somewhere between $30 and $40 just to process a single invoice! In other words, with the exception of best-in-class organizations that heavily employ modern invoice automation solutions and only spend an average of $3 to $4 to process a single invoice, invoices are out of control in 4 out of 5 organizations. But they don’t need to be!

To find out how you can get your invoices under control, join Sourcing Innovation and Nipendo next Tuesday, November 19, at 8 am PST / 11 am EST / 4 pm GMT for a live webinar on How to Make Invoice Automation Pay Off! In this webinar we will cover the challenges in the invoice process, how traditional e-Procurement technologies have let us down, what is required for true end-to-end invoice automation (and the 80% cost savings that can be obtained therefrom), how the Nipendo Supplier Cloud (which facilitates over 5 Billion in Procurement a year) fits the bill, and how it enables Israel Aerospace Industries (IAI) to reduce its paper-process by over 90% through the electronic receipt and processing of over 100,000 e-Documents from over 3,000 suppliers each year — which has already allowed IAI to reduce its operational overhead by over 50% in two years.

In addition, attendees will be the first to receive Sourcing Innovation’s new Illumination on An End-to-End Invoice Automation Framework — Benefits & Best Practices! So Sign Up today. Space is limited.

Conversant Coupa – Communicating Cybernetically

Well, almost.

This Wednesday, Coupa takes its One Vision tour online and brings the best of its One Vision tour to those of you who were unable to make it to one of the live events. In this series, which will consist of at least seven webinars between now and the end of January, Coupa will bring you insights on

  • The Vision and Reality
  • Building Your Business Case
  • Technology, Transformation, & Procurement
  • Financial Services
  • e-Invoicing
  • Amplifying Procurement with Managed Travel
  • Modern Procurement

This should shape up to be a good webinar series. the doctor was at the Toronto stop and the presentations were quite informative, especially the presentations on building your business case and the future of procurement. In addition, assuming they don’t leave out the talent, the talk on technology and transformation should be invigorating as Supply Management is all about the 3 Ts — talent, technology, and transition from where the organization is today to where it needs to be in a transformation journey.

The only thing missing from the agenda so far is a few of their customer presentations. One of the unique aspects of the One Vision World Tour is that every stop had a customer presentation, and Coupa encouraged their customers to talk about anything they wanted to share and the attendees to ask any questions that were on their mind. This is the best insight into a solution, and a solution provider, a prospective customer can get.

If you are on the market for an e-Procurement solution, or just looking to get a better understanding of what an e-Procurement solution can do, check out the One Vision webinar series.

Oompa-loompa-doom-pa-de-doo
We will share our secrets with you
All that we ask is you log in
Listen to our one world vision

Then you can share in enlightenment too
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John Mavriyannakis on the Future of Procurement: Part II

In Part I, we described the 4 major trends affecting Procurement today that were identified by Deloitte in its research and consulting initiatives (and which have been addressed in publications that include “Supply Chain Strategy”, “Winning With Your Supply Chain”, and “Charting the Course: Why Procurement Must Transform Itself by 2020”) that were summarized nicely by John Mavriyannakis, a Senior Manager at Deloitte Canada (and the Practice Leader in Sourcing, Procurement, and Settlement), in his recent presentation on Empowering Modern Procurement that was given as part of the Coupa One Vision Roadshow in Toronto

Specifically, John Mavriyannakis identified the following four trends:

  • Margin Pressure
  • Supply Chain Risk
  • Government Regulations
  • Talent

As a result of these trends, it is clear that today’s supply managers need to:

  • control margin pressure,
  • mitigate supply chain risk,
  • stay ahead of changing regulations, and
  • win the war for talent.

But that’s not going to be enough for a Procurement organization to succeed in the long term in the dynamically changing global marketplace. If they wish to survive, Procurement and Supply Management organizations need to rethink mission and capabilities. Specifically, they need to:

  • get strategic
    and establish a formal organizational presence that ties metrics to company performance,
  • transition
    to re-aligned processes and responsibilities that focus on business outcomes,
  • task talent cross-functionally
    to enhance the procurement capability of the organization as a whole, and
  • tie it all to technology
    that blends service and management tools that are easy to use and that allow for the right level of control.

While keeping in mind that they need to get to the 2020 Procurement and Supply Management organization in just 6 short years (which is no easy feat given that the average transformation time that is required for a Global 3000 organization to become a world class Procurement organization, according to The Hackett Group, is at least 5 years). In 2020, Procurement, according to Deloitte, is going to (need to) be:

  • the keepers of the global supply and demand perspective,
  • the nexus of finance, operations, and supply chain,
  • risk forecasters,
  • the arbiter of risk vs. reward,
  • the value-generation unit that is the treasure trove of ideas, and
  • talent rich.

And SI fully agrees with all but the last of these predictions. In addition, it partially agrees with the last prediction that Procurement is going to need to be talent rich to achieve the goals that are set before it, but given the lack of investment in talent to date in the average Procurement organization, SI isn’t sure that the talent is going to be where it needs to be in 2020. Even though talent has been in the top three Procurement issues for at least the last three years, it’s still in the top three budget items that are cut every year in these tough economic times, even though a small investment in talent can lead to a (very) large return in savings in a Procurement organization. (For example, one of the first companies to certify their entire department with the SPSM designation offered by Next Level Purchasing, a 1 Billion furniture manufacturer, doubled their annual savings only one year after completing the certification on the department level. That’s a double digit ROI multiple in one year! Compare that to the 2X or 3X you might get from automating manual processes.) Basically, the most successful Procurement organizations in 2020 will be talent rich, but the average Procurement organization will be struggling at the current rate of training and talent induction into our space.

John Mavriyannakis on the Future of Procurement: Part I

John Mavriyannakis is a Senior Manager at Deloitte Canada and the Practice Leader in Sourcing, Procurement, and Settlement who recently gave a presentation on Empowering Modern Procurement as part of the Coupa One Vision Roadshow in Toronto. Through its regular CPO Surveys, CFO Surveys, and its Source-to-Procure experience across 1000+ projects for 300+ clients, which made it #1 in the Procurement Consulting provider in the global Procurement Consulting marketplace, Deloitte has built up a considerable understanding of the current state of Procurement [which it has captured in a number of publications, including Supply Chain Strategy (Deloitte), Winning With Your Supply Chain (Deloitte), the CFO Surveys, and Charting the Course: Why Procurement Must Transform Itself by 2020 (Deloitte)].

According to Deloitte, Procurement today is dealing with 4 major trends, which are going to continue for the foreseeable future:

Margin Pressure
Margins are getting tighter and organizations need to be looking at least ten years ahead to determine future (labour) arbitrage opportunities, which are becoming increasingly more difficult to leverage as emerging economies emerge and produce middle classes with higher wage expectations (and transportation costs increase to make up the difference). In addition, the fact that price volatility has increased 57% in the last 12 months hasn’t helped matters any.

Supply Chain Risk
Due to the increasing interdependence and extensiveness of supply chains, risk is increasing, as illustrated byt he fact that 85% of surveyed organizations experienced at least one large scale disruption in the last 12 months. The increased risk is a big issue given that companies announcing supply chain disruptions had a 30% lower supply chain return compared to the benchmark group.

Government Regulations
Regulatory compliance issues have resulted in high-profile, high-cost shutdowns in recent years and with 2/3rds of CPOs admitting that their companies are only in the early stages of compiling information required to meet the recent SEC reporting changes, this is not a good state of affairs as the SEC reporting requirements are only one of a plethora of reporting requirements an international company that is importing and exporting on a daily basis around the globe needs to be compliant with.

Talent
Given that 76% of CPOs feel that their staffs’ skills need improvement or have a significant gap, talent is on the radar in a big way. And not just any talent — with 91% of the 60% of CPOs planning to change their operational model announcing a shift to center-led or centralized supply chain operations, this means that over half of the talent that is required needs to be effective in these type of Supply Management models.

So what does this mean? We’ll discuss tomorrow in Part II.

Vinimaya: Taking Their Procurement Marketplace Global, Part II

In Part I we noted that Vinimaya, despite scaling back on their marketing efforts for about two years, has been hard at work extending their core Procurement Marketplace platform to be a fully-featured Procurement Marketplace platform that fills the gap that ERP e-Procurement solutions leave wide open. Specifically, while the average ERP e-Procurement solution does great when it comes to master data management; workflow, approval, and PO management; and financial system integration; it doesn’t do so hot when it comes to content management, search, ordering, and invoice management. (Just ask vendors like Wallmedien that became the number one e-Procurement provider in Germany by filling in the holes in the SAP e-Procurement solution and Nipendo that is growing fast here in North America by offering an e-Invoice management and automation solution that most e-Procurement solutions are missing.)

The proof that Vinimaya fills the gap is, as they say, in the pudding that a large number of large organizations are eating. The Vinimaya solution, which has had great success in the private and public sectors, and which supports 37 different currencies, is utilized by buyers and suppliers in 13 languages across 80 countries on 6 different continents. That’s pretty damn good for a small company with less than 75 employees headquartered in Cincinnati, Ohio. Vinimaya’s success is due to the uniqueness it brings to the table. A unique federated search capability, a pure focus on the features other platforms lack, and a rapid implementation timeline (as a customer can go live on already supported supplier [platforms] immediately and most suppliers can be added within 24 hours) are just some of the reasons for their success. Other reasons include the platform’s ability to validate pricing in real time, force compliance if required, track pricing discrepancies, and get an organization’s spend under management.

And then there’s Vinimaya’s new vTransport solution that runs on top of their marketplace. One of the big inefficiencies in most Procurement organizations is invoice management and automation. With no standard means of invoice receipt and management, most large organizations require teams of tactical AP personnel who spend the vast majority of their time simply entering invoices into the payment system and validating basic information. In addition, due to limited manpower, only one in ten invoices gets fully validated and the result is a large number of overpayments, duplicate payments, and fraudulent payments. (There’s a reason that the recovery industry is still thriving and vendors like Lavante are building automated recovery solutions.) Like Nipendo, Vinimaya also recognized this issue and also recognized that many of the invoices are for goods and services requisitioned by organization personnel — most of which, if the solution is fully deployed and effectively utilized, should be bought through the Vinimaya platform.

So they acquired a leading PO and invoice management solution, improved it, and integrated it into their solution. With their new vTransport solution, POs can be delivered to the supplier through their mechanism of choice – XML, EDI, e-Document, supplier network, PDF scan attached to an e-mail, or old-fashioned fax, and then the invoice can be returned to the buyer through their mechanism of choice. And everything can be pulled direct from the central ERP data store and pushed back into the ERP workflow when received. In addition, the POs and invoices can pass through the Vinimaya audit engines which can verify prices and totals and limits to make sure no overcharges or fraudulent invoices get through. While the solution isn’t as extensive as you’ll get from a provider like Nipendo (which also has a print-to-cloud solution and [third-party] I-OCR integration), it’s considerably more extensive than the vast majority of e-Procurement solutions (and definitely way more extensive than what ERP offers) and will give most organizations an 80%+ solution. (The only POs and invoices missing will be for goods and servies not put through the platform – but such requisitions and invoices should be few and far between if the platform is fully deployed.) And the fact that it works with all of the big ERP and AP Systems (including Oracle, PeopleSoft, JDE, SAP, Lawson, Ariba, iValua, Microsoft, etc) out of the box is a big plus for organizations that want a good e-Procurement solution that is going to rapidly get their Spend Under Management (SUM).

Also, as indicated in our last post, the core platform has been extended, the UI has been revamped, and the performance has been accelerated greatly. Like many of the other e-Procurement players (like Coupa and b-Pack), Vinimaya has kept a close eye on consumer search and shopping (cart) technology and has incorporated the best features you’ll find on the web into their platform. Not only can you search all of the catalogs, punch-outs, and marketplaces relevant to your procurement needs in one federated search and dynamically validate the pricing and availability in real time, but you can filter on suppliers, price, and other relevant attributes dynamically, compare items in detailed comparison views, filter preferred items (based on simple or complex rankings) to the top, and track the price (and purchase) history of each item in real-time. Plus, the interface can be configured to each buyer and by each buyer to meet their particular needs.

Vinimaya has also added new quick-order and e-Forms functionality to support regular (re-orders) of products and services from suppliers based on standard catalog numbers (which a buyer probably has memorized) and standard organizational needs. The forms can be used for both simple and complex services, and templates can be pre-configured to meet all different types of service and manpower needs, including janitorial, (simple) advertising, and internal full-time and contingent workforce positions. In addition, buyers can also use them to make free-form requests and send them to the appropriate suppliers using the new quick-quote functionality. While not as extensive as what you will find in the Contingent Workforce or Agency Management solutions, it’s more than enough for most goods-based industries.

And extensive improvements have been made to auditing and analytics, but that, as well as other new development, will be the subject of a future post in this series on Vinimaya’s Global Procurement Marketplace.