Basware: P2P for the Global “E” Part V

When we last discussed Basware two years ago, we did a deep dive into their solution, particularly with respect to their invoice and payment plan capability, their Basware Commerce Network (BCN) and supplier/buyer portal, and their analytics offering. You can review this coverage in our four part series: Part I, Part II, Part III, and Part IV.

Since that coverage, there have been a few updates to the platform in these areas, but the biggest news is the recent Verian acquisition that extended their procurement offering, and we’ll cover this shortly.

From an invoice processing point of view, the match algorithm has been improved, as has the interface to the invoice. The upgraded UI makes it very easy to see not only unmatched invoices, but unmatched data, the closest match purchase orders, and all associated history of both. The pop-up windows allow a user to view the invoice and PO side by side, as well as the full audit trail if need be. From a payment plan point of view, the solution supports very powerful rules that allow a payment plan to match as many invoices as needed, and be automatically paid and approved subject to the rules.

From the BCN point of view, it’s growing year over year, at a transaction growth rate of 37%+, and should be processing 250M invoices by the end of 2018 and continues to add digital signature and tax compliance as more and more countries add regulations and allow digital signatures. The supplier portals have gotten a face lift, and it’s easy for a supplier to not only manage all communication, but multiple versions of their catalog for multiple buyers, as well as multiple price lists for different order volumes.

Their analytics offering keeps getting extended and improved as well, with the standard reports and dashboards now meeting 90% to 95% of what a typical buyer or AP clerk would ever need to look at. The reports have been grouped into three categories: spend, which are focussed on actual spend; procurement, which are focussed on overall process metrics and quality; and AP, which focus on financial data, process metrics, and overall end-to-end P2P KPIs.

The spend reports capture actual invoice data and payments and summarize, among other things, spend under control in a reference period, spend by supplier, spend by category, percentage of supplier spend under control, payment terms, and top n suppliers. The Procurement reports are focussed on quality and metrics. The quality reports focus on supplier quality and summarize active suppliers, (average) quality metric summary, rank by quality, rank by category, etc. The metrics focus on value. PO counts, by supplier, and by value. Average total order time by supplier, by category, and geography. Average procurement task time (for requisition approval, PO flips, etc.) and duration. The AP reports focus on finance, process, and KPIs. The financial reports summarize cash flow, cash flow forecast, discount availability, discounted invoices, discount trend, and similar financial data. The process reports summarize invoices — open, exception free, resolved exceptions, and average resolution time; tasks and durations; and average supplier acknowledgement/response times. The KPI reports summarize overall e-Invoice metrics, spend under control, auto-match performance, on-time payment, and average cycle times. It’s a very complete set of reports.

In other words, even though everything discussed above was quite good when we reviewed it back in 2014, Basware has kept developing and improving and streamlining, but that’s not all Basware has to offer. In our next post in this series, Part VI, we will discuss the other capabilities Basware has to offer.

London Bridge is Falling Down

But this time, it’s not the vikings*, it’s the procurement. And this is not a good thing. Bridges need to be built, not put on indefinite hold while enquiries are made into funding proposals. But then again, why does a foot bridge cost £185M?

As per a recent post by the public defender over on Spend Matters UK on how “Procurement and Funding [is] To Be Reviewed”, while a previous internal review by Transport for London did not find any evidence that would suggest that the final recommendations did not provide value for money from the winning bidders, the report did find major breaches of good procurement process. From allowing a supplier to submit a bid after the formal deadline, to a lack of documentation, to changing the evaluation process once bids were received, to treating suppliers differently – as we said, if any unsuccessful bidder had challenged in court there is no doubt that they would have won their case.

While this is bad, and provides a solid reason to put everything on hold for further examination and inquiry, this situation should never have happened in the first place. With so many resources on good public procurement available from the EU, the OECD, and private government oversight organizations, there’s no excuse, and no call, for any government procurement body in any advanced country to conduct an event like this — especially when there are good public procurement platforms (including, but not limited to Intenda, Causeway, Perfect Commerce, and others) to prevent situations like this from happening (and some are custom built for big procurement projects). Modern platforms block late submissions, allow evaluation criteria to be locked down before the bid goes out, allow initial submissions to be reviewed blind, and so on.

So, we beg you, before any more bridges fall down (or literally fall down because the funding to fix them has to be put on indefinite hold while the Procurement process is reviewed), learn the rules, follow the best practices, and put good platforms in place that prevent bad processes from ever happening in the first place.

* While the popular rhyme has to do with London Bridge falling down, the reality is that the rhyme might be the result of the destruction of (a) London bridge by Olaf the II of Norway somewhere between 1009 and 1014.

One Hundred and Eighty Seven Years Ago Today

Stephenson’s The Rocket wins The Rainhill Trials. An important competition in the early days of steam locomotive railways for the nearly completed Liverpool and Manchester Railway, The Rocket was the only locomotive to complete the trials and became the template for the railway.

The Rocket, which brought together several innovations to produce the most advanced locomotive of its day, was so revolutionary at the time it is now on display in the Science Museum of London. While not the first steam locomotive, it was the foundation for the steam locomotives that would become a major means of transport in the UK in the nineteenth century and should not be lost to the annals of history.


What do you think, LOLCat?


Choo! Choo!

No Environment is too Challenging or too Unique for Procure to Pay

Pete Loughlin recently penned a great post over on the Purchasing Insight blog that asked “Is This the Most Challenging Environment for Purchase to Pay” where he discussed whether or not the entertainment industry (and movie making in particular) was the toughest environment for Purchase to Pay there is.

As per Loughlin’s post, where he quoted Bogdan Tomassini-Büchner from digitalpurchaseorder.com, on a movie set it’s complete chaos. You’re hiring lots of people for a short time at short notice, there’s no time, there’s no money — even for multi-million dollar projects — buying stuff is a nightmare. There’s no time for a requisition approval process — the stand-ins, the set, the food is needed now. But with the right system, all purchases can be put through (approved) and all spend can be tracked.

Regardless of whether or not cost is critical, or incidental (because the biggest profit potential is in increased revenue and not cost reduction), cost still needs to be tracked, understood, and opportunities for significant savings identified. For example, even in entertainment, if, at the end of the year, the same provider is providing a significant amount of product across multiple sets or budgets, the parent company can negotiate an across-the-board discount off of the standard rate sheet for the following year (and all purchase orders to the vendor can automatically use that rate).

The same situation exists in the hospitality — or tour — industry, especially when products or services have to be acquired, or re-acquired (because the restaurant was closed for a health violation, the bus broke down, etc.) at the last minute. But all costs needs to be tabulated, tracked, reported, and when possible, appropriate taxes reclaimed.

However, the biggest challenge is in an old-school manufacturing or logistics company where everything is paper and fax and e-mail based, the process has to be “done this way”, and no Procurement system meets the need. If a vendor is trying to go into one of these environments without a highly configurable, adaptable, customizeable workflow — they will be as challenged as a first generation procurement system in the high-speed hospitality and entertainment industries.

However, as Pete has pointed out, there is no environmnt too complex for a highly configurable, adaptable, customizeable workflow. So if you don’t have a good P2P system, there is no excuse not to get one.

What Procurement Processes Should Be Automated?

The big push in Procurement Automation is typically the automation of invoice processing: automatic matching, verification, and when possible, payment because paper-based invoice processing in an average organization can cost $30 or more (with some estimates that paper-based invoice processing can cost an organization as much as $60). But when an organization switches to automated invoice matching, processing, and payment with a best-of-breed system that can automate processing the 85%+ of invoices that are problem free can reduce invoice processing costs to somewhere between $3 and $8 an invoice, depending on the system and the overhead costs.

And while this cost savings is great, it shouldn’t distract from the other cost savings opportunities that can come from automating other procurement processes, which eat up valuable time and resources. In this post we will discuss three other areas of Procurement that should be automated.

Requisition Approvals

Not every requisition needs a manual review. A requisition for a standard office supply reorder from the office manager, a requisition for a standard setup for a new hire, or a requisition for standard travel expenses for a pre-approved conference can all be automatically approved if the expenses are within the expected range and budgets are not exceeded. A requisition system that supports the definition of rules that can allow requisitions to be auto-approved can save the organization a lot of time and resource energy.

Automated MRO re-orders

A system that can support the definition of minimum stock levels, maximum stock levels, and perfect re-order levels can allow stock to be automatically re-ordered when a threshold is met. This negates the need for an MRO clerk to regularly check inventory levels and compute re-order levels.

Supplier Profile Maintenance

Supplier profiles need to be kept up to date to enable the organization to contact the right people, select the right locations, keep track of current products and services, and make payment. People change roles, and jobs, office locations move, products get discontinued, and so on. Keeping this information up to date takes a lot of time and effort – with a good portal, that reminds suppliers of their need to auto-update, suppliers can maintain their information, upload insurance certificates and certifications, and provide the organization with requested information on an as-needed basis.

Good Procurement systems automate the tactical and allow procurement professionals to focus on issues, not paper pushing.