Crossing the Purchase Process Chasm

eWorld, March 2015- Purchasing Presentation
Stuart Evans, CTO of Invu, discusses the Purchase Process, including the challenges that many companies face.

Transcript

1. Crossing the Purchase Process Chasm… Stuart.Evans@invu.net
2. Every business wants Purchase Control… • Control Spend • Precise coding • Efficient Process • Visibility • Requests/Authorizations • Receipting • Invoice Approvals/Variations • Reporting & Analysis: • Commitment • Accrual • Spend analysis/trends Requisition Approval PO Raising Receipt Invoice capture Invoice matching Exception handling Reporting
3. Budget & Commitment
4. If it’s so easy…. ……why hasn’t everybody done it? 1. Nothing in it for anyone but the FD – hard to get the “Go!” • ERP’s POP Modules inadequate or wrongly focused or both – by Finance for Finance • Attempt(s) have failed in the past (previous) – what’s different now? • The worse the system the “happier” the employee! 2. They think they already are doing it…(“Make do”) • Control but no visibility: “Spreadsheet ops” & Paper is not perfect either! • Process is often bypassed/worked around • Not systematic (Complete, Consistent, Visible and Audited) 3. They (think they) can’t afford/justify it • Financial cost • Time cost • Complex offerings
5. E.g. Adactus Housing Association: • No Central PO management (spreadsheets etc) • Had already purchased POP module of ERP system • More recently had already implemented Invoice Processing • Still wanted a purchase control solution because: • Operational “fitness” – strategic aim • Auditor demand • Demonstrate VFM – an HA community directive • But: • Non-Finance users would not accept ERP POP user interface for PO control • Finance felt this undermined credibility to roll out across business
6. Adactus – ERP POP Module Complaints….  Embarrassing and infective to roll out The overall process was ‘clunky’ and not slick – too time consuming
7. The Evil PO…. The Purchase Order is usually presented as the hero but has often turned out to be the villain: • Items from different budget holders • Piecemeal delivery • Part invoicing – premature closure of Order Increases complexity, exceptions or compromise Disengages employees & drives workarounds PO should be the means, not the end in the PO process PO
8. Ingredients for a Successful crossing…?
9. Engagement – How your staff purchase at home
10. Engagement • Visibility • Reporting • Minimal Setup/admin • Enabled - Simplicity • Empowered • Involved • Confident • Budget • Authorisation • Delegation • Oversight ”Something in it” for everybody… • Freedom from transactions • Spend Analytics CFO Employee Budget Holder Purchasing Manager
11. Disentangle the PO from Internal Process Item level Authorization PO transaction Budget Holders Employees Supplier Part or full invoicing Item/Line level receipting Payments Item level Processing
12. The Invoice Pantomime • Untrusted order time data • Long Approval chains • Slow payment sign off • Incorrect coding ”…Oh no it isn’t….”
13. System Requisition Approval PO Raising Receipt Invoice capture Invoice matching Exception handling Reporting End to End Trusted Data
14. Adactus Housing: 1 year on • 350 Users • All overheads now requisitioned & authorized via browser • All overheads have a PO • …and soon no Invoices accepted without PO ref. • Full visibility of Commitment • Full visibility & Audit of this process • Happier auditors.
15. Summary • Engagement - it’s about everybody • System - Get the right data, and the data right, right at the start • Trust your process & data – avoid the Invoice Panto ….and remember, it’s a process - so refine & repeat
16. Thank you stuart.evans@invu.net