Business Challenges

PROACTIS: How We Help

Organisations without effective Spend Control usually find themselves with a number of issues that are limiting their operational and financial performance.

Click on a business challenge to learn how PROACTIS Spend Control and eProcurement solutions enable organisations to improve the way they operate by instituting best practices, streamlining business processes, and improving controls.

Financial Control

PROACTIS solutions automate and streamline the entire day-to-day buying process; from request through authorisation, ordering, invoice processing, and payment via Accounts Payable. It provides the linkages between employees, internal systems, and suppliers that leverage the agreements and contracts established by Procurement. PROACTIS helps you to address:

Maverick, Unauthorised, Unnecessary Purchases

Issue: Maverick, Unauthorised, Unnecessary Purchases

Every day, employees need to purchase various goods and services as part of their job. The majority of those purchases are necessary and proper, but there are many ways employees can go astray with or without realising it. The result can be significant unnecessary cost and poor budget control. Consistent and comprehensive authorisation controls are required in order to make sure only necessary, budgeted purchases are made; and that the most cost-effective suppliers are always used.

PROACTIS Solutions: How They Help

PROACTIS Purchase-to-Pay:

  • Fast, intuitive purchase request and authorisation processes make it practical to require employees to make virtually all purchases through a standard system with consistent, automated controls
  • Authorisation controls ensure proper pre-approvals for purchases
  • Supplier website punch-out capability ensures proper controls while enabling easy  online purchases
  • Invoice matching, troubleshooting and authorisation workflow ensure all invoices are reconciled to the originator and that only proper invoices are paid (both pre-approved purchases and invoices with no PO)
  • PCard statement processing efficiently handles 'in the field' purchases from established suppliers while providing flexible exception alerts

PROACTIS Employee Expenses:

  • Easy claim submission and rapid authorisation processes make it practical to require employees to submit all 'after-the-fact' purchase reimbursement claims through a standard system with consistent, automated controls
  • Expense permission rules, exception alerts and authorisation workflows ensure all reimbursements are in compliance with corporate policies, and that appropriate managers are alerted to non-standard claims
Poor Visibility of Cost Pipeline; Difficulty Managing Budgets

Issue: Poor Visibility of Cost Pipeline; Difficulty Managing Budgets

In many organisations, purchase expenditures become visible to Department and Finance Managers only when the purchase order is actually placed or even not until the supplier's invoice is received and approved for payment. Incorrect account coding of expenditures can also confuse the issue and cause budgetary surprises when the mistake is recognised.

It is very difficult for managers to effectively manage budgets with only the 'rear view mirror' represented by standard general ledger financial reports. In order to have the complete financial picture, managers also need visibility of cost commitments associated with all purchases that have been authorised or placed, as well as outstanding purchase requests. This full visibility of where they stand against their budgets gives managers a far more complete picture when they need to make a decision about authorising another purchase request or proceeding with other planned activities.

PROACTIS Solutions: How They Help

PROACTIS Purchase-to-Pay:

  • A comprehensive electronic repository of all outstanding purchase requests, POs, and non-PO invoices provides complete visibility of cost commitments; dashboard graphics make information clear 'at a glance'
  • Automated budget-checking alerts managers when purchase requests could take expenditures over budget
  • A combination of automatic and required purchase and invoice coding based on pre-established rules eliminates virtually all account coding mistakes
  • Automated cost allocation rules handle even complex situations

PROACTIS Employee Expenses:

  • A comprehensive electronic repository of all submitted expense claims provides complete visibility of outstanding 'after-the fact' expenses
  • A combination of automatic and required expense claim coding based on pre-established rules eliminates virtually all account coding mistakes
Payment of Incorrect, Duplicate, Unauthorised Invoices

Issue: Payment of Incorrect, Duplicate, Unauthorised Invoices

When a high percentage of invoices are showing up in Accounts Payable (AP) without pre-authorised PO or contract references, it can be very difficult and time-consuming to perform the investigation required to ensure they are correct (i.e. item, price, quantity), valid (i.e. the goods or services were actually received), and not a duplicate (something that happens even more when an organisation's payment process is slow). The inclination to 'just pay it' becomes greater if the process of running down originators and verifying invoices is too time-consuming or cumbersome.

The reality is that the effectiveness and efficiency with which AP does its "to-pay" part of the purchase-to-pay cycle is largely dictated by the way in which your organisation does the "purchase-to" part of the cycle. In other words, the more information the AP department has about what's been purchased, the better job they can do when the invoice arrives.

Payment of even a relatively small percentage of incorrect, invalid and duplicate invoices is a completely unnecessary cost that can run into thousands of pounds a year.

PROACTIS Solutions: How They Help

PROACTIS Purchase-to-Pay:

  • Fast, intuitive purchase request, authorisation and receipt confirmation processes make it practical to establish POs for virtually all purchases in advance, with all of the details AP will need to verify accuracy and authorise payment when the invoice arrives
  • Automated invoice matching, troubleshooting and authorisation workflow ensure all invoices are reconciled to the originator and that only proper invoices are paid (both pre-approved purchases and invoices with no PO)

PROACTIS Contract Management:

  • Automatic PO generation sets up all the necessary details for automated invoice matching for ongoing contracts, such as those with pre-set payment schedules
High Cost of Accounts Payable Process

Issue: High Cost of Accounts Payable Process

Payment controls are essential, but the cost of the Accounts Payable (AP) function subtracts profits directly from your organisation's bottom line. A people-intensive, paper-intensive AP process is almost certainly costing your organisation more than it needs to. The costs of traditional manual processing are just not necessary. The technology to eliminate the great majority of the paper handling is available, affordable, and easily implemented within the context of your existing financial systems. Think about:

  • What is the average elapsed time between when an invoice is received and when it is authorised for payment? For many invoices, more than a couple days probably indicates inefficiencies
  • On average how many invoices are processed per month per AP FTE? Less than 50 probably indicates an opportunity for improvement, though this can vary by organisation. You can also do a quick calculation of the average AP cost per invoice this way
  • How much time do AP personnel spend answering supplier invoice status enquiries? The time spent answering these enquiries is adding cost for an activity that clearly adds no value. A high number of supplier calls may indicate a high number of late or incorrect payments as well

PROACTIS Solutions: How They Help

PROACTIS Purchase-to-Pay:

  • Fast, intuitive purchase request, authorisation and receipt confirmation processes make it practical to establish POs for virtually all purchases in advance, with all of the details AP will need to quickly authorise payments when invoices arrive

PROACTIS Intelligent Invoice Processing:

  • A wide range of automated invoice capture capabilities, from OCR scanning to various forms of eInvoicing quickly turn invoices into electronic records for automated processing
  • Automated invoice matching enables a high percentage of invoices to be processed with no manual handling at all
  • Workflow-based troubleshooting significantly reduces the time required to communicate with originators to resolve invoice discrepancies or validate invoices with no PO

PROACTIS Supplier Management:

  • The cloud-based Supplier Portal enables self-service account information access to eliminate the need for nearly all supplier enquiries

Effective Procurement

PROACTIS solutions provide a framework of sourcing, contract, catalogue, compliance and supplier management capabilities that enable you to leverage your organisation's full buying power, gain best value agreements, and maximise the percentage of "spend under management" across all categories of spend. PROACTIS helps you to address:

Poor Visibility of Spend

Issue: Poor Visibility of Spend

Good visibility of an organisation's spend is virtually impossible until the majority of purchases are made through a standardised process that captures an electronic record of each purchase. The details captured need to include at least the supplier, supplier contract, specific items or services, standardised purchase category, who requested or made the purchase, (at least the organisational unit), the quantity purchased and the price paid.

Without that information, it's extremely difficult to perform meaningful analysis or be confident in results. GL accounts alone are clearly not sufficient. Invoices alone don't contain enough detail. Information merged from many different sources is not standardised and like trying to 'compare apples and oranges'.

But once detailed, standardised information is being consistently captured, the organisation has the foundation it needs for full visibility and effective analysis of spend. With that visibility, many things can be done to reduce cost and risk, like: negotiation of improved volume discounts and terms, supplier consolidation, sourcing of better suppliers, improved approaches to stores management and more.

PROACTIS Solutions: How They Help

PROACTIS Rapid Spend Review Service:

  • Provides a baseline of current spend as a foundation for forward visibility, including a clear picture of the biggest opportunities for savings

PROACTIS Purchase-to-Pay:

  • The P2P process captures a comprehensive electronic repository of all purchase requests, POs, and invoices in standardised formats
  • Purchase templates and other tools ensure all the right details, coding and classifications are captured for each transaction

PROACTIS Employee Expenses:

  • The expense handling process captures a comprehensive electronic repository of all 'after-the-fact' expense categories
  • Expense claim templates and other tools ensure all the right details, coding and classifications are captured for each transaction

PROACTIS Reporting & Analysis:

  • Powerful reporting and analysis tools make it easy to create, publish, and access virtually any form of summary or detail report with instant drill-down to the lowest level of detail
  • Management dashboards make information clear at a glance
Low Level of 'Spend Under Management'

Issue: Low Level of 'Spend Under Management'

Purchases made from suppliers using negotiated best-value agreements represent 'spend under management". All purchases made with other suppliers or without leveraging negotiated agreements have a good potential of costing the organisation more than necessary, diluting overall buying power, and incurring undo supplier risk. The lower the percentage of 'spend under management', the higher the cost and risk to the organisation.

PROACTIS Solutions: How They Help

PROACTIS Purchase-to-Pay:

  • Provides the framework to direct employees throughout the organisation to the most advantageous suppliers and agreements for all types of goods and services every time they have a need
  • Supplier catalogue and punch-out capabilities make it easy for employees to find exactly what they need from the right suppliers for routine items; supplier contracts ensure purchases are made using the proper negotiated terms
  • Quick Quote and requisition capabilities make it practical to get competitive bids or initiate formal sourcing events for larger, less routine purchases

PROACTIS Catalogue Management:

  • Supplier self-service catalogue maintenance, simplified publishing controls and a central repository make it practical to provide employees with a wide range of supplier items and rich item information within PROACTIS Purchase-to-Pay or other eProcurement system

PROACTIS Contract Management:

  • Centralised electronic contract repository and automated contract lifecycle processes simplify contract management and make it easy to integrate accurate, up-to-date contract information into PROACTIS Purchase-to-Pay or other eProcurement system

PROACTIS Sourcing:

  • Standardised RFx templates; collaborative requirements development; electronic publishing, response submission and scoring; and automated supplier communication make it practical to formally source far more of your spend with the same level of procurement resource
Not Consistently Obtaining Best Value from Suppliers

Issue: Not Consistently Obtaining Best Value from Suppliers

In today's world, every organisation must constantly strive to gain the best possible value from what it spends on the many goods and services the organisation procures each year. Among other things, that means identifying suppliers who deliver the best value, establishing advantageous agreements, effectively managing supplier contracts, and ensuring that employees purchase from the right suppliers using the right agreements.

When the sourcing process is cumbersome and time-consuming, fewer competitive sourcing events can be performed, leading to sub-optimal supplier agreements. When supplier performance is not monitored, hidden costs can add up from poor delivery or quality. When contracts are allowed to extend without the opportunity to renegotiate or cancel, unnecessarily high prices may be paid. When negotiated contracts are not utilised by employees when they buy things, potential savings are never realised.

It takes a thorough, multi-dimensional, integrated, and efficient procurement process to gain the very best value from suppliers on a consistent basis.

PROACTIS Solutions: How They Help

PROACTIS Sourcing:

  • Automated, workflow-driven processes for developing supplier questionnaires and RFx documents, electronic RFx posting, automated scoring and sourcing event management dramatically streamline the sourcing process, enabling procurement to professionally source a far greater percentage of overall spend

PROACTIS Contract Management:

  • A central, electronic contract repository makes supplier contracts visible throughout the organisation to drive usage
  • Automated contract lifecycle management frees up procurement time while ensuring contracts are reviewed at appropriate times and that they are never automatically renewed without conscious evaluation

PROACTIS Supplier Management:

  • A central supplier directory with comprehensive supplier intelligence; a cloud-based supplier portal; supplier performance summaries; and automated supplier communications enable effective and efficient supplier relationships that not only free up more procurement time for sourcing activities
  • The same capabilities help improve the organisation's negotiating position by becoming 'easy to do business with'

PROACTIS Catalogue Management:

  • Streamlined catalogue publishing capabilities and supplier self-service catalogue maintenance make it practical to include more and richer supplier catalogues in the organisation's purchase-to-pay system to make it easier for employees to buy from the right suppliers

PROACTIS Purchase-to-Pay:

  • Workflow rules and controls lead employees to the right suppliers and provide appropriate visibility of contracts to ensure purchases are always made from the most advantageous sources
  • Automatic capture of all purchase activity provides spend visibility for use in future sourcing and contract negotiation activities
Mitigating Supplier Risk

Issue: Mitigating Supplier Risk

In today's world, supplier risk management is just as critical to your organisation's financial health as your efforts to produce cost savings. The negative impact of a single event on your organisation's financial position or reputation is potentially huge, even devastating. Risk simply cannot be ignored, even while you work to reduce costs.

Suppliers represent at least two types of risk to your organisation: 1) if a supplier does not deliver as expected, you may not be able to deliver as expected to your customers, and 2) if a supplier has a deficiency in the way they operate their business - e.g. lack of proper insurance, employee background checks, certifications or quality controls - you may well be liable for resulting problems that occur when they are performing on your behalf. You must always know where the risks are and how to mitigate them.

Supplier risk management cannot be seen as just a one-time or periodic event. It must be built into your organisation's ongoing supplier interaction in order to be effective.

PROACTIS Solutions: How They Help

PROACTIS Supplier Management:

  • A central supplier directory with standardised information, all scored questionnaire responses, and links to all associated documents provides the fundamental visibility needed for supplier risk management
  • Supplier qualification tools enable you to gain a thorough understanding of supplier capabilities, certifications, policies and procedures; and to collect essential information needed to certify them as suitably qualified for a specified range of products and services

PROACTIS Sourcing:

  • Automated processes for developing supplier questionnaires and RFx documents, electronic RFx posting, automated scoring and sourcing event management make it practical for you to go beyond basic qualification to evaluate suppliers for their ability to deliver a particular set of products, or to perform a particular project or service

PROACTIS Contract Management:

  • A central electronic contract repository holds all contract details, including agreed insurance, certifications, etc. It also contains facility, policy, performance, and general business review frequencies, and other time-based events
  • Automated contract monitoring alerts the right people when reviews are needed to ensure all contract provisions are met, inspections are performed, and key performance indicators are consistently reviewed
Managing Tail-Spend

Issue: Managing Tail-Spend

Tail-spend (the last 20% of spend that typically involves 80% of suppliers and transactions across a wide range of categories) is an area that is often ignored - or at least not closely managed. Why? Because there are so many suppliers and the idea of tackling them can seem overwhelming. Procurement professionals spend the majority of their time managing the big core areas of spend where the numbers are larger and savings are more quickly won.

But allowing your organisation to spend that 20% of total expenditure with little or no sourcing support, and with little focus on the large number of invoices involved, clearly results in paying higher prices. It also means incurring higher risk and burdening Accounts Payable and other areas with a large invoice-handling workload. By addressing the tail-end of spend together, Procurement and Finance can deliver significant savings in terms of both reduced unit prices and process improvements - both of which free up money and valuable resources.

PROACTIS Solutions: How They Help

PROACTIS Rapid Spend Review Service:

  • Quickly provides you with insight into your tail-spend, including a clear picture of the biggest opportunities for savings

PROACTIS Purchase-to-Pay:

  • Punch-out and catalogue capabilities make it easy for employees to find and buy exactly what they need from the right supplier - even across thousands of tail-end items
  • Electronic invoice capabilities and services reduce the invoice processing burden associated with tail-spend - a wide range of tools suitable for all types of suppliers
  • Spend visibility gained by capturing all purchase activity provides the basis for continuous analysis to identify emerging savings opportunities

PROACTIS Supplier Engagement:

  • Streamlined qualification and sourcing tools enable you to perform accelerated sourcing events suitable for smaller spot buys, including rapid RFx and Quick Quote capabilities
  • Online supplier portal and supplier management tools enable you to efficiently handle a high number of suppliers with capabilities such as supplier self-registration, certification workflows, self-service catalogue management, self-service supplier account enquiry, etc.

Managed Service & Outsource Partners:

  • Specialised category supply partners specialise in ensuring the lowest prices and best value for a wide range of tail-spend categories
  • Outsourced sourcing partners specialise in handling specific categories that your team may not have experience with on an as-needed basis
Inconsistent, Non-Transparent Sourcing Processes

Issue: Inconsistent, Non-Transparent Sourcing Processes

The most essential function of your procurement team is to guide your organisation through the process of selecting the right suppliers. That includes selection of the best suppliers for frequently purchased categories, as well as for high ticket items such as capital equipment and major outside services. Whether it be a strategic sourcing event or a spot sourcing event, every sourcing event is an opportunity to save money, mitigate risk, and obtain the best possible overall value.

If, however, sourcing events are not consistently executed or not always in compliance with sourcing policies, management has no real visibility or control of the procurement process. This opens the organisation to the potential for poor sourcing results, slow response to business needs, fraudulent buying, and financial penalties.

If anyone within or outside your organisation should ever call into question why a certain supplier was selected, you want to know that a consistent, well-documented process was followed; a process that was transparent, objective and fair.

PROACTIS Solutions: How They Help

PROACTIS Sourcing:

  • Sourcing Event Manager enables each sourcing event to be defined and managed as a project with a sequence of events (some iterative), dependencies and defined ownership and responsibilities. Visibility of progress is provided at every stage, optionally to both buyer and seller. Process templates ensure consistency and provide a framework for incorporation of best practices. Milestone and Schedule Manager ensures status visibility
  • RFx Manager helps you develop supplier requests that effectively express the need, then streamlines the process of publishing and evaluating responses, and ultimately awarding the contract
  • Automated scoring and evaluation takes place according to the scoring allocation and schemes specified in the questionnaire. Subjective override is available as an option as is panel marking or division of scoring responsibility
  • Full audit trail captures a complete history for each sourcing event, providing an easily accessible record that can be referred to at any time to answer questions or learn from past experience to improve future events

PROACTIS Contract Management:

  • A central contract repository provides standardised information and links to all appropriate documents for awarded contracts
High Cost of Supplier Enablement & Engagement

Issue: High Cost of Supplier Enablement & Engagement

More and more organisations are getting serious about implementing Spend Control processes and eProcurement systems to reduce costs while also improving internal efficiency, controls and compliance.

To maximise efficiency, suppliers themselves need to be embedded within the processes, managing their own data and catalogues, collaborating and trading online and self-serving their own enquiries. As eProcurement technology evolves, this is becoming an increasingly important topic in achieving organisational aims around spend, and extending the percentage of 'spend under management'.

Most organisations are also looking for ways to streamline business processes in general. In relation to spend processes, this means replacing manually processed documents such as orders and invoices with electronic documents to eliminate paper handling and storage costs, keying activity and errors.

PROACTIS Solutions: How They Help

The PROACTIS Supplier Portal (utilised by PROACTIS Supplier Management, Sourcing, Catalogue Management, and Purchase-to-Pay electronic commerce capabilities):

  • Provides a web-based channel for you and your suppliers to interact electronically, and enables a number of supplier self-service functions, including registration, profile management, catalogue management, RFx and quotation posting and response, supplier account enquiry and more

PROACTIS Supplier Management:

  • Automated supplier recruitment, qualification and adoption/on-boarding provide streamlined, collaborative, workflow-driven processes facilitated by a range of online tools for both the buyer and supplier

PROACTIS Catalogue Management:

  • Maintenance and publishing tools enable incorporation of new supplier catalogues and updates in an efficient, controlled manner. Supplier self-service maintenance makes the process even easier without losing internal control.

PROACTIS Purchase-to-Pay:

  • Electronic commerce capabilities replace the great majority of paper-based transactions with far more efficient electronic alternatives, including supplier website punch-out and electronic POs for ordering; electronic invoices, supplier self-billing, PO Flip and Purchase Card integration for invoices.
 

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