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
- 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
- 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
- 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
- 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
- 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)
- 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
- 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
- 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
- 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
- Provides a baseline of current spend as a foundation for
forward visibility, including a clear picture of the biggest
opportunities for savings
- 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
- 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
- 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
- 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
- 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
- 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
- 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
- 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
- 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
- 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'
- 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
- 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
- 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
- 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
- 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
- Quickly provides you with insight into your tail-spend,
including a clear picture of the biggest opportunities for
savings
- 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
- 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.
- 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
- 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
- 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
- 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
- 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.
- 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.