Procurement teams within companies of all sizes are under pressure to drive and then demonstrate measurable value and savings. Many are choosing to automate and optimize some or all of their finance and procurement operations as part of this process. However, like any other investment, procurement professionals should justify the investment to their CFO or finance team for such an initiative.

In this series of articles, I’ll examine the key benefits of purchasing and invoicing automation and offer some tips for building your own business case for a larger investment. By following the right steps, procurement teams can help their organization realize savings from $0 to at least $250,000 per year. So I’ll walk you through the process of crafting these savings.

I’ll guide you through planning and producing a compelling business case for your source or procure-to-pay process redesign. Focus on how I see companies traditionally approach building a business case for optimizing and automating finance and procurement and explaining why this can cause more problems than it solves. Demonstrate how you should approach this critical part of your organization’s digital transformation to ensure you get it right and get the buy-in you need.

Get the right scope

Looking beyond your burning issue to overhaul your entire source-to-pay process could help unlock additional cost savings and business benefits far beyond ETP savings, while delivering more predictable results.

Do any of the following scenarios sound familiar?

  • Your business is experiencing a series of invoice duplication and data quality issues. This naturally leads you to research how you can improve your invoice data entry processes and you end up paying for a new OCR platform to automate data collection on your invoices. Great? Except you’ve spent a lot of money trying to get more efficiency out of a broken process and ignored the root cause of your problem.
  • A compliance audit highlights that your company’s expenses are not pre-approved and need to be rectified. This naturally leads you to consider how you can process purchase orders and you end up paying a consultant to create a purchase order flow process in your SharePoint site. Problem solved? Bad luck, you’ve added a whole new workflow to your process without the downstream benefits of spend visibility, purchase order matching, or budget checks.
  • Your company identifies that it paid a fraudulent invoice. Your CEO and CFO are furious. You realize that the reason the invoice was paid was that there were no checks in place to ensure that the bank account details matched your master data records. This causes your team to change your process to manually verify bank statements for each invoice. Risk avoided? Not really, fraudulent invoices come in different shapes and sizes and you are only mitigating one type of problem. Time and effort wasted.

These “decisive events” are often the driving force behind most finance and procurement overhauls. Whichever fire burns the most tends to determine what needs to be fixed. However, this type of siled and reactionary approach tends to be very limited in scope, focusing only on “solving the immediate problem”. It is widely believed that tactical and narrow scope only solves the burning problem, which tends to miss out on cost reduction opportunities and usually only provides ETP savings. This type of approach can also trigger a domino effect of solving one problem that often highlights another.

What organizations, in fact many procurement teams, tend to forget is that there is a tremendous amount of measurable value to unlock in your overall funding and procurement process. So why not use the compelling events above as a trigger to overhaul your entire source of payments process and an opportunity to realize huge cost savings and lower your business risk profile.

A strategic scope that examines the entire value chain will allow you to demonstrate the significant and measurable cost savings that could be achieved, while significantly reducing the risk profile of your source to pay processes. Once you’ve set the correct scope for any project, you need to review your existing processes to get a clear idea of ​​what’s working, what’s not, and ultimately where the opportunities lie for automation, optimization and cost reduction.

Understand your existing processes

Processes don’t exist in isolation, if you don’t understand all aspects of the full value chain – what works and what doesn’t – you won’t achieve any real optimization, automation, cost reduction or profile reduction of risk.

Companies usually stick to a limited scope when trying to understand their existing processes. In the example we used above, where you paid a fraudulent invoice because the bank details were changed on the invoice, you might end up investing time in basic process mapping to verify bank details on your invoices, for example. Is process mapping enough on its own? Is tactical range sufficient? No. This tends to make organizations realize that the real cause of the problem is not being addressed (albeit too late). So you end up with a band-aid solution that only half-solves the problems you’ve identified.

The real levers that will drive ROI and drive internal/external user adoption are not understood and therefore not fully leveraged. This leads to new processes and/or systems that don’t achieve what your business case promised and ultimately guarantees a poor user experience internally and externally.

How are process reviews usually done in companies? Most often, a tactical scope is plotted with the output being basic process maps, which have limited detail about the process exceptions that are causing the issues. Unfortunately, this usually means that the source of a problem is not addressed and a detailed understanding of what will drive value and user adoption/change is not fully understood or achieved.

I recommend conducting in-depth interviews with your key stakeholders to understand how your processes work and your stakeholders’ requirements. If you understand the key pain points and levers to drive adoption, areas that will drive financial ROI, quick wins, and areas for long-term development, your business case will be much more compelling and harder to pin down. ignore.

Start by mapping your processes and take the opportunity to dig deeper into the entire value chain. Follow the process to its logical start and end points, not just the part of the process that seems most urgent. Interview key stakeholders and end users of the process to understand what works well, what doesn’t work well, and which exceptions cause the biggest problems in terms of time and manual labor.

From these interviews, you should be able to gather key information on issues such as:

  • What are the main pain points in the process?
  • What automation and process efficiencies will delight users?
  • What user experience is needed to drive greater user adoption?
  • What will generate a return on investment? What are the opportunities to reduce your costs of processing invoices, purchasing goods, or negotiating greater cost savings within your supplier base?
  • What would be the quick wins within your processes, which will need to be a longer term development?
  • What cultural and team factors might impact your ability to effectively change processes?
  • What are the different technological platforms currently used in your processes?

All valuable information that will help you build your business case and answer many questions that your management team should know before accepting your project.

The rest of this series of articles will look at the equally important next steps of mapping your existing data and technologies, mapping the future and the “coming soon” processes to implement, the technical “must haves” of those processes, put together a transformation roadmap and a bottom-up assessment of value.


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