Connecting the Dots for Global Manufacturer

dots5,000+ products, 27 distribution centres and over 20 years of business. How did a leading manufacturer replace disparate technology systems and improve business transparency?

Team Invenio were called upon for help. The client first conducted an internal needs analysis and drew up a shortlist of potential mid-tier solutions to review. Included in that list was SAP, it was clear that the business required a tier-one system and it was decided that  SAP would be the most appropriate choice for the business. As the parent company were an established user of SAP it would provide them with an additional support  and expertise should it be needed.

Following a swift implementation of SAP, the manufacturer was soon working with complete transparency across the business, within the implementation process they also discovered that they could reduce headcount in both warehousing and order processing through improved processes which saved them £££.

As SAP is incredibly robust, it simply means the information it produces is right, first time, every time, giving confidence in the numbers and 100% clarity across the business.

After the initial SAP implementation the manufacturer decided to look for an external SAP Support Partner to help them maintain their system. Although the support had run ok in the past the manufacturer, had noticed deteriorating service levels. As they retain a very small SAP team they really needed access to the right experts fast! So ultimately felt there was a real risk to the business if they didn’t combine this with external support. So for a second time, the manufacturer leaned on Invenio’s shoulders and have stayed there ever since!

The client referred to Invenio as liking the honesty and openness of the Invenio team.  The customer stated “The response times and service have been amazing and someone always gets on to any problems we raise straight away. In terms of the knowledge of the consultants we interact with, this is exceeding expectations, and the expertise available in the team is exceptional”.

But the benefits of working with Invenio don’t stop there! As there were some projects the manufacturer had placed on the back burner but with Invenio’s incredible cost structure, the manufacturer are revisiting these projects to look at what they can introduce.

This fantastic customer journey continues….

Reaping the Rewards with Procure to Pay

In our first blog of this series we discussed ideas on how to improve cost controls by doing more with less, and introduced the benefits of using a global, SAP-based, P2P system. We want to continue the series further by reviewing the issues facing CFO’s and their finance teams when multiple processes and software systems are in place in a global procurement function. We’ll also look at how these issues can be addressed, and the savings which could be achieved.

A report from The Cost of Control – Disrupted Networks stated that finance teams expect 15% of invoices to go unpaid past their payment terms, and 59% of those surveyed believe that the visibility of their supplier network activities and payments is becoming more complex. 64% went on to say that they believe that an open and transparent supplier network would help overcome this issue. This report, we believe, shows a need for change in a lot of organisations.

From our own research we’ve seen even more issues arise for the CFO and their finance teams when using multiple systems. These challenges include:
1. Data Accuracy: CFOs cite enormous difficulty in getting to “one version of the truth” when data sits in various systems outside of the corporate SAP system.
2. Time lag: With data in different formats and systems it can take weeks to consolidate and compile the data for reporting and analysis.
3. Cost: Companies need to update, integrate, maintain and train users on multiple different systems.
4. Silo-ed data: This issue leads to multiple issues. As an example, it’s difficult, to tell where suppliers are being used in different parts of the world or by different parts of the company. This means opportunities for group discounts can be over looked and higher fees can be paid for lower amounts of stock.
5. Added administration: Extra administration overhead is needed for data rekeying, and manual data checks – meaning human error is much higher as a consequence.

Although different organisations may experience only some of issues from those listed above, the case is probably still the same. Using multiple systems and processes to manage an organisation’s procurement process is inherently problematic, but there is a solution. Using a single purchase to pay system can help as it uses a single, common database to hold all data. The end result – a more consistent, accurate, timely and cost effective way to manage spend.

Having one global purchase to pay system helps companies to automate the entire procurement process from end to end. It will help to improve data accuracy and reliability, eliminate expenses associated with third party software solutions and it will eradicate any system integration issues. Because manual data entry, validation or interrogation is required it removes the risk of errors and extra overhead costs.

The current market conditions may be seeing “green shoots of recovery” but organisations still need to position themselves against competitive threats. Reducing the incidence of multiple systems can help reduce data errors, improve efficiency and improve cost efficiencies. What’s more it provides timely, reliable reporting, meaning the critical decisions CFO’s and Business Leaders have to make will be reassured by correct data from the past, present and future.

Multiple systems can be moved to one single platform but there are many options out there and the landscape can be very confusing. Here at Invenio, we help our customers choose the right system to suit their needs. We develop the system around the business needs and business processes with as little disruption as possible.

Rising to the challenge of Doing More with Less…

How can CFOs  help realise global cost savings from the procure to pay process?

In this series of blogs we examine the role of the procure to pay process within an organisation’s cost control initiatives and take a look at best practice techniques and technologies that can help increase the chances of success.

Increasingly competitive global markets combined with the economic uncertainty have impacted the profitability of businesses everywhere, so the need for on-going cost reduction has never been greater. Whatever type of business you’re in, and whatever its size or location, you’ll probably be familiar with the mantra of ‘doing more with less’.

However, in trying to do more with less, it is often the CFO and the finance team who bear the brunt of inconsistent and sometimes ill-considered cost saving initiatives. They face a battery of operational challenges:

  • How to best manage cost reduction initiatives.
  • How to discover hidden spend.
  • How to correct budget overruns.

Couple these with fragmented IT systems, inconsistent reporting infrastructures, and disconnected data silos it’s not hard to see how these issues can lead to a scenario where a CFO, unable to get a consistent, accurate view of global costs, risks making critical decisions based on inaccurate or incomplete information.

Creating a global culture that embraces visible cost control can give a CFO the vision to see where the business can make and maintain significant cost savings. And one of the key tools used by organisations today to keep these costs visible and under control is an effective procure to pay system. After payroll, the purchase of goods and services that support business operations is often the biggest source of costs in organisations today. And it is usually one of the hardest to control.

Whilst the finance team may not be directly responsible for global procurement processes, we’d argue that they ought to be intimately involved. After all, it is the CFO and his or her finance team who carry ultimate responsibility for prudent cost control and financial insight. Crucially, they also ‘own’ the core finance system – often the lynchpin of any successful business operation.

In this series of blogs we’ll be sharing ideas on how the CFO and the finance team help to improve cost control via implementing a standardised global procure to pay process. We’ll also take a look at the Invenio’s Procure to Pay solution  –  designed with this purpose in mind. Built on SAP technology, it enables finance teams to incorporate the entire global P2P process within a corporate SAP finance system. There are many advantages in this approach – and we’ll examine all of these, one by one, so that you can understand why, and how, a fully integrated P2P solution, driven by finance, will help you do more with less.

In our next blog we’ll take a closer look at the challenges that arise for the finance team through having multiple processes and software systems in a global procurement function. We’ll also take a look at how these can be simply and easily addressed by implementing a corporate standard solution across all offices worldwide – and the kinds of savings this will enable you to make.

Can You Reduce Your Business Process Outsourcing Costs with Procure to Pay?

In this next blog from the doing more with less series, we look at how automating admin-intensive processes such as purchase order matching and invoice approvals can reduce expenditure on administration costs, and avoid the need to turn to Business Process Outsourcing.

Organisations are operating in challenging and changing business environments. Teams have pressured KPI’s to meet but have less resources at hand. Time and sparse resources are being pulled away from value-added activities because they are needed to perform low-value – but necessary – manual activities such as invoicing, purchase order matching, approvals and other laborious tasks. This is one of the reasons why some organisations turn to outsourcing, but do the risks outweigh the advantages? And is there an alternative?

Business Process Outsourcing (BPO) is the external contracting of business functions, such as Human Resources, Finance or other “back office” operations. BPO, as a business segment has seen great growth over the past decade and continues to flourish and benefit many organisations but…. are times changing?

For those organisations that have chosen to implement a Business Process Outsourcing strategy, it brings the promise of eradicating low-value administration activities from core team members. But, it can also bring many new challenges such as; service levels with offshoring, unclear or complicated contractual issues, changing requirements and unforeseen, unclear charges. BPO also throws up new security risks – some of which are usually out of the organisation’s control, especially with shared services. Add to this, the security risks and difficulties in managing offshore centres, and we’re now seeing a strong desire amongst many organisations to “in source” these functions back into the business again so they can regain full control across many of their key financial processes.

Outsourcing procurement and finance functions is still an emerging practice, but given the challenges we’ve listed above, many organisations are rightly reluctant to cede control of such vital areas of their business. This is understandable as these functions control the profit and loss of the company and impact the important and critical day to day and long term strategic plans. This means that finance functions, reluctant to hand over control of these operations, must retain burdensome manual processes that steal time away from the more strategic, critical areas.

However, there is an alternative solution for finance teams, in the use of an integrated procure to pay system. These systems provide the facility to tightly integrate with key financial processes and they enable easy, company-wide collaboration across the entire procurement process. The real benefit however, is in the way that they can offer an easy way to automate many admin-intensive tasks such as supplier management, invoicing and purchase order processing.

Within finance, many people will only think of the benefits to the bottom line from using a p2p system but actually, with this type of technology, it can improve much more. From more effective collaboration and visibility of suppliers to time efficiencies, cleaner and more reliable data and stronger governance. In a recent example, a research survey commissioned by SAP reported that organisations where master data is synchronised between various systems (accounting, purchasing, and so on) experience on average a 31% lower PO error rate. In this one small example we can immediately see an opportunity to spend far less time fixing errors that need not have occurred in the first place!

UK Manufacturing Fear Not. You Can Grow with Globalisation

Manufacturing SAPWhilst the recent economic downturn hit the service industries hard, for manufacturers here in the UK, recessionary pressures were hardly a new phenomenon.  The rise of the emerging economies – rich in both labour and resource – combined with a strong pound, has seen manufacturing output in decline for many years.

Fortunately, the UK has seen positive trends from manufacturing. The manufacturing industry is growing and with it the industry is employing over 2.5 million staff in the UK alone and continues to see growth which suggests demand for British goods is still strong. EEF also states that exports are a major source of growth for many manufacturers; over 90% of EEF members are exporters with nearly 40% exporting more than half of their turnover.

Although a scary thought at first,globalisation has created significant opportunities for British manufacturing, and UK companies definitely are rising to the challenge. Growth in Asia and other emerging markets are providing significant new export potential; offsetting the more disappointing performance in some parts of the euro area. In China in 2012 saw sales of UK automobiles increase up by 60% and this figure continues to grow through 2014.

The UK boasts many successful, highly innovative and well-managed manufacturing companies. A big question is how can British manufacturers position themselves not only to capitalise on domestic market opportunity, but look ahead to priming operations to take advantage of demand in the emerging economies? Whether through sourcing raw material, shifting production plants or joining the growing trend toward the trade of British manufactured goods in the eastern economies – what can companies do to ensure a readiness for business on a global scale?

Find out how one of our long standing customers achieved this – read the SPP Pumps case study