Gaining Efficiencies and Controlling Costs
A large, multinational mineral extraction corporation faced increasing costs due to lack of visibility into their disordered procure-to-pay process. Daily demands prevented them from identifying key challenges and prioritizing solutions. RevGen Partners conducted a process optimization study to recommend several high-level improvements to deliver cost reductions through efficient systems and predictable, standardized processes.
Many of the client’s existing systems did not support process requirements. Manual workarounds, unmet functional needs and dissatisfied users ultimately led to dramatic cost increases. Additionally, a lack of visibility into spending compounded the corporation’s issues with cost controls.
Internal roles and responsibilities were not clearly defined, which led to redundant activities and a loss in productivity. The lack of guardrails to prevent process failures, as well as ineffective document handling, were causing excessive costs and wasted time. Additionally, we identified that the current process for managing vendors was negatively impacting compliance.
We conducted an end-to-end process evaluation and developed a process map to document the current state. Data was gathered to get a baseline of current performance, and then compared to industry benchmarks to identify key opportunities for improvement.
We then devised a descriptive and comprehensive plan that detailed and prioritized goals and initiatives to: increase efficiencies, contain costs, enhance visibility and improve communication within the client’s entire procure-to-pay process.
RevGen Partners recommended new solutions to optimize the company’s procure-to-pay operations. The recommendations were designed to help the multinational company better manage costs; create new efficiencies through process improvements; and streamline communications to improve vendor management.
Contain costs. We recommended that the client take advantage of system-supported technological processes rather than paper-based methods. We suggested process and technology improvements to create new efficiencies and ultimately control costs, including new document handling methods and the creation of an electronic storage system. To achieve additional spending reductions, we also made recommendations to streamline programs and adopt systems better suited to corporate needs.
Gain efficiencies. Our business consultants advised that the company eliminate its dual-invoicing system. Additionally, we highly recommended that roles, responsibilities and ownership be agreed upon across the organization in order to reduce non-value-added activities. Several measures to increase push-oriented workflow, including reminder emails and auto-rerouting, were also suggested. Lastly, a peer review process, a defined list of process exceptions and a performance management system were detailed within the roadmap.
Improve vendor management. To ensure vendor compliance with improved company pay-to-procure processes, RevGen Partners recommended that the client proactively communicate to vendors clear expectations for standard procedures and guidelines.
Prioritized action to develop a successful procure-to-pay process.
For a multinational company with significant and complex daily expenditures, improving its procure-to-pay process was a top priority. RevGen Partners was able to provide visibility into previously undetected inefficiencies within this process and provide detailed business optimization solutions to address their challenges.
With the help of RevGen Partners, this client is now able to take the prioritized actions necessary to develop and maintain a successful and standardized procure-to-pay process.
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