{"id":2591,"date":"2009-01-28T13:37:00","date_gmt":"2009-01-28T13:37:00","guid":{"rendered":"https:\/\/www.certitrek.com\/nlpa\/2009\/01\/28\/whitepaper-wednesday-procurement-process-centralization-standardization\/"},"modified":"2023-06-23T08:24:12","modified_gmt":"2023-06-23T12:24:12","slug":"whitepaper-wednesday-procurement-process-centralization-standardization","status":"publish","type":"post","link":"https:\/\/www.certitrek.com\/nlpa\/blog\/whitepaper-wednesday-procurement-process-centralization-standardization\/","title":{"rendered":"Whitepaper Wednesday &#8211; Procurement Process Centralization &amp; Standardization"},"content":{"rendered":"<p>Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I\u2019ll be reviewing a whitepaper entitled \u201cEnterprise Source-to-Settle Transformation\u201d from MarketSphere Consulting, LLC.<\/p>\n<p>Don\u2019t miss updates on Procurement &amp; Supply Chain, Subscribe here!<\/p>\n<p>This whitepaper is more of a case study than a true whitepaper, as it describes MarketSphere\u2019s success in transforming the procurement process for one of its Fortune 500 clients. The case study begins by describing some of the problems that the client was experiencing:<\/p>\n<p>\u201cProcesses were inconsistent across operating companies, primarily manual, paper-intensive, error-prone, and slow. All operating companies were on different, standalone instances and multiple versions of PeopleSoft\u00ae Financials. Contracts were not managed centrally and the few existing enterprise contracts had moderate off-contract (\u2018maverick\u2019) spend. Enterprise spend visibility was limited and required significant effort to compile. Unfortunately, this spend data was often unreliable due to the poor quality of data in the source systems. Buyers used multiple supplier websites to procure goods and often sought approval after the paper invoices were received. Invoices were keyed into both PeopleSoft and a separate purchasing system, often requiring manual exception handling due to incorrect coding.\u201d<\/p>\n<p>This client began the engagement with MarketSphere with five goals:<\/p>\n<ul>\n<li>Improve and standardize processes<\/li>\n<li>Improve financial transparency<\/li>\n<li>Improve Sarbanes-Oxley compliance<\/li>\n<li>Reduce enterprise spend<\/li>\n<li>Reduce transactional costs<\/li>\n<\/ul>\n<p>MarketSphere and its client identified five stages of the source-to-settle lifecycle to address:<br \/>\nSource, Procure, Settle, Account, and Analyze.<\/p>\n<p>The Source stage focused on the process of centrally sourcing and contracting with strategic suppliers across all business units. The Procure stage involved having all business units use a single eProcurement system. In the Settle stage, the client used a largely automated payment process where manual intervention was required only for exceptions and for paying those suppliers not capable or willing to receive payments by Electronic Funds Transfer (EFT). Procurement cards were also used for low value purchases. The Account stage didn\u2019t seem that glamorous \u2013 integrating accounting and asset codes from the purchase order into the accounting system, which is basic eProcurement integration.<\/p>\n<p>The Analyze stage was the one that I considered to be most fun, so I\u2019ll just provide the description word-for-word from that stage:<\/p>\n<p>\u201cAnalyze focused on the process of spend monitoring and opportunity analysis. The company needed the ability to periodically stratify and analyze spend data for a host of reasons \u2013 current period liability (pending payables), maverick\/off-contract buying, budget compliance, and contract compliance. As needed, users can run pre-established queries to monitor spend detail relevant to them for a certain period. On a semi-annual basis, spend data is \u2018enriched\u2019 (cleaned up) to better stratify spend by category, vendor, and\/or item as a key input into further<br \/>\ncost reduction opportunity analysis and strategic sourcing which begins the [source-to-settle] cycle all over again.\u201d<\/p>\n<p>The benefits of implementing this transformation include nearly $36 million in total P&amp;L spend savings, nearly $4 million in total transactional P&amp;L savings, and a host of other improvements. The whitepaper concludes with a handful of typical lessons learned plus five more subtle, yet important, ones such as: \u201cbased on past experience, we continue to find that having an actual user as the part-time deployment lead really helps break down barriers of trust, participation, buy-in, and accountability. Historically, either an IT person or external consultant was in this role, but was challenged with the aforementioned barriers since they could not relate to the user community and were there to just \u2018get the solution in.&#8217;\u201d<\/p>\n<p>While this whitepaper will not give you step-by-step instructions for transforming a procurement process, it does provide the framework and some good benchmarks if you will be embarking on a similar challenge. If you\u2019d like to download your own copy, you can get one from cfo.com by clicking here (registration required).<\/p>\n<p><strong>Recommended Reading<\/strong><\/p>\n<p><a class=\"row-title\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/super-bowl-xliii-the-purchasing-supply-management-connection\/\" aria-label=\"\u201cSuper Bowl XLIII:  The Purchasing &amp; Supply Management Connection\u201d (Edit)\">Super Bowl XLIII: The Purchasing &amp; Supply Management Connection<\/a><br \/>\n<a class=\"row-title\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/whitepaper-wednesday-procurement-process-centralization-standardization\/\" aria-label=\"\u201cWhitepaper Wednesday \u2013 Procurement Process Centralization &amp; Standardization\u201d (Edit)\">Whitepaper Wednesday \u2013 Procurement Process Centralization &amp; Standardization<\/a><br \/>\n<a class=\"row-title\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/can-you-earn-a-purchasing-certification-without-a-bachelors-degree\/\" aria-label=\"\u201cCan You Earn A Purchasing Certification Without A Bachelor\u2019s Degree?\u201d (Edit)\">Can You Earn A Purchasing Certification Without A Bachelor\u2019s Degree?<\/a><br \/>\n<a class=\"row-title\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/should-obama-encourage-fuel-conscious-sourcing\/\" aria-label=\"\u201cShould Obama Encourage \u201cFuel-Conscious Sourcing?\u201d\u201d (Edit)\">Should Obama Encourage \u201cFuel-Conscious Sourcing?<\/a><br \/>\n<a class=\"row-title\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/whitepaper-wednesday-purchasing-careers-skills\/\" aria-label=\"\u201cWhitepaper Wednesday \u2013 Purchasing Careers &amp; Skills\u201d (Edit)\">Whitepaper Wednesday \u2013 Purchasing Careers &amp; Skills<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Welcome back to another installment of Whitepaper Wednesday here on [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":4118,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2591","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.4 (Yoast SEO v19.13) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Whitepaper Wednesday - Procurement Process Centralization &amp; Standardization - Next Level Purchasing Association (NLPA)<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/whitepaper-wednesday-procurement-process-centralization-standardization\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Whitepaper Wednesday - Procurement Process Centralization &amp; Standardization\" \/>\n<meta property=\"og:description\" content=\"Welcome back to another installment of Whitepaper Wednesday here on [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.certitrek.com\/nlpa\/blog\/whitepaper-wednesday-procurement-process-centralization-standardization\/\" \/>\n<meta property=\"og:site_name\" content=\"Next Level Purchasing Association (NLPA)\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/NextLevelPurchasing\/\" \/>\n<meta property=\"article:published_time\" content=\"2009-01-28T13:37:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-23T12:24:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/11\/nlpa-images-128.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"1067\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Galo Matagay\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@nextlevelpurch\" \/>\n<meta name=\"twitter:site\" content=\"@nextlevelpurch\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Galo Matagay\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/whitepaper-wednesday-procurement-process-centralization-standardization\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/whitepaper-wednesday-procurement-process-centralization-standardization\/\"},\"author\":{\"name\":\"Galo Matagay\",\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/#\/schema\/person\/72d094fab77892483dfa6e061cb27eaa\"},\"headline\":\"Whitepaper Wednesday &#8211; 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