The Procure-to-Pat (Purchase to Pay or P2P) process offers great opportunities for improvement, especially in companies that are decentralized, still paper-based, and lacking standardization. This case study illustrates how a global financial services company significantly improved vendor satisfaction as a result of a focused re-evaluation of the end-to-end process.

1. Chazey Partners Case Study Series | 1
DRIVING PROCURE-TO-PAY QUICK WINS
© Chazey Partners 2014
Case
Study
Series
The end-to-end Procure-to-Pay process is one that offers great opportunities
for improvement in companies that are decentralized, still mainly paper-
based, and lacking in standardization. This case study explains how a
company that was determined to drive efficiencies through the process
ended up with significantly improved vendor payments.

2. Chazey Partners Case Study Series | 2
Background
This company had already committed to Shared
Services as a means of cutting costs and getting more
transparency into its operations.
Following significant operational changes resulting
from a corporate reorganization, what became
immediately apparent to the then head of Shared
Services was that the company’s disbursements
process (AP, T&E, Purchase card) still suffered
from inefficiencies and that these were negatively
impacting vendor payments.
The challenge for the SSO leader was, in a relatively
short time period, to drive some quick wins alongside
longer term solutions through the P2P process,
while at the same time evaluating existing AP and
T&E outsourcing partnerships to identify process
inefficiencies.
The company invited Chazey Partners to take on
an evaluation of the P2P process, and offer short-
and long-term solutions for improvements. Chazey
provided the necessary P2P process expertise,
analysis, and change management support.
Project
The project had three core stages, each of which
culminated in a presentation to the Steering
Committee, and were based on:
1. an “as is” evaluation of current processes
2. a proposed model
3. short-term to long-term improvement
opportunities.
The company provided one dedicated resource
for this project, which provided an important
contact point with a strong knowledge base of how
the business worked, and easy access to the core
stakeholders within the company. Chazey brought
one consultant and two analysts to the Project Team,
whereby the consultant was very experienced in P2P
and had the full trust of the client.
The Project Team presented a weekly, 30-minute
briefing to the Steering Committee, which included
the company CFO, to update on progress, and
highlight issues encountered and risks.
Inefficiencies in Disbursement
Themainissuesimpactingthedisbursementsprocess
were lack of training, inefficient use of existing
resources and technology, too much reliance on
paper, decentralization, and lack of visibility in
handing over work to the outsourcing partners.
The impact on the business was felt in terms of late
invoice payments and lack of data transparency.
One of the first decisions made was to roll out Oracle
across the combined businesses. This replaced the
existing Lawson platform, and immediately resulted
in improved standardization. The existing P2P
system was still predominantly manual, however,
with all the costs and delays you would expect from
such a process: Invoices were not being scanned
properly; there were backlogs; vendors were still
sending invoices to the business units as opposed
to the Shared Services Center; and there was little
reliable overview or data on vendor payments. And
although a document management system had been
implemented as a bolt on to Lawson, staff had not
necessarily been adequately trained, and the system
was used ineffectively.

3. Chazey Partners Case Study Series | 3
Specific Challenges
Accounts Payable
The main concern in Accounts Payable was that there
was little control of the data and it was difficult to
ascertain, with any degree of reliability, how quickly
vendors were being paid. Without a central control
of the Accounts Payable database – many of the
businessunitswerestillsettinguptheirownaccounts
with vendors, a legacy of growth by acquisition – it
was not easy to access data.
Travel & Expense
Although corporate cards were in use, these were
frequently used to procure items outside their
proper scope. Inconsistently managed, bad habits
had evolved that meant the cards were often used
for items that should really fall within Procurement,
a common enough scenario. And although the
Oracle implementation did tighten controls, the data
conversion left some items unclear, meaning that
data carried forward did not necessarily map to the
outstanding invoices, creating problems when drilling
down into outstanding vendor payments.
Purchase Card
The purchase card had in the past been controlled
by administration within the divisions, so its
management was decentralized, and, again, offered
opportunity for improvement. It was clear that the
high volume, low cost items that fell within purchase
cards could be better managed through standardized
procedures.
Assessing Performance
Chazey’s initial research came up with an “as is”
measure of processes that mapped the company’s
performance against both “median” and “top
performers” based on the industry benchmarking
data that Chazey has acquired. These benchmark
comparisons allowed the Steering Committee to
understand where improvements would have the
greatest impact.
The areas thus analyzed included:
1. AP Staff Productivity (number of invoices
processed per FTE)
2. AP Cost Effectiveness (total cost to
perform the process per invoice)
3. AP Process Efficiency (% invoices paid on
time)
4. AP Cycle Time (from receipt to approval)
5. T&E staff productivity (number of
disbursements per FTE)
6. T&E cost-effectiveness (total cost per
disbursement)

4. Chazey Partners Case Study Series | 4
Proposals: Process and Technology
Many of the AP inefficiencies originated in the
procurement process, which was out of scope for
this evaluation. With the vendor database not clearly
owned or managed by any one party, the process was
prone to challenges from the start. Complexities in
the approval process were exacerbated by delays in
invoice scanning.
The result was that approximately 40% of the
invoices received by the outsourcing partner were
already overdue at handover. Without the proper
metrics in place, it was difficult to get a baseline
measure of process health, and there was insufficient
accountability from the business.
These findings led to Chazey making several
proposals to improve disbursements. The proposed
improvements fell within three categories: short
term, medium term, and long term.
Target Operating Model
To drive improvements through the disbursement
process, the project team proposed a new Target
Operating Model (TOM) based on an agreed
P2P vision and with clearly defined roles and
accountabilities supported by a robust governance
structure. There was also a need to clearly define
standardized, global, end-to-end processes and
leverage appropriate technologies. Underpinning all
wouldbeaclearperformanceframeworkthatdefined
key metrics to monitor and improve the organization.
In the short term, a Global Process Owner, clearly
defined accountability for vendor master data, and
agreed standards would support the transition to
future state.
In the medium to long term, a focus on transferring
knowledge and leveraging the BPO relationships
would serve to drive improvements.
A summary of these key initiatives is outlined in the
chart below:
Summarizing
the
Key
Ini1a1ves
SHORT
(Q4
2013)
MEDIUM
(Q1
2014)
1.
P2P
PROCESS
OWNER
Implement
P2P
Global
Process
Owner
to
drive
policy
se?ng,
efficiency
and
standardiza1on
LONG
(Q2
2014)
2.
P2P
BOARD
Mobiliza1on
of
Working
Groups
/
Regional
P2P
forum
to
improve
the
governance
and
focus
on
key
metrics
at
various
level:
strategic,
tac1cal,
opera1onal
3.
KPIs
and
METRICS
Iden1fy
and
agree
with
key
stakeholders
relevant
P2P
process
and
people
performance
metrics
and
KPIs
1.
TECHNOLOGY
STRATEGY
Review
and
assess
the
current
technological
landscape
in
rela1on
to
global
standard
process,
business
needs
and
IT
strategy.
Develop
roadmap
for
future
solu1on
(leverage
Oracle)
2.
MASTER
DATA
STRATEGY
Develop
and
implement
a
clear
Master
Data
Strategy
3.
BPO
MODEL
Leverage
BPO
Vendor
for
all
transac1onal
ac1vi1es
suppor1ng
P2P
ONE
GLOBAL
PROCESS
Leverage
a
single,
standard,
end-­‐to-­‐
end
P2P
process
–
across
all
business
segments
and
geographies
1. No
EIN
No
Pay
Implement
No
EIN
No
Pay
policy
to
reduce
process
complexity
and
foster
compliance
2. Workflow
Implement
automated
workflow
for
approvals
and
excep1on
handling
with
escala1on
3. Align
Spend
Approval
Matrix
(DELEGATED
AUTHORITY)
Implement
a
less
complex
approval
matrix
that
is
consistent
across
Regions
based
on
roles.
4. Online
RequisiQon
Implement
online
requisi1on
system
with
defaults
by
vendor,
items
and
requester
with
upfront
PO
approval

5. Chazey Partners Case Study Series | 5
Performance Management System
Chazey suggested the company adopt a set of
recognized best practice indicators, which would
form the basis of a P2P Performance Management
System. As a result, a metrics dashboard was created
to share information with key stakeholders, which
would serve as a basis for corrective action. These
indicators included:
• volume by invoice type
• first pass yield
• percentage on-time payments
• number of new vendors created
• cost per invoice processed; etc.
To drive transparency and accountability, and to
establish clear rules and common understandings,
improved governance procedures and a service
delivery framework would provide the necessary
guidance and support.
The suggested process and technology design is
depicted below:
P2P
TOM
–
Process
and
Technology
Outcomes
As a result of the assignment a comprehensive plan was initiated to address a broad range of objectives
including Process Ownership, Governance, Process Design & Technology Enablers.

6. Chazey Partners Case Study Series | 6
Conclusion
The Purchase-to-Pay process offers great opportunities for efficiencies by taking a holistic approach to
Procurement. Some of the key challenges to enterprises wanting to drive improvements through this area
include clarifying ownership, definitions, and targets. Targeting short-term wins through streamlined
ownership and standards, and longer-term improvements by leveraging knowledge and sourcing options,
allows a company to shift to a new operating model that will drive sustainable improvements into the future.
Yes No
Have you got visibility not just to the P2P processes in your control, but to the
entire end-to-end P2P process?
Do you have a Process Control Database where all of your processes are
documented and up to date?
What Key Performance Indicators (KPIs) do you have? Are they “green”? If so, do
your customers agree?
Do you have visibility into the detailed performance of your outsourced provider,
if applicable?
Next Step: Take a moment to assess how robust is your P2P process?
If you would like to evaluate your readiness for P2P transformation, please feel free to contact
one of Chazey’s practitioners at enquiries@chazeypartners.com

7. Chazey Partners Case Study Series | 7
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Chazey Partners is a professional management advisory business that is committed to adding significant value
to our clients through a partnership approach. We bring together a unique wealth of expertise and real life
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providing expertise in a wide spectrum of business functions, including Finance, HR, IT, and Procurement.
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