July 02 , 2018

4 Concrete Steps to Purchase-to-Pay Implementation Success

by Digitalization, Procurement, Source-to-Pay, eProcurement, Accounts Payable Automation

Improved quality and transparency of procurement and invoice processes. Enhanced automation and control over purchasing and payments. These were the key targets of Helsinki Deaconess Institute (HDL), a social and health care services providing foundation, when it set out to transform its purchase-to-pay (P2P) process.

purchase-to-pay implementation

In a determined and rapid project with OpusCapita, HDL implemented a solution for eProcurement and purchase invoice automation. With it, the foundation has been able to start reducing manual work in purchasing and invoice handling, making savings in procurement costs, and creating best practices for both procurement and payments.

We sat down with Procurement Manager Samira Jaakkola from HDL and asked her to share the most important steps of their successful purchase-to-pay implementation and the journey toward a streamlined end-to-end process.

Samira Jaakkola

1. Involve all the key stakeholders

“If I had to name only one factor for the success of this project, it would be the close cooperation between procurement and finance. We had a common goal to develop the process. The objective for finance was to automate the supplier invoice handling process and for procurement to gain control over purchasing and improve contract compliance with suppliers. Together, the target was to create savings, both in costs and in time.”

“All in all, involving all the stakeholders from early on is crucial. We had very good collaboration with IT department and actually took the lead of the purchase-to-pay implementation project. Usually, all large system projects are led in our organization by the IT department, but procurement and finance had such a strong vision about what and how we want to accomplish that it made sense.”

2. Choose the right partner

“Obviously, choosing the right partner plays a big role. OpusCapita was able to offer us a solution for the whole purchase-to-pay process with the functionalities we were looking for. In the end, the key deciding factor for us was that we saw their genuine commitment to the project. We were convinced that OpusCapita would be a partner who shares our passion and strong ambition to make this project a success, and that they would be open to listening to our demands and wishes.”

3. Be clear on the changes required inside organization

“At first, I think the employees felt that the purchasing process is becoming more bureaucratic. Before they had just picked up the phone or sent an email to make the order. Now we implemented a system and at the same time, a purchase order practice. Change always hurts, and naturally the idea that they would need an approval for the purchases from their managers beforehand raised concerns of delayed approvals and piled up orders. But OpusCapita’s eProcurement system has been accepted very well. It is easy to use, and, for instance, the mobile usage has been an advantage that has won people over.”

“We currently have 300 people using the system out of the 1000 employees we have altogether. It is important to remember that the solution itself does not change anything. Change management needs to be a vital part of the purchase-to-pay implementation. You need to be clear on the changes that are required to the ways of working inside your organization and communicate them widely. Even with all the communication we did, there were still people who were surprised to learn that the new way of purchasing applies to them, too, and that the eProcurement system is the only way we place orders from now on.”

4. Focus on communication with your suppliers

“Before we started this project, we had catalogs from around ten suppliers, mainly on office supplies. It made ordering from them convenient, but did not make things easier downstream in invoice handling. Now we have catalogs and smart forms in use from over 60 suppliers for different products and services. Some suppliers would prefer to guide us to their web shop instead of delivering information for our eProcurement system, but if it comes down to it, we are in a position to say this is the required way to operate with us.”

“After 5 months in to the transformation, more than a quarter of the invoices are based on a purchase order or a contract. At the same time, we have also increased the number of e-invoices – now more 90% of supplier invoices are electronic. Our new way of working required quite a lot of communication toward the suppliers. It is an ongoing effort. If an invoice does not pass through and get approved, allocated and posted automatically, we investigate. It might be that the PO number is missing or it is in a wrong field, in which case we instruct the supplier on how they need to send their invoices to us. We increase the automation rate invoice by invoice. Next step is to weed out maverick buying internally, and continue increasing the number of invoices with a PO number.”

Establishing the supplier master data register was a big effort, and one that I would start earlier. Now that the supplier information with right contact information for orders and for billing is in check in the system and supplier self-service supports maintaining it, it is easier and faster to settle any unclarities about an order or an invoice. Previously, we also had a lot of one-time suppliers. Implementing the system has made it possible for procurement to take control and start guiding purchases to preferred suppliers, negotiating centralized contracts, and aligning for example payment terms.”