2015 Spend Management Report

Transcription

1 2015 Spend Management Report The Strategic Value of Reporting and Analytics for Optimized Purchase-to-Pay (P2P) Featuring insights on... Current Trends of P2P and Spend Management Solution Adoption The Strategic Advantage of Spend Management Solutions Features of Leading Reporting and Analytics Tools P2P and Spend Management Adoption Strategies Underwritten in part by

2 Contents Introduction 3 The Case for Reporting and Analytics 4 The Power of Reporting and Analytics 7 Identifying Spend Management in P2P 10 ExpenseWatch 12 About PayStream Advisors 15 2

3 Introduction Purchase-to-Pay (P2P) automation adoption is growing among innovative organizations. Some of the main factors that push companies towards accounts payable (AP) and procurement solutions are the pains that come from heavy reliance on paper, the inefficiency and high costs of manual-based processes, and the risks of a system with little visibility or control. However, once a company has realized its need to update their operations with technology, it struggles with selecting the right solution. The reason for this struggle is that many providers offer similar automation tools, making it difficult to select a leading solution. At a high level, providers offer a paperless document management and workflow system for purchase orders, invoices, expense reports, and/ or payments. On a more granular level, their offerings differ in their various features and services that automate smaller parts of the P2P process, such as an electronic procurement catalog. However, what many organizations are seeking is the strategic factor that differentiates one provider s offerings from another: which of these tools can truly enhance a company s long-term productivity and success? When faced with many similar options for P2P automation, one of the features that can set a solution apart is the way in which it manages spend data. Reporting and analytics tools, or spend management, are often built into an AP or procurement platform, and serve as a way to collect and analyze information gathered from transactions, employee activity, and supplier interactions incurred on the platform. In much the same way that a water wheel can turn a quiet stream into a source of energy, spend management software can turn stagnant transactional data into fuel for process enhancement, cost control, and savings opportunities. PayStream Advisors 2015 Spend Management report is aimed towards the strategic administrative and executive players in organizations of any size and industry specifically, those that are on the road to P2P software adoption. This report serves as a guide to today s leading reporting and analytics tools, and outlines how spend management solutions can turn P2P information into dynamic value. 3

4 The Case for Reporting and Analytics Purchase-to-Pay automation primarily consists of electronic procurement, accounts payable, and payments solutions. Some providers also incorporate expense reporting, contract management, supplier network management, and sourcing applications into their offerings. Some P2P solutions are packaged in holistic platforms that handle every step of the process, while others are sold as separate, specialized tools that can be integrated with existing payment and purchasing solutions. There are many common factors that drive organizations away from manual purchasing and payments operations. When asked why they are planning to automate their invoice management process, most organizations reported that they hope to reduce costs, reduce lost or missing invoices, and/or save time in the invoice approval process, see Figure 1. Figure 1 Most Organizations Hope to Reduce Processing Costs, Errors, and Time What factors are driving your organization to consider an electronic invoicing solution? Reduction in labor / processing costs Fewer lost or missing invoices Quicker approval cycles Better visibility across the transaction lifecycle Increased ability to capture discounts 31% 30% 25% 24% 54% Increased on-time payments 23% Reduction in exceptions / discrepancies 17% Fewer duplicate invoices Improved vendor satisfaction 10% 9% Fewer supplier inquiries 5% 4

5 While the most common goals of respondents considering AP automation revolve around lessoning the time and costs of invoice management, those considering a procurement solution have a stronger initial focus on control and visibility, see Figure 2. Streamline requisition and procurement processes 83% Better visibility and transparency across procurement 58% Figure 2 Most Organizations Hope to Streamline Processes and Gain More Control in Procurement What factors are driving your organization to consider an eprocurement solution? Improved control and security Cost control over maverick spend Reduced time-to-fill cycle times Availability of vendor performance metrics 17% 33% 33% 42% Lower production costs 8% 5 PayStream Advisors has found that when an organization employs a set of P2P solutions or a P2P platform in their back-office process, these goals of lower costs, higher control, and improved visibility are consistently achieved. In addition, that organization also makes greater use of their data with the reporting and analytics tools built into the P2P technology. The insight brought by spend management software gives companies the opportunity to pinpoint process trouble spots and enhance future operations greatly increasing the long-term ROI of a P2P solution. A typical spend management tool is built into the architecture of the entire P2P system, allowing it to run constantly and act as an underlying information net and activity monitor. For analysis, it uses data from all activity running through the platform, as well as additional data from the user s internal systems such as their accounting system, budgeting system, or vendor database. While many tools are customizable and can be applied to several different categories, the main information the solution will capture is that around spend, employee activity, vendor activity, process efficiency, and process discrepancies.

6 Reporting and analytics tools are beneficial for users of all levels in an organization, but they have more value for administrative users with strategic tasks and goals. It is important for these players to understand how money is being spent and what it is being spent on so that they can adjust spend controls. They use reporting and analytics tools to do things like identify employees conducting fraudulent activity or spending out of company policy, adjust budgets, view approvers that are taking too long to approve invoices, or view suppliers that are frequently sending duplicate or incorrect invoices. By looking at this information in a holistic manner, these users are able to identify spend and activity trends that are impacting their business, allowing them to make strategic changes that will improve efficiency and save money. Most solution providers provide a packaged spend management offering along with the main purchasing, document management, or payables solution. Some providers also offer an advanced module at an additional cost, but in all, most reporting and analytics solutions are not packaged as standalone products. Because of this, the relevance of spend management is not on the radar for many businesses looking for back-office process automation software, and it is not usually high on their list of criteria as they evaluate solutions. Another reason that spend management often remains in the background is that many organizations have not achieved the right level of technological maturity to understand its value. When organizations are initially looking to automate their manual and paperbased operations with P2P software, the first focus is usually tactical: they want to reduce costs and streamline inefficient processes by adding control and transparency. It is usually only after organizations have fully implemented and integrated their solutions and after they have seen good results that they turn their focus toward a more strategic use of the system. PayStream Advisors has identified this segmented adoption method as an unnecessary and even detrimental strategy in light of today s technology options. In order to get the most value from a P2P solution and gain a quicker ROI, organizations should evaluate all strategic abilities of their software options from the very beginning of the selection process. By recognizing the part that spend management tools can play in more efficient and controlled P2P processes, organizations are able to make better use of P2P technology and streamline their internal operations at a faster pace. 6

7 The Power of Reporting and Analytics The three main components of modern spend management solutions are built-in reporting, dashboards, and custom report builders. The standard P2P offering comes only with standard features and pre-built reports, while leading providers offer all three options. Some providers also offer additional reporting services through third-party analytics vendors. Standard Spend Management Reporting Built-in reporting allows users to run their transactional data through controlled reporting templates, automating much of the analytical work. The information used in these reports is extracted from all areas of the P2P platform, and the solution can also leverage data from the organization s existing systems. These pre-built reports are assigned to different employees based on pre-set roles and permissions, giving each user access to the things that they need while preventing sensitive business information from being visible to the wrong parties. For example, a procurement professional may have access to a small set of reports on vendor performance, while an administrator could run a series of reports on the purchasing activity of the entire department. Users could also schedule regular reports to run on certain data or date ranges, but an administrative user could set additional alerts for certain activity, such as rogue spending. Examples of standard reports include: Budget vs. Actual Spend by Employee Spend by Department Spend by Vendor Audit/Administrative Transaction History Duplicate Line Items or Payments 7

8 Tax Invoice Approval Times Accruals Some providers give their customers a set of pre-built reports, while others allow the client to carefully design the reports upon implementation. The provider may also create and add new reports that are specifically tailored to the client s organization and processes. Although the provided reports are pre-built, they are still often highly customizable after implementation as well. Users can drag and drop report fields, narrow down search items, or integrate reports or dashboards with user interfaces, such as the homepage of an invoice approver. Spend management tools also allow users to drill down into report details. Some solutions even allow users to look at a broad set of information from different perspectives. For example, a list of transactions could be viewed from a broader operational standpoint by a CEO, or with a financial focus by a CFO. This capability allows an organization to take a single set of data and spin it multiple ways, gaining unique and valuable insights in many areas of the business. Users can also bring in data from new places, and leverage it to gain new perspectives into spend, such as using integrated maps tools to show the locations where spend is occurring. In addition, users can extract data from the system by running query reports and exporting all data to Excel or the format of their choice. Dashboards Dashboards allow a user to combine or extract data from reports to make consolidated views that are easy to decipher and analyze. Dashboards can include pre-built and custom report data, and graphical widgets. Many solutions allow users to easily drag and drop pieces of the dashboard as they wish, and to customize how it is displayed on their homepage interface. Dashboards can be configured to reflect the report data and graphs that are most relevant to a user s specific role in their organization, see Figure 3. 8

9 EXPENSE REPORTING Overlimit Spend by Employee 10K Spend by Expense Category 8K 6K 4K Figure 3 An Example of a Role- Specific, Customized Reporting and Analytics Dashboard 2K 0 DEPARTMENT DEPARTMENT TYPE BUDGET ACTUAL xxx xxx $$ $$ xxx xxx $$ $$$ xxx xxx $$$ $$ xxx xxx $$$ $$$ Custom Reporting Custom report builders allow organizations to further increase the flexible and dynamic ways they can use their P2P information. Most solutions allow users to build reports from scratch based on almost any set of data, re-customize an existing report, or adjust a series of report templates. In addition, some providers offer a report-building service team for organizations that do not have the resources or skill to build their own reports. 9

10 Identifying Spend Management in P2P The following items are further points of consideration that prospective P2P automation adopters should leverage as they evaluate today s leading P2P solutions and platforms. Organizations should: Choose a provider that strongly values spend management Solution providers must recognize the relevance of spend management just as much as their potential customers, and must consider its development equally as important as the rest of their P2P offerings. Evidence of this mindset will usually manifest in the way the reporting and analytics tools are integrated with the rest of the solution. For example, dashboards that are built-in or easily added to the main user AP or purchasing interface are good signs of a strong spend management focus. Providing the ability to schedule reports by user or set activity alerts is another sign that the solution provider has process improvement and control in mind. Fully evaluate their own business requirements Different organizations have different areas in which they struggle to maintain visibility and control. For example, a small company with few employees may not have a lot of trouble with employee spend compliance, but it may have trouble properly managing budgets or identifying vendor inefficiencies. It is important that an organization choose a P2P solution that is customizable and can handle diverse areas of spend and process data. Recognize the complexities of pricing and packaging Some providers package a series of out-of-the-box reports with their main P2P offering and sell a custom report builder as an extra purchase. Others include the report builder in with the overall subscription, and offer a few additional analytics services at an additional cost. However, it is important to properly compare an organization s needs and complexities with the costs and packaging of a provider s spend management tools. A fully holistic reporting package offered at one price from a provider may not be as robust as one 10

11 from a provider that sells the built-in and custom reporting modules separately or vice versa. To that same end, some of the products that are included in one price may be irrelevant to an organization s needs. Organizations should carefully explore a provider s spend management package and compare it to their budget, process characteristics, and goals for future enhancement. Emphasize strategy Some organizations have trouble choosing a P2P solution because they cannot clearly evaluate differentiating factors. It is important that decision makers in an organization are properly informed of not only the competitive advantage that a P2P solution can bring, but also the strategic advantage that a robust reporting and analytics suite affords. When these key stakeholders are ready to make a decision among seemingly identical P2P solutions, they should not forget the power and relevance of spend management. When organizations realize the strategic value of spend management software, they are already at a great advantage in their Purchaseto-Pay solution selection process. The following profile summarizes the offerings of a leading P2P software provider that also leverages a strong set of spend management tools. 11

12 ExpenseWatch ExpenseWatch offers a comprehensive spend management system for small to medium-sized organizations. ExpenseWatch s expense reports, purchasing, and payable invoice modules feature straightforward document creation and receipt capture tools and approval workflow, while the platform s robust reporting and analytics module provides real-time spending information on all transactions conducted within the platform. Founded 2000 Headquarters Plymouth Meeting, PA Target Verticals All Verticals Partners/Resellers Intuit, Sage, Egencia, Microsoft, Equationtech Awards/Recognitions High Performer G2 Crowd Expense Management Grid; Philadelphia Business Journal Best Place to Work (2015), SmartCEO 2015 Corporate Culture Award Winner; Awesome QuickBooks Add-on (2010, Lifetime Award) Solution Functionality ExpenseWatch s SaaS solution integrates with a customer s existing ERP and financial systems in several ways. The primary method exports ExpenseWatch data to a flat file, maps the information into the ERP system, and imports ExpenseWatch data. ExpenseWatch also offers specialized tools to transfer data from ExpenseWatch into QuickBooks (desktop, server and online), as well as an API for direct integrations between ExpenseWatch and an ERP system. ExpenseWatch delivers high-quality security infrastructure using firewalls, intrusion detection, and security scanning, 24/7/365 realtime network monitoring, a SSAE 16/ISAE 3204 (formally SAS70 Type II) certified facility with multiple levels of physical security, and PCI DSS 3.1 compliance. It also uses industry-standard SaaS credential management. Client administrators control access to reports by assigning permissions to users individually or by predefined roles. Access to information can be set according to department, business unit, specific GL accounts, projects, or other characteristics. 12

13 Standard and Advanced Reporting Tools ExpenseWatch offers two types of reporting capabilities: behaviordriven reporting and holistic spend management reports. Behaviordriven reports give users access to various reports based on their role in the company, allowing them to manage the spending for which they are responsible. Holistic spend management reports give administrative users access to company-wide or departmental reports that analyze all organizational spending. ExpenseWatch also offers administrative reports for analyzing system configuration and change management. ExpenseWatch includes a series of pre-built reports with every subscription. Each of these reports includes a high-level view of spend, as well as drill-down capabilities and multiple options for deriving and extracting further information. General out-of-the-box reports include reports on user allowances vs. spending, budget vs. actual spend, voided invoices, invoice approvals, invoice statuses, projects, and tax information. The group also includes purchasing- and travel and expense-specific reports, as well as an integrated MapQuest tool that allows users to analyze company spend by location. Customers may also request quarterly exports of company spending data to be used within the organization s internal systems. ExpenseWatch s add-on, custom reporting module enables customers to create custom reports and dashboards specific to the needs of their organization. Custom reports can target any transactional data and measure any key metrics important to the operation of the business. There are also a number of advanced reports that come with the custom reporting module, such as a duplicate expense report line items report, a credit card management report, and last twelve months spend report. The custom reporting module is composed of three optional subscriptions to the ExpenseWatch system: Builder, Viewer, and Scheduler. This allows companies to segment their use of the module for building reports and dashboards, viewing and interacting with the information, and scheduling reports for automatic delivery. ExpenseWatch also offers a professional services team to help customers design and deliver custom reports and dashboards. 13

14 Spend Control ExpenseWatch customers can leverage the solution s spend management tools to lock down spending policies and monitor employee compliance, both as spend is occurring and through audit reports in later review. The solution offers transaction history reports for audit/forensic types of inquiries, such as adherence to workflow and approval statuses, as well as reports to ensure vendor legitimacy. Custom reports can be generated to showcase duplicate spend or other key metrics in order to analyze rogue spend, as well as to support a company s individual regulatory needs, such as HIPPA reporting and the Sunshine Act compliance for the healthcare industry. Implementation and Pricing The ExpenseWatch solution implementation requires an average of 30 days. During implementation, customers are assigned to work with an ExpenseWatch Customer Satisfaction Engineer, who remains their key contact throughout the lifetime of the business relationship. ExpenseWatch trains all users of the system. Customer support is available to all users through the Customer Satisfaction Engineering staff. Users can also access supplementary information in the Help and Support portal from within the application, as well as can submit a support request or receive phone support. Pricing for the ExpenseWatch is segmented by the three main modules: Expense Reports, Purchasing, and Payable Invoices. A standard offering of spend management analytics tools is available with these modules, while the custom report builder and a few additional services are available at an extra cost. 14

15 About PayStream Advisors PayStream Advisors is a technology research and consulting firm that improves the way companies plan, evaluate, and select emerging technologies to achieve their business objectives. PayStream Advisors assists clients in sorting through the growing complexities of IT applications related to business process automation with the goal of making objective, analytical, and actionable recommendations. Wherever business process automation technology is an issue, PayStream Advisors is there to help. For more information, call (704) or visit us on the web at 15