2015 Review of Current Procurement Trends for CFO s:

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1 2015 Review of Current :

2 : From recent conversations with our Top 10 Trends Guide customers, we ve learned that the review of articles and whitepapers from top AP Invoice Trends: analysts and industry experts is a vital part Aberdeen Group s October 2013 Report... 1 of crafting a solid software business case. PayStream Advisors 2014 Report... 2 This insight from customers made us think Aberdeen Group s October 2013 Report... 3 how much faster and easier it would be to Procurement Trends: locate the top trends and research in Aberdeen Group s September 2013 Report... 4 procurement and expense management if Summary of Ardent Partners 2014 Report... 5 the information was located in one place. Ardent Partners 2014 Report... 6 For this purpose, we ve compiled a list for Travel and Expense Management Trends: you of the 10 hottest trends based on top PayStream Advisors 2014 Report...7 industry analysts and bloggers that we Aberdeen Group s March 2013 Report...8 follow. Use the information in the Aberdeen Group s March 2013 Report...9 Mobile-first Trend: following document that is most relevant Intel s 2013 Report to your business needs navigate to the Works Cited original source for additional information. Who is this report designed for? This report is tailored to provide valuable information about the latest technology trends in purchasing and accounts payable for CFOs, CPOs (Chief Procurement Officers) and other decision-makers involved in evaluating procurement and expense management software. You will find resources that are specifically applicable to your role in your company: while CFOs will want to review the sections on AP Invoice and Travel & Expense Management, CPOs may be more interested in the Procurement section. If you are a CFO, CPO or other decision-maker, you can use this information to help you assess current business processes and to make a software business case.

3 AP Invoice Automation: 1) AP invoice software cuts processing time for AP invoices in half Aberdeen Group, a reputable provider of business intelligence, reports in From the Shadows to the Forefront: AP Automation and the Strategic Vision that best-in-class companies (ranked based on their self-reported performance across several metrics) process a single invoice in 4 days and at the cost of $4. In contrast, the industry average takes 9 days and at the cost of $10 to process a single invoice (4). This means that for a year s worth of invoices, let s say 30,000, the savings with an automated system would add up to the significant sum of $180,000. Make your AP department part of your cost-savings strategy Aberdeen s October 2013 report draws upon surveys of business leaders and professionals and data analysis to show that increased efficiency of AP invoice processing directly affects companies bottom line. Why Automate AP Invoice Processing? Cost of processing just 1 invoice with average invoice processing $10 Cost of processing just 1 invoice best-in-class invoice processing $4 From this report, learn how to Savings: harness the power of AP invoice automation to make your accounts payable department a part of your cost-savings strategy: $6/per invoice Cost of processing 30,000 invoices with average invoice processing $300,000 Cost of processing 30,000 invoices with best-in-class invoice processing $120,000 Savings: $180,000 deen-library/8671/ra-accounts -payable-automation.aspx pg.1

4 2) Companies are embracing touchless, paperless AP invoice automation PayStream Advisors, a leading research and consulting firm for procure-to-pay professionals, defines touchless or straight-through processing as completely automated and paperless AP invoice management. In the firm s 2014 report Electronic Invoice Management: A Move to the Middle, PayStream Advisors explains how touchless processing of AP invoices makes employees more productive and eliminates manual AP invoice processing errors the bane of employees, managers and vendors alike. Fewer errors, more time for employees More companies are moving to touchless or straight-through processing to optimize invoice management. This requires moving from a paper-based system to a fully digitized and automated Vendor invoice is ed System validates vendor system, resulting in time and money savings in the form of fewer errors, less exceptions and a reduction in calls from suppliers. B Straight-through processing automatically matches and validates submitted invoices. einvoice solutions now allow suppliers to self-correct errors before the C Optional match of invoices to groups of users Mapping of vendor domain to a GP Vendor ID Multiple invoice types are supported Invoice transaction is sent into a workflow invoice reaches the buyer, resulting in payables being processed quickly, efficiently, and at a much lower cost. Suppliers can also quickly access payment status information themselves, which saves AP an exorbitant amount of time fielding supplier phone calls. This frees up AP staff to engage in more strategic activities. (4) Glean insight from over 300 AP and procurement professionals Based on their research and survey of more than 300 AP and procurement professionals, PayStream Advisors report draws conclusions about why more small and medium-sized businesses are selecting software for touchless processing. Read more about how AP invoice automation increases efficiency, reduces costs and eliminates errors: gement% pg.2

5 3) Best-in-class companies are 50% more likely to promote electronic invoicing to their vendors Aberdeen Group s From the Shadows to the Forefront: AP Automation and the Strategic Vision reveals that companies willingness to communicate the cost and time savings of electronic invoicing to vendors will allow those companies to reap the full benefit of their AP invoice software. Devote resources to supplier enablement Best-in-Class companies are 1.28 times as likely as their peers (50% for the Best-in-Class versus 39% for All Others) to devote resources to supplier enablement for electronic invoice submission. This is no ordinary task as most suppliers have Payment Terms Address minimal or no incentive for submitting invoices electronically when they can continue to mail in or fax invoices. The onus of this initiative and its Vendor ID subsequent success really lies on the AP department on the buyer s side. They not only need to educate suppliers on the General Ledger Account Invoice Due Date Business Rules 1099 Taxes benefits of electronic submission but must also allocate their own resources to help with the installation and training in some cases of an electronic portal. It might seem like extra work for AP departments, but the benefits in terms of managing documents and financial transparency in due course AP / EMPLOYEE outweigh the upfront heavy lifting. (3-4) More tactics for optimizing AP efficiency As Aberdeen points out, although your AP department needs to invest time and resources into promoting electronic invoicing, this will prove invaluable for tracking documents and preparing for audits. Learn more about how to get your vendors on board and other tactics for optimizing your accounts payable process: pg.3

6 Procurement Trends: 4) Best-in-class companies have 57% more spend under management than laggard companies While managed spend is defined as purchasing from preferred suppliers with contract pricing, unmanaged spend is defined as purchasing from suppliers without contract pricing. The more spend your company manages, the better; when employees use preferred vendors, they reduce purchasing costs. When purchasing is left up to employee discretion, it leaves room for price variances, which can hurt your bottom line. In Aberdeen Group s September 2013 report CPO Series: Time to Delivery by Means of Visibility and Business Intelligence, the bottom 30% of companies (laggards) on average had only 32% of spend under management. On the other hand, the top 20% of companies (best-in-class) on average had 89% of spend under management (3). By having a more controlled buying process, best-in-class companies were able to achieve 12% in yearly procurement savings (3). Laggard Companies Best-In-Class Companies 32% 89% % of Spend Under Management Increase your managed spend and improve vendor compliance Aberdeen Group s report identifies key areas, such as time-to-delivery and inventory management, where CPOs (Chief Procurement Officers) can leverage the latest procurement technology to improve vendor compliance and reduce inventory costs. Learn more about the ways that your company can bring more spend under management: pg.4

7 5) Savvy CPOs (Chief Procurement Officers) are making compliance a top priority Andrew Bartolini procurement expert and publisher of CPO Procurement Compliance Checklist: Does your organization have controls for Rising the largest website devoted to procurement and supply chain management, shared that improving compliance with contracts, Adding or removing vendors from the vendor master list policies and regulations will be a top priority for Enforcing purchasing from preferred vendors Purchase requisitions that are over budget CPOs for the next three years. More companies are focusing on compliance because, as Ardent Partners reported in CPO Rising 2014: Convergence, non-compliant spend can add on 5 Ensuring that purchase orders originate with a purchase requisition to 20% more in spending costs for companies (23). In his article CPO Rising 2014: Tracking an audit trail for all requisitions, receipts, purchase orders and invoices Convergence. The CPO s Three Year Plan, Bartolini summarizes the findings of Ardent Partners, a research and advisory firm focused on supply management, and provides insight into why compliance has become such a hot topic. Approval hierarchies and workflows Matching invoices to receipts and purchase orders before making a payment Catching duplicate invoices and discrepancies between invoice and purchase order amounts Ensure contract compliance As CPO priorities shift, driving greater compliance has emerged as one of the fastest rising priorities for CPOs around the world. Ardent Partners research suggests that procurement teams are already making strides towards improving contract compliance, as average contract compliance rates have continued to inch higher over the past few years. Ensuring legal or regulatory compliance has also become higher priority for CPOs and procurement teams, and will likely become an even higher priority over the coming years as more industries become more regulated and as more enterprises conduct more business in more countries and different jurisdictions. Expanding role of the CPO Read more of Bartolini s article to learn about current trends in procurement from the perspectives of top CPOs: Ardent Partners complete report with detailed analysis of CPOs expanding role and best practices for procurement is available as well: pg.5

8 6) Innovative CPOs are adopting a single suite of solutions for procure-to-pay As CPOs deploy integrated solutions that handle everything from requisitioning to purchase order management and AP invoice processing, they are Procurement Savings: increasingly occupying a strategic role in reducing spending and maximizing cash flow for their company. Linking procurement to AP invoice processing expands the role of CPOs by further connecting CPOs to the AP department. Ardent Partners CPO Rising: 2014 Convergence, based on the perspective of over 273 Chief Procurement Officers and other procurement professionals, explains how companies use of procure-to-pay solution suites is enhancing the importance of CPOs. Procure-to-pay solutions enhance the role of the CPO Another trend that has served to drive investment in technology and help expand procurement s role has been the strategy to deploy a single suite of solutions instead of a series of disparate applications. This is particularly true for procure-to-pay solution suites, which directly link procurement activity with that of accounts payable. Our role has expanded due to P2P technology where it makes sense for A/P to report to procurement, said Sandy Hicks, Assistant Vice President and Chief Procurement Officer at the University of Colorado. At the solution level, Business Networks and Electronic Payments show the largest adoption percentage growth since our last CPO Rising report as more procurement departments seek true end-to-end solutions that connect trading partners. (14) Strategies for successful procurement In addition to reading about CPOs role in implementing procure-to-pay solutions in Ardent Partners report, you can also garner more information about the state of the CPO and procurement, as well as information about successful strategies for procurement: pg.6

9 Travel & Expense Management Trends: 7) Companies save thousands of dollars a year just by moving to expense reporting software In 2014, the average company will spend Why Automate Expense Reporting? 10% of its total annual budget on business expenses, which makes it even more important to have visibility to and control over employee spending ( Travel and Expense Management Guide for 2014: Trends for the Future, Aberdeen Cost of processing just 1 expense report with a manual system $20 Cost of processing just 1 expense report with expense reporting software $8 Group, 1). As PayStream Advisors Travel Savings: and Expense Management Insight Report reveals, more companies are making the smart decision to implement a completely automated solution for expense management. While a single $12/per report Cost of processing 6000 expense reports with a manual system $120,000 Cost of processing 6000 expense reports with expense reporting software $48,000 Savings: $72,000 expense report costs $20 with a manual system, it costs only $8 with an automated system (14). If you imagine a year s worth of expense reports, let s say 6,000, you will achieve $72,000 in savings by using expense reporting software. Enforce employee travel and expense policies To gain tighter control over your employees expenses, it is becoming more important to deploy software with policy management controls in place. Paystream Advisors report provides useful information about how expense reporting software can be leveraged to enforce employee travel and expense policies. The report also includes other current trends in expense management: Management% pg.7

10 8) 51% of business leaders surveyed by Aberdeen listed visibility to spending as their number one concern Access to real-time information about Visibility Checklist: how employees are spending company Does your organization have an expense management solution with money is crucial for enforcing company and department budgets. If managers and employees have budget data and Audit trail of all expense reports, receipts corporate spending policies at their and credit card transactions fingertips, this information will empower Visibility to expense policies based on them to make informed spending business unit decisions. Travel and expense Ability to track expenses against management software can alert managers department or project budget and employees to the remaining budget Budget indicator lights to show whether and whether certain expenses are within an expense is within budget budget. Aberdeen Group s 2013 report Ability to perform on-the-fly queries of explains how expense reporting software employee expenses can provide spending information that Reporting on expenses by employee or also helps executives to be more nimble in vendor their financial forecasting and decision-making. Executives are more nimble in making expense policy decisions The intelligence afforded by real-time visibility into travel spending against budget, a competency in place in 64% more Best-in-Class organizations than All Others, has been a crucial capability outlined in Aberdeen research over the past few years. With real-time visibility, executives can understand how the current travel budget sits against pre-planned trips; this intelligence can help these executives make decisions (Cancel a trip? Alter plans?) based on how planned travel sits against the overall corporate budget. (4) Achieve best-in-class status with expense reporting software Learn more about how your company can achieve best-in-class status by utilizing expense reporting software that provides real-time visibility to expenses: pg.8

11 9) Mobile travel and expense management software increases employee productivity by over 4.5 hours per month Your 2013 Guide to Travel and Expense Management by Aberdeen Group emphasizes the importance of mobile travel and expense management solutions for employees and managers on the go (6). If employees save 4.5 hours per month, they shave off 54 hours a year that they re spending on expense reports. Instead of getting mired in inefficient expense reporting, your employees can devote their time to more important responsibilities. Aberdeen reports that mobile expense reporting applications are essential for enhancing employee productivity. Best-in-Class companies are 60% more likely to use mobile expense management Best-in-Class organizations are 60% more likely than All Others to leverage a mobile application for travel and expense management. These applications, which are also offered in mobile-optimized web portals, place the power of greater end-to-end technology directly into the hands of business travelers and executives, offering handheld access to core travel and expense processes Aberdeen research has found that users of mobile travel and expense management applications enjoy a prime benefit: employees that leverage these apps save over 4.5 hours per month in productivity time. (6) Utilize mobile expense management solutions Learn more about how the top companies are utilizing mobile travel Top Vendors for the Company: TWO For the dates 1/1/2013 thru: 1/1/2014 Top Vendors and expense $5, $7, management CDW Sales, Inc. $3, WWR Medical Supplies Ariett Mobile Touch $4, $20, Search Kugel Engineering Company Home Comcast, Inc. $3, card systems and systems: Computer Training Systems $2, solutions, commercial on-line travel booking Beaumont Construction $6, $3, $2, Cowley Engineering Draft Vendors Spend Amount Beaumont Construction $5, % of Total $6, % $3, % $2, $ % CDW Sales, Inc. Computer Training Systems WWR Medical Supplies 1 Submitted % Kugel Engineering Company $4, % Comcast, Inc. $3, % Cowley Engineering $2, % Home $ 6, Draft $ 1, com/aberdeen-library $ 2,150.87Contract $ 6, Home 4 $ 4, Submitted Draft Contract 4 /8348/RA-travel-expen Contract $ 6, User: Joe Sign out Version: Ariett, Inc. Contact Support $ 1, Submitted 3 se-management.aspx $ 1, Approved 2 $ User: Joe Sign out Version: Ariett, Inc. Approved 2 $ User: Joe Sign out Version: Ariett, Inc. Contact Support Contact Support pg.9

12 Mobile-First Technology Trend 10) Forward-thinking companies have a mobile-first strategy Mobile-first design means software that is first designed for mobile devices and then adapted for the desktop. Ariett, a leading provider of procurement and expense management software, has been blazing a trail into the future by introducing a mobile-first interface: Ariett Touch. With Ariett Touch, users can enter or approve expense reports, requisitions or contracts on any mobile or desktop device. Ariett and other companies are pursuring a mobile-first strategy because it promotes ease of use and consistency across platforms. In Intel s 2013 report Accelerating Deployment of Touch-enabled Business Ultrabook Devices, the technology company makes the case for why they decided to deploy 14,000 mobile-first, touch-enabled devices to their employees. Increasing demand for touch capabilities Consumerization of IT will increase demand for touch capabilities. Employees will demand touch capabilities in the workplace based on their experience with personally owned devices. Touch applications are also demonstrating their value as evidenced by the adoption and proliferation of enterprise productivity applications on phones and tablets Applications are increasingly taking advantage of touch interaction. Over the next one to three years, we expect many personal/productivity and enterprise applications will become touch-enabled, and many may require touch capabilities. Lack of touch capabilities can lead to lost productivity and increased cost. We estimate that in one to three years, employees will need touch capabilities to perform their daily jobs but about one-third of Intel employees will not have touch-enabled systems if we adhere to our original deployment schedule of touch-enabled devices. This scenario would result not only in future loss of productivity but also in premature hardware refreshes, leading to increased total cost of ownership. (2) Watch video on mobile-first Read more about how a mobile-first strategy enhances employee satisfaction and productivity: nt-touch-enabled-business-ultrabook-brief For further information on this hot topic, take a look at Ariett s most recent video on the mobile-first experience: pg.10

13 Works Cited Bartolini, Andrew. " CPO RISING. Ardent Partners, n.d. Web. 9 July < Bartolini, Andrew. "CPO Rising: Convergence." Ardent Partners (2014): Web. 17 July Berard, Louis. "CPO Series: Time to Delivery by Means of Visibility and Business Intelligence." Aberdeen Group (2013): 3. Web. 11 June Berard, Louis. "Travel and Expense Management Guide for 2014: Trends for the Future." Aberdeen Group (2014): 1. Web. 9 July Dwyer, Christopher. "Your 2013 Guide to Travel and Epxense Management." Aberdeen Group (2013): 2, 6. Web. 11 June "Electronic Invoice Management: a Move to the Middle." Pay Stream Advisors Q1 (2014): 4. Web. 9 July Sarfaty, Avi, Refael Mizrahi, and Doron Mintz. "Accelerating Deployment of Touch-enabled Business Ultrabook Devices." Intel IT (2013): 1. Web. 11 June "Travel and Expense Management Technology Insight Report." PayStream Advisors Q1 (2014): Web. 11 June Tyagi, Ankita. "From the Shadows to the Forefront: AP Automation and the Strategic Vision." Aberdeen Group (2013): 5. Web. 11 June pg.11