Of the two opening sessions on the first day of PayStream ePayables Summit ’09, I chose to attend “Implementing e-Invoicing to Drive Continuous Process Improvement” from Motorola by Michael Riggins. As a consultant, I had strong penchant to comprehend and improve business processes on the front end of P2P operations before I stretched my foot into to e-Payments.
As a perfect start for that morning, I had all the ingredients I wanted for my breakfast on the agenda. I was interested in understanding the compelling company dynamics to move and adapt to new technologies in the Shared Services Division. To my thought, Riggins explained that the historic stats revealed that managing age old processes involving manual interventions had potential drawbacks. May it be inefficiency in processing invoices, time delays in processing invoices, higher number of exceptions, visibility into cash, and delays in reporting structure (to name a few) – it all led to a distorted cash management. Motorola initially tried “centralizing their AP processes” and “outsourcing their manual processes in matching PO-Invoice to low cost countries thus taking advantage of salary arbitrage.” However for a company the size of Motorola, they guesstimated that the cost per transaction was distinctly higher to what it could be by implementing electronic invoicing.
During the course of the session, I learned that this is more than a technical change that any company has to undergo to gain potential long term efficiencies and profits. It involves changes in culture, process, and people and more importantly the long term vision and buy-in from the leadership team of Shared Services Division. I was impressed by how companies are motivated to work together with supplier networks to gain the profits and not just shift the responsibilities to the outsourced vendors. Motorola not only executed their best practices and realized quick benefits but also envisions extending their best practices globally. For companies concentrating on cost cutting measures, I believe re-engineering their business process in the P2P domain accelerates their business processes- especially in clearing payments, gain potential discounts and provides better visibility and control over the cash enabling timely decisions.
