P2P for Financial Service Providers · seeking information regarding P2P automation. The report...

Underwritten in part by

© 2014 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]

P2P for Financial Service ProvidersTransform the Procure-to-Pay Process

Q4 2014 | Featuring insights on...

» P2P Market Trends in the Financial Services Industry

» P2P Challenges Facing the Financial Services Industry

» P2P Automation for Financial Services

» P2P Universe

» Solution Provider Profiles

Q4 2014 © 2014 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]

Executive Summary 3

P2P Market Trends among Financial Service Providers 4

P2P Challenges Facing the Financial Service Industry 8

P2P Automation for Financial Services—A Perfect Fit 9

The P2P Universe 14

P2P Opportunities for Financial Service Providers 18

P2P Best Practices for Financial Service Providers 22

Conclusion 24

SciQuest Profile 25

About PayStream Advisors 30

Contents


Executive SummaryAs financial service providers seek to further streamline their procure-to-pay (P2P) processes and improve the management of their working capital, many are now investigating workflow, document management, and accounts payable (AP) automation processes to increase access to information and make better, more informed decisions. The financial services industry faces flucuating and increasingly strict requirements, which can make compliance difficult in a paper-based environment. In today’s financial service industry, there is certainly room for automation-related improvement in the processing of business-to-business (B2B) purchase orders (POs) and invoices. PayStream’s 2014 P2P survey revealed that only 28 percent of financial service providers send more than 50 percent of their POs electronically, and even fewer (22 percent) receive invoices electronically.

Most P2P and AP managers realize that a case can be made for invoice automation, which yields increased productivity, efficiency, and visibility. However, few have pursued this potential improvement. Instead, many have focused on enterprise resource planning (ERP) systems and implementing shared service centers. Until recently, there have been significant barriers—both real and perceived—to implementing invoice automation. From a return on investment (ROI) perspective, there are potential problems with the ramp-up time and investment requirements. High labor costs could also mean trouble for ROI, particularly in the financial services environment, where technical issues and strict compliance regulations can require IT attention in addition to the work of existing staff. In an increasingly global framework, P2P automation is viewed as the next logical step for financial service providers to improve efficiency and visibility, reduce operating costs, and improve working capital. This PayStream Advisors market analysis report is targeted for financial service providers seeking information regarding P2P automation. The report will help chief financial officers (CFOs), controllers, procurement managers, and AP managers in the financial services industry make technology selection decisions as they evaluate new P2P strategies and solutions. Also included in this report are profiles of leading providers of P2P technology.


P2P Market Trends among Financial Service ProvidersDespite the rise of P2P technology, the majority of financial service providers are slow to migrate away from a paper-based environment. PayStream Advisors’ research indicates that the financial service industry is lagging behind other industries with regard to financial automation initiatives. When asked what percentage of POs they send electronically, nearly half (43 percent) of survey respondents in the financial service industry reported they send no POs electronically, see Figure 1. In results from another 2014 PayStream survey, 22 percent

of respondents from industries excluding the financial service industry reported not sending any POs to suppliers electronically.

Financial service providers are also receiving fewer invoices electronically, with 22 percent of survey respondents reporting they receive half of their invoices electronically, see Figure 2. This is low compared to 57 percent of survey respondents from other industries who receive their invoices electronically.

Figure 1

Financial Service Providers Send Few

Electronic POs

“What percentage of POs do you send electronically

to suppliers?”

43%

None

21%

1-10%

0%

11-25%

7%

26%-50% More than 50%

29%


Further highlighting the low levels of automation among financial service providers, PayStream research reveals that many processing pains for financial institutions revolve around manual, front-end processes. Survey respondents in the financial service sector report

a large number of exceptions, manual routing of invoices, and decentralized invoice receipt as the leading pains in the invoice processing cycle, see Figure 3.

Figure 2

Financial Service Providers Receive

Fewer Electronic Invoices

“What percentage of invoices do you receive

electronically?”

26%

None

44%

1-10%

4%

11-25%

4%

26%-50% 50-75%

15%

More than75%

7%

Figure 3

Financial Service Providers Experience Front-End Processing

Pains

“Please select which of the following problems most

lead to late payments and missed discounts at your

organization.”

Manual routing of invoices 60%

Missing information on invoices 25%

Large number of exceptions 67%

Lengthy approval cycles 37%

Lost invoices 48%

Decentralized invoice receipt 55%


When looking at financial service providers’ leading processing pains, it comes as no surprise that the number one benefit that financial institutions expect from invoice automation is quicker approval cycles

Fewer lost or missinginvoices

32%51%

Increased on-timepayments

58%

46%

Quicker approval cycles74%

50%

Improved vendorsatisfaction

21%

24%

Increased ability tocapture discounts

32%35%

Reduction in FTE/processing costs 52%

53%

Better visibility acrossthe transaction lifecycle 38%

47%

Fewer supplier inquiries24%

37%

Reduction in exceptions / discrepancies 32%

42%

Fewer duplicate invoices26%

37%

Other (please specify)4%5%

Financial Service Industry All Industries

Figure 4

Benefits Financial Service Providers

Expect to Achieve from Automation

“What key benefits have you achieved or do you

expect to achieve from an eInvoicing solution?”


(74 percent). Other top motivations to automate include increased on-time payments (58 percent) and a reduction in full-time employee (FTE) processing costs (53 percent), see Figure 4. All of these problems stem from a lack of automation and decentralized processes, which can be remedied with an efficient and integrated P2P system.

When comparing survey results from the financial service industry to the full survey, it is apparent that the financial service industry experiences more pains with visibility, supplier inquiries, exceptions/discrepancies, and duplicate invoices, see Figure 4.

One of the major advantages of today’s P2P solutions is their scalable and integrated nature. With eInvoicing implemented, automated approval workflow is only a small step away, providing a centralized process to financial service providers at a great value. While the financial services industry is lagging in front-end automation, the implementation of an eInvoice and workflow solution will dramatically improve invoice processing efficiency.


P2P Challenges Facing the Financial Service IndustryThe majority of financial institutions still operate in brick and mortar environments, and their purchasing profile is focused on procuring fixed assets or low value purchases such as office equipment, utilities, waste management, technology and labor. PayStream research reveals that financial service providers operate in a decentralized, paper-based environment, making PO and invoice processing an error-prone and lengthy process and resulting in late payments and the inability to capture discounts. Mergers and acquisitions add complexity to these difficulties, and further complicate the workflow and approval process.

While some financial service providers have adopted spot solutions to handle front-end imaging or have attempted to leverage their ERP for some capabilities, front-end automation has historically been neglected, and financial institutions have been slow to adopt P2P automation. On the payment side, the majority of financial service providers have migrated away from paper through the adoption of automated clearing house (ACH) or purchasing card payments. This creates opportunities for maximum front-end improvement and ROI through PO and invoice automation.

In the past, there have been significant barriers to the adoption of automation initiatives in the financial services industry. However, the growing popularity of cloud-based solutions significantly reduces cost and implementation time, allowing financial service providers to realize a quick ROI. There are no hefty license costs or hidden transaction fees associated with cloud-based solutions, nor are there long training delays, as today’s P2P solutions provide easy to navigate user interfaces that require little training. Another important benefit is the scalable and modular nature of today’s P2P solutions. These highly scalable solutions allow financial institutions to select and pay for only the solutions they need to be successful.


P2P Automation for Financial Services—A Perfect FitMany financial service providers run their business with arcane AP processes, resulting in a lack of visibility and creating more questions than answers—Did the supplier receive the check on time? Did the supplier properly reconcile the payment and apply the discount that was promised? Was an invoice accidentally paid twice? Will the annual financial audit receive low marks because proper payment controls were not employed?

PayStream Advisors research has identified some prevailing characteristics of financial service providers that make them perfect for modern AP automation and P2P solutions. The majority of financial service providers:

Have a small AP department – The majority of financial service providers (66 percent)reported employing 1-10 full time AP employees, see Figure 5. A small AP department usually corresponds with tighter budgets and more roles and responsibilities shared among fewer employees. P2P technology that eliminates tedious processes can reduce the workload of small AP departments. Implementation of front-end automation—or even leveraging a single solution module such as an approval workflow application—will greatly increase the overall productivity and efficiency of a small AP staff.

Figure 5

Financial Service Providers Have Small

AP Departments

“What is the approximate number of full-time

employees in your AP department?”

3%

3%

13%

16%

1 – 10

66%

11 – 25

26 – 5051 – 100

Over 100


Have decentralized processes – Many financial service providers (40 percent) still have decentralized AP departments, which means they receive and pay invoices from multiple locations or branches, see Figure 6. This decentralized model leads to redundant costs and results in higher operating costs and reduced control of the overall payment process. P2P automation works to centralize and streamline the entire invoice cycle, resulting in increased visibility, lower costs and on time payments.

57%

3% 7% Decentralized – Invoices are received, approved, and paid at different locations.

33%

Centralized – Invoices are approved and paid centrally.

We outsource our invoice receipt and payment process.

Partly Centralized – Invoices are received at multiple facilities but paid centrally.

Figure 6

Financial Service Providers Have

Decentralized Processes

“What is the nature of your AP department?”


Do not measure processing costs – Over half of financial service providers (53 percent) surveyed reported that they do not measure processing costs, see Figure 7. Organizations that do not measure invoice processing costs are missing out on valuable opportunities to improve invoice processing and lower its cost. One of the most fundamental benefits of a P2P solution is the full process transparency that it provides. Additionally, reporting and analytics technology gives companies the advantage of strategic analysis and ongoing process improvement.

Figure 7

Financial Service Providers Do Not

Measure Processing Costs

“What is your average fully loaded cost to process an

invoice?”

Under $110%

53%20%

10%

7%

$6 – 10

We do not measureprocessing costs

Over $15

$1 - $5

$11 - $15


Are not familiar with dynamic discounting and supply chain finance – Financial service respondents reported low knowledge of dynamic discounting solutions (71 percent), see Figure 8. Dynamic discounting is a process that allows buyers and sellers of commercial goods and services to dynamically change payment terms to accelerated payment based on a sliding discount scale. Capturing early payment discounts can be a significant source of revenue for financial service providers. P2P solutions now offer tools that enable financial service providers to gain the advantages of quick payments through Dynamic Discount Management (DDM) software and Supply Chain Finance functionality. These applications empower financial service providers to strategically pay their invoices in a way that will optimize value for the company.

Figure 8

Financial Service Providers are Not

Familiar with Dynamic Discounting

“Are you familiar with the concept of dynamic

discounting?”

Yes

29%

71%

No


Are ready for integration – As PayStream Advisors’ research shows, the majority of financial service providers experience processing pains in the front-end process. The greatest processing improvement gains and ROI can also be found in this area. AP technologies that financial service providers are planning to implement include front-end imaging, OCR/data capture, and workflow technology—all solutions that fall under the P2P best practices for invoice process efficiency when used together, see Figure 9.

Figure 9

Financial Service Providers Want

Front-End Process Improvement

“Which of the following technologies do you currently use or are

planning to implement within the next 6 months?”

Currently UsingImplementing in 6 Months

21%

7%

Front-end Imaging

OCR/AutomatedData Capture

AutomatedWorkflow

ElectronicPayments

PurchasingCards

8%6%

14%

10%

31%

4%1%

27%


The P2P UniverseP2P solutions work to streamline the purchasing process by enabling organizations to instantly connect to vendor catalogs, generate requisitions, utilize sophisticated workflow tools for approval processing, and deliver purchase orders to suppliers electronically. PayStream Advisors defines the P2P universe as consisting of six broad categories of functionality. Each of the solution providers profiled in this report provide a unique solution and approach to the market, but all of them address the six functional components of the P2P Universe, see Figure 10. Understanding the steps involved in the process will help AP, procurement, and technology professionals in the vendor evaluation and selection process.

PurchaseRequisition

Reporting& Analysis

Receiving &Reconciliation

PurchaseOrder Delivery

Work�owManagement

RequisitionApproval

1. Purchase Requisition – This step involves the integration with online vendor catalogs, which list approved products and display negotiated pricing and contract terms. This catalog is managed as product availability or prices change and new items are added. Most solution providers pride themselves on providing an interface similar to the average consumer retail shopping site, such as Amazon. Using the requisitioning functionality, buyers

Figure 10

The P2P Universe

P2P solutions streamline how organizations

generate and approve purchase requisitions, and how they interact

with suppliers


can log into the procurement system to search for products and services, compare multiple items, save favorite searches, easily access frequently purchased items, and order the items needed. Most solutions allow users to order products from multiple suppliers through a single requisition. Another aspect of requisitioning is the ability to control and reduce rogue spend, or spend that is in violation of corporate purchasing policies. These solutions address rogue spend by flagging purchases that are over a certain dollar value or have been ordered from a non-preferred vendor, and alerting the appropriate authorities.

2. Requisition Approval – Once a purchase requisition is created, it is routed for approval based on the business rules and criteria configured by the organization. The approval process can be as thorough or as simple as an organization chooses. P2P solutions allow multiple levels of approval to model their clients’ organizational charts. Approval workflows can be designed based on category of spend (one person approves office supplies, while another reviews all electronic items), dollar threshold (all items over a certain dollar amount have to be approved by two users), business unit, geographical location, supplier category, or any other custom parameters. P2P solutions come bundled with a robust set of notification tools to alert users via email when requisitions are pending their approval. Approvers are also notified of any items that have been ordered in violation of purchasing policy.

3. Workflow Management – Workflow management involves the definition and management of user roles, rights and permissions. Administrators can specify which users can create requisitions, what their spend limits are, and which approvers are responsible for what items or dollar thresholds, to name a few. Most solutions offer an intuitive and easy-to-use interface to manage the workflow administration process, either through drag and drop functionality, templates, or simple menu-driven features. Alerts and notifications go hand-in-hand with workflow management. Administrators can also configure the number and type of notifications to be sent to users as well as provide strong workload balancing capabilities, allowing users to delegate their responsibilities to other users in the event of vacations or other out-of-office scenarios. Another aspect of workflow management is the ability to handle automated escalation procedures, which notify supervisors or managers if no action has been taken.


4. Purchase Order Delivery – This stage includes the creation of purchase orders from approved requisitions and the transmission of the orders from buyers to suppliers. Most solutions support the automated batching of multiple orders to a single supplier, or conversely, the creation of multiple POs to be delivered to different suppliers from a single requisition. P2P solutions also provide the functionality to handle blanket POs and partial shipments. This component of the procurement process allows suppliers to choose how they want to receive the POs—via email or web portal. Suppliers can also use the portal to accept POs and send advance shipment notices (ASNs) and notifications when items are actually shipped to buyers.

5. Receiving and Reconciliation – P2P solutions cover much more than just the ordering process by addressing invoice management and receiving as well, see Figure 11. On the supplier side, P2P solutions facilitate the flipping of POs into invoices and the delivery of invoices to the buyer. On the buyer side, they automate the goods receipt and reconciliation process. These solutions support centralized and distributed receiving and allow buyers to select the purchase orders against which goods have been received to track lost numbers, quantities received, and expiration dates. Some P2P systems also provide the ability to handle returns or hold the items for inspection, if needed. Finally, the solutions enable two- or three-way matching between POs, invoices, and goods receipt documents. Some solutions go a step further and facilitate matching with contracts, as well.


6. Reporting and Analysis – This includes the ability of the solution to generate standard and custom queries and reports and provide visibility across transactions to both buyers and suppliers. The solutions provide comprehensive audit trails of all actions taken within the system with date and time stamps. They also offer vendor self-service options to reduce the number of supplier inquiries to the procurement department. Users have the option to schedule and receive periodic reports based on custom criteria. Analytical capabilities allow managers to examine spend at various levels, including type of expense, employee department, and region. This real-time data derived from the P2P process can be used to comply with regulatory requirements and can also provide valuable business intelligence for strategic spend analysis and reduction of rogue spend. Some solutions even leverage inter- and intra-industry best practices and spend statistics to offer benchmarking services.

Web Portal SubmissionDirect ERP Integration

Invoice ValidationDocument Scanning/OCR

Workflow ConfigurationRouting & ReviewAlerts / NotificationsReminders & Escalations

Invoice or Line Item LevelAttachments / CommentsWorkflow for ResolutionCollaborative Interface

Process MonitoringSearch & Retrieval

Invoice / Supplier ReportsDiscount Management

Discount Scheme ConfigurationPayment Initiation

Multiple Payment TypesRemittance Management

4Discount /Payment

Management

3Exception / Dispute

Handling5Reporting& Analysis

1InvoiceGeneration / Delivery 2Approval

WorkflowManagement

eProcurement Process Flow

Figure 11

eProcurement Process Flow


P2P Opportunities for Financial Service ProvidersThe common goal that all P2P automation solutions share is improving process management. Not every solution follows the same approach or provides the same functionality at each step of the P2P cycle. It’s important for AP, procurement and finance professionals to fully understand the various forms that P2P solutions assume in order to decide which methods would work best in their specific workflow.

Back-End Document Capture and Archival

The simplest form of invoice automation is the usage of scanning technologies for back-end imaging and archival. This method does not impact the invoice approval process, since scanning and imaging occur after the fact. For this reason, back-end document capture and archival are not favored, as it is primarily a storage and retrieval solution that fails to yield any improvement or efficiency in workflow.

In back-end document capture and archival, operators batch and scan paper documents at the end of the invoice receipt-to-pay process. AP staff then indexes the invoices manually by using a split screen view to keep information from invoice images into electronic forms. Once indexing is complete, the document images are stored in an electronic repository for retrieval, based on the searchable fields created. Historically, AP departments have used imaging in this manner to eliminate physical storage requirements, facilitate document retrieval for discrepancy resolution and audits, and improve responsiveness to supplier inquiries. Since scanning and indexing occur after approval processing, the invoice approval process continues to follow its current manual and paper-intensive course.

Front-End Document and Data Capture

Employing an imaging solution at the front-end of the invoice processing cycle, invoices are scanned remotely or at a central processing facility upon receipt. Once invoices have been scanned and images enhanced to optimize recognition, data is extracted from the documents using automated image recognition technologies. Front-end document and data capture represents a quantum leap over back-end imaging because it sets up genuine improvements to the


invoice receipt-to-pay cycle. This is truly the starting place for workflow automation.

Validation rules ensure that the data extracted is valid and accurate by directing the solution to compare specific fields against the information held in the appropriate back-end system (e.g., purchase order numbers against the purchasing system). The accuracy of such rules-based matching has reached the point that many companies now opt to automatically pay invoices that meet all validation rules, freeing AP staff to focus only on exceptions. Most current generation systems put the onus of exception and discrepancy correction back on suppliers, facilitating the evolution of AP departments into profit centers focused on spend analytics and working capital management.

Data Extraction

Tools and technologies that facilitate the extraction of information from scanned invoice images have had an interesting life cycle, beginning with template-based optical character recognition (OCR) to free-form recognition and more recently intelligent document recognition (IDR). IDR systems enable end users to extract content from invoices without the system having to learn the layout of the invoice. Some intelligent engines are able to correctly sort batches on the fly, locate data fields such as invoice and PO number, as well as line item information, and then extract the desired content from those data fields. Intelligent solutions do not require the coding of rules or design form templates. Rather, the systems learn by reviewing a relatively small number of invoice samples. This helps the system scale to large invoice volumes and widely varying document layouts without requiring a human operator to specify a template for each one, or to explicitly create and tune an extensive library of keywords.

Embedded fuzzy search methods improve the extraction results by using other known data sources to automatically validate the information before exporting it to the ERP and document management systems. The benefit of this is that more invoices can be processed straight through, whereby documents can automatically flow from scan to post in the least amount of time and with minimal amount of manual intervention. Fuzzy logic can also make the IDR solution language-agnostic, allowing global organizations to process high volumes of invoices in multiple languages.


Front-End Capture with Matching and Workflow

In a more advanced form, invoice automation solutions combine front-end document and data capture with matching and workflow capabilities to streamline and automate invoice receipt and approval processing. Workflow solutions enable AP departments to define how different types of invoices are processed. PO-based invoices can be matched against the PO and receipt documents automatically, while non-PO invoices can be routed to the person or people who are required to approve them. All tasks are routed based on pre-defined business rules, and user roles and access rights can be set to match the organization’s existing approval hierarchy.

Approvers are typically notified via email when invoices require their review and approval. Users click on the hyperlink contained in the email message and log onto the system to view, code and approve invoices online. Many solutions on the market today have mobile functionality that keeps invoices moving through the system when approvers are on the go. Mobile applications are becoming increasingly popular and allow users to quickly approve or deny invoices for payment. Most solutions available today come bundled with alerts and reminders, out-of-office delegation rules and escalation procedures to ensure that invoices are processed in a timely manner.

Combining eInvoicing with Imaging and Workflow Automation

The most sophisticated invoice automation solutions combine front-end document imaging and data capture with electronic invoicing and automated workflow. This enables organizations to process all the invoices – irrespective of whether they are submitted in paper or electronic format, through a single, common process.

Under this scenario, AP staff members work with the technology solution provider to transition suppliers from paper to electronic means of invoice submission, usually a stand-alone portal or a shared supplier network. Most solutions offer suppliers multiple options when it comes to submitting electronic invoices including direct integration with ERP and billing applications to transmit invoices in a hands-free manner without manual intervention, flipping purchase orders into invoices and web forms and templates that can be used to generate electronic invoices. Most solutions also provide supplier on-boarding programs that aids in transitioning suppliers to electronic.

Once invoices have been submitted, they can be subjected to a range of validation criteria based on buyer-defined rules, check for


mathematical integrity and duplicates, ensure completeness and accurately of information provided on invoices, apply business rules and tolerances, etc. Invoices that do not meet any of the specified criteria are flagged as exceptions and suppliers are asked to correct the errors before resubmitting the invoice. Clean invoices are then forwarded for further processing.

Travel and Expense Management

Financial service providers of all sizes can take advantage of the benefits of automating their Travel and Expense (T&E) processes. Automation provides complete end-to-end control of report submission, approval, reimbursement, reporting with data analysis, and integration into back-end accounting systems. Having this integration provides more visibility into spend with accurate accounting and detailed reporting for every transaction and expense category. When organizations have this information at their disposal, they are equipped to determine exactly which areas in their travel and expense spend are excessive and can put automated controls in place to reduce runaway cost. Corporate card statements are integrated into today’s T&E systems granting complete visibility into spend. Not only can expense reports be filed quickly when transactions are readily available, but merchant details accompanying each transaction can make tracking and reporting easier. Statements can be recalled instantaneously and analyzed for company violations or excessive spending.

Electronic Procurement

eProcurement solutions streamline the purchasing process and dramatically reduce the P2P lifecycle from weeks to just days. eProcurement tools automate each stage of the P2P cycle, from eProcurement to programmed exception handling and matching, along with enhanced dispute management and approval workflows. eProcurement adopters can not only achieve productivity gains and cost reductions, but also obtain traceable Sarbanes-Oxley audit trails.


P2P Best Practices for Financial Service ProvidersWith the abundance of sophisticated P2P tools available in the marketplace today, why aren’t more financial institutions making headway to control processing costs? The answer lies in the execution.

PayStream Advisors’ research indicates that the difference between a winning P2P automation program and an unsuccessful implementation lies in the ability to execute such initiatives. The subtleties between a success and a failure are based on rather simple principles. This section of the report provides the secrets of successful P2P management with a look into best practices of P2P innovators—What techniques have they employed to better control costs? How do they monitor their programs? In short, what are they doing that you could be doing to ensure that your P2P initiative is a success?

Define Expectations – Even before you start investigating P2P options, have a crystal clear understanding of what you expect to achieve through automation. Thoroughly document the benefits and ensure that they align with your business environment and purchasing needs. These expectations will vary with each financial service provider’s unique needs, and can include the number of suppliers you want to transact with, the percentage of purchase orders you want to deliver electronically,to the reduction or redeployment of purchasing staff, and reducing your procurement costs by a certain percentage. By having well-defined expectations, you are creating benchmarks against which you can monitor the success of your P2P program.

Use of Technology – The biggest lesson that PayStream has gleaned from the early P2P adopters is that technology alone does not equate with strategy. Simply implementing the latest or most expensive P2P solution is not going to help you achieve the objectives you have outlined. You must first develop a sound strategy, then implement the P2P technology that complements the strategy. A major element of choosing the best system is having a realistic view about your company and its needs. Remember that the best solution does not have to be the most sophisticated or costly one in the market today; it is the solution that best suits your unique needs and enables all levels of your P2P strategy to be successful.

Company Support – The success of any project requires support from the entire company, and P2P initiatives are certainly no different.


Senior management needs to be fully committed, as this will enable you to get buy-in from the lower-level employees who will actually be using and monitoring the system. Senior management is also responsible for ensuring that proper funding is allocated for the project and that the P2P automation initiative is not at risk of being derailed at a moment’s notice. Many organizations make the mistake of adopting a technologically sophisticated solution, then leaving the workforce to figure out how to use it, and expect to see immediate results. Make sure that the employees who will be implementing the solution, as well as those that will be using the functionality, are involved in the project from the beginning and receive the necessary training to obtain the most from the application.

Corporate Policies – Corporate purchasing policies should be dynamic, updated often, and disseminated from one centralized source. Companies with successful P2P programs employ their purchasing solutions to communicate purchasing policies and procedures to users of the system. For example, if an employee chooses to purchase an item from a non-preferred supplier or opts for an unnecessary upgrade, the solution can not only stop the employee form making the purchase, but can also allow the employee to click a link to view why the purchase is in violation of policy. Integrating your purchasing policies within the procurement application goes a long way toward reducing maverick spend. When employees know their boundaries and are rewarded for compliance, purchasing policies become part of the corporate culture, affording you the best means to effectively manage your P2P process.

Business Intelligence – A wealth of information can be gleaned from P2P systems, allowing managers to examine spend at various levels, including type of expense, employee, department and region. One of the richest features in P2P automation today is the ability to use existing data to strategically monitor and tailor purchasing. Furthermore, P2P solutions deliver the ability to expose patterns of waste and fraud, two areas of growing concern for financial service providers all over the world. It is not that instances of fraud have increased over the years, but rather that due to advanced tools offered by P2P systems, the ability to detect fraud has changed dramatically. Companies ahead of the automation curve are proactively using fraud detection and prevention tools offered by their P2P providers to actively address these issues.


Conclusion As P2P automation continues to mature, all key stakeholders throughout the entire P2P process—including procurement, AP, and treasury—can realize significant tangible and intangible benefits from invoice automation. P2P automation is a logical strategy for handling POs, supplier invoices, and payments. The financial services industry can realize measurable performance, visibility, and ROI benefits by implementing an automated P2P process.

Advances in P2P functionality have dramatically reduced the cost and complexity of invoice automation. By applying best-in-class technologies, and by collaborating with today’s most advanced solution providers, financial service providers can greatly reduce front-end PO and invoice processing pains and reap the rewards of seamless P2P automation.


SciQuest ProfileSciQuest is a leading provider of cloud-based business automation solutions that enable greater visibility and compliance organization-wide to help enterprises of all sizes gain control, optimize efficiencies, and reduce spend. SciQuest solutions are easy to implement and are proven to deliver measurable, sustainable value with SciQuest’s high-touch support, analysis, and automation.

SciQuest’s consistent investment in usability, integration, and depth of product functionality have resulted in financial growth, a strong reference base, high customer retention rate, and extensive experience in integrating and optimizing customers’ existing technology investments. SciQuest solutions are primarily deployed in a Software-as-a-Service (SaaS) environment, with some limited on-premise offerings available. SciQuest solutions can be easily integrated with any Enterprise Resource Planning (ERP) or financial system for adaptation to customers’ requirements, and can be tailored for an optimal implementation approach based a client’s specific needs. SciQuest provides a comprehensive “in-house” modular portfolio of integrated solutions rather than a partner-based portfolio. This modular approach makes their solutions scalable, which is a perfect fit for small or large companies alike.

Website www.sciquest.comFounded 1995Headquarters Morrisville, NCOther Locations

Newton Square, PA; Pittsburgh, PA; Houston, TX; London, England; Hamburg, Germany

Number of Employees

Over 550 worldwide

Number of Customers

Over 525 worldwide

Key Clients Dupont, FedEx, Maersk, Memorial Sloan-Kettering Cancer Center, Starbucks, University of California System, Wells Fargo, Wendy’s QSCC

Target Verticals

Commercial (including Financial Services, Life Sciences, Utilities, and Chemical Manufacturing), Higher Education, Healthcare, Public Sector


Awards /Recognitions

» 2014 Deloitte Technology Fast 500 Award » 2014 American Business Award – Silver » 2014 Green Supply Chain Award » 2014 PayStream Advisors P2P Technology of the Year

» 2014 Supply & Demand Chain Executive 100 Award

» 2014 Inbound Logistics Top 100 Logistics IT Provider Award

» 2014 #58 of the 500 largest Cloud applications vendors according to Apps Run the Cloud

» 2013 North Carolina Technology Association 21 Award

Solution Name SciQuest Spend Management Suite

Solution Overview

Products in the SciQuest portfolio include: Spend Radar (for spend analysis), Total Supplier Manager, Sourcing Director, Contract Director (for CLM), Spend Director (for eProcurement), Supplies Manager, Enterprise Reagent Manager, and Accounts Payable Director. SciQuest solutions can be easily integrated with any Enterprise Resource Planning (ERP) or financial system for adaptation to financial service requirements, and can be tailored for an optimal implementation approach based on a client’s specific needs.

SciQuest recently released version 14.3 of their spend management suite, which includes significant upgrades across the product suite. New functionality provides users with greater insight into critical spend management processes while improving their ability to benefit from early payment discounts and avoid late payment penalties. SciQuest’s Spend Management suite is modular, allowing organizations to leverage the full suite to address specific procure-to-pay (P2P) challenges.

Purchase Requisition

Financial institutions can use the SciQuest Spend Management Suite to connect to their preferred suppliers, drive spend to those suppliers, enforce buying policies, achieve proper approvals on all


orders, and increase efficiencies throughout the entire P2P process. SciQuest’s requisition tools offer high visibility and accessibility, with features configured to simplify and streamline any financial institutions procurement processes.

Requisition Approval

With SciQuest’s Requisition Manager, workflow is typically set up during implementation based on requisition attributes, and then maintained in the Advanced Dynamic Workflow interface. A single SciQuest requisition can contain items from multiple suppliers, and when the requisition is ultimately approved, the requisition is broken down into multiple purchase orders per supplier.

The solution provides full visibility, allowing financial institutions to view the status of their requisition in terms of approval, PO creation, and fulfillment. They can also view any approvers linked to their order and communicate directly with them through the application. Robust workflow functionality incorporates email alerts and user communication from the requisition and PO, and both shoppers and approvers can see graphical representations of the workflow, highlighting the current step in the approval process.

Purchase Order Delivery

Once a purchase requisition is approved, a PO is created in the SciQuest application, distributed to the vendor, exported to the ERP, and created as a blanket or standing order. The functionality supports blanket orders, with pre-negotiated and fixed pricing for goods and services, automatic PO transmission to the supplier, and transaction-specific blanket PO numbers. The solution has the ability to split requisitions into multiple POs based on various criteria. Linking invoices to a single PO or multiple POs is standard functionality, as is support for multiple partial invoices and credit memos against a PO.

Requisition Reconciliation

SciQuest provides detailed information on each received invoice and receipt document, including the cost and quantities, and ties this information back to POs. A PO can remain open until the total cost and/or quantities are received, or closed without the full cost and/or quantity being received. Through the receipt process, items can be designated as returned or placed on hold until an issue is resolved


with the supplier. SciQuest provides 2-way and 3-way matching, and matching rules can easily be configured through the application interface.

SciQuest provides extensive integration of invoice management into their procurement functionalities, building strong P2P integration and overall process control for financial institutions. SciQuest interfaces are easy to navigate, with multiple tabs and drop-down menus to provide complete visibility into the P2P lifecycle. Full history of all received invoices and receipts is available through the SciQuest solution and through data exports.

In addition to complete catalog management, the SciQuest Supplier Portal provides vendors with full order management capabilities, creating complete visibility into order status. The SciQuest Supplier Network also provides suppliers and customers with a forum for facilitating communication and reducing call volume. The Supplier Dispute functionality allows financial institutions to designate a received invoice as a dispute and open a two way conversation within the application with the supplier to settle the dispute.

Reporting and Analysis

SciQuest’s latest release, version 14.3, provides enhanced reporting functionality. The solution contains reports allowing financial institutions to set specific parameters and generate industry specific reports, as well as ad-hoc reporting capabilities. Robust business intelligence tools enable customers to build custom queries in external tools in order to support compliance reporting requirements, thus helping banks understand enterprise spend and usage patterns, identify saving opportunities, and audit both user and supplier compliance. Queries can be saved for future use and shared with other approved personnel, and users can schedule periodic reports to run automatically. The SciQuest Spend Dashboard provides drill-down graphs and instant access to detailed data, so that financial institutions can optimize their spend management.

The SciQuest Spend Radar solution provides even deeper spend analysis. To help eliminate rogue spending, SciQuest analytics provide reports within the classification hierarchy that determine spend being directed to preferred suppliers and off-contract spend. SciQuest also provides data-driven benchmarking services and reporting to financial institutions through the SciQuest Client Partner team, which provides consultation to customers on their monthly, quarterly, and annual


activities to help them develop strategies for successful ROI and drive spend towards more manageable and measurable outlets.

Implementation and Pricing

SciQuest employs a detailed four-step implementation process for all their projects: Initiation, Solution Specification, Solution Build, and Solution Deployment. SciQuest’s typical implementation time ranges between 16 and 24 weeks, although this can vary based on a number of factors including the desired level of integrations with financial institution systems and the client’s level of involvement and readiness throughout the implementation.

SciQuest delivers standardized training and knowledge transfer to empower the customer’s internal trainers and “super users” who will train the entire user community. SciQuest also provides additional on-site training tailored to the specific client needs. Customers can view educational materials, participate in online training webinars, and enjoy in-person educational opportunities. The SciQuest Customer Support team provides all SciQuest customers with a high level of technical support service throughout their entire contract lifecycle. The Customer Support team is available by telephone, e-mail, and web-based support 24x7x365.

The SciQuest fee structure is set up with renewable SaaS licenses and initial implementation, and allows customers to pay for only the software and services they need to be successful. Suppliers have full access to their SciQuest customers through the SciQuest Supplier Network with no supplier fees.


About PayStream AdvisorsPayStream 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) 523-7357 or visit us on the web at www.paystreamadvisors.com.

P2P for Financial Service Providers · seeking information regarding P2P automation. The report...

Documents

Transcript of P2P for Financial Service Providers · seeking information regarding P2P automation. The report...