Posts Tagged ‘Supplier Information Management’

Benefiting from a Prescription for Clean Data: A Case Study

Tuesday, January 24th, 2012

A recent case study developed by Spend Matters details  how a North American and global procurement organization for a top five pharmaceutical company applied a defined exercise and solution implementation from Lavante to discover where it had excess risk exposure, lack of policy compliance, overpayments and other cost driving issues. The procurement organization, which primarily focused on order-to-cash, procure-to-pay, credit and collections was ultimately able to trace all of its challenges in these areas back to weak or missing vendor data.

As the case study details, the company already had some of its vendor data under active management, but many vendor data points required enhanced management. Critical data with inaccuracies included:  remit-to addresses, parent child connections, duplicate vendor entries and incomplete fields including TIN, email and fax numbers.

If the organization had embarked on its data cleansing efforts internally, the benefits would not have cost-justified the task. As such, it decided to work with an external partner. After evaluating a number of providers, this pharmaceutical company selected Lavante based on the power of its underlying technology and the portal it offers to access it. Lavante also offered a breadth of coverage to reach the majority of the pharmaceutical company’s vendors rather than just the top 10-20% of its vendors.

The company implemented the change process by centralizing data quality through one common channel in order to ensure accurate books. To achieve this, the solution was integrated with the pharmaceutical company’s vendor outreach and registration process through four key components: validation, updates, augmentation and de-duplication to primarily find duplicate payments.

To read more about this process, download the full case study by clicking here.
It clearly demonstrates how this global pharmaceutical company was able to recover $5MM in credit opportunities based on a total spend of $10 billion. In order to have the same EPS impact, the organization estimated they would have needed to generate between $50MM and $100MM in new sales.

An underlying platform for credit recovery proved to be the key success factor. Previous, largely manual consultant-led activities focused on only top vendors and their “statement reviews” and led to a lower recovery rate. In contrast, the Lavante platform cast a wider net, and this broader reach resulted in additional recovery opportunities that had been previously overlooked. This was critical for this pharmaceutical company as the top 10-20% of vendors were already “over-farmed” and the next tier down was where the most significant potential for recovery was found.

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Posted in AP Industry, Case Study, IAPP, Lavante, Recovery Audit, Shared Services, Technology, Vendor File Cleansing, Vendor Statement Audit | No Comments »

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Supplier statement audit can provide important insights before your next sourcing decision

Monday, August 8th, 2011

With the increasing pressures on the profit margins, the efficiency of the procure-to-pay (P2P) processes has been under intense scrutiny within an enterprise.  Typically, Procurement and Finance organizations manage various aspects of P2P processes.  Thus, for a successful execution of the entire P2P process, each organization needs to understand the actions and motivations of the other.  This P2P mindset threads procurement and payment activities into one continuous lifecycle.

With this in mind it is a worthwhile to consider the details of the entire cross-functional process.  At the front end, one will encounter any number of sourcing and procurement activities where highly trained professionals are chartered to identify the best possible suppliers to buy the best possible products or services at the best possible cost of ownership.  At the far end of the P2P lifecycle, one will encounter Accounts Payable (AP) department whose goal, as told to me by one industry expert, is very simple, “To pay the right entity, the right amount, at the right time.”  This is a simplification of course, but generally, all professionals in the space are pursuing some combination of these stated objectives.

Typically these departments are measured, evaluated and guided through an exhaustive suite of metrics.  A number of sophisticated software applications and service providers stand ready to review, in fine detail, how efficiently resources are being spent across commodities, geographies, business units and supplier types.

Having been a practitioner in this space, I can tell you that even though the concept is simple, AP departments face a number of external factors that constantly challenge their ability to achieve transactional perfection.  As a result, the last decade has seen the emergence of “supplier statement audit” which routinely reviews the transactional (read: payment) history of the enterprise to determine the efficiency of the supplier payment processes.  For too long such supplier statement recovery auditing has been confined to the AP suite as a tool for improving the efficiency of Accounts Payable.  With increased focus on the broader P2P process, supplier statement recovery audit results should be more frequently evaluated by the procurement professionals in the context of the larger supplier management process.

There are many benefits to combining supplier statement audit results into the associated procurement metrics, such as supplier scorecards or spend analytics.  Procurement departments have as much or more to gain by evaluating the results of the recovery effort as do AP departments.  Here are just a few ways procurement can gain from incorporating a review of statement audit results:

      • Statement audits can reveal profit leakage, which procurement needs to understand in order to assess larger budgeting or savings opportunities that may exist. 
      • Analysis of recovery claims can reveal valuable  insights that will better inform future procurement activities, such as  overlooking the related nature of separate suppliers and missing out on pricing  discounts. 
      • Procurement can identify suppliers that routinely  commit transactional errors and incorporate those suppliers’ lack of accuracy in  the supplier scorecard for a more holistic supplier evaluation. 

As a best practice, build in a process to review supplier statement audit results before your next supplier strategy review.  It will provide important insights for managing suppliers.

I would welcome your thoughts on this topic.

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Posted in Lavante, Recovery Audit, Shared Services, Supplier Information Management | No Comments »

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Top 5 Changes Coming to AP – Collaboration and Cooperation

Wednesday, July 27th, 2011

Top 5 Changes to AP

In this post, I’d like to present the final two changes we see coming to AP, that will drive efficiencies and increase the value that AP brings to an organization.  In two previous posts, we covered the first three changes:

1.  More Importance Will be Given to the Quality of Supplier Information
2.  Supplier Networks Become a Reality
3.  Technology Provides New Ways to Automate AP Systems & Processes

Here, I present some ideas related to the final two changes:

4. Buyers & Suppliers Collaborate
5. More Cooperation between Finance & Procurement

All of these changes are discussed in a recent webinar I co-presented with Bob Cohen, VP Marketing at Basware, which can be viewed by clicking here.  And, here is a quick overview of the final 2 changes.

4.   Buyers & Suppliers Collaborate

The desire to bring buyers and suppliers closer to together is not a new concept, but it is one that is gaining more attention and momentum.  The potential benefits — from reducing transactional and administrative costs, to streamlining business processes — are just too great to ignore or put off for some unknown future date.  But, there are challenges that must be overcome, as each department has its unique set of requirements.  These can be overcome by focusing on better connections between buyers and suppliers, which then helps drive more timely access to better data.

The first step in the process is to improve the electronic connections between suppliers and buyers.  Moving away from paper-based, manual processes to electronic, automated processes serves to dramatically speed transaction times while reducing errors It also provides the opportunity to proactively use current data to drive better deals for your company.  Timely access to current data will help in setting better terms, more advantageous payment schedules, the ability to leverage product delivery issues (i.e. shipment is delayed, so payment should also be delayed), or to best determine payment timing strategies.  This all will help improve cash flow and streamline business processes for added cost savings.

5.   More Cooperation between Finance & Procurement

Improving the working relationships between finance and procurement is another area of potential organizational benefits, and one we predict is already in play.  Considering the different perspectives and roles that Procurement, AP, Finance, and Suppliers play within the P2P cycle, the potential for departmental disconnects are great, making the benefits to gain in harmonizing the connections equally as significant.  Accounts Payable is in a unique position to be the key convergence point for Procurement, Finance and Suppliers.  Placed at the center of these three entities, AP has the opportunity to add great value to the overall organization.  For example, where procurement is focused on what is spent, AP has the data to know what is spent, and when it is delivered.  With AP at the center of these three entities, they are in a position to deliver critical, timely data to procurement enabling them to negotiate better terms, improve deliver and receipt of goods, etc.  In this scenario, AP takes on a much more strategic and indispensable role in achieving organizational goals.

This has been a very quick overview of what we see as critical changes coming to the AP environment. For a more in-depth discussion around these points, please download the webinar by clicking here.

We will be posting additional material on these topics over the next few months.  We welcome your thoughts about changes you see which will impact AP and Procurement.

 

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Posted in AP Industry, Lavante, Procurement, Shared Services, Supplier Information Management | No Comments »

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Joint Webinar with Winshuttle Explores Automating Links from AR to AP

Wednesday, July 13th, 2011

Streams of dataLast month, Lavante teamed up with our partners at Winshuttle to offer a unique look at how our combined solution is able to automates a stream of recovered dollars back to your company’s bottom line. During the session, we focused on how our technology solutions work to streamline a company’s SAP financial recovery auditing processes, resulting in lowering transactional errors and credits with suppliers.

The webinar focused on the following:

    * Minimizing the impact and time required to access real-time SAP Financial data
    * Leveraging access into your supplier records to drive dollars back to your company’s bottom line
    * Improving the accuracy of financial data and supplier records in your ERP System
    * Using the Winshuttle/Lavante solution to self-fund the joint-installation of both technologies

Click here to see a short video with an overview of what we discussed in the session.

And, to view the webinar, please click here.

I’d love to hear your thoughts about the material presented.

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Posted in AP Industry, Lavante, Recovery Audit, Vendor Statement Audit | No Comments »

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Part 1 – The Future of AP: The Top 5 Changes Coming to AP

Thursday, June 16th, 2011

Top 5 Changes to APAt last month’s IFO Fusion conference in Orlando, my good friend and colleague Bob Cohen (VP, Marketing at Basware) and I presented what turned out to be a very popular session, The Future of AP: The Top 5 Changes Coming to AP. Although an obviously ambitious topic, it is one that both Bob and I care deeply about. In our capacity as marketing professionals in the AP market, we are consistently exposed to the client voice not only as representatives of our own companies, but also at the numerous industry conferences we constantly attend across the nation.

This presentation was the distillation of literally hundreds of conversations with finance and technology professionals over the past two years about what AP professionals and the AP market have identified as the key to becoming increasingly efficient, productive, and more relevant in today’s business environment.

The list that follows outlines what we see as the top five changes coming to AP:

1. More Importance Will be Given to the Quality of Supplier Information
2. Supplier Networks Become a Reality
3. Technology Provides New Ways to Automate AP Systems & Processes
4. Buyers & Suppliers Collaborate
5. More Cooperation between Finance & Procurement

In this post, I’ll add my thoughts about about the first two points; the remaining items will be handled over the next two weeks.

1. More Importance Given to the Quality of Supplier Information

Improving supplier information is an elusive but increasingly seen as a critical goal in AP departments. Lavante benchmarking data indicates that every year over half of any company’s suppliers will change some significant contact attribute in their AR department. These changes – ranging from the primary contact, physical address, or email – can dramatically affect an organization’s ability to interact with that supplier and maintain transactional excellence.

A rapidly-decaying vendor database has real hard costs associated with it. Consider the potential loss of missed discounts, unanswered phone calls, or miss-directed checks as just a few possible outcomes of incorrect contact data. There is an enormous financial upside to improving and maintaining the highest quality of supplier data. This issue gains increased relevance as industry analysts are focusing attention on this new vendor data management market* and technology providers, such as Jigsaw and Lavante, deliver solutions to help companies effectively automate this process.

Improving supplier data offers a great benefit across the larger procure-to-pay life cycle by providing both procurement and finance with one uniform, single source of truth that will drive improved procurement activities as well as payment processes.

2. Supplier Networks Become a Reality

Simply put, a supplier network is inevitable. Numerous software providers are emerging and gaining momentum as network providers, although a clear market leader is yet to rise to the top. It is obvious that AP professionals are increasingly interested and excited to leverage the benefits and functionality that a comprehensive supplier network can offer.

We see the emergence of a supplier network is a natural for two major reasons.

    • A network most closely resembles what is fast becoming the favored means of communication amongst large, disperse groups – social media. Consider when you buy products on Amazon and the instant access you have to what others think about the seller and the product. Think also about how quickly you can use Facebook to inform your entire family that you are safe after a natural disaster has struck your geographical region. Or, the use of Linked-in to seamlessly communicate well-beyond your personal network to professionals in your field. AP departments (and all business for that matter) have much to gain from adopting this same level of immediacy and efficiency!

    • A supplier network should deliver equal benefits to both supplier and customer. Ultimately the winning technology will deliver the greatest benefits across both populations in order to drive adoption.

Click here for part 2: Technology Provides New Ways to Automate AP Systems & Processes. The final installment will come shortly with: Buyers & Suppliers Collaborate and More Cooperation between Finance & Procurement. Please add other ideas about what you think is coming in the AP industry.

Lavante & Basware will present a webinar on July 13 at 11am PDT on this topic, covering these top five changes. Click here to find out more and register.

* See Jason Busch’s Spend Matters blogs for more discussion around vendor data management, supplier networks, and other P2P issues.

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Posted in AP Industry, Lavante, Shared Services, Supplier Information Management | No Comments »

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Why Supplier Information is like Precision Machinery

Monday, June 13th, 2011

Precision InstrumentFor years, procurement organizations had as its primary charter to best manage spend and spending activities. The concept of “spend” comprised several different elements:

- Suppliers
- Supplier Contractual terms
- Purchasing volume with those suppliers under control of agreed upon terms

In pursuit of maximizing/managing spend, many procurement professionals have devised numerous intelligent methodologies for selecting the correct suppliers and for negotiating the best possible terms. Unfortunately a lot of the work done on these matters exists as a point in time. For example, selecting a supplier at a single point in time and you set contractual terms at a point in time to last for a period of multiple years. What is not accounted for is that as soon as you lock in a contract with a supplier much of the details regarding the supplier will begin to change almost immediately.

Just like precision machinery, supplier information degrades over time if not maintained properly. For example, Lavante often finds that a customer’s supplier file includes nearly ten percent overlap in the supplier population. That is to say one in ten suppliers are related to some other supplier in the population – but that connection is not visible to the customer. This unseen linkage between suppliers can lead to significant profit loss in the form of missed price breaks, volume discounts, and rebates.

True spend management requires the best of breed technology and processes to select suppliers and negotiate terms. In addition, due to the constantly changing landscape, it is important to manage and refresh the supplier information in real time so that enterprises have ongoing visibility into the constantly evolving relationships within the supplier population.

Precision machinery requires lubrication, sharpening and maintenance at continuous, frequent intervals. Similarly, accurate and well maintained supplier information can reduce unnecessary errors which will help you avoid over-payment all while improving organizational efficiencies and providing your company a competitive advantage in strategic relationships.

To find out more about Lavante’s solutions to help maintain supplier information please click here.

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IAPP Fusion 2011 Delivered AP Thought Leadership – From 1099 Reporting and Statement Audit Best Practices to Innovative Technology and Team Building

Thursday, May 19th, 2011

This year’s Fusion (May 8-11 in Orlando, FL) began with the announcement of the association’s name change from IAPP to the Institute of Financial Operations (IFO) – which was exciting news for everyone present at the conference. The conference then fulfilled on its promise to present thought-provoking sessions along with ample opportunity to network with AP and Shared Services professionals.

Here are some themes I heard rise to the surface throughout the four-day event:

    • Tax & Compliance Issues: Numerous sessions and discussions were devoted to this topic. Attendees were looking not only for more understanding about regulations, but specific details on how to move from non-compliance to compliance. Two recurring examples were the changing landscape around the 1099 reporting laws and foreign citizen reporting.

    • Automated, Comprehensive Statement Audits: PayStream Advisors & Lavante held a joint session presenting new research on Statement Audits as a Best Practice in Recovery Auditing, focused on the difference between traditional AP recovery audits and dedicated statement audits. The audience expressed great interest in innovative technology for statement auditing, as well as the resulting increased recovery dollars and vendor updates. Lavante’s booth was constantly filled with prospects wanting to learn more about our statement audit technology.

    • Selecting & Deploying Innovative Technology: Not only were there sessions devoted to this subject, but considerable activity on the exhibit floor. I met with several Lavante customers attending the conference specifically to look for technology to help with invoicing and supplier management. The high interest in this topic was clearly demonstrated when the joint session led by Basware & Lavante, The Future of Accounts Payable: Improve Data, Improve Processes, Discover Technology had the highest attendance of any conference session (over 100, standing room only).

    • Building a Strong, Motivated Team: Many sessions and considerable “buzz” was devoted to how to motivate and build a strong, successful AP team. I saw sessions and witnessed many hallway conversations that focused on cost-effective ways to reward and recognize internal staff in order to build the best, most productive team possible.

These are just some of the main themes that I picked up at the conference. I welcome feedback from others attending the conference about great sessions or themes you saw emerging.

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Lavante Awarded The Industry’s First Statement Audit Patent

Tuesday, April 5th, 2011

Last week, we announced that Lavante was awarded a new patent by the U.S. Patent and Trademark Office. Patent Number 7,908,188 was awarded on March 15 and covers Lavante’s statement audit processes, technology and software application. This is a huge step for Lavante and a huge step in fundamentally changing the recovery auditing industry.

I’ve been working in the recovery auditing industry for over 16 years and I recognized an opportunity for large corporations to recover credits that are sitting out at their suppliers. I also realized that the manual processes used in traditional recovery audits were not going to scale to support an ongoing, full-scale review of supplier AR records. I founded Lavante in 2001 to build the processes, technology and application to automate the end-to-end statement auditing process.

Today, we’re the only automated solution for statement auditing in the market and this patent is an amazing validation of our original vision, our execution, and our technology leadership. I am so proud of the company and team that we’ve built. We’re experiencing record growth in our customer base and revenue, while partnering with our customers across industries help them find ongoing dollars out at their suppliers. At the same time, we help our customers improve their processes, data and relationships with their suppliers.

Our future vision gets even more exciting. We’ve taken our experience with supplier communication and management and we’ve expanded out product footprint to include Supplier Information Management (SIM). With a single platform for both recovery auditing and supplier information management, we’re offering the market a unique, self-funding combination for supplier AR reconciliation and quality supplier data. No one else in the industry provides this combination!

We recently closed a round of funding led by SAP Ventures. Here is how our new board member, Andreas Weiskam, Managing Director, SAP Ventures, describes our new patent:

“Lavante is filling a critical technology gap that has existed between companies and their suppliers. The ability to automate supplier communication and AR reconciliation is a game-changer for large corporations. The award of this patent validates Lavante’s visionary approach to technology and processes to the audit recovery market.”

I welcome your thoughts about this exciting development and how you see it will move the statement audit and recovery industry forward.

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Lavante SIM for Supplier Information Management

Wednesday, August 11th, 2010

Hello All,

I am very proud to announce that Lavante SIM was released for general availability on August 9th.  This launch marks the expansion of our vendor file management services into a larger suite of supplier information management products and services.

Lavante SIM has been created specifically to address the feedback that we have received from the market over the years about the challenges that all of you face.   Lavante has learned that supplier information is integral to optimizing relationships with suppliers and for maximizing the value from your ERP system and other automated solutions.  Used correctly, a well-kept supplier master data file is a strategic asset that you can leverage into time savings, resource savings and dollars to your bottom line.

The collection and management of supplier data is more important now than ever based on the growing number of regulations and controls that your departments are faced with.  In that last years alone stricter penalties and controls have accompanied new OFAC screening laws, Sarbanes Oxley and diversity mandates (to name a few).  In just the last few months, 1099 tax legislation was included in the new health care bill which will require you to collect TINs, W-9s and W-8s and to perform 1099 reporting on a larger scale than ever before.  Your companies will likely need to implement new policies and new systems to manage supplier information and stay in compliance.

Lavante SIM has been built as a direct solution to the challenges that you and your departments face.  The on-demand application is the industry’s most advanced solution and enables companies to proactively engage with suppliers on an ongoing basis.  The product drives 8 times the compliance of any other competitive solution and manages communication across the entire supplier lifecycle, from on-boarding, to data capture and validation, to automated maintenance.  Lavante SIM can help you with vendor master file cleansing as well as TIN collection and validation against the IRS website.  The product will even help to reduce costs and labor of ERP installs and upgrades.

We are proud to announce the delivery of this revolutionary product and we are proud to work so closely with our clients to create real solutions to major industry problems.  I encourage you to reach to your Lavante contact person or to visit the Lavante website at www.lavante.com to learn more.

Thanks for taking the time to read this,

Joe Flynn, Founder and CEO, Lavante Inc.

Lavante Supplier Information Support:
408-754-0491
888-610-0757

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Posted in 1099 Reporting, AP Industry, Lavante, Supplier Information Management, Tax ID Numbers, Technology | No Comments »

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Supplier Information Management (SIM)

Thursday, April 29th, 2010

A week ago I blogged the answer to some questions about a recent press release regarding our Q1 growth… in the blog I let slip a teaser about a new product…  after a few more queries…  I will reveal the following:

Powered by the underlying Lavante ConnectTM platform which is hands down, the premier tool for driving communication compliance across a supplier population of any size, Lavante has unified their development team of 13souls under one game changing goal: Supplier Information Management (SIM)

This is not what you have read about anywhere else, this is not vaporware, this is not one way.  This is the soup and the nuts.  This is hard ROI…  You get both the industry leading recoveries and the supplier information together.  Pays… for… itself…

This is connection to all suppliers… for all of your departments with workflow and automation and two way communication with the click of a mouse.  This is data and docs and proactive updating based on your needs and controls.  This is much more than you have seen anywhere else but you need to hold on for a few more days…

Blast off is on May 11th in Dallas.

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Posted in Supplier Information Management, Tax ID Numbers, Technology | No Comments »

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