Posts Tagged ‘vendor file cleansing’

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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Seven Tips to Avoid the Impact of Bad Supplier Data

Tuesday, December 6th, 2011

Bad data can be at the root of many finance and accounts payable challenges. And there are many ways vendor data can be processed that cause duplicate vendor files to be set up.

Consider the various ways that a company names can be constructed.  The screen shot below how the Lavante Recovery™ solution has located potential duplicate vendors based on phone and fax numbers matching for variously-named suppliers.

 

 

 

 

 

 

 

 

 

 

 

 

From inconsistent naming conventions, to the same vendors located at different addresses, the potential for errors are vast and the impact of this bad data can be dramatic.

Based on a recent research report by Jason Busch and Thomas Kase of Spend Matters, here are the top seven areas to focus on to avoid the costly impact of bad supplier data:

  1. Create an undisputed single point of reference – With processes to automate the supplier registration process, to collect supplier communications in a common repository and to assure data entry accuracy, organizations and dramatically eliminate costly errors.
  2. Adhere to compliance requirements – Technology solutions can build in flexibility to support new compliance requirements by dynamically engaging with vendors around business changes, reducing compliance turnaround.
  3. Assure security and privacy – In partnership with the Information Technology organization, Finance and A/P need to have strong adherence to security and privacy governance for data security, IP protection and information privacy.
  4. Eliminate payment errors – A focus on processes to eliminate payment errors will reduce expenses around reissuing checks, late payment penalties and reduce over-payments and duplicate payments which can occur whenever a vendor is set up twice in the system.
  5. Establish business continuity dependencies – Often owned by the Procurement team, business continuity impacts areas including material costs such as wrong parts, the cost of product or service disruption when stock runs out, operational overhead. It is also important to evaluate sales-side impact prior to making buys-side decisions, especially if a vendor is also a customer.
  6. Minimize overhead for supplier management – By implementing supplier self-service maintenance functions, organizations can minimize internal staff resources for data maintenance activities
  7. Automate using technology – Investments in technology will greatly improve your overall ROI as well as improve a company’s procurement professional utilization which can result in substantial savings.

The full white paper,  Developing and Maintaining Accurate Supplier Data – Overcoming Dirty Supplier Information in Finance and Procurement, includes much more about the importance of keeping vendor data files clean and up-to-date, along with a case study that details how one Fortune 500 Pharmaceutical company used Lavante Recovery to solve the problem and improve its recovery processes.  Click here to download the report.  Or, click here to read more about how Lavante Recovery helps cleanse vendor contact records.

 

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Posted in AP Industry, Lavante, Recovery Audit, Supplier Information Management, Vendor File Cleansing, Vendor Statement Audit | No Comments »

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Lavante is Pleased to Welcome Lennox Industries as a New Lavante Recovery User

Monday, November 21st, 2011

Lennox Industries Selects Lavante RecoveryEarlier this month we announced the addition of a new Lavante Recovery™ customer, Lennox Industries.  I’d like to share with you some of the compelling reasons why they chose our solution over other traditional, manual services.  Not only do these reflect what I see as the key strengths of our technology-driven recovery solution, but they underscore what we continue to hear other companies describe as critical needs in the recovery audit industry.

Lennox selected Lavante, in part, because of our ability to deliver: comprehensive statement audit process;  patented, SaaS technology allowing seamless access to all results through a web-based portal;  speed and ease of deployment which delivers fast, continuous results, and; vendor file management and data cleansing as part of the recovery process.

Lavante’s patented SaaS technology continues to drive a differentiated offering for companies looking to maximize recovery dollars.  Because of our automated processes, Lavante Recovery is able to reach out across the breadth of a company’s supplier base vs. a small sampling which manual process-based services are limited to.  Our web-based portal also provides our users with seamless access to real-time reports and a view of every aspect of the recovery process.

The speed and ease of deployment are other important criteria to Lavante customers.  Our solution does not  require on-site personnel nor extensive, complex data collection procedures, making it fast and easy to deploy.   And in today’s business environment, where companies are forced to take on more and more task with fewer resources, our customers recognize that Lavante Recovery deployment has minimal impact on both AP and IT staff.

Another important feature noted in this announcement is the inclusion of vendor file management and data cleansing as part of the entire recovery process.  Our outreach to the majority of suppliers combined with over 2  million suppliers in the Lavante Supplier Network means that we update and cleanse your vendor contacts, which also helps to identify potential duplicate vendors.

We are excited to be working with Lennox Industries, a leading provider of customized home heating, cooling and indoor air quality products.   Click here to read more about this recent announcement.

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

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The Connections Between Accurate Supplier Data and High Recovery Credits Discussed in Sourcing Innovation Blog by Michael Lamoureux

Monday, October 24th, 2011

automatically connect with suppliersEarlier this month, Michael Lamoureux, better known as “the Doctor”, posted two very informative blogs on Sourcing Innovation, focused on the process of statement side recovery benefits.  His initial entry, Recovery Audits – Are they Worth It, argues that indeed, with the right technology, the money recovered is significant.  He states:  “… using technology and analysis, some companies are able to recover an average of 600,000 to 1,000,000 in vendor credits for every 1,000,000,000 in a recovery audit… in some cases, the leaders are able to recover 5,000,000 for every 1,000,000,000, and that’s always worth it no matter how big you are.”  These savings expanded even more when the solution provider includes a “SIM-powered” technology, which helps cleanse data and literally clean up problem areas.

His next post, Lavante Recovery – A Risk-Free Way to Segue Into SIM  expands the conversation to discuss Lavante’s Recovery Audit solution, which has built-in SIM-type capabilities.  And, the article continues to cover how Lavante works to “identify omissions, errors, and inconsistencies in your supplier data.”  What I saw as the vision of the two posts is the clear connection Michael makes between clean supplier data (and the ability to keep it updated on a continuous basis) and the ability to drive the maximum recovery effort.

“The benefits of good supplier data and multi-channel reach-out cannot be underestimated where recovery audits are concerned…. With respect to the former, cleaner supplier data makes for more complete transaction data, which not only increases the chance of finding a duplicate, incorrect, or fraudulent transaction — but improves your follow-on spend analysis efforts (and results). As a result of its supplier data cleansing effort, Lavante is typically able to process at least 95% of spend through its recovery audit solution, which maximizes the chances that it will find the majority of your recovery opportunities.”

Our company’s founders, Joe Flynn and Tom Flynn, saw the connections between clean supplier data and maximum recoveries when they built out Lavante’s solution set.  Our SaaS-based solution set starts with an automated outreach to the breadth of our client’s suppliers, and then continues to update records through our supplier network database, now with over 2.3 million suppliers.  The continuous communication with suppliers results in very high compliance, which keeps our client’s vendor records current, driving the maximum amount of credits possible.

Michael is very astute in his observations and analysis.  I have been in supplier management business for 25+ years and very few are able to connect the dots between Supplier Audit Recovery and Spend Analysis.  In a future post I will dig further into Doctor’s comments on how Recovery leads to cleaner supplier data resulting in improved spend analysis, which in turn provides better sourcing and more effective supplier management.

If you are interested in this connection of vendor file management and data cleansing processes, as well as statement audit please visit our website.  And, click here to read more about Michael Lameraux and his Sourcig Innovation.  The two blog postings referenced here can be found at: Recovery Audits – Are they Worth It, Lavante Recovery – A Risk-Free Way to Segue Into SIM .

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Posted in AP Industry, Lavante, Procurement, Recovery Audit, Supplier Information Management, Technology, Vendor Statement Audit | No Comments »

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