BBVA financial services group; $740 B total assets; 7,400 branches; 107,000 employees; (footprint 30 countries)Major Business Units: Corporate Banking, Retail Banking, Wealth Management3 largest areas of operation: Alabama (3), Texas (4), and Arizona (5)
Procure-to-Pay Professional implementation mid-late 2010 (August)Spend Visibility and SiPM implementation mid-late 2009 (August)Contract Management Basic implementation (replace ECMS) late 2010 (December)
All processes were owned by the LOBs and invoices paid through AP60% of all AP spend was identified as sourceable based on categorization of suppliers (not products)Training and communication involved earlyDetermined all information would be provided by external systems4. Top suppliers identified based on spend and transaction count
Bad data collectionLOBs submitted invoices to AP, LOBs signed additional contracts, AP created new suppliers based on invoicesExternal data sources stored incorrect informationProcurement splintered (Functional and IT)Sourcing ineffective based on limited criteriaPurchases made based on LOB’s recommendationsTraining and communication fell short based on initial reach but no follow-upsNot enough resources to handle basic requirements (lack of motivation and cooperation)Majority of supplier relationships existed directly with the LOBs rather than Procurement (name dropping)Cannot control 60% of spend when relationships are owned by the LOBNo guidance regarding approval hierarchies; information provided was outdated and incorrectSuppliers may choose not to use the system due to fees, additional steps, or fear of traceable spendTraining and communication fell short based on initial reach but no follow-upsPackage was limited to a small portion of Ariba’s abilitiesCommunications were disregarded based in the manner in which they were deliveredNo true champion for product; historically shown to be a money pit with limited potential from a system perspective
Ownership of the system changed hands along with a new philosophyIdentified the actual processes (all of the truths and issues) developed several iterations to a future stateAdding structure to a chaotic environmentTraining handled solely by the Ariba Operations GroupCommunication plans developed and sent on a schedule as well as remindersPolicies were never considered prior to the system’s implementation; new policies were developed and aimed at wrangling the outlyersDeveloped internal operating guide with job descriptions and rolesEstablished basic SLAs for standardizing supplier enablement (basis for productive employees)More practical outlookWhat can we do with what we have?Ensure the IT group understands the role of support; creating interface functions; white lists for external access; additional user restrictions or external mapping requirementsMoving the boulder – if you follow a process and make minor exceptions; fully document the process; the system will build itself and at some point people will take notice
Focus on contracts next initiative
Better communication:formula of communication lines # of lines for n people = n(n-1)/2Ex. 4 people equal 6 lines of communication 10 people equal 45 lines of communication You can see how this type of implementation can get out of control quickly
Transcript of "Breaking Barriers: Driving Continuous Improvement and Value in Your Spend Management Initiatives"