On the mainstage at Coupa Inspire 2016, Bhargavi Kosaraju, Director, Product Operations and Procurement at KPMG, led a panel discussion with representatives from Aon plc and Capital One Financial focused on value-driven approaches to transforming spend management—a critical project that can drive enormous efficiencies across the procurement process, but only if the transformation is conducted effectively. Speaking on the panel were Chris Barker, Senior Director, Workplace Solutions at Capital One; Jon Buckbee, Senior Director, Enterprise Supplier Management at Capital One; Shardul Oza, Vice President, Global Spend Management at Aon plc; and Jim Kendall, Senior Director of Financial Solutions at Aon plc.
The panel discussion emphasized four key areas in transforming spend management: the centricity of customer value, outcome-based design principles, unified spend management, and the creation of a global core model. Both Aon and Capital One have focused their spend management transformations around these core ideas and reaped benefits along the way.
Focusing on Customer Value
The idea of keeping customer value at the center of spend management transformation kicked off the panel, with KPMG’s Kosaraju defining the concept as an approach driven by placing user success in the front and center of the business case, as well as procure-to-pay system selection, process and integration design, and training and development. For Aon, which has operations in 120 countries worldwide, this took the form of a focus on usability. Their geographic spread resulted in very little spend under management, Oza said, and they focused on usability to change this because they recognized that a solution no one uses is worthless. This has driven huge user adoption as a result.
The Capital One team echoed this sentiment. Buckbee said that, when they started looking for new spend management platforms a year ago, the Capital One team found solutions that were extremely feature rich but did not have good user experiences. That led to them questioning what the value was of a solution that could do everything, but did not have a high-quality user experience. As a result, Buckbee said that Capital One started to look for solutions that placed the user experience front and center—even going so far as to give up on a few features to get a solution their end-users would adopt.
Designing with Outcomes in Mind
Outcome-based design principles are meant to allow companies to focus on their end-goals. For Capital One’s Barker, this translates into an emphasis on what the solution is intended to do and where the company wants to go with its procurement solution. Buckbee added that Capital One has a number of value metrics accompanying their Coupa deployment, even going so far as to make an executive responsible for driving those metrics, which includes tripling the percent of spend under management. This has resulted in a mixed deployment team at Capital One where half focuses on usability and adoption, while others, like Buckbee, focus on how to drive value.
At Aon, Oza said they developed a picture of what success “looks like,” which came about as part of the financial business case for implementing a spend management solution. Some of the aspects of success, Oza said, are visible, but not measurable, and have an impact on results. Oza also said that it is vital to design for what you want the organization to look like in the future, and not for what the process is right now.
Creating a Unified Spend Management Team
The concept of unified spend management, KPMG’s Kosaraju said, involves bringing sourcing, procurement, and accounts payable together under a single spend management umbrella in order to harness the full power of a company’s spend portfolio. At Aon, this takes the form of the Global Spend Management group, which Oza heads and Kendall is a part of. Kendall said that having sourcing, procurement, AP, expense, and analytics all under a single organization allows them to make decisions much more quickly than it could with separate units. The single infrastructure provides visibility across the entire information flow, which has been transformative for Aon’s team.
At Capital One, Buckbee is a member of the Enterprise Supplier Management (“ESM”) team, which was traditionally limited in scope. Over the last few years, however, Buckbee said they added in all the relevant staff that had previously been embedded in the line of business; about 60 days after signing their deal with Coupa, they also pulled in other organizations like purchasing, supplier setup, and the invoicing help desk. Buckbee said they also began to think about what the organization needed to look like in the future, which forced them to work backwards and create the new team accordingly.
Capital One’s Barker added that they also realized some of the functions the legacy ERP team had done could be performed within the ESM operations team. This led to the development of an admin capability in the ESM operations team, which Barker said allowed them to take on many of the duties of the legacy ERP team—a huge efficiency win for Capital One.
Scalability with a Global Core Model
The idea of a global core model involves developing a scalable global solution, which Kosaraju said allows for standardization where relevant and customization or localization where necessary. For Capital One, this meant creating an implementation that was roughly 90% standard but allowed some “wiggle room” for items like Value-Added Tax and other localization needs. Barker noted that they only wanted to build the system integrations one time, and involved everyone across the company—in the UK, North America, the Philippines, and elsewhere—so they could get base requirements “out of the way” and be able to operate from a business enablement perspective instead of an integration one.
Aon’s Kendall said that the company operates in 120 countries across four distinct business lines, so they wanted to build a single integration that would allow them the ability to “socialize” the system with each geography and see what localized changes to make. Oza added that they had a global design workshop in Lincolnshire, Illinois, last year that involved country heads from multiple geographies, so they hammered out what was needed early and could focus then on localizations.
Final Thoughts: The Next Steps in the Spend Management Journey
Much of the panel discussion emphasized the possibilities inherent in spend management automation, as well as how Aon and Capital One addressed how to handle complex implementations. For global companies in particular, implementing a single spend management solution—while tremendously valuable—can be difficult. Aon’s Kendall, for his part, said he was worried last year about how they would actually implement the program, but today his focus has changed to how well they can use all the data that they now collect. Capital One’s Barker, on the other hand, said he expects that their spend management implementation will only get better. Only time will truly tell, but the fact remains that Aon and Capital One have taken the plunge to automate spend management and have already begun reaping benefits.
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