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Jun 14
procurement managed services for PE

The Undeniable Value of Procurement Managed Services for Portfolio Performance

By Private Equity No Comments

Operating partners always search for innovative strategies to optimize portfolio companies’ performance.

Procurement, an often-overlooked area, presents a remarkable opportunity for cost optimization and improved operational efficiency.

The key lies in procurement-managed services.

The Game-Changing Nature of Managed Services

Managed services bring a fresh, data-driven strategy to procurement, transforming this traditionally administrative function into a powerful value driver. Backed by cutting-edge analytics and deep industry expertise, these services rapidly become a game-changer in procurement.

The Power of Intelligent Buying and Smart Spending

By shifting to managed services, one can realize an immediate 8% to 12% reduction in purchase costs. This is enabled by sophisticated analytics and a network of experienced procurement professionals who provide comprehensive support.

The approach is all about intelligent buying and wise spending, delivering sustainable savings across all spending categories.

Leveraging Volume Aggregation and Expert Insight

Managed services offer the advantage of volume aggregation and expert insight.

By aggregating demands from multiple clients, they can negotiate better prices, particularly in low-spend areas. Moreover, their scale provides deep expertise and real-time market insights across various categories, allowing us to learn from industry leaders and enhance our capabilities.

The Significant Cost Savings of Strategic Procurement Activities

The potential cost savings from strategic procurement activities are significant.

Consider this: one company slashed its operating costs by 19% by outsourcing its entire purchasing function. Another firm captured average savings of almost a third in its first three significant categories tackled following establishing a new central purchasing function.

The Need for a Well-Informed Perspective in Transitioning

Yet, like any strategic decision, moving to procurement-managed services must be made with a well-informed perspective. While effective for transactional activities, labor arbitrage can limit savings in strategic buying activities that require close internal cooperation.

Capturing the benefits of demand and specification management, which can account for 40 to 50 percent of total savings, also requires close collaboration with other business functions, which can be challenging for an outsourced provider.

The Transformational Impact of Procurement Managed Services

Procurement-managed services represent a significant opportunity for operating partners.

Leveraging advanced analytics, expert knowledge, and industry best practices can transform the procurement function of your portfolio companies into a strategic asset.

As always, it’s essential to approach this with a clear understanding of your portfolio companies’ unique needs and capabilities to ensure a successful transition.

As an SAP Ariba™ Gold Partner, Premikati is a leading services provider for all facets of Ariba™ and procurement in general.  To contact our team, click here.

Jun 05

The Power of Automation: Unleashing Efficiency with SAP Ariba Commerce Automation

By Procurement No Comments

Businesses today are realizing the urgent need for procurement and spend management innovation. Key decision-makers, particularly those in finance and procurement, seek solutions to streamline processes, boost efficiency, and improve organizational visibility. This is where SAP Ariba Commerce Automation enters the scene. 

 What is SAP Ariba Commerce Automation? 

SAP Ariba Commerce Automation is a solution designed to supercharge your procurement processes through powerful automation. Its primary goal is to enhance operational efficiency and ensure a steady supply chain by improving spend visibility and fostering efficient collaboration with suppliers. 

It’s a solution recognized for its innovation and effectiveness, with SAP being recognized as a leader in the 2022 Gartner Magic Quadrant for Procure-to-Pay (P2P) suites for the seventh consecutive time. 

Key Features: A Deep Dive 

SAP Ariba Commerce Automation comes with a suite of features designed to optimize procurement operations: 

  • Regulatory and Business Process Compliance: The solution ensures digital matching of invoices to POs and contracts, thus enabling compliance with regulatory requirements through e-invoicing. Transactions are validated based on configured business rules, reducing manual intervention and exceptions. 
  • Automated Procurement Workflows: The solution automates manual processes, freeing up workforce capacity, decreasing operating costs, and increasing productivity. It also enables digital delivery of POs to suppliers across a business network. 
  • Supplier Portal: The portal allows suppliers to flip a received PO on the network into an invoice, eliminating data entry and other errors. It also gives suppliers a view into invoice status updates, reducing inquiries. 
  • Invoice Status Portal and Transaction Visibility: This feature provides visibility into orders and invoices with a holistic view of spend. It allows suppliers to configure notifications to receive emails when their invoice status changes, promoting adoption for long-tail suppliers through self-service updates and invoice visibility. 

Impressive Benefits 

The benefits of SAP Ariba Commerce Automation are as significant as its features. These benefits include: 

  • Improved Procurement Compliance: The solution supports business process compliance with highly configurable business rules on the network. 
  • Automation of Spend Management Processes: The solution enhances productivity, lowers operating costs, and frees up people’s capacity by automating paper-based and manual processes. 
  • Increased Transparency of Business Spending: The solution provides a holistic view of organizational spending with greater visibility into orders and invoices in one platform. 

Recent Innovations and Future Outlook 

SAP is not resting on its laurels. Recent innovations and planned updates include: 

  1. Guided Buying: The next evolution in guided buying is here. The new capabilities improve the buying experience and leverage AI, intelligent recommendations, and machine learning. This creates a holistic view of what the buyer is purchasing and how it aligns with their organization’s environmental, social, and governance (ESG) goals. 
  1. SAP Central Procurement: The latest release of SAP Central Procurement addresses the challenges associated with centralizing procurement. It delivers the benefits of a uniform, centralized procurement system across all direct and indirect categories — without reworking individual solutions spread across the organization. 
  1. SAP Category Management: A new category management solution, SAP Category Management, is set to roll out this year. It will provide actionable market intelligence and category insights, empowering category managers and procurement professionals to make strategic category decisions. 

 

Statistics Highlighting the Importance of Procurement Optimization 

To underscore the significance of these advancements, let’s consider some compelling statistics: 

  1. Companies that excel at procurement have 20% lower costs, less supply chain disruption, and up to 55% fewer supplier defects (Source: The Hackett Group).
  2. High-performing procurement organizations operate at up to 21% lower labor costs (Source: The Hackett Group).
  3. According to Gartner, by 2023, organizations that have adopted AI in their supply chain management strategy will reduce errors by up to 50%. 

 

From the rollout of SAP Category Management to the enhanced supplier management and the integration of AI and machine learning, SAP is poised to redefine procurement and supply chain management. 

As procurement professionals, we must stay abreast of these developments, leverage these innovative solutions, and drive strategic value and business outcomes in our organizations. 

May 16

Unleashing the Power of AP Automation: A Strategic Move Towards Efficiency and Profitability

By Procurement No Comments

In an era where digital transformation drives sustainable business growth, one area that remains ripe for disruption is Accounts Payable (AP). AP automation is no longer just an option – it’s a business necessity that yields considerable strategic advantages, particularly for mid-market companies. This post aims to provide an in-depth understanding of the myriad benefits of AP automation to executives committed to fostering operational excellence, reducing costs, and enhancing cash flow management.

 

The AP Challenge: A Time and Resource Intensive Process

AP processes often contain manual data entry, paper invoices, and lengthy approval cycles. These processes are time-consuming and prone to human error, resulting in late payments, missed discounts, and increased operational costs. The lack of real-time visibility into AP data often leads to suboptimal decision-making, hampering growth and profitability.

The AP Automation Advantage: Transforming the AP Landscape

AP automation technology disrupts this status quo, offering a more innovative, efficient, and cost-effective way to manage AP processes.

Let’s delve into the specific benefits:

  • Time Savings: AP automation drastically reduces the time to process an invoice, leading to faster approvals and payments. This increased efficiency frees up valuable staff time that can be better utilized for strategic tasks, such as analyzing spending data or improving supplier relationships.
  • Reduced Operational Costs: Automating AP processes reduces the need for manual intervention, thereby minimizing the scope for human errors and the costs associated with rectifying them. Moreover, it can also decrease storage and postage costs associated with paper invoices. Calculate your potential savings here using SAP’s Buying and Invoicing Value Calculator.
  • Enhanced Cash Flow Management: With real-time visibility into outstanding invoices and payment dates, AP automation allows companies to optimize their cash flow. Companies can take advantage of early payment discounts and avoid late payment penalties, thereby improving their bottom line.
  • Decreased Rogue Spend: AP automation controls maverick spending by enforcing corporate policies and approval workflows. It also improves spend visibility, enabling companies to identify and mitigate rogue expenditures more effectively.
  • Improved Supplier Relationships: Timely payments and transparent communication foster healthier supplier relationships. This enhances supply chain efficiency and opens up opportunities for negotiation and collaboration.

The Powerhouse Duo: SAP Ariba Buying and Invoicing and Premikati

While the benefits of AP automation are clear, the choice of software and its implementation process is crucial.

SAP Ariba Buying and Invoicing is a robust solution offering comprehensive AP automation capabilities. It streamlines end-to-end procure-to-pay processes, enhances visibility into company-wide spending, and drives compliance and control across the invoice management process.

Yet, the success of any AP automation initiative is about more than just the software. It’s about how effectively the software is implemented and integrated with your existing systems and processes. This is where Premikati offers rapid implementation and deployment services that ensure a smooth and efficient transition to automated AP processes.

Premikati’s expertise in SAP Ariba implementation reduces the time-to-value, allowing companies to experience the benefits of AP automation sooner rather than later. Their robust training and support ensure that your team is equipped to leverage the software’s full potential.

AP automation is a transformative strategy that can significantly improve your business’s operational efficiency, financial health, and competitive edge. With SAP Ariba Buying and Invoicing and Premikati’s deployment services, your business is well-positioned to navigate the AP automation journey successfully.

Connect with us today to talk to our team.

Mar 27

Best Practices to Master Buying and Invoicing

By Procurement No Comments

CFOs and CPOs face numerous challenges when managing to buy and invoicing processes within their organizations. Efficient financial management is crucial to maintain a healthy cash flow, reducing risk, and making data-driven decisions. In this blog post, we’ll explore the top ten pain points related to buying and invoicing from a financial perspective, along with best-in-class solutions and supporting statistics.

 

Manual Invoice Processing

One of the most time-consuming and error-prone aspects of financial management is manual invoice processing. Automating this process with AI-based tools can significantly reduce the time spent on processing invoices and improve accuracy. According to the Institute of Finance and Management (IOFM), organizations that have automated invoice processing report a 60-80% reduction in invoice processing time.

 

Inaccurate Financial Data and Reporting

Access to accurate, real-time financial data is essential for making informed decisions. Implementing real-time data analytics and reporting tools can help CFOs and CPOs to achieve greater insights and improve decision-making. Companies that use real-time analytics experience a 54% improvement in decision-making speed, according to the Aberdeen Group.

 

Fraud and Compliance Risks

Fraud and compliance risks can have severe financial and reputational consequences for organizations. Enhancing internal controls with fraud detection and compliance management systems can help mitigate these risks. The Association of Certified Fraud Examiners (ACFE) reports that companies with strong anti-fraud controls can reduce fraud losses by up to 50%.

 

Decentralized Procurement and Purchasing Processes

A decentralized procurement process can lead to inefficiencies, lack of visibility, and increased costs. Centralizing procurement with a comprehensive, cloud-based procurement platform can streamline operations and reduce expenses. The Hackett Group found that centralized procurement can reduce procurement costs by up to 20%.

 

Inefficient Vendor Management

Managing vendors effectively is crucial for maintaining strong relationships and ensuring optimal performance. Implementing a vendor management system with automated vendor onboarding and performance tracking can improve the efficiency of this process. Deloitte reports that companies with efficient vendor management experience 26% faster vendor onboarding times.

 

Lack of Spend Visibility

Gaining granular, real-time insights into spending is essential for cost control and strategic decision-making. Utilizing spend analytics tools can provide CFOs and CPOs with the visibility they need to make informed decisions. Gartner states that organizations that leverage spending analytics can achieve up to 15% cost savings.

 

High Invoice Error Rates

Invoice errors can lead to payment delays, strained relationships with suppliers, and increased costs. Adopting a smart invoicing system with built-in error detection and prevention can reduce invoice error rates significantly. Ardent Partners found that companies using smart invoicing systems can reduce invoice error rates by up to 37%.

 

Slow Approval Workflows

Lengthy approval workflows can delay payments and hinder cash flow management. Streamlining approval workflows with automated routing and escalation features can expedite the process. PayStream Advisors report that organizations that automate their approval workflows experience a 45% reduction in approval cycle times.

 

Difficulty Managing Cash Flow and Working Capital

Effective cash flow management and forecasting are vital for maintaining financial stability. Implementing cash flow management and forecasting tools with real-time visibility can improve accuracy and decision-making. PwC found that companies that use cash flow management tools can improve cash flow forecasting accuracy by up to 36%.

 

Ineffective Budgeting and Cost Control

Budgeting and cost control are integral to financial success. Adopting an integrated budget management system with real-time tracking and reporting can streamline these processes and provide better insights. The Financial Executives Research Foundation (FERF) reports that organizations that implement integrated budget management systems experience a 33% reduction in budgeting cycle times.

 

By addressing these pain points with best-in-class solutions, CFOs and CPOs can significantly improve their organizations’ financial performance, reduce risk, and enhance decision-making capabilities. These improvements will ultimately lead to a more efficient and effective buying and invoicing process, allowing organizations to thrive in a competitive business environment.

Contact us to learn more!

Feb 16

Five Ways to Ensure your Sourcing Strategy Never Disrupts the Supply Chain

By Blog No Comments

Because sourcing is at the heart of any procurement strategy, it is critical to the success of your supply chain.

Poor sourcing strategies have a negative impact on the supply chain such as  downtime, low inventory, and a lack of supply chain transparency.

Here are five things you can do to protect your supply chain from disruptions:

1. Assemble the Right Team

It goes without saying that your supply chain requires people to function. More importantly, it requires the right people.

Consider the following when assembling your sourcing team; such as the ability to quickly learn, analyze large amounts of data, build long-term relationships, communicate, and negotiate.

2. Provide the Right Tools

In today’s supply chain climate, your productivity depends on the tools you make available to your team and the tools and solutions they have at hand can make all the difference.

With emerging technologies across the globe, the supply chain has never had the potential to be more efficient. 

A great example of a sourcing solution is SAP Ariba’s Sourcing tool.

3. Have a Solid Sourcing Strategy

Your sourcing strategy is used to find the most effective, efficient, and reasonably priced solution to your supply chain needs.

So, how do you identify the right product or supplier?

Here are some tips:

  • Understand the market trends. 
  • Always pick quality and time over price. 
  • Build relationships with several vendors in the market. 
  • Have clear expectations or targets. 

4. Have Multiple Vendors for Each Product Supplied

Building long-term relationships with your vendors or suppliers is extremely beneficial to the supply chain. However, if the pandemic taught us anything, it’s the importance of having backup plans.

Supply chains are more flexible, visible, and resilient than ever before. Despite this, there is still an element of uncertainty surrounding supply chains.

To be better protected, it is critical to work with more than one supplier. A great place to start is the Ariba network where over you can connect with over 40 million suppliers and growing!

5. Constantly Review Suppliers

A supplier review provides insight into the supplier’s performance.

Constantly reviewing a supplier ensures that potential disruptors are identified as soon as possible; giving you the opportunity to prevent them from causing harm to the supply chain.

To get the most out of your supplier’s performance, make a list of performance indicators. Quality, service, delivery rate, damages, compliance, innovative ideas, and cost are some examples.

Summary

Disruptions in the supply chain are undesirable. It’s not just that they cost the company time and resources, though those are significant. The unfavorability stems from the impact on the company’s customers.

What are some common disruptions in your supply chain?

One of your primary responsibilities as a supply chain or sourcing manager is to prevent disruptions. Particularly artificial disruptions. One of the most effective approaches is to develop an effective sourcing strategy.

For your procurement solutions and services, click here at www.premikati.com

Oct 13
Virtual Card

5 Reasons Why Virtual Cards Are The Future of B2B Spending

By Procurement No Comments

Virtual cards offer added safety, reduced costs, reduced waste, boosted cash back, unprecedented spend visibility, and instant reconciliation. That’s why we partnered with Ramp to bring our customers all of these benefits and more. 

In order to explain why virtual cards are such a boon for business expenses, it’s important to first understand what a virtual card actually is. A virtual card is similar to a credit card in that it has numbers, a date, and all of the information you’d normally use when inputting your card information for an online purchase. However, unlike a regular debit or credit card, you don’t keep using the same virtual card for years until it expires. 

Instead, a virtual card is like a disposable credit card that’s linked to your actual credit or debit card. A virtual card may be good only for a single purchase, a set duration, or up to a certain spend limit. After that, it’s done. You just get a new one.  Why would you want an endless stream of card numbers for your business? Well, there are actually a lot of reasons, especially if you’re still using paper checks or paper invoices. Some of the most important reasons to use a virtual card for your B2B spend include: 

Safety

Think about this—you don’t carry around the originals of your most important documents, do you? Like your social, birth certificate, or marriage license? Usually, we just give someone a copy. A disposable version that won’t really impact our lives if it’s lost. 

Virtual cards are kind of like that from a safety perspective. Avoid having your personal information stolen as well as interruptions that are likely to occur if you have to report fraudulent activity on your account and wait for a new card. Hackers and fraudsters alike are stopped in their tracks with a virtual card, though. And if you suspect suspicious activity while the card is still active, no big deal. Just cancel it and grab a new card number, leaving all your actual accounts in tact and safely away from the outside world. 

Even outside of privacy invasions and malicious actors on the web, internal fraud also has no room to grow. Because spend can be set for a specific limit and purchases are visible in real-time, there’s not much room for internal fraud to take hold. Consider it damage mitigation and risk prevention.

Obligatory COVID-19 tie-in: 

It’s 2020. We’d be crazy not to mention how (or if) virtual cards can help during the pandemic as business processes are completely upended in the name of social distancing. While some analog businesses are stuck dealing in papers and in-person contact, businesses that use virtual cards can manage their jobs quicker, safer, and from the security of home minus all the security risks. Virtual cards are one way to boost business continuity during the coronavirus. 

Reduce Costs (And Save The Trees)

Money is expensive, am I right? Not only is it costly to have people working to collect paper invoices, print paper checks, reconcile spend, and on and on and on, the simple materials cost alone is staggering. 

“Paper checks account for $12.5 trillion of business spend every year in the US alone.” –Tracy Kellaher

I don’t even want to contemplate what that means for the environment, especially if you start looking at envelopes too. 

Make two strategic strides at once by reducing paper waste and excess spend with the switch to virtual cards. 

Cash Back

Sure, some banks offer a little cash back on purchases, but what if you could get rewarded in ways befitting to a business? Not only do you get the added benefits of ditching the expense reports and the paper piles in favor of automated accounting, you could earn 1.5% cashback and possibly even more in rebates just for spending in the same ways you already do. 

Plus, you can maximize that cashback by utilizing dozens of cards across the company, because it will no longer be such a risk to equip your employees with a little company plastic. Cha-ching! 

Spend Visibility

Spend visibility is basically a buzzword now. It’s something you need in order to accurately track your finances and make wise choices about your suppliers. Through the use of virtual cards, you become equipped with basically instant full spend visibility for every analog method you replace. Easily view the 50k foot overview or a granular, single-user, single-purchase snippet of data, all updated in real-time. No more waiting. 

This offers a major boost to spend forecasting that can now be easily viewed filtered by category—e.g. department, merchant, or employee.  You can search, get customized alerts, and even find automated savings. 

Instant Reconciliation

Tired of chasing people down? Equally tired of waiting and waiting only to spend a bunch of time reconciling invoices? If you’re doing it the analog way, then that’s good—it means your brain already knows there’s an easier way. 

With virtual cards, you can experience the efficiency of instant reconciliation. Automatic categorization and receipt-matching plus accounting integrations let the old expense report take care of itself. With cards from Ramp, modern finance teams can save 5.4 days and $15k per month. And the really cool thing about that is… 

Premikati has partnered up with Ramp to provide unlimited virtual and physical cards to make managing your spend a breeze. Earn cashback, access more than $150k in partner rewards, easy accounting integrations and no fees. Plus, Ramp boasts 10-20x the limits of traditional credit lenders thanks to their novel underwriting system and a 30 day payment schedule with no interest. We’re excited to join together to help you find strategic savings from the best suppliers, safety, spend visibility, and a big win for the environment.  

 

Dec 31
cut procurement costs Premikati marketplace

Cut Procurement Costs – Not Quality

By Procurement No Comments

A New Year’s Resolution to Cut Procurement Costs, Not Quality

 

Many people take on personal new year’s resolutions such as to lose weight, but what’s often more important than the number on the scale is someone’s overall health quality. Similarly, many businesses want to cut costs, but focusing just on reducing expenses may not be the most sustainable way to grow overall.

For example, switching to a vendor that supplies lower-quality products, such as for IT devices, may reduce costs in the short-term, but if those devices break down faster, it can cost more overall to repair or replace them.

Thus, companies looking to save money in 2020 should make a new year’s resolution to cut procurement costs without cutting quality. To accomplish this task, businesses can leverage:

    • Purchasing Power: Either by consolidating spend with fewer vendors or by leveraging group purchasing organizations, companies can often obtain a discounted rate for purchasing the same products and services. For example, making tail spend purchases through a B2B marketplace can enable businesses to obtain better rates from suppliers based on the combined spend of the marketplace’s multiple clients. If a small or medium-sized business tried to negotiate rates based on just their own spend, they would have less leverage than a marketplace has when setting rates with suppliers.
    • Spend Insights: As companies improve their ability to track spending, they can more easily identify pure cost-saving opportunities that have no bearing on product or service quality. For example, using spend insights to identify erroneous purchases, such as incorrect pricing or accidental orders, allows companies to reduce costs without affecting any other areas of their business. Similarly, spend data may show that companies are going over budget with purchases that do not add much value. From there, businesses can implement stronger cost controls so that unnecessarily expensive purchases do not go through.
    • Productivity Gains: In addition to the direct cost savings that can come from negotiating better rates and cutting waste, businesses can also save on expenses and potentially increase revenue through productivity gains. For example, if a business can process orders and invoices more efficiently through a procurement marketplace, they may be able to reduce the costs of using a third-party accounts payable provider. Moreover, freeing up employees’ time to focus on more revenue-generating tasks can help companies grow, without adding expenses.

Start Saving With Premikati Marketplace 

To simplify tail spend purchasing and cut procurement costs without hurting quality, businesses can turn to Premikati Marketplace, which runs on SAP Ariba™ Buying and Invoicing. The platform provides an easy way to access great pricing on quality products and services, while also allowing businesses to implement cost controls, gain rebates and streamline the overall buying process. Altogether, businesses can reduce tail spend costs by around 30% through this marketplace.

To learn more about how Premikati Marketplace can help you achieve a new year’s resolution of cutting procurement costs without cutting quality, please get in touch with our team.

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