How a Global Retailer Transformed Procurement with Cloud Source-to-Pay

Rapid growth and international expansion amplified the opportunity costs associated with immature procurement practices. In order to modernize, lower risk, and drive value, the client selected Optis Consulting to guide them through the Focus and Launch phases of their source-to-pay journey.

The Client

One of the world’s top apparel brands recognized as an innovative design hub with a focus their clients’ experience. With an employee count of over 15,000 and annual revenues exceeding $4b, this retailer boasts over 400 stores in 20 countries. 

The Opportunity and Business Case for Source-to-Pay 

The client has a strong corporate culture rooted in accountability, autonomy, and entrepreneurialism. The procurement process supported this culture by granting broad authority to front-line retail staff to purchase goods and services for their stores from suppliers in their local communities. Centralized corporate functions were granted similar autonomy, procuring goods and services from suppliers they knew and trusted with little support from procurement. However, with growing pressure on the brick-and-mortar retail industry, the company was faced with a difficult challenge: to reduce costs and risk in procurement and finance operations while preserving its localized, entrepreneurial culture.

By moving to a digitized buying process using a broad selection of in-platform catalogs and simple, automated approval workflows, the client could ensure front-line staff were buying from the right suppliers at the right price while still maintaining the flexibility and speed their culture demanded. In finance, there was a clear priority to move from their current OCR scanning solution to truly digital, touchless invoicing with automation and improved international compliance. Lastly, with competitive forces applying pressure to the maturing apparel market, the client identified an opportunity to go digital and streamline their strategic sourcing and contracting processes to better serve their business partners.

The client partnered with Optis Consulting in a two-phase project to address these top areas of opportunity. During the Focus phase, Optis worked with the client to understand their current maturity level, identify areas of greatest opportunity, develop the transformation strategy, and define the high-level future state procurement process. This culminated in an Optis-supported software RFP. As part of the engagement, Optis helped to uncover critical software requirements, supported the development of the RFP, and helped the client navigate the execution of the RFP.

After a thorough evaluation process with several source-to-pay market leaders, the client selected a best-in-class technology solution to provide the enabling platform for procure-to-pay and strategic procurement.

The Launch phase included transformation of key business processes, deployment of the selected software, as well as Optis-led project and change management. In addition to deploying the solution, Optis worked with the client to develop the business objectives and KPIs that defined program success, laying the groundwork for ongoing improvement efforts.


Phase 1: Focus
STRATEGY & SELECTION

The first phase had two primary goals:

  • To achieve alignment at an executive level in the program goals and required strategic changes; and,
  • To select the software solution that would best help the client achieve those goals.

In initial interviews with key stakeholders, it became apparent that maintaining the culture of autonomy was paramount. It was also made clear that while procurement, finance, and executives valued efficiency and savings, front-line staff (and particularly those in stores), valued speed above all else. Their world was dynamic and fast-paced, and the software needed to help them navigate that world, not put up roadblocks. Additionally, there was little desire to use policy to mandate that frontline staff use the platform or buy from specific, approved suppliers. Instead, leadership wanted the platform and the implementation to support the autonomy frontline staff had to choose who they wanted to do business with – especially at the store level. These initial findings wove their way into the high-level future state and software requirements. A polished user experience, a simplified buying experience, and a high degree of automation on the invoice side were key. The solution had to be so easy that people would use it voluntarily. Ultimately, these considerations were critical in the future state design and software selection and became key principles of the resulting deployment.

Phase 2: Launch
BUILD THE CHANGE

The project was led by Optis Consulting and the client’s procurement department with core team members from finance and technology teams, as well as the solution’s professional services team.

The project scope included integrating the solution to Oracle EBS for all master and transactional data, SailPoint for role management, and ActiveDirectory for SSO. This level of collaboration across organizations and amongst departments led to the development of a complete platform configured to meet the unique needs of all the business units. User experience and supporting the client’s entrepreneurial culture were both critical factors throughout this deployment.

As a result, the frontline users’ experience was emphasized throughout software selection, design, platform configuration, and in balancing integration requirements. Optis used an agile, iterative design-build approach that allowed users to see the impacts of design decisions during the build and course-correct as necessary. This maximized engagement ensured alignment with user preferences and, ultimately, improved user adoption. The project was guided by a well-informed, active, and engaged steering committee. Cross-functional senior leadership provided influence, strategic guidance, and made decisions quickly.

Reflection

The client went live with the solution’s procure-to-pay (P2P), sourcing, contract management, and spend analysis modules on-time and on-budget. The P2P module was deployed to all North American corporate offices and distribution centres for select commodities and departments with a plan for further enablement.

Later that same year, the client deployed P2P to all North American retail operations. Sourcing and contract management were deployed to the client’s centralized global procurement department and, after an initial pilot period, will be used for all sourcing projects moving forward. The client team is also leveraging spend analysis to support reporting of program KPIs.

  • Highlights from this implementation include:
  • Competition generated through RFP saved over $2.8M in licensing fees (5-year term)
  • Requisition approval cycle times have been reduced to <1 day
  • Invoice approval cycle times have been reduced from 11 days to 2 days

Areas of Focus

STRATEGY & SELECTION
During the Focus stage, the client ensured that there was not only executive buy-in, but also alignment on the strategic direction their implementation was taking them. This phase also ensured the right software was selected to meet the needs of their stakeholders.

PROCUREMENT EXPERIENCE
The strategy, solution design, and rollout were able to enhance purchase controls while also allowing frontline staff to retain their autonomy in deciding who to buy from. This was achieved by selecting an easy-to-use solution, integrating a broad array of catalogs, and simplifying approval workflows.

AP AUTOMATION
A major objective of this project was to achieve touchless invoicing. In order to do this, the project needed to implement the tools for truly digital invoicing, as well as increase use of purchase orders and receipts. The combination of these allowed for high-rate three-way matching, significantly reducing effort in the invoicing process.

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