BasWare announces Key Performance Indicator Model to measure Purchase to Pay efficiency

Combined software and consultancy tool helps organizations to drive OPEX savings through continuous improvement of purchasing and accounts payable

BasWare today announced that it will be inviting customers to pilot its new Key Performance Indicator (KPI) model this summer. The tool has been developed in response to requests from customers who say they urgently need to improve the operational efficiency of their purchase to pay (P2P) process. The KPI repository comprises 119 metrics identified with the support of The Hackett Group, a strategic advisory firm, specializing in enabling executives to achieve World-Class performance by providing advisory, benchmarking and transformation services. BasWare will help customers to choose the relevant KPIs in their current situation, based on the customer’s strategic goals.

According to The Hackett Group, finance departments which intensively measure their performance are showing significantly better results in decreasing costs and improving the productivity of their operations. The result will be improved quality, increased productivity and ultimately enhanced customer service.

The BasWare KPI model sets recommended KPIs for the three main business critical financial processes: Purchasing, Accounts Payable and Travel and Expense Management. The KPIs measure cost, quality, productivity, strategic alignment and employee and supplier specific issues. For the Accounts Payable, these include the monitoring of incoming invoices per Full Time Employee (FTE); accessing the time between invoice reception and posting; reviewing the percentage of these that are posted within agreed days; calculating the percentage of wrong payments, and establishing the cost of processing each invoice.

“Improving operational efficiency is a major challenge for organizations today. Our work with The Hackett Group has demonstrated that the best way to achieve significant efficiency gains is to move from a short-term ROI strategy to one of continuous improvement. The BasWare KPI model provides the blueprint for this strategy. Together with the Enterprise Purchase to Pay software suite, it allows organizations to streamline and automate the purchase to pay process and establish real-time visibility, cost control and regulatory compliance,” explained Sari Aapola, Vice President of Global Product Marketing and Marketing at BasWare.  

The BasWare KPI model will be available to new and existing customers who have integrated all or part of the BasWare Enterprise Purchase to Pay (EPP) solution into their finance process.  The core KPIs will be agreed as part of BasWare’s wider Business Consulting service and can already be set, in advance of the full service roll-out scheduled for late summer.

The consultancy process will ensure that the data drawn from the BasWare EPP solution is measured against the correct KPIs to meet the specific goals and objectives of the customer.  Once the KPIs are agreed these will then be reviewed regularly against internal targets and against industry average scorecards set-up to enable the finance director to measure the efficiency of the organization’s P2P process. To enable an “apples-to-apples” comparison users can sign up to the BasWare KPI User Group where scorecards can be compared against other organizations.

“The best way to optimize the P2P process is to consolidate as many of its components as possible using a Shared Services model. Once this has been achieved, an end-to-end process view can be set up to look at strategy, optimization and ownership. This then needs to be tightly managed and monitored against the key performance indicators (KPIs) agreed,” explained Kai Zabel, Senior Manager, The Hackett Group.

“The BasWare KPI model is a great tool for driving efficiency in the P2P process. It is very flexible, ensuring the selection of KPIs and communication channels between the three key stakeholders - executives, heads of operations and team leaders - can be tailored to a departmental and individual level. Positive results should be fed back to maintain the success and build the foundation for incentive programs that will achieve even greater results. Equally, poor performance must be highlighted and followed up with root cause analysis to ensure that the same patterns are not repeated,” concluded Sari Aapola, of BasWare.

About the BasWare KPI Model

The BasWare KPI Model addresses major issues identified during ongoing global benchmarking programs conducted by The Hackett Group, and subsequent workgroups with BasWare at the end of 2005 and the beginning of 2006. The findings of both have provided the foundations for the KPI model. The combined efforts of these two market leaders took more than three months to develop the most advanced P2P KPI repository available. The consultancy service is already available to finance and procurement managers looking to enhance the P2P process. The interface with BasWare Enterprise Purchase to Pay will be available following the completion the pilot program this summer.

The BasWare KPI model is fully flexible, making the measuring of the P2P process straight forward to set up. Once in place it uses simple scorecards against which the success of current projects can be monitored and simple analysis of the results drawn. The selection of KPIs and means of communication can be tailored to a departmental level to ensure that appropriate KPIs can be set dependent on the role of the individual and function of the department. BasWare has identified three main groups; executives, heads of operations and team leaders.

A white paper outlining the finding of the research projects entitled: How to Set-up a Best Practice Key Performance Indicator Reporting System for the Purchase-to-Pay Process and be found at www.basware.com/whitepapers.

For further information, please contact:
Sari Aapola, Vice President of Global Product Marketing and Marketing, BasWare Corp.
Tel: +358 (0)40 759 2046

About BasWare
BasWare is the global leader in Enterprise Purchase to Pay and Financial Management solutions. More than 400,000 end-users in over 20 countries use its software to automate back-office financial operations to enhance efficiency, gain process control and transparency, and meet compliance requirements. BasWare’s products are widely used in Shared Service Centres.

In 2005, net sales reached EUR 42.8 million. The growth target for net sales in 2006 is approx. 45% and will continue to be supported by a growing network of value-added resellers.

Founded in 1985, BasWare Corporation is a public company listed on the Helsinki Stock Exchange. Headquartered in Helsinki, Finland, it has eight subsidiaries in the US and Europe. The company currently has 500 employees. The UK business is headed up by Esa Tihila and is based in Guildford, Surrey.

About The Hackett Group
The Hackett Group (www.TheHackettGroup.com), a strategic advisory firm and an Answerthink company, is a world leader in best practice research, benchmarking and business transformation services that empirically define and enable world-class enterprise performance.

Through the acquisition of REL Consultancy Group, a global leader in generating cash improvement from working capital, we offer Hackett-REL Total Working Capital services to liberate cash flow from operations through improved working capital, reduced costs and increased service quality. Hackett-REL has helped clients in more than 60 countries free up over $25 billion through working capital improvements in the last 10 years alone.

Only The Hackett Group empirically defines world-class performance in sales, general and administrative (SG&A) and supply chain activities with analysis gained through 3,500 benchmark studies over 14 years at 2,000 of the world's leading companies. Our clients comprise 96 percent of the Dow Jones Industrials, 77 percent of the Fortune 100 and 92 percent of the Dow Jones Global Titans Index.