In 2014, Freshfields was planning to replace its outdated invoice workflow system after almost ten years in use. At the same time, our London headquarters were drawing up a plan to consolidate and partially replace its ERP and FiCo systems worldwide.
 
Accounting activities for all Freshfields offices in Germany and Austria are coordinated from the Frankfurt office. For our project team in Frankfurt, the goal was therefore to integrate the purchase-to-pay solution and then to roll it out on a global scale, with this project serving as a template. The invoice workflow was not only set to become electronic – the ordering process would also be embedded into it. So, we opted for Basware's purchase-to-pay platform, which features a modular design that makes it flexible enough to cover the entire ordering and invoicing process. This blog explores what we learned in the process and best practices for delivering a purchase-to-pay solution in an effective and efficient manner.

The Background

The scope of the project in Germany and Austria initially appeared manageable. In the old system, there were some 3,000 users at 7 locations in 2 countries. The company operated approximately 3,000 cost centers, receiving 26,000 invoices per year from 6,300 suppliers. Like many other companies, the supplier landscape at Freshfields is extremely diverse — ranging from the flower shop around the corner, to regional and national suppliers, to large global suppliers and everything in between.

The Project Team

A good starting point for ensuring a successful implementation is the composition of the project team. To ensure all potential challenges were foreseen, all business areas affected by the change were represented in our project team from the outset: Accounting, Purchasing, IT and Data Security — not forgetting Change Management, of course.

Three Factors for Successfully Implementing Purchase to Pay

The other factors affecting the success of a project such as this can be summarized in three common challenges: complexity, communication and collaboration.
 
The project team at Freshfields worked to proactively eliminate these issues with 3 key recommendations:

1. Reduce Complexity

Complexity refers to the diversity of the relations between elements in a system. Even in supposedly small projects, the level of complexity can be huge.
 
So, try to reduce complexity by questioning the status quo. Ask questions like:

  • Do this many users really need to have the rights to approve invoices?
  • Can an invoice be issued for each individual order item?
  • Can the supplier structure be changed if not all suppliers have the technology to follow the electronic invoice process? 

It is also important to keep an eye on the complexity within a project at each stage. This not only applies to the process but also to the new system. For example, we initially assumed that employees would quickly learn how to use the system as they already had ten years of experience with an electronic workflow. However, due to the significant technological developments that had taken place, the workflow for using such a system changed considerably. The switch was more like transitioning from driving a car to flying a plane than simply moving from an old car to a new car. Employees needed to learn the new system from scratch.

2. Communication

Communication refers not only to the exchange of information between people but also between systems.
 
One of the most important lessons we learned at Freshfields is: During a project, you can never communicate too much!
 
Although people might be heavily involved in the project during the kick-off, there is often a tendency to disappear or scale-back involvement once the basic conditions have been laid out. This can quickly lead to resentment and misunderstandings across the project team. You should therefore design a communication plan based on three simple criteria: Who, when and how?
 
We first identified the different interest groups, then considered what key messages these groups needed to hear, what the best communication methods for the individual groups were and what timing was advisable.
 
This involved a range of communication tactics. In addition to newsletters, the company intranet, large information events, smaller informal meetings and 1-to-1 discussions were extremely useful for gaining feedback from employees and bringing them on board with the project. The high communication density was maintained months after the go-live.

3. Collaboration

This point affects a number of spheres of activity. On the one hand, it involves the project partner, (e.g. the provider of the purchase-to-pay solution) and on the other hand, it involves internal interaction and collaboration with suppliers.

Collaboration with the Project Partners

  • Take advantage of the knowledge that your provider's employees possess. Business consultants play a special role in this respect, because they not only have excellent knowledge of the solution but also how it has been implemented for other customers. You can make the most of this knowledge for your project. By the time of the kick-off in London, Basware had enhanced its service portfolio with business consulting and their consultants for e-invoicing and purchasing were brought into the project – a real value-add!
  • Make use of best-practice solutions. Again, this approach is about harnessing existing knowledge, as best-practice solutions are based on experience gained from a large number of projects. We didn’t do this at first, which proved troublesome. We used a custom-built solution designed with an additional test step, which led to additional costs and problems during everyday operations. In the end, we had to undo this work, incurring further costs. So I can't stress enough the importance of starting with the best-practice solution and then assessing what works and what needs to be adjusted.
  • Make sure that there is a warm hand-off between your project manager and the customer service manager. Once a project is completed after the go-live, the project manager is no longer available, which can cause a breakdown in the support provided. A customer service manager can and should pick this up. Make sure that the customer service manager is doing their job, which will give you and your employees more confidence in using the new solution.

Internal Collaboration

  • If you do not have full support, right up to the top level of your company, this will affect your ability to make decisions and will sooner or later lead to problems. So, ensure that you have the backing of all levels of management right from the start. This is the only way that you will be able to make the most effective decisions during the project.
  • It is a bad idea to "bend" the software to avoid changing the old process. Instead, working as a team, consider how your processes should be designed or re-engineered to ensure that the solution can work efficiently, and adapt your processes accordingly.
  • Identify the product owner. The product owner is the counterpart of the customer service manager within your company. After the go-live, the product owner stays informed about everything to do with the new solution, answers questions if there are any problems, and identifies areas that need to be adjusted or where training is required. The product owner also acts as the interface between all departments.

Collaboration with Suppliers

  • Speak to your suppliers about the change at an early stage. Encourage individual suppliers to act as pilots. After all, you can only identify what works and what doesn't under real test conditions.
  • You will need to motivate and win over your suppliers too. In some cases, you will encounter resistance to changing processes, registering on a (new) platform and potentially incurring charges for this. Good arguments and a continuous supplier campaign are essential. Make sure that there is also someone responsible for this.
  • The increased efficiency and reduced costs achieved by introducing an electronic purchase-to-pay process are tangible benefits for the invoice recipient. The benefits for suppliers may not always be quite so obvious.
  • Ensure that the data used in the process is high quality to significantly reduce the cost and effort required for processing invoices. This will mean that your suppliers will get their money faster. In a manual process, the knowledge of individual employees will sometimes make up for bad invoice data; in an electronic process, this is no longer possible. So, work with your suppliers to ensure that the master data is correct!

And I've saved the most important advice to the end: With all the stress that the challenges of such a project can bring, remember to look back over your achievements and celebrate. Have fun!
 
Basware can also help you reach your goals when it comes to digitizing the purchase-to-pay process. Please contact us to arrange a no-obligation consultation.