SBC Services enhances procure-to-pay process
President of procurement outlines the efficiency gained with online tools at napp conference
Staff -- Purchasing, 4/7/2005 2:00:00 AM
"Standardization and automation are my story," announced Maureen Merkle, president of procurement at SBC Services in San Antonio, Texas at the 13th annual conference of the National Association of Purchasing and Payables held recently in Orlando, Fla. Merkle spoke on the topic of streamlining the procure-to-pay process before 300 procurement and accounts payables professionals.
Merkle has overall responsibility for all of SBC's purchasing activities, which include an annual spend of more than $9.4 billion in 2003. SBC was created through the merger of several smaller telecom firms including Ameritech, SNET and Pacific Telesis and is in the midst of acquiring fellow telecom giant AT&T.
The drawback to such a growth strategy is that the purchasing organization was left with using several disparate regionalized purchasing systems and processes—many of which were still very manually intensive. For example, SBC's procurement organization was unable to generate a single spending report for a particular commodity through its existing systems—it had to pull four separate reports and mix and cross-reference.
"It was clear we had to critically streamline the purchasing operation and systems," said Merkle. To do this, her group performed a series of activities simultaneously to both standardize and automate purchasing processes.
Merkle's group created a link from the procurement organization's homepage on the company intranet called "Purchasing Central," which provides all SBC employees with access to a single internally developed e-procurement system called Automated Procurement Management System (APROMS). Purchasing Central also provides users with updated purchasing policy information on such topics as order status, invoice and supplier payments and training.
In a nutshell, Merkle says, it provides users with responses to such questions as: How do I buy things? How do I take care of such accounting issues as designating cost or budget center?
With APROMS, employees may place orders for anything from office products and furniture to business cards and forms to fleet services and janitorial supplies via the SBC e-Marketplace's individual modules. e-Marketplace also helps reduce transactional costs, provides a common shopping experience for employees, allows for controls enabling approvals, and improved workflow, triggers, and reports through a single sign-on.
The results speak for themselves. Today, 93% of SBC's transactions originating through its corporate travel program require no human intervention, resulting in lower transaction fees. What's more, with online travel booking, 90% of the time employees choose the lowest airfare. The company's e-Buy process for its office products spend boasts of a compliance rate of 97% in 2004.
Merkle's group also put in place online reverse auction and inventory management tools. And on the payables side, SBC developed the Purchasing Invoice Reconciliation Tool (PIRT) on the Pay Group website, which ensures that invoices are paid on time and supplier issues are resolved.
The procurement organization's homepage also includes a link to a Business Plan website, which provides key metrics to track procurement's progress. Statistics on the site detail decreases in cost per purchase from $9.78 in 2001 to $2.11 in 2004 and invoice error rate from 20.9% in 2001 to 3.2% in 2004.
MRO buyers' 30-day price expectations
Commodities voted most likely to rise in price
| UP | DOWN | SAME | INDEX* | |
| SOURCE: PURCHASINGDATA.COM |
||||
| Seals & rings | 25.0% | 0.0% | 75.0% | 62.5 |
| Flat belting | 25.0% | 0.0% | 75.0% | 62.5 |
| Cutting tool inserts | 23.8% | 0.0% | 76.2% | 61.9 |
| Motor controls | 21.7% | 0.0% | 78.3% | 60.9 |
| Adhesives | 20.0% | 0.0% | 80.0% | 60.0 |
| Special fasteners | 19.2% | 0.0% | 80.8% | 59.6 |
| Test instruments | 17.4% | 0.0% | 82.6% | 58.7 |
| Lighting fixtures | 17.4% | 0.0% | 82.6% | 58.7 |
| Lubricants | 22.6% | 6.5% | 71.0% | 58.1 |
| Electric motors: 1-30 HP | 14.3% | 0.0% | 85.7% | 57.1 |
| Nonfriction bearings | 13.3% | 0.0% | 86.7% | 56.7 |
| Gears | 13.0% | 0.0% | 87.0% | 56.5 |
| Rubber hose | 11.1% | 0.0% | 88.9% | 55.6 |
| Grinding wheel | 10.0% | 0.0% | 90.0% | 55.0 |
| Lift truck batteries | 7.1% | 0.0% | 92.9% | 53.6 |
| Speed reducers | 10.0% | 5.0% | 85.0% | 52.5 |
| Temperature controls | 12.0% | 12.5% | 75.0% | 50.0 |
| * Above 50=rising, below 50=falling. | ||||
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