CityFibre Makes the Business Case for P2P – A Coupa Symposium Highlight

At the recent Coupa executive Symposium in London, perhaps the most interesting presentation came from an unlikely source. It wasn’t from Spend360, recently acquired by Coupa, or from Coupa customer Sanofi, the huge pharma firm. They were good sessions, but it was Peter Murray of tech firm CityFibre – “the UK’s largest alternative provider of wholesale fibre network infrastructure and the builder of Gigabit Cities” - who stole the show, for us anyway.

That was because he really took us back to the basics of why having effective, fit-for-purpose procurement technology is important. His firm had no purchase-to-pay system until recently, and he described a situation where staff were becoming increasingly frustrated with the time and effort it took just to buy what they needed to do their jobs.

So he described a situation where:

  • No Purchase Orders (PO) were sent to vendors
  • POs were raised after receipt of goods and services
  • Much expenditure was claimed via expenses
  • Major project spends were not going through proper procurement

But there were “policies” in place, so every request needed 3 signatures, which meant there were multiple emails flying around, yet approvers couldn’t access budget data. This led to “low level but corrosive morale issues – people were spending large parts of their time chasing paper and colleagues for approval”.  The firm made an “educated guess” that from order to invoice approval needed 20 “touches of paper”, and occupied 80 minutes of person time per purchase.

So his business case for investment was based very much on the time saving for staff. But we all know the flaw in this proposition. If everybody in a business of 40 people saves a couple of hours or so a week, that does not mean you can take all those individual hours and identify two people who are not needed and get rid of them.

We asked this in the Q&A and Murray agreed with that caveat. But, he said, first of all he discounted the expected process efficiency saving by 90% - and the business case still held up! Then his firm is growing strongly. He argued that the greater efficiency and better use of staff time would mean that fewer recruits would be needed in the future – not that they would fire existing staff.

We rather liked that argument, and it was certainly interesting that he was able to justify the investment cost based on that. It helps that better technology these days does not require the huge implementation effort (and cost) we used to see, which required obviously an even bigger justification number on the business case benefits side.  So within just 10 weeks CityFibre went live with Coupa – “over Xmas with procurement and expenses, and very little staff training”, Murray said. All is going well so far – he says that 100% of spend is captured, budget overruns have bene pretty much eliminated and the firm is now looking at applying some procurement techniques to drive further cost savings.

So, the messages from this case study might be the following:

  • The worse your processes are to begin with, the more your users will see benefits when you implement technology – and the better the business case will look.
  • Not all business cases need to use the full range of traditional metrics to justify or measure the success of automation projects.
  • A business case can be built around enabling growth (rather than firing people), the opportunity cost of wasted time, visibility, and even staff motivation.
  • When you offer an easy technology alternative, people tend to comply.

 

 

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