Swissport Drives Procurement Improvement Through S2P Technology – Highlights From Ivalua Event

One of the highlights of the recent Ivalua customer event (“the Voice of Procurement”) in London was the keynote from Reiner Orth, CPO of Swissport, a EUR 2.7billion revenue firm that runs cargo and people handling operations at airports all over the world.

Orth only joined the business last year, and he talked about his work to date to develop procurement from what was pretty much a greenfield site (and still is in many ways). Every airport for instance is a separate legal entity, so it is a highly devolved environment, hence decisions around global / regional / local procurement are very important. “Getting the structures right is key”, he said.

The business is by nature low margin, yet clearly many suppliers are vital to Swissport’s success, so his philosophy is “we push our suppliers but we don’t squeeze them” – a nice expression, we thought.

When the programme started, procurement only managed some 30% of spend (Orth’s is targeting 90%+), there were few controls and no real purchase order system in place. So he identified that systems would be a key enabler – but he also acknowledges that training and development for staff is just as vital.

Orth engaged consultants to help make a source-to-pay technology choice, and after the selection process, Ivalua came through as the winner. Their product offers the benefits of an end-to-end approach – the “everything in one tool” offering was attractive, Orth explained.  The Ivalua platform then links with the wider SAP ERP financial system, with payments made via that SAP route. A pilot in Brazil has already been successful, and the next stage is a roll-out for the top ten countries.

Orth talked about the new processes and technology contributing through seven key “enablers” which will drive savings and other benefits;

Automationreduce inefficiencies by automating entire P2P process

Standardisationone standard process for the whole organisation

Transparency - faster and transparent end-to-end process

Compliance - putting proper PO approval steps in place

Spend management - getting the overview of all spend via the PO data

Duty segregationdifferent roles defined (requestor, approver, etc)

Responsibilityclarity and traceability along the process

We thought that looked like a pretty good list that might be useful to others looking to justify P2P or S2P investment.

Those aspects around improved governance and compliance are also important too as the firm moves towards a potential IPO (float) this year – it is currently owned by the Chinese HNA Group. The CEO has been very strong in supporting the procurement transformation, for instance, by backing a “no purchase order, no pay” approach. But Orth also talked about the importance of having procurement people with the right attitude – there has to be a strong business focus, not just a compliance-type attitude.

All in all, it’s impressive that Swissport has moved so quickly over the past year or so, and it shows again that technology can be as strong enabler to help drive procurement change. And it will be interesting to see how the global rollout of the Ivalua platform goes over the coming months on the back of that successful start in Brazil. Watch this space, as they say.

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