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PO penetration process - F&A
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The Client
The client is a global business conglomerate having a presence in several
countries worldwide. With diversified business interests in manufacturing,
services and retail, it has grown significantly through strategic global
acquisitions and partnerships, development projects, capturing new
markets and discovering new raw material sources.
Managing Experience
Risk Mitigation and Increased Productivity for a Global Business Conglomerate
OVERVIEW
Industry: Manufacturing, Services & Retail
Geographies: Global
Solutions:
- Reduced manual effort
- Lesser processing time
- Transaction incident monitoring
Results:
- Increased productivity by 15%
- Reduction in maverick spend
- Increased PO penetration
Case Study | Outsourcing | Manufacturing, Services & Retail Industry
Managing Experience
2
Business ChallengeOur client faced a challenge of controlling the non purchase order based
purchases. As a result of a large percentage of non PO based purchases,
our client faced issues like duplicate payments, controllership issues
related to the need for a non PO purchase and opportunities of getting
better rates through a PO process.
Solutions Delivered by AegisOur team of process experts collected all relevant transaction information
and analyzed the non purchase order spend. The data was analyzed and
the workshop was conducted with the relevant stakeholders like
procurement team, the department heads, in whose departments spend
percentage was high and the purchase head. During this workout the
reason of the non PO spend was discussed and possible options to
convert it to a PO spend was discussed in light of cost benefit situation
in relation to various categories of non PO spend categories.
Based on the agreements reached during the workout sessions, the
policy was framed and provided to all the business houses to mandate
the same across departments. Any exception to the policy where non
PO based expenses were incurred were to be pre approved by
authorized senior management.
Transaction incident monitoring solution was introduced as a rigor for
fortnightly tracking the purchase order penetration to cover all the
exceptions. The key feature of the monitoring solution was to detect all
non purchase order invoices raised and conversion designed to
circumvent the standard policies framed for purchase orders.
Case Study | Outsourcing | Manufacturing, Services & Retail Industry
Managing Experience
3
Key Results and Benefits- Controls: Risk mitigation due to system driven controls for processing
payment, adhering to the corporate policies by way of all the requisite
pre approvals in place of the senior management.
- Improvement in productivity: Reduced manual effort and aided in
lesser processing time resulting in 100% accuracy.
- Drove visibility and enabled dashboard reporting by nature of expenses
leading to overall controls on spend.
- Enhanced vendor satisfaction due to accurate receipt of payments on
due date.
- Thorough vendor selection process led to competitive biddings.
- PO penetration improved from 60% to 95%
- Enhanced controls – movement from manual controls to system
controls
- Increased productivity by 15% – PO invoice processing
- Cost control – Reduction in maverick spend
- Positive P&L impact through better negotiation
Case Study | Outsourcing | Manufacturing, Services & Retail Industry
Before
After
0%10%20%
30%40%50%60%70%80%90%
100%
Client PO Penetration Productivity
Managing Experience
4
About AegisAegis is a global outsourcing and technology company committed to
impacting clients’ business outcomes by focusing on enhancing customer
experience across all touch points and channels. Aegis was founded 30
years ago in the US and now has operations in 56 locations across 13
countries with more than 55,000 employees. Aegis services over 300
clients from verticals such as Banking and Financial Services, Insurance,
Technology, Telecom,Healthcare,Travel & Hospitality, Consumer Goods,
Retail, and Energy & Utilities. The company is wholly owned by the Essar,
a USD 27 billion conglomerate.
For more information write to us at [email protected] or visit
www.aegisglobal.com
Case Study | Outsourcing | Manufacturing, Services & Retail Industry