Sarbanes-Oxley and a variety of other legislative and internal control doctrines have left many companies with a cumbersome, massive, and costly process to maintain their procure to pay controls. Are you just one of the masses? You are not alone, and there is a solution for those willing to apply a little elbow grease and get thorough with the inventory of your current process. This can be accomplished with a modest investment, and will actually save your company money in the short and long term.
Consensus market analysis indicates that just 1% decrease in overall operating costs has the equivalent impact of a 10% increase in operating revenue on the bottom-line impact. That said, extracting efficiencies in back-office processes, including procure to pay, is a large value lever when considering a technology investment.
The Procurement Organization
As a responsible procurement organization you have four primary responsibilities as authorities and agents for your organization:
- Segregation of duties
- Managing Restricted Funds (Private Sector)
- Check Signing
Does your current manual process contain any of the following process cost sinks holes?
- Manual or automated queries
- Manual report review
- Consistent need for manual payment approval
- Single source employee control point
- Varying control thresholds by line of business, function or department
If the answer was yes to even one of the questions above, there is time and cost savings to be realized in the effective deployment of the PeopleSoft Event Notification Framework.
A Case Summary
A client company managed the control and control audit with a dedicated resource. This resource spent the better part of a month running queries, triaging the data from the output, and subsequently following up on the very limited number of issues produced. The number of issues reported was low due to a fantastically controlled process and robustly implemented policies, but rather it was due to inconsistency in data and inconsistent methods required to extract that data. This same client did not require purchase orders, so the approval framework was the sole control; further driving the need for robust controls, reporting, and reconciliation.
By implementing the event and notification framework in PeopleSoft, this resource was able to focus and repurpose efforts in expense analysis and the development of a more intricate control framework, effectively removing $125,000 of operating cost. This change was incremental:
- First: establish notifications based on a scheduled report/query output.
- Second: Define ‘significant’ events, implement a process to notify control of irregularity the day after its occurrence
- Third: Expand and build out a complete and robust event and notification framework based on trial successes.
Typical Procurement Process
An archetypical disbursement sub-process in the procure to pay cycle resembles this:
Figure 1: Archetypical Disbursement Process Flow
With PeopleSoft Event and Notification Framework, not only can all those steps be automated and replaced with events, you reduce risk and the capability of human error by deploying a system based process.
Event & Notification Overview
At the highest level the Event and Notification Framework offers the following functions:
- Isolate, automatically process, and monitor the business logic asynchronously.
- Define your own business events and build your own event handlers for these events with minimal impact on the delivered code.
- Troubleshoot based on detail provided in the Event Monitor.
- Monitor PeopleSoft processes and receives notifications when exceptions are found.
- Scan PeopleSoft tables using PeopleSoft Query and receive notifications when exceptions are found.
- Use the Notification Dashboard to monitor messages and link to the PeopleSoft page where you can review or correct the issue.
- Receive notifications to your email account.
- Receive notifications to your PeopleSoft work list.
- Pass messages to a third-party system using the XML format.
- Create a custom action for a notification using a PeopleSoft application class.
Transforming the Process
Figure 2: Transforming a manual procure to pay process using PeopleSoft 9.2 Event & Notification Framework.
What Can Be Achieved?
- By controlling your spend, you, in turn, can reduce operating costs
- Reduce redundancy, stop duplicative payment, prevent missing payment deadlines.
- Closer to real-time adjudication of irregularities and issues
- Automated reconciliation and closure of purchase orders
- Reduce time spent on the control process – more time spent and expense analysis and optimization.
- Intelligent, configurable, and flexible controls
Let Astute Business Solutions Guide You
- Business Case
- ROI & Estimates
- Process Design and Reengineering