About Company

Industry: IT Product & Services MNC

Region: India

Employees: 7000+

Solution: ProcUrPal’s Supplier aggregation  

Challenges:

In today’s business landscape, managing tail spend has become a critical challenge for organizations across industries. Tail spends, typically constituting about 20% of an organization’s total spend, involves a long list of suppliers and high transaction volumes, posing significant management complexities and risks. 

• Company had a total annual spend of about $ 30Mn under the IT category out of which the managed spend was about $20 Mn and the rest $10 Mn was non managed and a significant portion of it was one time low $ purchases with a long tail of suppliers. 
• Company had a supplier base of around 9000 suppliers.  
• The company had an ERP implemented. However, the tail spend was predominantly managed outside of the ERP and hence there was a lack of visibility on the spend. 
• Business Units were making their own choices of suppliers and each time a new requirement came up, new supplier was getting onboarded and the process of onboarding was so elaborate and time consuming. There was ample opportunity of consolidating the suppliers and leveraging the volumes. 
• Compliance and risk management processes were ineffective while managing this tail spends. 

Recognizing this challenge, company partnered with ProcUrPal, a leading consolidator of suppliers, to streamline and manage its tail spend effectively.

ProcUrPal’s Tail Spend Management Solution:

ProcURPal, a SaaS platform was used by company to enquire, initiate the purchase requisition, confirm Purchase Orders, Track deliveries, Receive Goods and process supplier invoices for payment. 

1. Procurement Initiation:

• ProcUrPal manages procurement across all categories, including IT, facilities, marketing, professional services, financial services, travel, and hospitality.
• Company provides the approximate budget and the spend volumes quarter on quarter.
• Company initiates purchase requisitions as and when the need arises using ProcUrPal platform.

2. RFI/RFQ Submission:

• Based on the threshold agreed, Company either confirms the order without the quotations or would request ProcUrPal to initiate the process of RFx, seeking formal quotes from suppliers.
• ProcUrPal’s RFx module greatly assisted the company in this process. 

3. Supplier Onboarding & PO Placement:

• ProcUrPal onboarded suppliers into the system if necessary and placed purchase orders with suppliers on behalf of company.
• Back-to-back purchase orders are placed by ProcUrPal on identified suppliers, detailing price, payment terms, delivery instructions, and other relevant information.

6. Communication & Documentation:

• Communication between ProcUrPal and suppliers is meticulously documented and made available upon request to Infosys, ensuring transparency and accountability throughout the process.

7. Invoice & Payment Processing:

• Suppliers raise formal invoices referencing ProcUrPal’s purchase order number, and ProcUrPal subsequently raises invoices to company for payment processing.

8. Acceptance & Payment:

• ProcUrPal initiates a request for the acceptance of goods/services (Goods Receipt Note – GRN).
• Upon receipt of goods/services, company initiates the GRN, after which ProcUrPal makes payments to the suppliers, ensuring timely transactions and adherence to contractual obligations.

Key Results:

1. Through the implementation of ProcUrPal’s tail spend management process, company was able to streamline the entire process, bring visibility on the spend. Analyse spend data. 
2. Company’s managed spend rose from just 60% to 85%.
3. The supplier base was cleansed, and the active supplier base was reduced from 9,000 to about 1,200.
4. The consolidation of purchases resulted in a cost savings of about $1.5Mn just within a span of about 3 quarters. 
5. ProcUrPal’s data analytics ensured further opportunities be explored for cost savings and effective sourcing.  
6. The risk associated with supplier onboarding drastically reduced and the entire process of Tail spend became more transparent and 100% compliant.