A GPO is a single owner assigned by the company to completely oversee an end-to-end
process, such as procure-to-pay (P2P).
The role of the GPO is driven by the specific business priorities of the company but usually
involves:
• Process Management: Complete process design, re-engineering or re-mapping
• Development of governance structures and protocols, and ensuring staff compliance
with said protocols as well as technological infrastructure
• Performance Management: Analytics and establishing of performance metrics and
monitoring compliance
• Driving continuous improvements by identifying pain points in process and prioritising
opportunities
Many enterprises suffer from a P2P approach which is fragmented and inefficient. If
implemented correctly, the GPO role is a strategic one which can:
• Envisage an efficient P2P structure
• Drive change to enact it, through technological innovation, improved processes,
personnel changes, etc.
• Standardise P2P across the whole enterprise, compensating for regional differences /
difficulties
• Encourage effective collaboration between various company stakeholders and key
suppliers
The number of companies adopting P2P Global Process Owners has been on the rise
since 2009.
A recent survey of P2P Process Owners found that finance and procurement are the key
lines which GPOs report into:
P2P Process Owners: Which Function Do You Report Into?
IT, GBS, Management or COOs
Finance and Procurement Combined
Procurement
Finance
0%
10%
20%
30%
40%
50%
60%
70%
Source: How to be an Effective P2P Process Owner, Tungsten Network
The same survey also asked:
Source: How to be an Effective P2P Process Owner, Tungsten Network
Non-optimised P2P processes continue to cost the parent company:
• Time: Companies disregarding the efficiency of their P2P structure take up to
75% longer to process their invoices.
• Money: Invoice processing costs increase up to 80% more than those of P2P
leaders.
• Effort: Incalculable working hours are lost as staff use inefficient workarounds
and track down inaccurate payments.
Source: More Power Through “End-to-End” Process Ownership, Chazey Partners
Increasing Globalisation / Supply Chain
Complexity
Insufficient Skill to Capitalise on Savings
Opportunities
Insufficient Number of Staff
Lack of Visibility into Enterprise Spend
Increasing Supply Risk
Top Down Directive to Cut Costs
0%
10% 20% 30% 40% 50% 60% 70% 80%
Source: Aberdeen Group, September 2010
A successful GPO needs to have:
Strategic Global Outlook: GPO must continually be pushing for transformation
towards standardisation across whole enterprise. Ability to focus on bigger picture and
align P2P process with company goals.
Tech Savviness: Firm grasp of technologies and processes available to improve P2P
efficiency and scale.
Functional P2P Experience: Credibility and working knowledge of P2P process helps
GPO achieve buy-in from company management and stakeholders.
Clear Visibility Into Key Metrics for Every Functional Aspect of the Enterprise:
Regardless of authority, GPO must understand effect of each business process on all of
the others. Holistic overview of the enterprise enables effective transformation of P2P to
work in concert with other processes.
Source: Survey conducted by Sharedservicelink and Tungsten Network
Source: The Value Of Global Process Owners In Global Business Services, Deloitte
Efficiency: On average, P2P leaders with GPOs process up to 1,300 more purchase
orders per FTE than companies with low-performing P2P.
Speed: They take on average 4.1 days to process an invoice from receipt to approval
compared to 7.1 days in case of non-optimised P2P process.
Invoicing Accuracy: GPOs can design and implement improved P2P structure
which eliminates excess manual processes, maintains accurate master vendor databases
and oversees internal controls and vendor compliance.
Source: Survey conducted by Sharedservicelink and Tungsten Network
Step 1: Define the role of the GPO and ensure it has proper
authority
• GPOs responsibilities and expectations must be clearly documented and consistent
with company policy.
• GPO must have authority to take charge of P2P process and implement changes.
Step 2: Secure Corporate/Management Buy-in
• GPO must effectively communicate global vision for P2P in order to secure senior
management support.
• On-board senior management can provide useful guidance and remove roadblocks in
GPOs path.
• Lack of management buy-in leads to change resistance. By contrast, senior
management support leads to positive effect on KPIs and service quality in 74% of
GPO projects.
Step 3: Understand the Process
• Ensure that the GPO understands the enterprise’s current P2P process end-to-end,
accounting for:
• Technological constraints/areas for improvement
• Talent management, ensuring right people are placed in effective roles
• Areas of supplier/vendor overlap
• Potential pain points such as: long cycle times, non-compliance, lack of PO visibility
Step 4: Communicate with Key Stakeholders
• The GPO must communicate their vision of the desired P2P process and get key
company stakeholders to understand and sign off on the design in order to enforce the
process:
• Keep all relevant department heads/key management personnel apprised of progress
and potential issues.
• Frequently test design for potential pain points, feedback to company stakeholders.
• Promote benefits of improved P2P structure and sell your vision.
Step 5: Maintain Sound Project Management
• Build internal and external global networks and clearly communicate with them
• Communicate progress on KPIs on weekly or monthly basis
• Manage risk, record progress and pain points, educate stakeholders, prepare to roll
out
• Resistance to change: Stakeholders/staff don’t see need to change viable system
• Non-compliance with new system: Due to employee attrition, staff attitude
towards changing process procedures, etc
• Technological implementation: Compatibility issues involved in implementing
new hardware/ software for various regional networks across global enterprise
• Lack of definition and clarity of GPO role
• Limited decision power and impact: Does a global mandate/ authority
naturally comes with a global title?
Don’t:
• Lose operational focus: GPOs cannot get bogged down in process minutiae
and must maintain focus on strategic goals and vision of the enterprise.
• Think small: All process initiatives and changes must have impact on global
scale. GPO requires insightful and holistic view of the entire enterprise when pushing
for process change.
• Avoid standardisation: It can be tempting to create bespoke solutions to
solve tricky regional issues. However, standardisation across the entire enterprise
should be the goal to maximise efficiency and reduce operational costs.
Do:
• Achieve and maintain transparency: Overcome mistrust and change
resistance to keep company confidence in the project at high level.
• Design and build effective process model: Ensure it eliminates
process inefficiencies through intelligently implemented changes enterprise-wide.
• Benchmark standards: Effectively measure performance against an
accurate baseline. Requires accurate and holistic performance metrics
• Ensure user compliance: Monitor relevant business units to ensure
compliance otherwise standardisation efforts are rendered meaningless.
19 - 21 May 2015, Singapore
Featuring:
• Best Practice Case Studies from Fortune 500 companies
• Insightful C-Suite Panel Discussions
• Technology Innovation for P2P End-to-End Processes
Click Here to Download the Agenda