PROCURE TO PAY THE E-EASY WAY:
How Unimarket set NIWA on the path
to business transformation
Through the introduction of Unimarket’s e-marketplace to modernise its procure to pay processes,
NIWA has spearheaded an entirely new and more efficient way of doing business. By choosing
a proven, locally-based service provider in Unimarket, the company has dramatically improved
the performance of a key business process by leveraging internet technology, resulting in a 60%
reduction in administrative resources and a full return on investment within just six months.
NIWA, the National Institute of Water and Atmospheric Research, is a Crown Research Institute established in
1992. With over 600 employees – predominantly scientists – located around the country, it has regional centres in
Auckland, Christchurch, Hamilton and Wellington, with further small offices across New Zealand.
INNOVATING BUSINESS PRACTICE
Tim Allen, Strategic Procurement and Asset Manager, NIWA, says that prior to
implementing Unimarket the organisation operated on a hub and spoke model, where
regional offices took responsibility for satellite offices in their immediate areas. “This
presented challenges with purchasing, as responsibility was decentralised to the
regions. Although overarching business rules were in place, each region would develop
its own way of doing things.”
Local customs, practices and processes would evolve and become habit. “Essentially,
the outputs were the same in that goods were purchased and invoices approved, but the
process varied,” says Allen – and that meant inconsistency in standards and inefficiency
in the system. “There was duplication of administration teams and a preponderance
of manual, paper-based processing between regional centres and head office, where
payments were processed.”
Upon conducting an exercise within NIWA to map internal procure-to-pay processes,
the truth of duplication and inefficiency was revealed. With that understanding, “We
wanted centralised control, but with decentralised access so our regions can get the
products and services they need quickly and easily. We also wanted to create a high
trust environment and remove bureaucracy in the organisation, as everything had to go
through a manual approval process which involved shuffling around multiple copies of
purchase orders, invoices and packing slips,” Allen explains.
At the same time, he says, in the aftermath of the global financial crisis, NIWA was an
organisation seeking to rapidly modernise to eliminate waste in all forms and improve
competitiveness. “Procurement flows across human resources, IT and finance. Changes
to this function have a widespread impact and present an opportunity to drive change
on a broader scale to improve performance.”
“Where we once had
poor compliance with
business rules, with just
20% of invoices having a
corresponding purchase
order, today it’s 100%.”
– Tim Allen, NIWA
www.unimarket.com
“It’s a step change which enables other significant changes in line with our
self-service strategy. What comes after is accepted more easily and
more willingly thanks to the obvious benefits delivered by Unimarket.”
– Tim Allen, NIWA
A STREAMLINED APPROACH
"Unimarket’s ease of use is compelling..." Says Allen.
Having long maintained awareness of
the concept of e-marketplaces, Allen
says the major inhibiting factor in the
early days of marketplace portals was
a lack of maturity. “I did some pilots in
the mid 2000’s when working for an SOE,
but there wasn’t anything available that
could deliver on the promise of a full
purchase to pay process.”
By 2011, he says, there were only two
local players left standing in New
Zealand, one of which was Unimarket. It
was Unimarkets' modern, streamlined
architecture and simplicity that tipped
the scales in its favour: “Unimarket’s
ease of use is compelling. Everything
hinges on how easy such a system is
for the user, especially as we wanted to
move away from administrative support
to a self-service model,” says Allen.
But probably the greatest advantage
is that Unimarket is cloud-based. As a
result, the implementation took just
four months. “That’s from signoff to
completion. We didn’t want a laboured,
disruptive process, and were mindful
that once a better way of executing a
process is identified, every day you are
not doing it represents a loss,” says Allen.
RETURN ON INVESTMENT
Within just six months of going live, the full cost of the
Unimarket implementation was recovered. At the same time,
the cost of the purchase-to-pay cycle dropped by an estimated
80%, predominantly because less administrative resources
were needed.
Further benefits that NIWA has gained
include better governance, as Allen
relates. “Where we once had poor
compliance with business rules, with just
20% of invoices having a corresponding
purchase order, today it’s 100%,” he
says. A purchase order doesn’t just mean
numbers on invoices, either. “Knowing
what’s scheduled for purchase means
visibility of commitments and the
ability to manage budgets better, rather
than floods of invoices coming out of
nowhere and hitting the Statement of
Financial Performance,” Allen points out.
“Surprises of any kind in finance are not
well received; it means you aren’t in full
control or able to accurately report your
trading position.”
User acceptance of Unimarket is
practically universal, he adds – and
that’s because it delivers a far improved
purchase-to-pay process. “With
Unimarket, you don’t have to understand
finance to understand the process. It’s
almost an eBay equivalent: you get
on, navigate to what you need or the
supplier you want to use, and buy it. The
buyer then receipts the goods or services
into Unimarket upon delivery and the
supplier sends an e-invoice, resulting in
on time payment every time.”
CONTACT US
And, he says paperwork and the
spreadsheets which were once used
in abundance to manually track
expenditure are completely eliminated.
“We no longer require offsite document
storage either. Even when we receive
a paper invoice, it is scanned, stored
electronically and the original shredded.
Access to digital images also enables
managers and budgets holders to easily
determine the origination of costs, thus
eliminating enquiries handled by the
Finance Team.”
Centralisation delivers efficiencies
in purchasing, too – regardless of
the region, pricing from suppliers is
consistent while the opportunity to
‘bundle and leverage’ is a reality.
But perhaps the biggest benefit of all
is a peripheral one. “It’s a step change
which enables other significant changes
in line with our self-service strategy.
What comes after is accepted more
easily and more willingly thanks to the
obvious benefits delivered by Unimarket.
It’s paved the way for a new self-service
approach to doing business; that’s a
massive move, as the self-service model
is not common in our sector and it has
helped us to be more competitive.”
CHANGE
MANAGEMENT
Change management, says
Allen, was undoubtedly the
most challenging aspect of the
implementation. “In moving from
administrative support to selfservice, we’re fortunate that our
people are scientists who test if what
we’re doing is beneficial to them
and the organisation. This means we
usually don’t push change from the
top down, but rather ensure first that
it is accepted from the bottom up.”
With the point of the exercise clear
(easier and better purchasing with
reduced administration) and a ready
understanding that an automated,
streamlined process would reduce
cost, Allen says widespread ‘buy in’
was achieved. “In the wake of the
financial crisis, our people knew
that we had to be as competitive
as possible to secure government
funding and to service our private
sector clients. They also know
that paperwork is a nuisance and
immediately recognised that it put
them in control of their purchasing
world and was an enabling tool
to help manage project
expenditure better.”
Correspondingly, Allen says
Unimarket is “intuitive and easy to
use compared to tier one financial
systems so the level of system
support required after training was
minimal. What tends to happen is
regional champions emerge and
become local experts who can
provide help where it is needed.
Allen adds that NIWA took a ‘big
bang’ approach with Unimarket.
“It’s not just the front end; we’re
receiving electronic invoices from
suppliers, which are integrated into
the system and paid automatically.
This remains an on-going process
and the aim is to fully automate
the complete procure-to-pay
process, leaving no ‘manual’
pockets anywhere.”
[email protected] | +64 9 370 0903 | unimarket.com