Optimizing a Global Insurance Company’s Procure-to-Pay Function

The Client’s Challenge

A global insurance group had already established a captive shared services center, but was concerned that the promises around savings and customer satisfaction made by its previous advisory firm were failing to be realized. As a result, it engaged Everest Group to assist with analyzing and optimizing its Procure-to-Pay (P2P) function.

Insight to Action

Putting its Service Improvement methodology to work, Everest Group initiated a rigorous data collection activity to capture baseline costs and construct a comprehensive view of the current P2P environment (FTEs, costs, application environment, and organizational structure). Everest Group also extensively analyzed the client’s spending distribution across all its purchases. Leveraging its extensive knowledge of P2P best practices gained by its frequent interaction with outsourcing providers and the marketplace in general, Everest Group quickly formulated a list of “gaps to best practice,” and built a detailed implementation plan to jump those gaps to the desired future state. Further, Everest Group suggested a large-scale procurement enhancement project to cleanse the vendor master file, analyze and optimize spend, dramatically reduce the number of vendors it currently used, and employ strategic sourcing initiatives.

Impact

Via its Service Improvement methodology, Everest Group was able to rationalize the client’s P2P accounting resource base by more than 30 percent, and the client is currently realizing savings of more than 18 percent on total spend. End users of the P2P process are reporting enhanced satisfaction with the management reporting being provided and on time vendor payment percentage has risen from 68 percent to 98 percent.  As a result, millions of dollars in available discounts are now being realized as well.  Consequently, the client engaged Everest Group to optimize its “Order to Cash” and “Record to Report” accounting processes.