Can you outline why your team embarked on this project and the problem that needed to be solved?
BGIS is a fast-growing organization providing a full range of real estate services to corporate clients. Our mission is to deliver innovative business solutions for clients with real estate portfolios, while continually creating value for their stakeholders and ensuring a sustainable, safe, and comfortable environment for all. We constantly seek to innovate, partnering with leading technology providers to help drive improved service outcomes for our clients that ensure critical safety, compliance, sustainability, and business continuity objectives are achieved. We work with over 12,000 subcontracted suppliers and our goal is to make it easier for them to do business with us.
BGIS’s growth made it clear our supply-chain systems required improvement. The procurement-related teams held numerous “Blue-Sky”, brainstorming and effort-impact planning sessions resulting in alignment on the critical projects necessary to deliver the most impactful results. The findings were that the integration between our sourcing, procurement, operations, and invoice management processes were strained due to sub-optimal systems and lack of standardization.
How were things done originally and what was the inspiration to innovate the process?
The findings from the sessions were that the integration between our sourcing, procurement, operations, and invoice management processes were strained due to sub-optimal systems and lack of standardization. The team identified four opportunity areas addressing high administrative costs, rework, speed, compliance, and supplier satisfaction:
- There was a lack of a comprehensive contract lifecycle management tool; contract registry was managed in a complex and cumbersome SharePoint workflow.
- The existing supplier compliance provider imposed high user-registration fees, resulting in low adoption and compliance rates by suppliers. Supplier setup process was manual and did not integrate with BGIS’s ERP.
- Recurring contract PO processes were inefficient, inconsistent, and fraught with error, resulting in invoice rejections and payment delays.
- The supplier invoice processing system was inefficient. Administration was labour-intensive, often resulting in payment delays.
BGIS is committed to implementing innovative ways to optimize our processes, making them more efficient and able to sustain the organization’s growth. As we indicated earlier, we partner with 12,000+ suppliers globally to provide reliable, quality services to our clients and we needed industry-leading systems and tools to make it easier for them to do business with BGIS.
What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)
BGIS moved from relatively manual processes for invoice processing and contract management, often resulting in duplication of efforts, to achieving its goal of an integrated and efficient end-to-end source-to-payment process.
- The eHUB contract lifecycle management system, the only one of its kind in our industry, allowed Strategic Sourcing to be more efficient and take on additional workload equivalent to 8% of our operating budget with no additional resources. eHUB currently manages 2,600+ contracts, 3,350+ amendments and 3,750+ suppliers. In 2021, the Strategic Sourcing team executed over 800 contracts and amendments (95% increase from that in the previous SharePoint manual tool). Strategic Sourcing has maintained a 99% compliance with our Strategic Sourcing and contract management policies. The eHUB system has the added features of milestone tracking, automated reminders, extensive initiative tracking, resource planning and advanced reporting capability. We recently added the ability to track achieved savings, which when reporting is fully implemented, will create additional efficiencies. The system allows us to implement bulk updates to records and process large amounts of data through the backend. For example, we recently established and processed 1,200+ amendments for execution within a week – an achievement which would not have been possible before.
- Since the implementation of the Avetta supplier compliance system and the new supplier setup tool, supplier registration in Avetta has reached 100%. 1,000+ suppliers with 8,000+ connections are registered and BGIS achieved 85% compliance within 6 months of implementing the system. Additionally, Avetta has been able to accommodate enhanced H&SE requirements, client-specific COVID-19 requirements, diversity and inclusion questionnaires, automated document signoff and enhanced reporting. Supplier satisfaction with Avetta increased to 98% from 72% with the previous provider.
- The implementation of the Oracle Cloud system resulted in the unprecedented “PO Flip” and enhanced financial reporting, internal controls, and invoice management capabilities. Real-time invoice validation and reduced processing time improved the on-time payment metrics. With the visibility, timeliness and transparency provided to the suppliers, the enhanced process enabled the P2P team to deal with 50% less exceptions compared to 2 years prior, saving substantial time and costs, and enabling the team to focus on other process improvements. In addition, the Supplier Portal also better supports cash stability for both BGIS and our suppliers.
- Invoice payment and efficiency improvements have been reported consistently since the implementation of the Supplier Portal and the Oracle Cloud system. First-pass-yield on invoice processing achieved 90%, up from 60% (50% improvement) and Supplier Portal usage has increased to 40% of our suppliers, up from 15%. The cost per invoice has been reduced by 35%. The P2P is now able to focus on value-add initiatives rather than ongoing issue resolution. Supplier satisfaction with BGIS invoice processing systems has increased to 95% (up from 44%)!
- Part of the Oracle Cloud system, a business portal for BGIS users allowed for automated change requests leading to reduced touch points, fewer exceptions and inquiries, real-time invoice validation, and improved ability for on-time payment. The maintenance activities of the contract PO were greatly streamlined reducing errors and rework.
BGIS issues an annual Supplier Satisfaction survey and while our relationship with our suppliers has always been very positive, since these supply-chain sourcing to payment solution improvements were implemented, our results have significantly improved. Overall satisfaction increased to 96%, up from 78%; the satisfaction with BGIS systems, tools and apps has increased to 89%, up from 62%; and 89% of our suppliers find it easy to do business with BGIS, up from 64%. These results indicate that we are well on our way of achieving our goal of making it easier for suppliers to do business with us.
How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market?
The BGIS tagline is “Enabling Innovation”. As a global leader in integrated facility management services, we offer a full range of facility and real estate management services, partnering with clients globally to bring forward innovative solutions. Our clients are sophisticated and demand sophisticated solutions. We strive to be leaders in a very competitive industry, and we foster a culture of innovation and continuous improvement within our organization and our supplier base.
Open forums, focus groups and clear communication help us drive innovative and unique solutions. Our Innovation Council hosts monthly discussions where cross-functional reps share ideas and the latest innovative solutions and obtain valuable user perspective.
Since the initial implementation of the systems noted here, we have continually sought ways to enhance and improve the delivery model beyond the initial scope. These systems have the capacity to support BGIS growth, new functionality and expand globally.
In addition, we leverage Business Intelligence (BI) to provide improved dashboards and business analytics. Our objectives for the next few years are to generate insights and predications that enable strategic decision making by allowing full visibility and actionable insights into trends. This entails a focus on integration and data governance to gain holistic insights; enabling a data driven culture that adopts embedded analytics for decision-making, forward-looking predictions and recommendations that drive business outcomes; and increased efficiency through process automation and digital transformation.
We utilize Robotic Process Automation (RPA), Application Programming Interface (API) data transfer and Operational Data Store (ODS) technologies, technologies that will continue to provide exponential growth support without requiring additional resources. Cross-functional leadership teams meet regularly and closely ensuring that emerging technologies are applied for future value and growth.
What advice do you have for those who may want to implement this innovative approach in their own organizations?
Several learnings resulted from these projects and are now embedded in our organization:
- A well-established business case, project charter and executive support are key to a successful system development and change.
- Open forums, focus groups and clear communication within the organization as well as to the supplier base helped us come up with innovative and unique solutions. These open lines of communication and idea exchanges were imperative to obtaining user perspective as well as buy-in and support. Involving these key participants resulted in an outcome that provided increased supplier satisfaction scores.
- Having a Centre of Expertise along with strategic points of contact (SPOCs) in the business units to help with cascading and championing the change management message across their teams and help with training users was a key factor.
- Having standardized and centralized processing within our corporate procurement-related functions (Strategic Sourcing, P2P, etc.) using consistent tools and processes across all our business units is critical to success and efficiency.
- Comprehensive and ongoing communication and training is imperative to the success of the implementation of a system with such significant magnitude and span across our supply-chain and cross-functional delivery systems.
What factors do you think are the most important to consider when innovating supplier performance?
The most important factors to consider when innovating supplier performance are to establish a mutually respectful relationship with mutually accepted objectives and KPI’s that are well defined in the contract. It is important that neither party holds the other accountable for things that are outside their control. BGIS has a supplier score card system which ensures that supplier performance is measured using a methodology that is measurable, consistent, uses inputs from the systems outlined above, and avoids subjectivity.
It is critical to establish a strong governance process that has appropriate review cadence with individuals at the highest possible level of the supplier organization to monitor performance results, improvement opportunities and action items. We hold regularly scheduled Supplier Business Review (SBR) meetings which result in well documented notes and action items that are reviewed at each meeting.
Having a well documented processes ensure that consistency in supplier reviews and management regardless of changes in individuals. We have found that a strong and well-documented performance management regime allows for strategic innovation and partnership with our suppliers.
