Automated Workflow and Approval Processes Result in Substantial Cost Savings at Sapient

Sapient, a global services firm operating at the intersection of business, marketing and technology, helps clients evolve and grow in an increasingly complex marketplace. Headquartered in Boston, Massachusetts, its two service groups, Sapient Interactive and Sapient Consulting, deliver industry leading solutions to clients across North America, Europe and India, including BP, Essent Energie, Celebrity Cruises, Hilton International, Key Bank, Sony Electronics and Verizon. The company is widely recognized for its deep well of talent and passion for client success. Its culture of innovation and creative problem solving has been a source of academic research, including case studies on leadership and organizational behavior used by MBA students at both Harvard and Yale, industry awards and recognition events. Founded in 1990, Sapient employs more than 7,000 people in 24 offices around the world.

Unyielding Commitment to Customers at Heart of AP Department’s Biggest Challenge

With a broad and deep understanding of global trends and industry best practices, Sapient’s technology-savvy workforce is at the forefront of helping businesses open new doors to opportunity and growth. Its strong and loyal customer base spans three continents and is the result of the company’s ability to consistently deliver innovative solutions that offer significant competitive advantages in today’s rapidly changing global marketplace.

For the AP department at Sapient, however, it was precisely the success of its workforce’s close customer relationships that created one of its biggest challenges. At the root of the problem was an extremely mobile workforce that, more often than not, could be found deeply engaged on projects at their client sites. As a result, invoices, which were routed directly from suppliers to consultants for processing, review and approval, often sat for months at a time on office desks with little hope of getting into the payment system.

From this root problem a host of ancillary issues ensued. Problems with suppliers were inevitable, as lost, missing or buried invoices frequently led to late payments, delayed services or unfavorable contract terms. Departmental resources routinely responded to supplier inquiries or tracked down missing invoices on an “emergency” basis, significantly impacting the overall effectiveness of the group’s strategic sourcing mission. Cash management initiatives, especially important in highly competitive markets and challenging economic conditions, suffered as AP staff struggled to get control over its invoice processing system.

AP Department Seizes Opportunity to Revamp Procurement-to-Pay Lifecycle

Aggravated by the increasingly distributed nature of its client and supplier base, the AP department at Sapient recognized the need to revamp its manual invoice processing systems to eliminate persistent bottlenecks and reduce processing costs. Without question, the inevitable delays inherent in physically moving invoices around the world to get them signed and processed were costing the company real money – and supplier goodwill.

“As a strategic sourcing organization, we wanted to spend more time on operations that drive company margins, central to our ability to negotiate the best contracts and attract a wide array of quality suppliers is an accurate and timely payment system,” said Steve Bertolami, Director of Global Procurement at Sapient. “This meant that we needed to remove the paper from the process, breaking the costly cycle of missing invoices and recurrent payment delays to refocus our efforts on our strategic sourcing mission.”

Strategic Overhaul of Procurement-to-Pay System “Resets” Supplier Relationships

By combining the company’s existing Oracle ERP investment with the imaging, automated workflow and approval capabilities of the MarkView Financial Suite from Kofax, Sapient was able to complete the major retooling of its procurement-to-pay system without disruption to its ongoing business operations. According to Bertolami, the new process is “night and day” from prior experiences.

Today, supplier invoices are received at one of three centralizing processing centers, located in the U.S., U.K. and India, where they are scanned into the system via MarkView imaging technologies. Depending on the type of invoice, one of four automated workflows then kicks in to move the invoices toward final review and approval: a PO, non-PO, preapproved or return to supplier workflow.

From the supplier’s perspective, the new system has been a game changer. When an invoice is submitted or approved – or a payment generated – an email notification is automatically sent to the supplier. If an invoice is rejected due to missing or incomplete data, the MarkView system automatically returns the invoice with detailed information on why it is being returned.

For the first time, from procurement to payment, the AP staff now had proactive visibility into the entire payment cycle. As a result, rather than spending 80% of their time resolving supplier issues, the AP department at Sapient now spends less than 10% – a number that keeps dropping as procedures continue to be refined and processes streamlined. Likewise, high-dollar billable individuals are no longer searching for invoices or spending time on the phone with suppliers who are having trouble getting paid. Instead, Sapient consultants are able to focus more time on the client-facing activities that are the mainstay of their business.

Renewed Focus on Strategic Sourcing Improves Margins

From a cash flow perspective, the MarkView based system is making a significant difference. Freed from the mechanics of a very reactive, costly process, the AP team is now able to focus more of its resources on the strategic sourcing side of its business. This is an important step forward, since suppliers play a key role in the day-to-day work product Sapient offers to its clients and represent a major cost factor for the company.

With the new system, suppliers quickly gained confidence in Sapient as a trusted partner, enabling the company to revisit the punitive contracts and payment terms that had been put in place over time as a result of the manual system. “Immediate” or 15-day terms payment were soon rolled back to normal 30-day payment periods, greatly relieving the stress on the AP organization and enabling optimized cash management. Additionally, a renewed strategic focus on finding the right suppliers quickly resulted in more competitive bids. On more than $40 million worth of spend, costs have been reduced by more than 20%, a strong beginning that portends well for the future.

“Suppliers now like doing business with Sapi­ent and are much more willing to work with us as an organization because we are con­sidered a good partner, and the move from a reactive to proactive stance really did a lot to increase the visibility of the AP team,” said Bertolami. “Our folks on the ground now have much more actionable information to work with, leading to higher productivity levels, significant cost savings and a happier, more engaged work­force. The change has been dramatic and is directly impacting our bottom line.”