Dell was in the weeds with meetings payment in 2012. The
technology giant had a mix of payment tools in play: purchase cards, statements
of work to request purchase orders and even cutting some direct checks. All
payment channels were supposed to flow into Ariba, Dell’s enterprise resource
planning tool.
There were pros and cons to each payment method in terms of
compliance, data visibility, policy and process, but Teddy Oberts, procurement
category manager for meetings and events at the time, preferred the SOW with
purchase order. It offered the right level of documentation with clear roles,
responsibilities, expectations, service levels and due diligence details for
management to review and approve funds. The P-card, on the other hand, was
convenient for suppliers who require payment in advance or for last-minute
expenses.
While Dell required both documentation and flexibility,
fragmented payment methods were leading to loss of data, despite the effort to
funnel it all to Ariba. Additionally, lack of visibility into the
procure-to-pay life cycle of an event translated into process inefficiencies
and delays in both sourcing and payment.
Starting Up With Eved
“There was always an understanding that there were similar
categories where procurement had a more mature methodology,” said Oberts, who
now leads cross-organizational productivity and integrations programs for Dell.
“Travel is very similar because you are dealing with the same categories of
spend: air, hotel, ground transportation.” In 2012, Dell put a request for
proposals in play to solve its meeting payment challenges and obtain more
visibility into the business.
But it wasn’t the RFP that led Dell to event procurement
platform Eved, which founder Talia Mashiach had the foresight to involve in
both Dell Women’s Entrepreneur Network and its Founders 50, which supports new
technology companies. That strategic placement eventually put her in front of
Oberts’ predecessor and led to discussions with the large marketing agency that
was managing Dell’s meetings spend at that time.
Mashiach wanted Dell’s RFP. “We recognized there was a gap
in the middle [of the process], and we needed to automate this whole procure-to-pay
workflow, not just the beginning and the end,” she said.
That same year, the marketing agency and Eved created a
joint venture “to facilitate all of Dell’s [meeting] payments and to give them
visibility,” said Mashiach. The agency delivered the service, while Eved
provided the technology. “We really collaborated with Dell to understand how
the technology should work and where we needed to enhance our software.” Eved
ultimately took over the entire contract, in 2014, but first it had to achieve
significant technology development milestones and integration with Dell’s
systems.
Incubating Meetings Intelligence
Working with the marketing agency, Eved created an
electronic data interchange that allowed it to gather or deploy information
through Dell’s systems and enable the technology to “incorporate the
[procure-to-pay] documentation, the process flow, and identify the stakeholders
for approvals,” said Oberts. Ultimately, the soft-ware also incorporated the
SOW, which had been a separate document people attached to the purchase order
request.
To work effectively, Oberts emphasized, “it [also] needed to
tie with our ERP system to know when programs were funded—and that money was
available rather than just planned.”
That’s the key to Eved.
The technology works as a payment processor, not as a pay
agent (i.e., a credit provider). Corporations put an approved budget into
Eved’s system, which can connect to the client’s ERP system. The company can
procure and pay up to the specified amount, and Eved tracks the funds.
Depending on a company’s own controls, invoices appear in a queue, and the
approver checks the ones he’d like to pay. Eved then notes those as paid and
generates a single accounts payable file with information like cost centers and
general ledger codes so the finance department can pay Eved for the designated
period, say, weekly. The system isn’t just a rubber-stamp process, though.
Rather, it allows for customization. For each client, Eved can incorporate the
contract terms it negotiates with suppliers, and companies can set up approvals
processes for suppliers requesting rush payments.
“Like a card, they’re paying one invoice to Eved,” said
Mashiach. “We’re disbursing those funds to suppliers, so it just simplifies the
whole process and solves the problem for companies to have to write and process
so many invoices through their standard AP system,” she added. Unlike, say, a
meetings card, Eved’s direct integration with the corporation’s ERP system “automates
getting all the data from invoices … automatically back into their financial
systems, which is huge because today [many corporations] key it in manually,”
said Mashiach.
In addition to manual processing, visibility of line-item
detail in credit card data concerned Oberts. “You see only a total for the
dollar amount, not the various quantities or types of items [purchased],” he
said. Plus, “the level of data captured is limited, based on how [the vendor]
registered in the merchant categories set up by the card providers, which may
not correlate completely to the goods and services purchased,” he offered.
With Dell’s input, Eved addressed this issue by giving
clients the ability to onboard preferred vendors into a marketplace and to
categorize vendors based on the types of services they deliver.
As the technology platform matured to the point that it
could manage spend automatically, Dell was able to release the marketing agency
from that task, giving the full contract to Eved. With financial backing from
external investors, Eved went solo the following year, in 2015, but continues
to service the company that helped it gain its footing.
The Payoff
That’s good for Dell, which has realized “double-digit
percent savings” from slimming down to a single spend-management partner,
reducing administration costs and increasing productivity. It also reduced the
costly need to expedite payments to vendors.
Dell meetings administrators now create business requirement
documentation within the Eved system, allowing the company to see at a glance
an event’s status, the suppliers involved and their responsibilities. Oberts
estimated the model saves administrators as much as 20 percent of the time
previously spent in the procure-to-pay life cycle.
“The system does a good job of maneuvering through the steps
to notify the next individual that it’s their turn to act; that’s time saved,”
said Oberts. “It also helps with the five Ws—who, what, when, where and why—so
the funds can be released at the right time and the vendor knows when to start
services based on having an approved purchase order, rather than just a verbal
approval.”
Additionally, said Oberts, Eved has clarified spend data by
pushing all the invoice information and data back into the ERP system. “And
once you have better data, you make more objective and informed decisions,” he
said.
Cleaning up the procure-to-pay cycle has improved Dell’s
meetings and events overall, according to Oberts. “The new model allows the
internal team to be more valuable in terms of what they can deliver, be that
the quality of the programs administered or the reduced time in reconciling,”
he said. “The difference is an increase in program quality, as [planning] time
is now focused on the overall experience and messaging, rather than the
administrative tasks like contracts and invoices.”
Moving away from its start-up status under Dell’s wing, Eved
discovered that the technology giant’s struggles were far from unique. “Dell’s
issues were the same as Fortune 500 companies across the board, where
they didn’t have visibility into meetings and events spend and the payment
process was very painful for this particular category,” she said. Addressing
that complexity up front has proved all the better for Eved, as it pushes its
solution out of the nest and into the marketplace.
This report originally appeared in the November 2015
edition of Travel Procurement.