Spring 2012 issue of Horizons

Features – continued

The new process could be that the purchasing card statement is reviewed and approved by the person’s manager to ensure all purchases are valid and within company policy. To change a process, the right stakeholders need to be involved and must agree that the change is needed. Stakeholder understanding and agreement is a crucial step in the process as it ensures that there will not be barriers to resolving the issue. Case Study Below is a real-life example of how a well-thought out plan can help an organization run efficiently, meet its goals, and save the company from paying unnecessary costs: Company XYZ reorganized its four administrative offices into one centralized administrative office. The centralized accounts payable department was now processing four times the number of invoices and disbursements than they had processed in the past. Shortly after the centralization occurred, however, the AP process began to fail and invoices were regularly paid late. These late payments resulted in late fees and vendors calling periodically in an effort to collect funds. If the company continued on the road it was on, it could easily be paying $50,000 and $70,000 each year in late fees plus suffer immeasurable damage to the company’s reputation. Company XYZ decided that the process had to be re-engineered and an outside consultant was brought in to assess the process. The first step performed by the consultant was to hold SIPOC meetings to determine where the process was breaking down. The SIPOC meetings led to many preliminary findings: • Invoices were still being sent to branch locations • Those invoices were not being sent timely to the centralized office

Obtaining measurable support for why the issue is problematic is key in this process. This data driven approach will help you obtain buy-in from your employees and management, so that all involved understand the problem and start formulating ideas to address the issue. Once problem areas within the process have been identified and confirmed, your team should map out the process. This will help everyone visualize at what stage in the process an issue occurs. The process should then be re-mapped (or re-engineered) to resolve the issue. For example, if the current purchasing card policy— which requires purchasing card expenses to be approved by the person who made the purchases—is not effective in monitoring purchases, then the team should brainstorm and map a new process that would ensure adequate control of the purchasing cards.

Raise Your Expectations

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