Customer Success

Challenge

Encumbered with disparate processing systems and locally developed applications Medco P&T leadership found its procurement operations unproductive and inflexible to change.

The firm’s backend processing system primarily consisted of an ERP application managing finance, plant maintenance, human resource and materials management activities. This system had not been created to support e-procurement. As an initial solution, Medco E&P ran a parallel but unattached locally developed application that handled vendor evaluations and procurement processing. Unfortunately, this disjointed solution offered no system-to-system communications and duplicated many processing efforts.

The myriad of challenges saddled within the out-dated e-procurement process overwhelmingly burdened the productivity of system users. Due to the lack of communication between the two processing systems, users had to duplicate efforts, which not only undermined productivity but also resulted in data-entry errors, further hindering productivity. In addition, minimal visibility into process status – where tasks where, who held said task and how long said task had been running – made team responses to processing issues reactive. Adding to this rudimentary inflexibility was the fact that the system left users unable to audit process movements. Consequently, team members could not redirect process steps and participants to effectively remediate process problems. They could not effectively plan for matters dealing with product unavailability and resource overload.

Given the crippling effects of the system, the Medco E&P leadership set out to implement a software solution that would dynamically connect the various systems, track and optimize each initiated process and nimbly facilitate audits during the approval cycle.

The Medco E&P project team retained Bizmann System, a business process consulting firm located in Singapore, to help create a project plan and solution framework. Key corporate requirements included product flexibility, ease of use, and ease of integration. With a business requirements document in place, Bizmann recommended HandySoft’s BizFlow® to create a fully-integrated e-procurement automation application.

Solution

The introduction of the BizFlow®-based e-procurement solution afforded the Medco E&P team efficiency and process innovation. Steps to procurement process automation include:

• Prepare Service Request – User initiate service request, which posts to the ERP system to create a service request number. Since BizFlow® is also integrated with the e-procurement system, it immediately notifies selected vendors. They fill out e-forms, which automatically trigger vendor evaluations, which in turn update the database with vendor proposals and starts the “validate contract” sub process.
• Validate Contract – Once initiated, BizFlow® routes contracts based on defined policies and procedures for respective approvals. After the necessary validation, BizFlow® posts to the ERP system for updates.
• Prepare Purchase Order – Upon contract validation, BizFlow® issues a purchase orders that is routed for approvals. Budget availability, allocations and budget validations are carried out within the sub-process. BizFlow® also takes care of integration with the ERP system for cost center management, enabling a single interface for work completion.
• Prepare Work Acceptance Notice – After the PO is completed, a work acceptance is triggered and routed for processing and approvals. The ERP system gets updated dynamically. If changes are required, BizFlow initiates change sub processes such as validate change contract, change contract change purchase order, and work acceptance notice cancellation. To close out the process the e-procurement solution updates all systems and archives for future analysis and audits.

Tying into both the existing ERP and e-procurement applications, BizFlow® enables once-and-done data entry. Managers can assign or redirect tasks to process participants based on current workload. Built in are automatic task distribution based on pre-defined business rules. And rich, detail-driven analytical reports and intuitive process paths allow for quick assessment of resource utilization driving the. Providing further autonomy and flexibility, the e-procurement solution enables backend processes to automatically forward submissions to decision-makers for approval, while guiding tasks along the appropriate escalation paths when necessary

Included in Medco E&P’s e-procurement solution is an integrated view of all the data associated with each task, such as

• Product data
• Electronic images
• Vendor registration
• Scoring and assessment vendor evaluations

Rather than chasing down from multiple systems and people, this single user interface has significantly increased staff productivity and improved customer service.

Results

Using the e-procurement solution, Medco E&P has

• Significantly improved operations by eliminating redundant data entry and manual paperwork. Not only has the company saved thousands in paper, they have saved thousands by eliminating files, freeing space, and reducing labor costs. No longer are staffers inundated by monotonous re-keying due to document loss or processing error. Rather, they are empowered with the ability strategically manage and monitor tasks based on priority and impending deadlines.
• Granted business users more control over process design, freeing up IT to focus on other development concerns.
• Eliminated job sorting and tedious waiting time through automated routing based on job authorities. This easy process modification allows authorized users to make on-the-fly modifications to fit the company’s ever-changing business environment.
• Enabled corporate leadership to strictly enforce approval and hierarchy control while streamlining the overall process. Managers can set authorizations with dynamic and multiple sets of approval limits or just automate approvals based on price levels. Through this new level of control and visibility, managers get to exert greater control over resource planning and management initiatives. By linking work tasks to user roles rather than particular users, managers can dynamically reallocate work based on productivity and availability.

Medco E&P, Director of Business Shared Services, Pak Syamsurizal Munaf says “The implementation of HandySoft’s BizFlow® certainly brings about seamless integration between systems-to-system and manual processes. It leverages the use of our existing ERP system and shortens the ROI. The flexibility of BPM allows us to conduct process improvements thereby creating an opportunity for our organization to improve her deliverables."