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Procure-to-Pay A Journey from Simple to Sophisticated Focused on Process Efficiencies. REIT = Real Estate Investment Trust (NYSE:BXP)* 157 Properties 60.3 Million Square Feet In-Service $ 28.4 USD Billion Total Combined Market Cap Five Regions/Markets Boston New York Washington DC
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Procure-to-Pay A Journey from Simple to Sophisticated Focused on Process Efficiencies
REIT = Real Estate Investment Trust (NYSE:BXP)* • 157 Properties • 60.3 Million Square Feet In-Service • $28.4 USD Billion Total Combined Market Cap • Five Regions/Markets • Boston • New York • Washington DC • San Francisco • Princeton * December 31, 2012
The Environment • 720+ Employees across 100+ Physical Locations • - Corporate Office with Five Regional Offices • JD EnterpriseOne 9.0 / Tools 8.98.4.3 • Implemented January 1999 / Upgraded May 2009 / Implemented Tools Upgrade • Procurement • Originates Across Many Locations; Decentralized • Centralized Accounting • Small to Large Transactional Value • Striking a Balance between Risk/Controls and Efficiencies
OUR JOURNEY… 6+ Year Evolution of Procure-to-Pay Processes and Systems
The trigger… • “We’re a PO culture….” …four different systems. ….five different processes.
Purchase orders • We standardized: • NexusPayables(real estate solution provider) • Workflow • Process …but
INVOICES By type 2008 2012
…HAS to Be a Better Way • Rationalize – Process Improvement (2009) • Invoice Scanning • Invoice Consolidation • Preferred Vendor Program • Recurring Vouchers
…HAS to Be a Better Way • Invoice Scanning • 235 File Drawers • Centralized Scanning • #1 Used Application • Complete Transparency
…HAS to Be a Better Way • Invoice Consolidation - Examples • Otis = National Contract 350 • Janitronics = 1,700 to 600 • Temco Industrial = 1,800 to 430 • Preferred Vendor Program • Within Each Region • Recurring Vouchers • Leveraging JD Edwards to Recycle Vouchers during the Contract Period = 250 Reduce Invoice Count by 18% from 2009-2010
…HAS to Be a Better Way • New Programs (2010-12) • Outsourcing Utility Invoice Processing-Payment • US Bank P-Card • US Bank C-Card • JD Edwards Integration
…Outsourcing Utility Invoices • Electricity, Water & Sewer, Natural Gas, Steam & Fuel Oil • Invoice Processing • Invoice Audit • Future: Energy Reporting
…P-Card & C-card • 207 P-Cards = 14,000 Transactions/$4.2 Million • 150 C-Cards = $2.4 Million • Online Coding, Receipts, Online Approvals • Rebates • Audit • JD Edwards Integration
INVOICES By type 2008 2012 87,000 60,000
OUR JOURNEY… 6+ Year Evolution of Procure-to-Pay Processes and Systems
Payments 2008 2012
…Ghost card & paymode • Bank of America ePayables (Ghost Card) • 2012 = $12.5 Annually = 4,000+ Payments • 340 Vendors • Rebate = $157,000 • Bank of America Paymode (ACH) • 2012 = $161.3 M = 7,000+ Payments • 1,000 Vendors • Cost = $.50 vs. $2.11/Check • Cost Effective/Efficiency for Both Parties
Payments 2008 2012 45,500 42,000
2013 Re-baseline • 85% of Transactions are Only 10% of Spend
2013 ‘procure’ Objectives • Establish PO Threshold Minimum • Eliminate PO Requirements for Contracted Purchases • Receiving Optional for PO’s under a Dollar Threshold - TBD • Migrate Lower Dollar Transactions from PO to P-CARD • Push Spend to $10,000,000+ • Raise Single Transaction Limit • From $2,500 to $5,000
2013 ‘PAY’ Objectives • Reduce the Number of Checks!!! • Convert to ACH or Ghost Card(36% -> 50%) • US Bank P-Card • One Auto-Debit/Month ~ 1,200 Transactions • US Bank C-Card • One to Two ACH Payments/Month ~ 200 Cardholders
…Lessons • Partnership • Challenge your Banking Relationships • Push the JD Edwards Solution • Measure then Re-Measure
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