If proper planning and strategy are required to ensure a commercial card program brings maximum business benefit in terms of reduced costs and improved efficiencies, the same can also be said of the development of an overall Procure-to-Pay technology strategy. A commercial card program has the potential to vastly increase the type and amount of information that can be gleaned during the purchasing process. A technology infrastructure that is well integrated with that process can improve procurement now and enable improvements such as increased leverage from suppliers, improved internal compliance or a reduction in the number of purchase orders that need to be issued and processed. Side-by-side with strong technology integration and user compliance – driven by top-level management support and cardholder buy-in – ensure that the commercial card program realizes its full potential, handling the maximum amount of spend in the most efficient way.

One critical challenge in ensuring that an organization will be able to derive maximum value from its Commercial card program is to integrate the program as closely as possible with the technology infrastructure from the ground up. The technology platform must be aligned as closely as possible with business and information-handling processes to enhance the required flow of information.The increased amount, type and detail of transactional data being captured can be used wherever, whenever and however required to maintain and improve the procurement process. This means that it’s necessary to involve Information Technology (IT) as early as possible in the planning phase, in direct cooperation with other business units such as procurement, finance and human resources. The goal is to make purchasing and transaction processing easier and faster for the company’s users, and to enable a new level of detail and accuracy in the reporting and analysis of corporate spending across the broadest possible range of spending categories.

The technology component of a Procure-to-Pay strategy has to be aligned not only with the Procure-to-Pay strategy and overall company goals, but must also be designed taking present IT resources into account: it will seldom be physically possible or financially feasible for the developers of a Procure-to-Pay strategy to be given whatever new technology investments they request. The procurement strategy of the previous year must also be reviewed, not only to identify areas for improvement but also to ensure that plans are consistent with previous years and that changes are not made so radical that end user buy-in is lost. The users – as well as other key stakeholders such as management – must be able to understand the new strategy as a logical progression from what went before, even if the changes are significant and fundamental.

Several companies that participated in the VISA Procure-to-Pay Best Practices study assigned representatives from their IT departments to work directly with the procurement staff, in order to ensure that both the technology and procurement-process implementations were in sync. One midsized company, taking its cue for Procure-to-Pay technology investment from its IT strategy, even decided to delay a planned e-procurement system because it couldn’t be integrated with the existing IT platform and other initiatives: an excellent example of the kind of organizational vision that can result when departments cooperate closely, recognize each other’s priorities, and take their cues from broad organizational strategy.

One common goal in integrating technology and purchasing is to allow users to fill out and submit expense reports online. Technology integration will enable reports to be pre-populated with general ledger and cost centre information drawn from back-end systems such as enterprise resource planning (ERP) software. This level of functionality deepens user buy-in by making the increased process efficiency readily apparent at the desktop. Ultimately, the technology strategy should pave the way for ever more advanced functionality, for example the ability to pay commercial card statements automatically.

“We’re making reconciliation easier all the time,” says one large enterprise VISA customer that has integrated advanced ERP and e-procurement systems into its commercial card program. “Now every cardholder’s basic information – cost centre, e-mail address, supervisor and so on – is automatically uploaded into the directory file and our Issuer can apply any changes for commercial card reporting.”

A strong technology foundation enables companies to implement Procure-to-Pay strategies consistently and uniformly across disparate business units, corporate ‘cultures’ and geographic locations. A sound IT foundation, aligned with the requirements of the Procure-to-Pay strategy, enables supervisors and program administrators to obtain clear, accurate, to-the-minute reports on spending trends. The ability to receive immediate notification of spending inefficiencies and instances of purchasing non-compliance enables new savings opportunities to be identified and existing ones to be maximized.

But it’s by encouraging and enforcing user compliance that companies can realize the full potential of a Procure-to-Pay strategy and thereby focus on improving user compliance where it can bring the greatest savings. As with the implementation of the technology support for the Procure-to-Pay strategy, an approach to user compliance must be handled with care. Program managers must regularly communicate which purchases are eligible for commercial card use. If an eye is kept on purchase categories still being handled in other ways, such as by purchase orders, managers can develop a better idea of transactions that could benefit from being added to the program, as well as tracking purchases that should have been made that way but were non-compliant. One company pointed out to cardholders that the card ‘protected’ them by eliminating their individual responsibility for transactions, shifting it to the organization. The Accounts Payable function at another company sends standard e-mails to encourage frequent spenders either to get a card if they don’t have one, or to use it more frequently if they do. Success should always be rewarded: communicate the benefits associated with card use and commend actual instances.

The best way to ensure that a Procure-to-Pay strategy reflects an organization’s unique culture, as well as fulfilling tangible business goals and priorities, is to involve key business stakeholders up-front. This naturally includes individuals with decision-making authority whose buy-in is critical, but broader interdepartmental representation is also necessary. One large enterprise VISA customer formed a key stakeholder committee when it embarked on a card program redesign, and included representatives from the security, tax, audit, legal, finance, treasury, procurement and expense management functions.

Best practice companies often soft-peddle commercial card implementation, insisting only that card use is “strongly encouraged” rather than mandated. Such a strategy will be more effective if encouragement is made regularly and in innovative ways. The VISA Procure-to-Pay Best Practices Study profiles several companies that have effectively adopted a ‘hearts and minds’ strategy for commercial card implementation.