One of The 15 Secrets to Shared Services Success - Lean in Purchase to Pay

Over the next few weeks I will be sharing with you some of the gems that came out of the March event on 15 Well Kept Secrets to Shared Services Success (sponsored by market leaders OB10 and Basware). Where to start?! With Secret No. 4, of course: ''Practise Lean' led by Marks and Spencer. All this is intended to help you with your shared services, e-invoicing and purchase to pay projects.

Make Lean An Innate Way of Thinking and Increase Your PO Compliancy

Marks and Spencer established their shared services centre in 2003. Now they have 110 FTEs in Finance supporting 65,000 FTEs. In 2006 they realised they had no KPIs and decided in truth they weren't really operating shared services, but instead centralised finance. There were demands from the business to offer more support without increasing headcount. They realised they needed their team to become more productive, and therefore more efficient. Therein followed a shift to 'Create a Passion for Excellence'. In April 2007 they went live with SAP. They are indeed the largest implementation of SAP in retail. They executed Lean and now 90% of customers are satisfied. Lucy Wilson Head of Operations and Service Management and Jason McGovern Head of Accounting Operations reminded us that Lean is not about cost reduction but about eliminating 'waste' and focusing on reducing the time spent on an activity.

Key Take Aways:

1. They switched this and freed up £60 million cash and added £2.2 million to the bottomline through interest.


2. They ran a 5 day workshop and documented each process, and then agreed which bits didn't add any value, and which bits they didn't add value to.


3. They also ensured there would be no more than 5 people in the team.


4. Through Lean they have reduced this to 6 pence - a savings of £2 million.


5. Through Lean they have reduced the time an FTE spends on financial processes by 58% - this means productivity can easily double.


6. They calculated that each SAP license cost £500 per annum - they identified all SAP users, and then 120 FTEs that did not require access to SAP and delivered a £60K annual saving.


7. M&S do not have the option of parking an invoice - there are only 2 options - post it on the system or return it.


8. They implemented a No PO No Pay scheme and went from 55% PO to 90% PO - in non merchandise PO invoices are now at 96%.


9.