James McDonald is the Director of Procurement Operations at Voya Financial (formerly ING). He is somewhat of a legend in the P2P world, and is a frequent speaker at many financial automation software and P2P-focused conferences. He is also a member of PayStream’s Advisory Board, and we were proud to have him join us in San Antonio for his session, “Optimizing P2P Value Using Metrics and Automation.”

One reason Mr. McDonald is such a prominent P2P figure is the profound success he had in implementing a procurement system in his organization. The installation and launch of the system, and the following dynamic optimization of the Procurement technology, led to amazing efficiency and productivity for Voya. Mr. McDonald maintains that efficiency by leading the team supporting and administering P2P-related technology and programs, and together, they are responsible for developing strategies to facilitate compliance and grow more programs that drive automation. Mr. Donald shared some of his strategies for accomplishing those goals in his session.

Voya Financial transitioned from ING U.S. in April 2014. They currently report 7000 employees and $850M in total spend—$500M of that is PO spend alone. They have the vision of being America’s Retirement Company, and they strive to maintain efficient business processes to help in that goal. Their Procurement/Finance structure entails centralized Procurement, decentralized buying, and centralized Accounts Payable (AP), and the systems they use in these processes are Ariba Buyer (Invoicing) and PeopleSoft Financials (AP, GL).

According to Mr. McDonald, Voya’s AP and Procurement systems before automation enhancement were decentralized and un-managed. Every process was a manual procedure with no technological support, and they utilized “Authorization Tables” to identify who had the authority to approve which invoice. Change only came from the top and AP staff members were “processors and doers” rather than “thinkers and enablers.” Solutions were thrown at problems as bandages instead of cures, and most importantly, there was no continuous improvement mindset. The impact these factors had on the business culture was stagnation—there were recurring problems, non-compliant users with no motivation to move beyond their comfort zones, and overall, no progress towards strategic goals.

When it finally became time to remedy the entire situation, James McDonald had his hands full. However, the success came from a transformative approach that was focused on the entire P2P lifecycle of the organization. This approach viewed AP and Procurement as interchangeable entities, and integration between the two was a top priority. Through the use of P2P Best Practices, they were able to connect their PO and eInvoicing process and ultimately fully align AP with Procurement. The success in costs savings showed significant FTE reduction/redeployment, early pay discounts capability, P-Card rebate revenue, and procurement policy compliance. In terms of process efficiency improvements, there were increases in electronic straight-through invoices, active eInvoicing suppliers, and invoice to P-Card conversions.

In all, the success that Voya experienced had much to do with the confident and optimistic approach they took on improving their business processes. They analyzed the various performance metrics that were damaging the success of their departments, and reversed them by using strategy to drive efforts and optimize their resources—strategies that Mr. McDonald shared with INNOVATE attendees. To achieve a solid P2P transformation, Mr. McDonald advised organizations to make eInvoicing and AP automation a priority by identifying strategic goals, building into employee objectives, and looking to redeploy processors as automation enablers. Companies should also encourage P-Card use and growth, and aggressively manage compliance through mandated training and analyzing compliance KPIs.

Overall, Mr. McDonald drove home the importance of value: recognizing the value that an optimized and integrated AP and Procurement process could have; identifying how to gain that value; aggressively moving towards that value; protecting that value through consistent maintenance and compliance. PayStream was proud to have such a legendary P2P Innovator at this year’s Summit, and we look forward to seeing how far Voya can take their P2P process efficiency in the years to come.