Rapid Process Improvement for P2P at a Drilling Company
In a short span of 2 months, BPM-D helped a deep-water Drilling company to create a projected saving plan of $7.5 million through process improvement in their Procure-to-Pay area; using BPM-D Framework’s Rapid Process Improvement offering.
A leading deep-water drilling company operating out of London, has regional offices around the world and operates more than 50 drill rigs employing 4500+ employees. The company operates all types of drill ships and rigs in harsh and benign conditions.
Challenge & Opportunity
They were dealing with issues in their Procure-to-Pay (P2P) process:
- Only 55% of the invoices were being paid on time and the invoice processing cost was too high.
- The various teams were working in silos and did not have an end-to-end view of the Procure-to-pay process.
- With multiple stakeholders and a regional structure, knowledge was localised with individuals.
The organisation had set a target of achieving 90% on-time payments, and progress had been made in tackling the issues, but not enough to achieve the target. A decision was taken to look at the overall P2P process to help the organisation improve on time payments and the overall process efficiency.
Earlier initiatives had identified about 200 specific issues, but it was unclear on where to start. BPM-D supported the initiative by introducing a top-down focus and creating visibility of the end-to-end process.
- 20 key As-Is processes in the end-to-end Procure-to-Pay processes were documented in the client’s process repository tool.
- Key stakeholders were interviewed.
- 200 (bottom-up) issues were rationalised, new ones added and mapped to the processes.
Based on the processes’ impact on timely payment and current maturity – a simultaneous exercise of prioritisation helped identify the High Impact and Low Maturity (HILM) areas of business; areas that needed immediate attention.
This helped drive the next phase of Rapid Process Improvement, by helping focus efforts on the HILM process areas, for the company’s key value drivers.
A kick-off workshop was conducted with the key stakeholders from the business. This provided them with an end-to-end view of the Procure-to-Pay process and provided an insight into the dependencies on the other parts of the business. More importantly, based on the issues, the workshop yielded 48 Improvement actions for the processes. These improvement actions helped shape the To-Be process models.
In order to deliver the business case, a series of 29 ‘Mini Projects’ or work packages was developed from the 48 improvement actions. These were then prioritised based on an effort v/s benefit. This gave the company a good overview of which work packages to pursue first. The work packages were prioritised into three execution waves:
- First Wave: focusing on resolving key source issues.
- Second Wave: focusing on optimising the PO processing.
- Third Wave: focusing on continuous improvement.
Business benefits were calculated on 5 major areas that added direct or indirect benefits to the bottom line. The business case was based on a thorough understanding of the operating costs and how these could be reduced by improving the inventory management.
A compelling, fully costed business case that yielded the following benefits: