Partner project: tail spend management for Vodafoneziggo
Tail end spend – also known as marginal or low-value spend – often goes unmanaged and is therefore ‘invisible’. It can hide unorthodox buying, waste or worse, which is why more and more companies are tackling it. For VodafoneZiggo we implemented tail spend process automation together with our Dutch partner Xxelerate.
Axxerion is widely used within VodafoneZiggo, not only to support facility-related processes but also for processes such as Site Management, Access Control, and Asset Management. VodafoneZiggo is one of Spacewell’s major clients, is the owner and supplier of the Axxerion solution and provides consultancy services. Spacewell collaborates with its partner XXelerate to carry out projects and to provide functional management services.
VodafoneZiggo currently has 2 procurement systems in use. There are orders that cannot go through one of these 2 systems, for example because the selected supplier is not known in either procurement system, or because it concerns an incidental order for which it is not necessary to onboard the supplier. For these orders there is a 3rd process, called the Tail Spend process. This process was not supported via automation but went through email, telephone, etc. and VodafoneZiggo saw opportunities to improve the process and deploy Axxerion to support it.
To this end, VodafoneZiggo Excellence Center Procurement has carried out the Tail Spend project together with XXelerate and Spacewell, with the following objectives:
- Handle orders effectively (targeted, without waste) and efficiently (at the lowest possible cost) for “incidental” suppliers
- Keep the number of suppliers in the Tail Spend category as small as possible
- Be and stay in control of company-wide purchasing
- Simplify the ordering process for the end user
- Have management information available
- Long term: rationalize the number of suppliers, with the principle that scale will lead to purchasing benefits
After an extensive brainstorming session led by Spacewell’s Erik van Vessem, a project plan was made and the implementation of Axxerion started. Over a period of approximately six months, various sprints were carried out and an extensive workflow was realized in Axxerion, which ensures:
- Carrying out various checks to see whether the order meets the criteria for Tail Spend, among other things
- on the basis of the amount of the order
- whether orders have already been placed with this supplier via Tail Spend
- whether the supplier is known in one of the two other purchasing systems
- whether or not another supplier should be selected for the ordering service / product
- Approvals at the right level, with the possibility for Management Assistants to approve on behalf of managers
- Automatic transfer of approval tasks to substitutes if there is no timely response, taking into account holidays
- Recording of the invoice (s) and payment details when ordering
Other functionality that has been delivered:
- Web service interface with the external party that handles the payment of invoices
- Reports for Procurement Managers
- Email notifications
The Tail spend process has been delivered to VodafoneZiggo’s satisfaction and is in production.