In my last blog, we established more definition around the benefits of implementing a Deduction Management technology. Now we must leverage this information to craft a strong business case and implementation strategy in order to gain adoption with key partners and sponsors. The cornerstone of your business case, of course, is your Return on Investment (ROI). Begin with a baseline study: how many people, how much time, how many transactions, how many repays, etc. From there, identify where you want to be by leveraging SaaS technology, and the gap in between is your project savings opportunity. Be sure to consider both the efficiency and hard dollar saving impacts that were laid out in my last blog, Defining the Real Benefits of an Automated Deduction Management Program. Once you have your projected savings, lay them out over time (e.g., 5 years) and prepare a cash forecast showing savings vs. costs and net ROI. These should be stacked by savings type (e.g., efficiency, reduced paybacks, risk avoidance, etc.). Leverage this analysis to identify several critical success factors or Key Performance Indicators (KPIs) based on the elements of your ROI, these will be used throughout your project implementation and to manage on an ongoing basis for success.

With the hard analysis done, the next activity is to strategize on how to best engage with key stakeholders. It is imperative to create alignment in order to achieve adoption and subsequent success. My last blog discussed the importance of identifying WIIFM’s (What’s In It For Me?). Until a stakeholder understands how your initiative will impact them, or the company as a whole, they will not be as committed. In my opinion, the best way to accomplish this is a combination of telling the right story, and then having the numbers to back it up. This blog series has already provided some guidance on how to do both. Also be aware, if you are not already, that the role of the CPO and CIO are changing in a way that they are becoming closer partners with the CFO and Finance organization and play a more central role in project decisions. Make sure you know your audience, and identify what’s in it for each of them.

The next step is to define your implementation and supplier engagement strategies. Depending on your environment and specific areas of pain or opportunity you are solving for first, your path to implementation may be structured to allow the business to quickly receive maximum benefit and scalability early within the program. Variables may include how and when you reach out to specific groups of suppliers, which back-end systems you want to sync data with, what the rules are to manage the inquiry and dispute processes, and who the players are and their roles across all business units throughout the organization. Once you have determined your strategy, align your ROI model to adjust for the timing of your rollout plan and create communication plans to your suppliers and stakeholders about what they can expect from your program and when they can expect it.

The final piece is one that is often overlooked with many projects is creating a plan for not only the ongoing management of the program but for tracking and reporting against the initial project ROI as well. I have seen some very large, complex and costly projects that dedicated tremendous resources to implementation, and decent effort into program management, but neglected to make sure that their investment was paying off in the ways they expected. Imagine you were one of the key players in your company who worked on the implementation of a new company-wide, global ERP system. There was so much work involved to get to the finish line, everybody celebrated for a week. Six months after you go-live however, you CFO calls you and asks the question, “So how do we look in terms of actualized ROI so far from your new program?” Do you have a plan in place to readily answer this question? This is where we look back at our original ROI model and the Critical Success Factors and KPI’s that were identified early on as key areas of savings for your program. Track against these using metrics and scorecards. That said, always consider the S.M.A.R.T. (Specific. Measurable. Achievable. Relevant. Time-bound.) rule when creating your KPIs so you do not have to track something that is difficult to quantify.

I hope you have found this blog series both informative and valuable and that it may help you in creating new areas of savings for your organization through better supplier collaboration and oversight of the Deduction Management process. Feel free to reach out if you want to talk more about your own environment, or take a look at the solutions that PRGX Deduction Management has to offer.

Thanks for reading!


Senior Director Solution Consulting at PRGX

Josh Morrison is head of Global Solution Consulting with PRGX and is a 20+ year veteran of P2P, Strategic Sourcing and Supplier Management. In his role, Josh works closely with customers to identify new areas of value and develop lasting and scalable strategies for large and complex enterprise organizations. Josh holds an MBA in Entrepreneurship and Innovation, and currently serves as a member of the Board of Directors and President of the New England Local Chapter for the Institute of Financial Operations, the Account Payable industry’s leading professional association.

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