Introduction. Table of Contents

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2 Introduction To stay competitive, you know how important it is to find new ways to streamline and save on your company s operations. Learning how leading companies handle commercial payments can give you deeper insights into where and how you can improve. Help you understand how to run your Procure-to-Pay processes more efficiently. Enhance visibility into corporate spend. Gain better control and compliance. And ultimately, help enable you to add more profit to your bottom line. Visa commissioned Deloitte Consulting to conduct 90 in-depth interviews in with more than 60 global/multinational, mid-size and large corporations as well as federal and local government agencies across the world. In 2010, Visa commissioned Deloitte Consulting to update each of the following 28 Travel and Corporate Card Best Practices from the comprehensive study to include current trends, updated case studies, and additional key findings. See the section entitled Study Methodology for additional detail. The Visa Global Procure-to-Pay and Commercial Card Best Practices Study describes how these organizations implement and optimize their Procure-to-Pay processes and commercial card programs. The study gives you access to best practices for a variety of topics: Maximizing the benefits of purchasing and corporate card programs. Streamlining travel and entertainment management. Taking advantage of the latest innovative best practices. And automating the entire Procure-to-Pay process. Each best practice is divided into three useful sections a recommendation overview, a benefits outline and steps for implementation so you can quickly find the information you need. For more information on the Visa Global Procure-to-Pay and Commercial Card Best Practices Study, contact your commercial banker. Table of Contents Automate Order Placement with an e-procurement Solution Study Methodology Note: Survey results, research and practice recommendations are intended for informational purposes only and should not be relied upon for marketing, legal, technical, tax, financial or other advice. When implementing any new strategy or practice, you should consult with your legal counsel to determine what laws and regulations may apply to your specific circumstances. Visa is not responsible for your use of the information, including errors of any kind, or any assumptions or conclusions you might draw from its use. Much of the information contained in this document applies internationally, but a certain amount of information applies only to certain countries or regions. Although Visa tries to mark all country- and region-specific information with a country indication, it does not warrant or represent that all information without indication applies internationally. You should check the applicability of any information in this document to you or your organization.

3 Automate Order Placement with an e-procurement Solution Best practice companies have successfully implemented e-procurement solutions to streamline and automate their order placement activities. e-procurement software applications are employee self-service solutions that support requisition, approval routing and order placement. These applications eliminate manual purchasing activities, minimize process variance, enable process integration, reduce the need for multiple procurement systems, and minimize invoice and payment errors. Studies have shown that the use of such tools can reduce the average cost of Purchase Orders between US$10 and $20 1. Successful e-procurement implementations are based on the development of a clear business case containing measurable goals and benefits. In addition, successful implementations require involved project sponsors, clearly-defined communication and training programs, and a phased rollout strategy. For example, some companies select specific vendors to be initially placed on the e-procurement system. As users get accustomed to use of the system, additional suppliers and spend categories are added. One U.S. communications company implemented an e-procurement system with a team of key Procure-to-Pay stakeholders from the shared services organization. The team worked with end users from each business unit (e.g., administrative assistants and managers) to understand what types of purchases should be placed on the e-procurement system. Placing the time-consuming, low dollar, and high volume purchases on the e-procurement system led to the rapid adoption of the system. After initial implementation, it gradually added a number of other suppliers and spend types to the system. "Our company operates in a non-mandate environment but the e-procurement system allows us to limit the purchasing options of employees to preferred vendors and approved spend types. Global Procurement Director, U.S. Communications Company To help ensure the estimated e-procurement system benefit is achieved, companies encourage compliance with the prescribed use of the system. Some companies strongly encourage usage through education and compliance reporting while other companies mandate usage. A U.S. communications company was particularly successful in achieving e-procurement system compliance through the incorporation of the purchasing card as a form of payment in the system. Using a purchasing card in conjunction with the e-procurement system dramatically streamlined the purchasing and payment process for employees. The company developed an internal marketing campaign to advertise the ease of use of the purchasing card and e-procurement system which significantly increased user adoption. Leading organizations develop formal processes to enroll suppliers in their e-procurement systems and maximize the automation benefits by integrating the purchasing card as the payment method. A multinational technology company required the e-procurement suppliers to accept purchasing cards as the form of payment and provide Level II transaction data. As a result, the company increased automation within its Procure-to-Pay process and improved its spend reporting and control. For more information on integrating card payment with Procure-to-Pay technologies, 1

4 please refer to Visa's Practical Guide to Commercial Card Integration with e-procurement and ERP Applications. This guide explains how to integrate commercial card programs with enterprise applications and covers the following topics: Procure-to-Pay market trends, why, when, and how to integrate, ongoing integration management activities, integration case studies and recommended integration practices. Options for Best Practice Adoption The implementation of an e-procurement system automates the order placement process. It can also enable end-to-end automation through payment via purchasing card of e-procured purchases. "We significantly increased use of our e-procurement system by ensuring that the user interface was as streamlined and intuitive Option I Option II as possible. Options for Adoption Use e-procurement system for eligible spend and preferred suppliers Integrate purchasing card as a form of payment with the e-procurement Global Procurement Manager, Multinational Manufacturing Company system Benefits Encourages compliance for Maximizes cost savings through purchases with preferred suppliers automation of the order Enhances spend analysis for placement to payment process supplier negotiations Improves control and compliance to purchasing policies and procedures Key Considerations Requires preferred suppliers to Requires preferred suppliers to enroll in e-procurement system enroll in e-procurement system Requires detailed user training and Requires resources to integrate communication purchasing card data with the e- Requires determination of Procurement system preferred payment method, by Requires detailed user training and supplier communication Benefits Successfully implemented e-procurement systems may provide a variety of improvements to the Procure-to-Pay process. 2

5 Category Control and Compliance Cost Savings and Process Efficiency Supplier Management Benefit Obtained The use of e-procurement solutions increases the use of preferred suppliers and encourages compliance with purchasing policies and procedures. e-procurement systems automate the requisition and purchase order creation process leading to cost savings and process efficiencies. Additional process efficiency can be gained through the integration of purchasing cards as a form of payment in the system. By mandating purchases through the e-procurement system, a greater volume of spend can be placed with preferred suppliers, improving the ability to negotiate for pricing, volume discounts, and quality of service. "On average, companies purchase 35 percent of their controllable spend through e-procurement." Visa Commercial Card Integration with e-procurement and ERP Applications Study, 2006 User Satisfaction e-procurement systems can increase user satisfaction through standardizing and simplifying the purchasing process. Implementation Steps There are a series of actions steps which are necessary to implement and successfully use an e-procurement system, regardless of the level of adoption. # Description of Action Step 1 Develop cross-functional team of business and technology employees to determine order placement via e-procurement requirements 2 Identify eligible spend categories for e-procurement 3 Develop detailed business case for e-procurement including investment description, anticipated costs, and any quantitative and qualitative benefits 4 Develop measurable goals to track the costs and benefits as well as compare actual performance to projected performance 5 Select and implement an e-procurement solution 6 Identify and enroll preferred suppliers for eligible spend categories in the e-procurement system 7 Integrate the commercial card as a form of payment 8 Modify user trainings and communications to reflect e-procurement purchasing policies and process 9 Develop reporting capabilities to analyze e-procured spend and supplier performance 10 Periodically conduct spend analysis to identify additional spend categories eligible for e-procurement purchases 3

6 1 Forrester, The Forrester Wave : eprocurement Solutions,

7 Study Methodology The objective of the Visa Procure-to-Pay and Commercial Card Best Practices Study was to better understand the changes in the segment and to gain a comprehensive understanding of best practices across the Procure-to-Pay process and within the commercial card program. Visa commissioned Deloitte Consulting to conduct 90 in-depth interviews in the summer of 2007 with more than 60 global/multinational, mid-size and large corporations as well as federal and local government agencies across the world. In 2010, Visa commissioned Deloitte Consulting to update each of the following 28 Travel and Corporate Card Best Practices from the comprehensive study to include current trends, updated case studies, and additional key findings. The evaluation of the Procure-to-Pay process included sourcing, order placement, payment and settlement, reconciliation, control and audit, and reporting activities. For the commercial card management process, the assessment focused on practices related to the purchasing and corporate card program strategy, management, and reporting. Interviewees included Regional Controllers, Chief Procurement Officers, Directors of Strategic Sourcing, Procurement Managers, Accounts Payable Managers, Global/Regional/Local Commercial Card Program Managers and Travel Managers. Study participants had a range of commercial card programs in place including purchasing card, corporate card and commercial one card programs with each of the top three card providers: Visa, MasterCard and/or American Express. 5 STUDY METHODOLOGY