This article summarises a recent discussion of a successful requisition to order process implementation case study.
Featuring Lhotse’s Co-Founder Henning Hatje and Senior Solutions Advisor Nicholas Martin, along with guest Gerald Seufert (Head of Payable Accounts and Requisitions at Fraport AG).
Lhotse is the first user-centric digital procurement solution – focused on making it easy for your employees to submit their needs, simple and fast. It works through an intelligent and collaborative question-and-answer approach, to simplify the purchase request process for requestors.
Fraport is a leading airport management company with operations at 31 airports across 4 continents. Their core operation is the passenger and cargo services at Frankfurt, one of Europe’s major hub airports.
Gerald was responsible for managing the Lhotse’s integration project at Fraport. Alongside his employees, he takes responsibility for all procurement processes at the organisation. Specifically, he deals with a variety of customers who have varying purchasing and specification guidelines, and seeks to adapt and find solutions to each one.
Nicholas has been on the product journey since the company’s inception. Indeed, as Senior Solutions Advisor at Lhotse, he is heavily involved in all implementation projects.
Redefining the Requisition to Order process
“Requisition process 2.0″ is a title that may seem harmless at first glance. However, it’s anything but trivial for those familiar with purchasing and requisition to order processes. This article highlights a successful implementation case study of Lhotse at Fraport, with their joint efforts for procurement optimisation.
In this article, we will cover three main segments:
- What prompted Fraport to change their procurement process?
- What were their requirements?
- How did Lhotse solve Fraport’s pain points and convince them of their solution?
Fraport AG: A City of Employees
With a workforce of almost 80,000, the number of employees at Frankfurt Airport exceeds the population of a small city. This is one of the largest workplaces in Germany. Almost 8,000 work directly for Fraport AG and, as such, are potential purchase requestors.
Fraport AG operates in many sectors, from retail and commercial, leasing and letting, and of course, aviation itself.
The pandemic had far-reaching consequences for the tourism sector. This eventually contributed to Fraport’s decision to find restructuring measures in order to optimise their current procurement process. In this sense, Covid-19 was a major driver for change. In 2020, this culminated in a decision to truly question all processes, rather than mere specifics.
Fraport’s pain points were a complex combination of technical and procedural hurdles. First, due to the great number of approval steps in their procurement processes, submitting requisitions had become an arduous process. For this reason, Fraport wished to find a solution which would reduce inefficiency by transferring more responsibility to employees.
The second issue was with IT.
At Fraport, users would be forced to fill out requirements in a designated form. This form would then go through approval processes and, ultimately, would have to be manually entered again into SAP. Due to a lack of integration between these systems, data was rendered redundant. The result was greater manual effort, less efficiency, and dissatisfied users.
When asked which process had the greatest need for improvement, Fraport’s executives unanimously answered “procurement”! The entire procurement process at Fraport was described by Gerald as “painful”. From determining requirements, sourcing and contracts, to invoice verification and payment.
Navigating digital transformation with Fraport’s Digital Factory
Founded by Fraport in 2020, The Digital Factory has a strong mandate: To encourage digital transformation in order to increase productivity.
Indeed, the Digital Factory is a process framework that has been firmly established as the backbone of technological innovation. It was through this project that Fraport sought varying solutions on the market and ultimately came across Lhotse. Multiple departments were involved in the digital factory on account of procurement’s numerous stakeholders.
From Nicholas’ perspective, the Digital Factory formed a project management umbrella that ensured all processes had clear objectives and were incredibly structured. In his view, the Digital Factory allowed the collaboration between Fraport and Lhotse to remain extremely focused and, in the end, to get off the ground.
As part of the Digital Factory, Fraport developed a five-step plan for the running of all implementation projects. Whilst these projects can be fast and dynamic in themselves, a clear structure is still vital for success. Fraport’s five-step plan covers everything from requirement definition phases, which involve many workshops, to developmental phases and ultimately integration.
Fraport’s procurement software selection process
At Fraport, the choice of a new digital procurement solution came down to a mixture of both quantitative and qualitative criteria.
A prerequisite for the Digital Factory was that a positive business case should exist for each likely solution. Thereafter, a prioritisation round took place at Fraport in which stakeholders discussed a number of digitalisation topics. It was crucial that new procurement technology would automate and standardise processes, and simultaneously save the organisation substantial money.
The Digital Factory has standardised evaluation matrices, which resulted in the 2 highest-digital procurement platforms. Ultimately, decision-makers evaluated each pitch, and it came down to a majority vote between two providers.
Despite Gerald initially voting for Lhotse’s competitor, in his own words, his scepticism was shown to be gravely misplaced. Gerald was particularly surprised and impressed by Lhotse in more ways than one.
Firstly, by the speed of implementation at the set-up phase: Getting from decision to product integration with SAP, took less than three months.
Equally, as a person with a thorough understanding of SAP, Gerald was pleasantly surprised by how successful Lhotse’s integration with SAP was.
Why did Fraport ultimately choose Lhotse?
Lhotse is a cloud-based digital procurement solution which compliments the standard SaaS solution. Ultimately, there are two components to its ingenuity.
The first is making life easier for business users who wish to make indirect procurement requests. Indeed, the intuitive user experience necessitates no prior procurement expertise, so that users are able to make purchases quickly and easily. The second is how Lhotse improves spending control and compliance on a more corporate level.
With their legacy processes established some 20 years ago, Fraport decided it was time to look for new procurement tools on the market.
Gerald noted that SAP as an ERP system fell short in one key aspect. In his view, getting the most out of SAP requires knowledgeable users who have the expertise and experience required to use the platform. At Fraport, all circa. 8,000 employees are potential requestors. Thus, finding an intuitive solution became imperative.
The key to successful procurement process digitisation at Fraport
Gerald put the success of the collaboration between Lhotse and Fraport down to three key principles.
Firstly, Lhotse’s ease of use and intuitive user interface. With around 8,000 requestors, all with little procurement expertise, Fraport needed an uncomplicated digital procurement system that allowed users to fill questions step-by-step without hassle. Lhotse was able to deliver on this through Lhotse Forms.
A second key to this successful digital procurement strategy was Lhotse’s ability to be entirely flexible and adaptable to different processes and workflows.
Thirdly, Fraport’s procurement processes greatly benefited from a newfound ability to consolidate everything into one place, due to Lhotse’s easy integration with existing systems.
In the end, collaboration was easy. The process of procurement transformation with Lhotse was, in Gerald’s words, extremely supportive and even fun!
“Successful collaboration with Lhotse came down to three things: user-friendliness, adaptability, and easy integration with existing systems.”
From Nicholas’ perspective, successful collaboration could also be attributed to the clear communication between both parties. Both Lhotse and Fraport were willing to learn from one another and make compromises for the sake of optimising the end result.
The End Result: a smoother requisition to order process
A solution for procurement excellence, which rejects old bureaucratic and cumbersome processes in favour of innovation and agility.
