The approval process for the huge number of transactions that are recorded within each functional area of any multi-billion dollar business becomes more daunting as work processes are centralized into large processing centers. Approval processes often evolve over time with different approaches and philosophies used by different functional areas, making coordination and the sourcing of a common system difficult.

A Peeriosity member at a large global manufacturing company was evaluating replacement options for their custom-developed “Transaction Approval Matrix”, including a better understanding of what the scope should be for the approval matrix.  For example, the Purchase-to-Pay team uses the approval matrix to review spend authorizations (including viewing signature samples) and the General Ledger team uses the matrix to review authorization levels by position and employee name.  Other authorizations have been added over the years for other functional areas.  Because the custom-developed system was created on a platform that was no longer supported, finding a replacement solution was a high priority.

To understand the options being used, the member worked with Peeriosity to create an iPolling^TM question to quickly understand the range of design alternatives being used by leading companies around the world.   The focus of the poll was to understand if peer companies have implemented a software tool, and if they had, the scope of process areas that were covered by the tool.   Many also commented with specific details about the solutions that their companies had selected.

The poll results indicate that 77% of member companies have implemented a software tool to manage the approval process, with 11% currently evaluating a software tool. 

Regarding the scope of the system or hierarchy used for approvals, for 46% of member companies the scope is focused on Accounts Payable and Procurement, with 13% focused exclusively on Accounts Payable processing. Interestingly, 20% have an approval system or hierarchy that includes many functional areas, that are not limited only to Accounts Payable, Procurement, and General Ledger work processes.

Here are examples of some of the additional comments from Peeriosity members:

• We use SAP for AP and Procurement approval levels; however, approvals for other processes are handled outside of SAP.  This is an improvement opportunity for us.
• We use a homegrown tool built on top of Westbrook’s Fortis system. We are currently looking to build out replacement functionality through our BPM Software, Sequence Kinetics provided by PNMSoft.
• Using Oracle ERP iProc for Procurement and ReadSoft’s InvoiceIT for invoice approval and workflow. 
• We use Oracle EBS workflow for procurement, expense reporting, and PO approval, and we use a home-grown workflow solution for AP.
• For most of our hierarchy approvals, we use the Oracle GEMS grade and/or job title to control procurement approvals and spend authorizations. The control matrix we use is leveraged by Oracle tools.
• We establish approval authorities based on job level in the HR system, and not based on job title or specific name. The HR system feeds the workflow components of Oracle and Concur for payables, and Ariba for procurement and contracting.
• We use SAP to track and check approvals for Requisitions, PO creation, and Service approvals. We use a separate system to track approvals for completed reconciliations. We also use another system to accept approval for some of our non-PO-related invoices.
• We use our Oracle EBS for GL approvals. Other process areas use a homegrown system. We are continuing to move toward centralization to Oracle.
• We currently leverage an internally developed workflow solution; however, we are considering transitioning to an external solution (looked at Dolphin, Open Text, Direct Insite).
• We currently use an automated workflow system built by ICG Consulting Group. The hierarchy is maintained in the back-end process. We currently use a person-based hierarchy but will be switching to a role-based hierarchy in early 2015. This hierarchy will also integrate with Workday bringing in the name of the authorizer and escalating the approval item if a name is not returned.
• We use custom tables in SAP to manage our approval limits & hierarchy for Accounts Payable, Procurement, and General Ledger.
  

What type of system or hierarchy is used at your company to confirm or control approvals? If you have implemented a system or hierarchy, what functional areas are included in the scope?

Who are your peers and how are you collaborating with them?

 “iPolling^TM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated e-mail system, Peer Mail^TM, members can easily communicate at any time with others who participate in iPolling.