ServiceNow GRC Meets Aavenir Source-to-Pay: Implementing Real-time Vendor Risk and Compliance Management

Continuously monitor, detect, assess, mitigate, and remediate risks and compliances in third-party vendor ecosystems by harnessing the power of ServiceNow GRC integrated with Aavenir’s AI-powered Source-to-Pay (S2P) solutions built natively on unified ServiceNow Platform.

For most large enterprises today, 80-90% of their third-party supplier engagements are typically of large scale (multi-million-dollar engagements) and the term ranges from 3 to 5 years. Managing Risk and compliances for such vendors manually involves greater complexities and risks than ever before. Multiple enterprise teams need to collaborate internally and with suppliers across source-to-pay lifecycle stages, including selection, negotiation, purchasing, assessment, and evaluation, for collecting diverse pieces of information. It slows down source-to-pay processes or overburdens your sourcing and procurement teams. The reality is that, despite best intentions, critical items keep falling through the cracks—and most companies can’t even identify what is left unaddressed during vendor selection, contract negotiations, and vendor management.

Enterprises that implement integrated Governance, Risk, and Compliance approach across business functions including IT, finance, legal, procurements, and more, reduce supplier audit costs by 80%, find supplier risks by 22% faster, and boost the overall productivity of risk and compliance managers by 70%. From cutting costs to reducing risks, there are many benefits to implementing a unified GRC solution.

So, what’s wrong with current vendor risk and compliance management processes?

Manual: Managing risk and compliances manually for thousands of vendors has been time-consuming and error-prone, consisting of manual emails, spreadsheet updates, and repetitive data entry in siloed vendor management solutions. It slows down overall sourcing and procurement processes or overburdens your teams.

Siloed: Too many siloes can create difficulty in accessing vendor risk and compliance intelligence during vendor selection and contract negotiation. It makes it even more difficult to prioritize third-party risks through the vendor lifecycle or when requirements change.

Organizations use Governance, Risk, and Compliance (GRC) Management Solutions to improve risk visibility, prioritize GRC efforts, and deliver GRC insights to help firms act quickly and decisively. Most GRCs include a suite of applications such as Policy management, Regulatory compliance, Digital and technology risk management, Third party risk management, Audit management, Resilience and continuity management, and Privacy management.

ServiceNow GRC includes a Third-party Risk Management (TPRM) product, which helps organizations assess, monitor, and mitigate the underlying third-party risks and compliance requirements. Using ServiceNow GRC, organizations can generate/manage the third-party compliance checklists and risk score registers for regulatory, policy, and compliance reporting against preset ratios/parameters including, amongst others, financial stability, key staffing, business continuity, geographical risk, etc. For this analysis, GRC collates and analyses data from various 3rd party sources databases (D&B- Financial, Thomson Reuters - Regulatory Intelligence, Eco Vadis- ESG, Lexis Nexis- Supplier screening, Bit Sight-Cybersecurity) and ensures compliance against the organization’s unique checklists, risk registers, and existing policies.

Retrospective (Not Real-time): The real gap is that GRC intelligence is not being accessed, managed, and continuously monitored in real-time from the transactional source-to-pay systems where the RFPs, contracts, and invoices are executed. For example, while procuring innovative or strategic services:

Sourcing Managers need to look at unique risk, performance, and compliance requirements during the phase of supplier shortlisting, evaluation, and awarding.
Legal needs to manage complex risk mitigation requirements during contract negotiations.
Senior Management must ensure that all defined governance, risk, and compliance (GRC) checklists and policies are strictly adhered to throughout the entire source-to-pay process lifecycle.

Hence, what is needed is an integration of GRC solution with Source-to-Pay applications so that the intelligence from the GRC solution can be embedded in source-to-pay solutions to address the above two overlapping but separate aspects of third-party risk, compliance, and governance processes.

Is there a better way to solve the above challenges?

Innovative enterprises are unleashing the power of ServiceNow’s Governance, risk, and compliance management system that provides a unified view of supplier risk data, compliance checklists, supplier screening against blacklists, etc., and connecting ServiceNow GRC solution with Aavenir Source-to-Pay solutions used by procurement, sourcing, legal, Finance, IT and third parties.

Vendor Risk and Compliance Management with Aavenir Source to Pay Solutions and ServiceNow GRC Integration Architecture

In this article, we’ll talk about harnessing the power of ServiceNow GRC solution integration with Aavenir RFPflow- Vendor RFP Management, Aavenir Contractflow - Vendor Contract Management, Aavenir Onboardingflow - Vendor Onboarding Management, and Aavenir Obligationflow - Vendor Obligations Management for unified supplier risk and compliance intelligence management.

Enhanced Capabilities of ServiceNow GRC integration with Aavenir Source-to-Pay solutions.

Integrating ServiceNow GRC with Aavenir Source-to-Pay Solutions offers a comprehensive approach to managing third-party risks and ensuring compliance in real time. This integration streamlines the process of supplier screening, RFP creation, vendor onboarding, contract drafting and review, obligation management, and performance monitoring.

Here are the potential use cases of this powerful integration:

Vendor Risk and Compliance Assessment

Shortlist Vendors Meeting Compliance Standards: Find vendors who satisfy the minimal risk ratings, regulatory criteria, diversity requirements (such as women- or veteran-owned businesses), compliance standards, and other requirements listed in ServiceNow GRC checklists and risk registers. Evaluate vendors against past experiences, ethical labor practices (such as forced or child labor issues, and more), or any active ongoing litigations.
Build RFP Questionnaire for Vendor Risk and Compliance Assessment: Aavenir RFPflow can import comprehensive third-party risk and compliance evaluation questions from the ServiceNow GRC checklists. Include questions in the RFP to validate the latest Environmental, Social, and Governance (ESG) compliance, and assign weights to questions that promote responsible and ethical sourcing.
Supplier Information Update: Aavenir RFPflow can collect vendor responses and automatically update the latest supplier information to ServiceNow GRC for integrated risk management and vendor portal use cases. Aavenir Onboardingflow can request vendors to upload risk and compliance management certifications for various industry regulators (such as the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), U.S. Department of Health and Human Services (HHS) and National Credit Union Association (NCUA) and more) and automatically upload certifications to ServiceNow GRC or Vendor Portal.
Supplier Score Update: Aavenir can update supplier scores according to business rules defined in GRC, promoting fair and compliant supplier selection.

Contract Management

GenAI-Powered Contract Authoring: AI-powered Aavenir Contractflow can generate contracts and clauses that meet GRC requirements, ensuring compliance from the start. Ensure contracts address significant operational, IT, and financial risk mitigation requirements throughout the vendor lifecycle, from contract initiation to negotiation to amendments.
Enforce Organizational Policies: Using Aavenir Contractflow, contract managers can author/review contracts to enforce compliance with organizational-specific policies and procedures, such as data privacy, security, and vendor governance practices.
Identify Risk Scores: Aavenir Contractflow can provide risk ratings/scores for each contract clause, terms, and obligations as per ServiceNow GRC to mitigate potential risks and compliance challenges.
Ask GRC-related Questions to Contract: AI-powered Aavenir Avy AI Assistant allows contract managers and business teams to ask human-like questions to their contracts and get instant answers regarding any GRC information (for example: Are there specific data protection measures and protocols in place? | Does the contract include clauses ensuring environmental compliance?).
Identify Missing and Risky Clauses: Aavenir Contractflow can automatically find missing GRC-related clauses, flag contracts/clauses/terms that pose compliance risks, and pass these insights to risk managers to keep the GRC risk register updated and enable timely remediation actions.
Signed Contract Uploads: Aavenir Contractflow can upload all signed contracts to ServiceNow GRC or vendor portal to make it accessible by business teams for compliance checks.

Obligation Management

Automatic GRC Obligation(s) Capture: Aavenir Obligationflow automatically discovers key obligations related to risk and compliance management from the contract, such as SLAs, ESG requirements, payment schedules, deliverables, regulatory requirements, and more.
Track Obligation Fulfillment and update ServiceNow GRC: Aavenir Obligationflow creates contractual obligations fulfillment tasks, assigns workflows to relevant business teams, and updates GRC checklists to track compliance in real-time.
Performance Reporting: Aavenir Obligationflow Dashboard continuously measures, tracks, and reports supplier’s compliance performance against contractual terms, SLAs, and non-SLA obligations and can update information in ServiceNow GRC for real-time vendor performance reporting.
Automated Notifications: Avenir Obligationflow and ServiceNow GRC users can receive automated notifications and reminders for upcoming deadlines and obligations, reducing the risk of non-compliance.
Real-Time Compliance Reporting: Generate real-time reports of a supplier’s compliance with your organization’s GRC policies and regulations.
Monitor Performance Deviations: Aavenir can monitor deviations from contractually agreed-upon performance standards and trigger ServiceNow GRC workflows for risk assessments and remediation actions automatically.

Benefits of integrating ServiceNow GRC with Aavenir Source-to-Pay solutions:

By integrating ServiceNow GRC with Aavenir Source-to-Pay Solutions, organizations can effectively manage third-party risks and ensure compliance in real-time, enhancing supplier governance and compliance and mitigating potential risks throughout the supplier lifecycle.

40% improvement in productivity for GRC staff handling vendor assessments
30% reduction in vendor tiering time
63% reduction in vendor contract management time
40% reduction in penalty payments from failed audit findings
80% improvement in productivity for GRC staff responsible for vendor risk reporting
22% decrease in overall workload (efficiency gain) for vendor risk management

All figures calculated below are based on metrics collected from ServiceNow customers as part of Forrester Total Economic Impact™ (TEI) studies as well as customer surveys and interviews, as a commissioned validation on behalf of ServiceNow. The integration of Aavenir source-to-pay solutions will further elevate the business value of ServiceNow integrated risk products, enabling more opportunities to manage vendor risk and build resilience in real time.

Source: Forrester Total Economic Impact™ (TEI) of ServiceNow — Validated Financial Model Data, a commissioned study conducted by Forrester Consulting, February 2022.

Start Your Path to Success

Connecting Aavenir source-to-pay solutions with ServiceNow GRC solutions offers organizations an integrated approach to mitigating risks, ensuring compliance, and optimizing business outcomes throughout the source-to-pay lifecycle.

Enhanced Risk Management: Real-time monitoring and assessment of vendor risks, enabling proactive mitigation strategies.
Streamlined Compliance: Automated compliance checks ensure adherence to regulatory and organizational standards throughout the supplier’s lifecycle.
Improved Supplier Selection: Comprehensive supplier evaluations incorporating risk and compliance criteria for better-informed decision-making.
Efficient Contract Management: AI-powered contract generation and clause management streamline the creation and review of compliant contracts.
Centralized Information: Unified platform for managing all supplier information, contracts, and compliance documents, enhancing accessibility and oversight.
Operational Efficiency: Automation of routine tasks such as obligation tracking, and performance monitoring reduces manual effort and errors.
Real-Time Reporting: Instant access to compliance and performance reports, facilitating timely and informed decisions.
Cost Savings: Reduces costs associated with non-compliance penalties and inefficient manual processes.
Enhanced Governance: Strengthens governance practices by ensuring consistent application of risk and compliance policies across all vendors.

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5 Enterprise Contract Management Software Capabilities to Look for in 2025

In recent years, contract management software has seen a significant transformation due to advancements in technology, global events and volatile market conditions. Global events including the pandemic, the great resignation, rising inflation, wars, and supply chain disruption have all forced innovation and transformation when it comes to contract management processes. There is no sign of a return to more stable conditions. Market conditions will continue to create pressures on contracting relationships. This, in conjunction with technology advancements, will continue to reshape the contract management software capabilities in future.

According to the 2023 World Commerce and Contracting benchmark report, which meticulously analyzed insights from over 750 organizations worldwide:

71% of organizations considered improving internal contract management processes is a high priority in 2023, compared to 64% in 2021.
58% of organizations considered raising skills of current staff / attracting new talent is a high priority, compared to 51% in 2021.
81% of organizations consider the selection and adoption of contracts technology is a top priority, unchanged from 2021.

In 2024, Contract lifecycle management (CLM) software will evolve from a system-of-records process to an enterprise-level operational system-of-actions process, addressing business risk, costs, and the pursuit of revenue maximization. This blog delves into the evolving landscape of contract management software, drawing insights into the latest trends in CLM technology.

Top 5 Enterprise-class Contract Management Software Capabilities 2024

These are the top contract management features to watch out for in 2024 and beyond.

1. AI and Machine Learning Everywhere

Artificial Intelligence (AI) and machine learning are set to play a more significant role in CLM software in 2024. AI has been in place but the latest advancements in AI such as Generative AI, Applied AI, and AI observability will standardize data, automate compliance, and provide total visibility to accelerate the contracting process. As a result, business teams can focus on higher-value tasks and strategic decision-making. Here are a few key use cases for Applied AI in Contract Management.

AI-enabled Drafting: Traditionally, drafting a contract is a time-consuming process that requires a high level of legal expertise. As per a 2015 IACCM Benchmarking Study from PWC, 80 percent of procurement functions are not fully aware of competitive terms and contract structure. In 2024, CLM solutions will use natural language processing (NLP) and machine learning technologies to extract terms and clauses from third- party paper, legal-approved standard templates, and meritorious legacy contracts for creating clause libraries and legal playbooks. These will be available as AI recommendations while drafting future contracts. Using generative AI, CLM Solutions will also be able to generate fresh new contract templates, clauses, and terms for drafting contracts that are tailored to specific contract types and business use cases. These new capabilities will standardize contract language and reduce contract negotiation time by 40%.
AI-enabled Review: AI can help identify potential risks, unfavorable terms, and deviations with respect to the most frequently used terms and clauses while reviewing contracts. AI will auto-redline deviations and suggest alternate clauses to automate contract negotiations. AI in CLM software can reduce contract review times by up to 90% and can process thousands of contracts in a matter of hours, a significant improvement over manual review process.
AI-powered Search: In most organizations, once contracts are signed, they are stored in email inboxes, drives, or in dedicated contract repositories, until, in rare cases, someone needs to recheck the agreement terms. These often lead to missed milestones, resulting in revenue leakage and strained vendor relationships. In 2024, CLM solutions will provide NLP and AI-powered Contract repositories, which will organize contracts in a better way enabling smart, easier, and conversational search capabilities across contracts. AI can analyze critical data points from thousands of active contracts and third-party contracts, making contract monitoring more efficient and error-free.
AI-enabled Analytics: AI observability will enhance predictive analytics, helping organizations better understand contract performance, obligations, and risks. By harnessing AI, legal departments can foresee potential disputes and identify opportunities for cost savings. The adoption of natural language processing (NLP) in contract analysis is expected to grow by over 70% by 2024.
AI-assistance: AI powered conversational assistants will answer any question related to contracts stored in CLM solution, simplify clauses, generate contract summaries and recommend alternate clauses.
AI-powered Contract Obligation Compliance: Real-time monitoring of contract performance is a priority for 85% of organizations. AI based obligation extraction and fulfillment helps businesses check contracts for compliance against SLAs, GDPR, HIPAA, ESG compliant clauses (defined in ITSM, GRC or 3rd party ESG management solutions) and more. Generative AI will also suggest clauses and verbiage to make contracts compliant. Automation can reduce time spent on compliance reporting by up to 70%. By 2024, most CLM solutions will offer automated compliance reporting features.

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2. Data Security and Compliance

As per the 2023 World Commerce and Contracting benchmark report, the primary challenges to acquire contract management software including obtaining budget (61% compared to 62% in 2021) and building consensus across stakeholders (55% compared to 59%) has decreased. However, concerns about data security are now seen as a major barrier to adopt CLM technology by 42%, the increase in this barrier perhaps reflects the broader issues associated with the incorporation of artificial intelligence into many systems.

In 2024, Data security and privacy will be critical concerns while implementing contract management software, given the sensitive nature of legal documents and client information. CLM software will continue to ensure and enhance data security as well as compliance with evolving data protection regulations, such as GDPR and CCPA.

AI-Data Protection: In 2024, over 90% of CLM software solutions will offer advanced encryption and multi-factor authentication to protect sensitive contract data. Purpose-built AI engines for built and trained for each customer of CLM software to safeguard large volume of contract data. Personalized AI-engine will provide highly accurate and business case relevant AI recommendations.
Audit trails: Advanced CLM solutions will provide a detailed history of each contract enabling business teams to track and monitor all activities related to contracts, allowing the company to efficiently manage accountability and compliance during regulatory inspections, and avoid penalties and costly delays.
Privacy: CLM solutions will ensure that once a contract is created, it cannot be viewed, altered or tampered with, providing secure and immutable contract transactions. This will be particularly valuable in industries where trust and transparency are paramount, such as real estate and finance.

3. Connectivity with Enterprise Applications

From large to mid-size and even smaller enterprises are recognizing the importance of CLM integrated solutions and connected contract data. 2024 will see an increase in such CLM solution integration initiatives.

Integration of E-signature - Digital Signature adoption grew by 60% in 2020 due to the COVID-19 pandemic, and the trend is set to continue in 2024, making it easier for parties to execute contracts remotely. This not only saves time but also reduces the need for physical paperwork, benefiting the environment and contributing to a more sustainable approach to contract management. In 2024, 85% of CLM software users are expected to leverage integrated e-signature solutions, reducing contract execution time by an average of 70%.
Integration of Legal Services Delivery (LSD): Contract Lifecycle Management integrated with Legal Service Delivery automation, the combined stack becomes a potent game-changer for legal operations and a huge step toward legal tech transformation. Imagine a request coming into legal for drafting a new contract. Such requests would be routed through the Legal Service Delivery ticket mechanism. Upon receiving the ticket, legal ops or the Contract Management team could respond to the request by creating the appropriate contract in the CLM tool. Similarly, legal service requests for matter management or investigations that require rapid scanning and understanding of contract data will benefit immensely from a tight integration between Legal Service Delivery and Contract Management. 2024 will see an increase in such integration initiatives.
Integration of Source-to-Pay (S2P) Operations: CLM connected SPO (Sourcing and Procurement Operations) will enable smooth contract intake, review, and signature. CLM will also connect with Risk Management solutions like VRM to monitor supplier risk and performance against SLA's, GRC solutions to monitor compliance and fulfillment for various Risk, ESG compliances, and Security initiatives undertaken by the company.
Integration of Supply Chain Management (SCM): Integration of CLM solutions to SCM solutions makes it easy to draft, review, negotiate, e-sign, and execute contracts, and drive suppl-chain contract compliance. CLM connected supply chain management solution will increase transparency and control over supplier's contractual commitments. CLM connected SCM solution will provide a holistic view of contractual obligations such as contract terms, delivery schedules, and quality standards. This transparency empowers supply chain professionals to proactively identify underperforming suppliers, reduces instances of non-compliance, reduce supply chain disruptions by ~15% and enforce on-time delivery rates.

4. Workflow Automation

Collaboration and workflow automation will remain at the forefront of CLM technology. Contract Managers often work collaboratively with business functions on contracts, and the latest technology platforms will continue to facilitate this process. In 2024, CLM software will offer advanced collaboration features that will streamline the entire contract lifecycle, from initiation to renewal.

Contract Lifecycle Automation and Collaboration: CLM solutions will offer configurable and dynamic workflow capabilities, allowing teams to automatically route contracts through relevant employees based on contract type, vendor type, and other conditional, rule-based approaches. AI-enabled workflows will automate review and approval for various AI-generated clauses and recommendations. In 2024, business functions will collaborate real-time to author and review contracts, provide feedback, and track changes. In 2024, workflow automation in CLM software will further reduce bottlenecks by up to 80%, leading to more streamlined contract lifecycles.
Automated Alerts and Notifications: CLM software will automate reminders for not only key contract milestones, such as renewals and terminations, but also for contract obligations, reducing the risk of missing crucial dates and compliances.

Want to learn how Aavenir Contractflow can help you expedite the contract review and negotiation process for the quickest contract approval time possible?

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5. Flexibility, User-Friendliness and Scalability

Every organization has unique contract management needs. In 2024, CLM software solutions will provide greater customization options, enabling greater enterprise-wide adoption by tailoring the system to their specific requirements. CLM software will offer more user-friendly interfaces that require minimal training. Scalability will also be a focus, ensuring that CLM solutions can grow with organizations as their contract management needs evolve.

Personalization: CLM software will increasingly offer customization options. Whether it's the structure of contract templates or the configuration of approval workflows, CLM software will be highly adaptable. Users can personalize their dashboards, workflows, and notifications to align with their specific needs and preferences.
Chatbot: Real-time AI-enabled help chatbot, will enable users to navigate the system with ease, reducing the learning curve. Shared workspaces and commenting within the platform will enable more efficient communication between stakeholders involved in the contract process.
Mobile Accessibility: Contract managers need to access and execute contracts on the go, so CLM software will be designed with responsive web interfaces and dedicated mobile apps. By 2024, more than 75% of legal professionals will access CLM software through mobile apps, allowing them to manage contracts on the go, improving overall productivity. rend #5 CLM solution integrations and customizations.

Closing Notes

As we approach 2024, the contract lifecycle management software landscape is set to undergo significant transformations. AI and machine learning, blockchain technology, data security, e-signatures, collaboration tools, customization, and mobile accessibility are all key trends shaping the future of CLM technology. Legal professionals and organizations that embrace these trends will gain a competitive edge in managing their contracts more efficiently, securely, and transparently. It's evident that the legal industry is moving towards a more tech-savvy and streamlined future, making contract management an integral part of the digital transformation journey.

Value-based provider network contracting: The role of legal and compliance in Healthcare

When people interact with the healthcare system, it’s typically a connected experience where one interaction leads to another: a doctor’s visit, a trip to the pharmacy, medical equipment, a course of physical therapy, a hospital stay, and so on. The conditions and terms under which healthcare services or products are provided across the healthcare value chain are outlined in a value-based healthcare provider network contracts. These contracts can be between various parties in the healthcare value chain network, such as

Healthcare providers such as hospitals, integrated deliver networks (IDN’s), clinics, physicians, and practitioners,
Life Sciences medical device, equipment, and diagnostics manufacturers, pharmaceutical companies, and Contract Research Organizations(CRO’s)),
Healthcare payers, PBM’s, and pharmacies
Employers and patients patients
Government entities

The care-giving landscape is changing rapidly in a post-pandemic world. Many patient journeys now begin online, thanks to the proliferation of digital interaction models. The location of care is shifting from inpatient or hospital settings to outpatient facilities—and, when possible, to the patient's home. These shifts in the delivery of healthcare services and products are resulting in more competitive ecosystems of participants, including hospitals, the public sector, pharma, MedTech, and technology firms – all of whom are getting closer to patients and engaging with providers for research, care-giving, and patient services. To compete in the market and ensure successful healthcare outcomes, all such stakeholders that contract with providers must navigate provider contracting complexities and speed up processes and business operations while managing legal and regulatory compliances.

As per the American Health Lawyers Association, in the US, the average time to signature for healthcare contracts is 30 days. The shortest time to signature is 10 days and the longest time to signature is 90 days.

Complexities and challenges with managing healthcare provider contracts:

Elongated provider onboarding processes: As a part of the onboarding process, excessive verification and credentialing cycles needs an accurate and complete provider data. Collecting provider information over multiple emails back and forth results in delays and inaccuracy of data.
Extensive provider verification: While onboarding selection, Healthcare and Life Sciences organizations must verify the provider's credentials, certifications, qualifications, licenses, education, Tax Id, address, training, and work experience. The improper verification processes can lead to fraud, regulatory risk, cost overruns, and most importantly, compromised quality of care.
Adherence to regulatory standards: Healthcare organizations must comply with a wide range of state and federal regulations. Failure to comply can result in fines and penalties. Contract managers need to ensure that providers have the multiple necessary regulatory standards such as below and more before entering into contracts.

- FMV validations
- Exclusion list checks
- ACA
- HIPAA
- Sunshine Act
- Stark Laws
- Anti-corruption and anti-bribery requirements
- Codes of Ethics
A variety of provider contracts. Not all provider contracts are created equal. The organizations contracting with providers need to adapt processes to a wide variety of contracts such as provider services agreements, clinical research agreements, speaking engagements and so on. These agreements have several commonalties, and at the same time have their own unique terms and conditions, pricing and incentive arrangements, regulatory compliance requirements, and performance requirements.
Ill-defined contract processes. Inefficient and inconsistent contracting process lead to delays in contract execution, missed deadlines, and errors in contract administration. For example: Negotiating in-network and out-of-network provider fee schedules and payments, validating the same against FMV benchmark databases, and obtaining approvals for exceptions can be a lengthy process.
Multiple stakeholder collaboration: Healthcare provider engagement decisions often involve multiple stakeholders, such as provider onboarding, contract administration, patient services, legal and compliance, and finance teams. Effective contract management requires clear and open communication between all parties involved in the contract. Aligning the interests and priorities of these stakeholders can lead to delays in decision-making.
Changing market and regulatory compliances: The healthcare industry is constantly changing with new regulations and compliances, and this can necessitate the renegotiation or re-compliances of existing contracts. It can be a time-consuming and expensive process. For example: covid outbreak or any other pandemic requires rapid amendments and changes to existing contracts by either updating existing clauses or regulatory requirements or by adding new provisions to existing contracts in bulk, etc.

Provider performance monitoring and evaluation: After the contract is signed, healthcare organizations often continue to monitor and evaluate the performance of providers to ensure quality of service, maintenance of credentials, training and certification requirements, and adherence to organizational quality and reporting standards. Inability to manage and track provider performance resulting in regulatory noncompliance and lower patient satisfaction. Healthcare contracts can also lead to misunderstandings between the parties, and to disputes over the interpretation of the contract terms. Inability to manage and track provider obligations can result in regulatory noncompliance and lower patient satisfaction.

To address these challenges and risks in healthcare contracts, organizations, it is essential for organization to have purpose built and pre-configured provider contracting solution which handle such complexities. Aavenir Providerflow, an AI-powered healthcare provider contract lifecycle management solution built on ServiceNow enables provider onboarding, contract management & performance management.

How Aavenir Providerflow can help manage healthcare provider network contracts?

1. Provider onboarding

Aavenir Providerflow provides faster, accurate and complete provider onboarding using configurable pre-qualification, verification, and approval workflows. Organizations can easily setup onboarding requirement checklists, qualification requirements and pre-qualification questionnaire templates. Organizations can collect all the important provider information, credentials, certifications, qualifications, licenses, education, Tax Id, address, training, work experience and store in a centralized repository.

2. Self-service provider registration

It enables providers to complete onboarding tasks, get their questioned answered, and fulfill requests for additional information, certifications, contracts, and more. The solution provides flexibility to providers for submitting, managing and updating their own data via intuitive guided Providerflow portals. This ensures that the provider data is always current and up to date.

3. Automated provider info verification

The solution verifies NPI IDs, addresses, and CAQH credentials. receive real-time alerts for non-compliance against HHS-OIG, FDA, State Medicaid and federal and state exclusion list.

4. Centralized healthcare contract repository

Aavenir Providerflow can store all contracts in a centralized repository and allows you to search contracts by type (e.g. physician agreements, supplier contracts, payer contracts). All contracts are stored in a HIPAA-compliant secure repository with role-based access control on ServiceNow Platform. Contract record also has an ability to attach relevant documents (e.g. credentialing documents for physicians). NLP enabled full-text search ensures that contracts are easily accessible when needed.

5. Automated alerts and notifications

There are often strict deadlines that must be met for various regulatory requirements in the healthcare industry. For example, contracts with payers may need to be renewed on an annual basis, and failure to meet this deadline could result in the organization losing its ability to bill for services. Aavenir Providerflow solution sends automated email alerts and notifications that remind the organization for upcoming deadlines, helping to ensure that all deadlines are met.

6. Contract version control:

In the healthcare industry, contracts may be revised frequently due to changes in regulations or changes in the organization's relationships with healthcare providers. Aavenir Providerflow as a healthcare contract management solution provides version control features that allow the organization to track changes made to contracts over time and ensures that they are always working with the most up-to-date version.

7. Customizable contract lifecycle workflows:

There are often complex approval processes that must be followed in order to execute a contract in healthcare industry. For example, a physician agreement may need to be approved by the medical staff committee, the board of directors, and the legal department before it can be executed. Aavenir built on ServiceNow platform offers full-flexible workflow configuration feature that can be customized as per organization’s approval processes, helping to ensure that everyone is involved at right time and contracts are executed in a timely and efficient manner.

8. Reporting and analytics:

Aavenir Providerflow offers detailed reporting and analytics features that allow the organization to track key metrics such as payer mix, Fair Market Value Benchmarks and exceptions, reimbursement rates, and denials, helping to identify areas of opportunity and improvement. Provider information dashboards helps you measure contract performance and generates reports for FMV compliance, Sunshine Act compliance, sanctions and exclusions.

9. Provider performance tracking

Aavenir Providerflow helps you evaluate healthcare providers' performance (contract KPIs) in accordance to contract terms and obligations mentioned in contract. Data collected through performance tracking enables evidence-based decision-making in healthcare contract management and optimum resource allocation. By tracking performance metrics, healthcare organizations can identify potential risks, key areas for improvement and implement strategies to enhance the quality and safety of patient care.

10. Compliance management:

There are numerous regulatory requirements that must be followed in order to avoid fines and penalties. For example, contracts should ensure FMV compliance in which businesses and individuals must use reliable and objective methods to determine the fair market value of the relevant assets or transactions. Aavenir providerflow offers compliance management features that ensures that contracts are executed in accordance with regulatory requirements and ethical standards. The solution can also automatically flag contracts that do not comply with FMV, HIPAA, Stark Law, or any other regulations, helping to ensure that the organization stays in compliance.

11. Mass/Bulk contracting

Aavenir Providerflow can process mass contracts to streamline compliance efforts, save time, and maintain standardized documentation for all business associate relationships. It ensures that all contracts are compliant to all latest laws and regulations. For example, Bulk Business Associate Agreement (BAA) contracts refer to a practice where multiple Business Associate Agreements are executed in large quantities, often simultaneously or in a single batch. Mass BAA contract processing allows covered entities to efficiently manage their relationships with various business associates, such as electronic health record (EHR) vendors, cloud storage providers, billing services, and other entities handling protected health information (PHI). CLM solution makes BBA contract processing so quick and easy ensuring compliance and standardization for all business associate relationships.

Closing Thoughts

In conclusion, managing healthcare provider contracts is a complex and critical task that requires close attention to detail and a comprehensive understanding of the terms and conditions outlined in the contract. By using provider contract management solution such as Aavenir Providerflow, healthcare organizations can ensure maximum value is derived from their contracts, maintain regulatory compliance and combat potential breaches of contract and frauds.

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Aavenir launches new Generative AI capabilities for Contract Lifecycle Management on ServiceNow

[Texas, McKinney] - Aavenir, the pioneer of AI-powered contract lifecycle management on ServiceNow, proudly unveils its latest Aavenir Contractflow release with exciting new generative AI capabilities that accelerate contract reviews and negotiations, with remarkable speed, ease, and precision.

Powered by Aavenir’s proprietary large language models (LLMs) and conversational AI technologies, the release offers industry-first generative AI capabilities that include automated clause deviation detection, scoring, and clause recommendations to manage contract risk. The release will enable legal and procurement teams to self-rectify low-deviant clauses, focus on negotiation of highly deviant clauses, and redirect critical clauses to legal teams for specialized review.

While reviewing or negotiating contracts within Aavenir Contractflow, the new clause deviation capabilities auto-detect contract clause variations against legal-approved clause libraries, repository contracts, and prior contract versions. Aavenir’s intuitive user interface summarizes alternate clauses along with deviation scores and provides contract managers with the ability to replace highly deviant contract clauses with suggested best-fit clauses. When coupled with ServiceNow’s robust workflow flexibility and Aavenir’s clause-level approval capabilities, the management of batches of deviating clauses across teams is immensely simplified.

The latest release further adds to Aavenir’s arsenal of robust and widely adopted AI capabilities such as contract clause and obligation extraction, and natural language-enabled smart contract search.

“Aavenir’s proprietary Large Language Model fine-tuned for contract management will pave the way for rapid value addition with business-enabling use cases like contract generation, risk detection and recommendation, auto-redlining, and more. This, in conjunction with data enrichment from connected solutions such as ServiceNow Source-To-Pay, GRC, and LSD will become a game changer for procurement, legal, and IT teams.” Said Jesal Mehta, CEO and Founder of Aavenir.

"Our Generative AI capabilities are far more advanced and extensively trained to provide clause deviation results based on actual meaning and intent, and not just structural composition. Aavenir’s models and solutions ensure adherence to data protection agreements we have with our customers and adherence to ServiceNow’s security and privacy requirements, which makes it far more secure and reliable than publicly available generative AI solutions.", added Sunil Masand, SVP of Products.

About Aavenir

Aavenir optimizes Source-to-Pay experience with connected AI/ML-powered solutions for Sourcing Management, Vendor Onboarding, Contract Lifecycle Management, Contract Compliance Management, and Accounts Payable Automation, all built on ServiceNow. For more information, book a 30-min Demo.

Media Contact
Marketing & Communications Team, Aavenir

Phone: +1-408-554-2656
Email: contact@aavenir.com

Originally Published on: BusinessWire

Aavenir Raises $6M, Led by Accel to Expand Source-to-Pay Solutions Portfolio

SAN FRANCISCO--(BUSINESS WIRE)--Aavenir, a leading AI-enabled Source-to-Pay solution provider, announced today that it has raised $6 Million in Series A funding. The round was led by Accel, with participation from ScOp Ventures. Accel also led Aavenir’s Seed round.

Procurement is tasked with delivering cost savings, improving efficiency, and managing risk and compliance. Aavenir is on a mission to make source-to-pay smarter, faster, and more joyful through technology. Aavenir helps enterprise teams to collaborate, streamline, and automate workflow for sourcing, vendor onboarding, contract lifecycle management, procurement, obligation management, & accounts payable invoice automation - all on the world’s leading workflow platform, ServiceNow.

“Aavenir has uniquely positioned its solutions with an extensive set of fully configurable functionalities powered by digital workflows, machine learning, & NLP that automates manual tasks, speeds up approvals, and frees up time for strategic activities. We are excited to partner with Aavenir as they continue their journey of delivering the future of work, today,” said Prayank Swaroop, Partner at Accel.

Enterprises are dealing with a reality of complex siloed systems, multiple platforms, data inconsistencies, varied user experiences, manual data entry & integration challenges. Aavenir addresses these challenges by offering AI-enabled user experiences, unified data models, IT compliances & fast integrations with ERP systems/apps.

Jesal Mehta, Founder, and CEO of Aavenir said, “We thank Accel for continued support. Aavenir will use the capital to build new products, increase S2P solutions footprint & strengthen our core sales team for market expansion. Our ServiceNow partnership and their sales teams help us implement certified Aavenir applications and maximize ServiceNow ROI. ServiceNow’s low-code/no-code platform enables Aavenir to quickly implement solutions that are close fit to business requirements at reduced Total Cost of Ownership (TCO).”

“Aavenir team comes with rich experience of implementing source-to-pay applications for enterprises around the world. We are excited to work with the Aavenir team, who understands customer challenges at the most nuanced levels and quickly alters solutions,” added Kevin O’Connor, partner, ScOp Venture Capital.

About Aavenir

Aavenir delivers the ‘future of work’ to optimize vendor sourcing, commercial relationship, and spend management. Aavenir’s AI-enabled Source-to-Pay solution portfolio includes applications for Vendor Onboarding, RFP Management, Contract Lifecycle & Obligation Management, Accounts Payable Automation. www.aavenir.com

About Accel

Accel is a global venture capital firm that aims to be the first partner to exceptional teams everywhere, from inception through all phases of private company growth. Accel has been operating in India since 2008, & its investments include companies like BookMyShow, Browserstack, Flipkart, Freshworks, FalconX, Infra.Market, Chargebee, Clevertap, Cure Fit, Myntra, Swiggy, Urban Company, & Zenoti, among many others. www.accel.com.

About ScOp

ScOp is a venture capital firm based in Los Angeles, California. ScOp seeks to make minority investments in seed-stage, early-stage, & later-stage companies. The firm seeks to invest in the software, SaaS, artificial intelligence, & e-commerce sectors in the USA. www.scopvc.com.

For further information, contact@aavenir.com.

Contact

Marketing & Communications Team | Aavenir l contact@aavenir.com

Originally published on BusinessWire

Transforming Indirect Spending in Retail & CPG Industry

Indirect spend can be a noteworthy untapped opportunity for retailers looking to save money and redirect funds for growth investments. Retailers face significant profit margin pressures. They aim to deliver goods and services to customers on time and at competitive prices, battling prevailing inflation and supply chain challenges. So, along with direct spend, indirect spend also needs to be managed and optimized for better profit margins.

Traditionally, spend management in the retail industry has focused on optimizing direct spend, as it is directly tied to procurement of raw materials, components, finished goods, and services necessary for the production of retail goods. Procurement teams manage direct spend effectively as an essential part of keeping costs low, generating value, and supporting the retail organization’s profitability and competitive strength, but today the most relevant question for the retailers is:

Does my team have visibility into all indirect spend? Are indirect expenses getting out of control? What is the impact of uncontrolled indirect spend? How can I gain better control and governance on indirect spend?

According to McKinsey, indirect costs account for an average of 10-15% of sales for the retail industry.

The good news is that most retailers are aware that their indirect spending is far from optimized, and are aware of the key challenges related to indirect spend in procurement:

lack of spend visibility
fragmented ownership
spend authority
an absence of incentives to reduce indirect spend
a siloed approach to the procurement of not-for-resale (NFR) categories

Approaches to Optimize Indirect Procurement Spend in Retail

Visionary retailers are exploring new approaches to manage indirect spend—and achieving results! These retailers aren’t viewing indirect costs as a concern only for the procurement function. Instead, they’re looking to transform indirect spending across the entire business. They’re overcoming challenges by leveraging new operating models and tools, such as:

1. Cross-functional team approach

Transformation of indirect spending requires the involvement and commitment of more than just the procurement staff. A cross-functional team approach breaks down silos, surfaces questions about the retail business needs, and helps make balanced trade-offs.

A cross-functional team approach pulls the critical supplier-management functional levels (such as competitive bids and supplier consolidation) that affect who the retailer buys from and at what price. The unit also pulls process-management levels, which influence how a retailer buys. If the various functions comply with procurement policies and use only preferred vendors, it will reduce maverick spending, help improve and centralize spend visibility, and equip the retailer to negotiate better pricing and fees, and vendor payment terms.

Business Case: A retailer seeking to optimize logistics spending, tasked a cross-functional team with redesigning its distribution network. The team was able to reduce end-to-end costs by selectively increasing specific logistics costs. For example, it switched some deliveries from sea to air to gain sales and reduce markdowns. It also increased delivery frequency for some products and stores while decreasing it for others.

2. Focused and stronger supplier collaboration

Retailers should work with suppliers on cost improvements and innovations. Suppliers are excellent idea generators because they are more familiar with a retailer's negative behaviors than the retailer is, and they can assist in changing those behavior patterns rather than losing the business. Retailers also invest in improving supplier capabilities in ways that will pay the investment back several times over. With a strong supplier relationship, the retailers can benefit from better product quality and availability, faster responses to market needs, less administrative effort, greater efficiency, and lower total cost.

The elements of successful supplier collaboration include

focusing on a limited number of suppliers to deliver the highest return on investment
establishing a robust value-sharing agreement at the outset
creating a dedicated supplier-collaboration team separate from but aligned with category managers
building disciplined performance management and benefits-tracking processes and systems

Business Case: When retendering its contracts for outsourced warehousing, one retailer required suppliers to submit proposals for improving the joint warehousing operation. Based partly on these proposals, the retailer reduced its supplier count to two, allowing for closer collaboration while maintaining some competitive tension.

3. Automating Source-To-Pay with AI-enabled tools

Digitization has revolutionized every business process and will continue to do so; sourcing is no exception. Today, leading retailers are using digital and analytical tools in the following areas to achieve dramatic reductions in indirect costs:

Spend visibility: Advanced digital solutions, powered by artificial intelligence (AI) and machine learning, enable retailers to rapidly and accurately map the relevant spend base into granular categories, highlighting who spends how much on what. Cutting-edge digital procurement solutions can pull purchase-order (PO) and invoice data from multiple systems to create a “spend cube,” automatically generating benchmarks on pricing and specs, as well as dashboards and reports to help category managers monitor spending.
Spend control: Digital procure-to-pay tools give retailers better spend management by enforcing more discipline in how suppliers are set up and approved and supporting a more rigorous PO-approval process.

Aavenir smart solutions are designed from the ground up, to help you achieve that competitive advantage, helping you know your indirect spends. With Aavenir’s contract lifecycle management solution, you can negotiate better terms with your indirect spend suppliers, such as payment terms, quality specifications, return policies, defect rates, and more. Not just that, Aavenir Invoice Automation solution will also help you track any deviations and non-compliances from the agreed terms so you can quickly catch items or services that were delivered to you at prices different from the contracted price or if you are being charged higher.

Business Case: A retailer reduced the cost of its paper shopping bags by 25% by redesigning them. Through digital analysis of basket size, product dimensions, and data from cashier surveys, the retailer determined the ideal measurements of a shopping bag based on the distribution of physical volume and weight of products.

Manage indirect spend for a direct impact on your company’s health

Indirect spending has moved from the shadows of procurement and into the limelight of value creation. With a simple change in the outlook on indirect spending, many organizations in the CPG and retail industries can learn from other industries to realize substantial savings:

Delta Airlines could save $11 million on hotel bookings in one quarter by employing a software solution that revealed financial issues.
World-famous motorcycle brand Harley-Davidson saved $4 million by outsourcing all indirect spend to just three suppliers.
Cadence design systems reported $6 million in savings by investing in a technology that provided insights and cost-saving opportunities.

In conclusion, organizations can eliminate waste and inefficiencies by investing in the right technology solution and adopting well-researched best practices for managing indirect spend as part of the overall procurement strategy. By increasing focus on indirect spend, the procurement function could transform into a source of significant cost savings helping achieve a greater competitive advantage, and thus a healthier bottom line for the organization.

Source: McKinsey

Busting Vendor RFP Automation Myths

50% of Vendors believe that RFPs are biased towards one vendor or solution.

There are many myths and misconceptions surrounding tenders and RFPs, which can cause many companies to neglect RFPs entirely in favor of leads that come from exhibitions, events, direct inquiries, and even word-of-mouth referrals.

Some think that RFPs inherently are only looking to find the lowest bidder while others feel that most RFPs are biased towards a particular vendor or a solution provider. And many think that RFPs take way too long to complete. A few of them also think that RFP solutions can only be used for responding to an RFP.

Here in this blog, we are going to bust all these vendor RFP automation myths. What we’re going to do today is explain why RFPs aren’t anything to fear.

Don't fall for these 3 Vendor RFP Automation Myths

Myth 1: RFP is a time-consuming task, so procurement managers can only run a handful of RFPs per year.

Yes, RFPs can be more complex and lengthy than ever before. That’s the grain of truth in this first myth. But this is a self-perpetuating situation because by assuming RFPs are time-consuming, procurement teams will often budget their time to limit how many RFPs they will handle in any given year.

There are multiple reasons why RFPs have become progressively lengthy—like increasingly complicated technical specifications and the need to conform to more rigorous compliance standards. But at the same time, requirements have increased and procurement technology has developed to meet our new needs through the development of RFP creation tools and solutions.

Yet if used incorrectly, improved RFP technology can also contribute to the length of time it takes to manage a sourcing event to completion. The solution to time-consuming RFPs is to only include the information and product-related requirements necessary and ignore everything else. But that means finding a process and technology that removes the manual work and streamlines steps by focusing on the requirements of the sourcing team.

A major component of this process change and solution hunt is to identify what parts of the RFP need to be customized and delivered by a human, and what can be automated… which leads us to the third vendor RFP automation myth.

Myth 2: RFPs are so complex that there’s simply no room for automation.

Unlike the other myths on this list, there’s no grain of truth here. In fact, the opposite is true. Complex as RFPs can be, there is always a place for automation. Complex doesn’t mean unique. Automation not only thrives on complexity, but its implementation also simplifies the complex system by pulling out the thread of a common solution. With RFPs in particular, there are multiple points in the process where you can infuse the procurement and supplier data you already have to implement automated steps along the way.

At the very simplest end of the spectrum, static data—like purchaser names and contact details—can be automatically loaded. But there is a wide range of process steps within even the most complex RFPs that can benefit from artificial intelligence and machine learning. Automation doesn’t replace the collaborative, human, relationship-based parts of RFPs. Instead, it helps augment the source in many ways. Here are some examples:

Vendor profiles can be automatically reviewed and updated within the RFP.
Progress can be tracked along the lifecycle of the RFP event.
Response reminders can be formulated and delivered to stakeholders throughout the organization.
RFP scoring can be calculated and measured automatically.
Vendor evaluations can be analyzed based on set criteria.

Myth 3: RFP Solution can only be used for responding to RFPs.

RFP solution is designed to optimize the response process to RFPs and other information requests. In addition to providing a response to these RFPs, it can also be used to create:

Requests for Information (RFIs)
Due Diligence Questionnaires (DDQs)
Security Questionnaires (SQs)- Any other Q&A-type information requests your company receives in the sales cycle

While creating these requests is the primary use of RFP Software, the content stored within its central repository or library is valuable for all stakeholders in an organization. This repository can be used as a central source of truth across departments for training, supporting customers, creating proactive proposals, and storing internal content.

With a proper RFP creation solution, the organization can streamline the spending to fewer suppliers and drive better value from those relationships by supplier base rationalization.

For a lot of procurement managers, the spending from RFPs is often treated as less complex and less strategic spend within the organization. But that doesn’t mean the RFP solution needs to only serve the purpose of RFPs response. Organizations can host sourcing events by leveraging the data and automation that are usually applied to transactional spend—and applying it to the strategic spend handled by RFPs to reduce ad-hoc buying.

With artificial intelligence (AI) algorithms, organizations can radically improve the supplier-identification process, scanning millions of suppliers in a fraction of the time. The procurement team receives AI-based vendor recommendations by frequently refreshed source data for millions of vendors coming from a variety of proprietary, public-source, and commercial databases, some global and some region-specific.

Source Smarter, Faster and Better

Although many steps in the RFP process are manual, repetitive, and time-consuming, you can source smarter, faster, and better with RFP Automation Software. One such software is Aavenir RFPflow, built on ServiceNow. RFPflow not only streamlines your sourcing processes but also helps you find quality suppliers 2X faster. From preparing and publishing RFx to evaluating vendors and monitoring KPIs - all you can do with RFPflow. Its AI-driven automation offers a simplified RFX process management for procurement teams and accelerates the RFx-to-award cycle time by creating easily accessible repeatable RFI/RFP/RFQ templates, bringing all stakeholders on a single platform, and standardizing the end-to-end sourcing processes.

Test drive the RFPflow product on ServiceNow instance to get immediate ROI with a negligible implementation timeline and deployment cost.

Increasing Supplier Payment Terms: Who pays the price?

About 9 years ago, the corporate juggernaut Unilever extended its payment terms from 30 days to 90 days. Within 3 years of making that change, Unilever increased its total turnover by 25%, operating profit by 50%, and investments in fixed assets by 60%. With that cash, Unilever further invested in its supply chain, passing on efficiencies to its suppliers in the form of higher volume orders. In other words, it created mutual value for both Unilever and its suppliers. But would it be the case for every organization that extends payment terms? Perhaps No, perhaps Yes!

A steady cash flow is crucial for any business, and companies forced into extended payment periods are at greater risk through this hindrance in cash flow. This may seem discriminatory, but it's worth taking a moment to understand better why credit payment terms are so crucial to the revenue profile of a company.

Beyond Net 30: What is the new normal?

As per an IACCM article, Extended Payment Terms: Good News for Global Firms, more than 11% of invoices issued to SMEs globally are still paid outside of payment terms, and 7.5% of invoices are in the end written off as bad debt.

And this situation was before the COVID-19 global pandemic hit. Industries ranging from commercial and retail to industrial and technology have to quickly readjust their payment strategies due to the pandemic, including how credit is delivered and payment terms are managed.

At the US regional level, the average payment duration was 61 days in 2020, as per research by Atradius.

What are the extended payment terms and their cost implications?

Extended payment term is a strategy companies use to delay payments of invoices. It is usually a bit longer-than-normal period, which can sometimes exceed 120 days or more.

Faced with a company where it is simply impossible to negotiate reasonable payment terms, suppliers have started to implement other financial protections against extended credit.

Repercussions of delayed payments include:

Interest on late payment: Many suppliers charge interest on late payments. For example, in the United Kingdom, late payment legislation allows a firm to charge both interest and a fixed sum for the cost of recovering a late commercial payment.

Invoice factoring: It involves the sale of invoices to a third party at a discount in return for prompt payment. While this allows companies to manage their cash flow and avoid overdraft costs, invoice factoring costs around 2 - 7% of the value of the receivables factored.

How to control, manage and optimize cash outflows?

The key to optimizing your cash flows and liquidity is to delay all outflows of cash as long as you possibly can while still meeting all your outflow obligations on time. Delaying cash outflow makes it possible for companies to maximize the benefits of each dollar in their cash flow. However, a point to be noted - it can be risky if not done wisely.

Points to ponder while delaying cash outflows:

To ensure proper management of cash outflows, tracking and managing business liabilities is a must.
Check the feasibility of trade credit: this allows companies to defer cash payments to suppliers until later without calling credit card interest and limits into play.
Trade discounts: This requires companies to pay invoices quickly, but they can take advantage of a discount by doing so.
Avoiding using the float: it is very common but somewhat risky; the practice of using the float between when your check is written and when it is cashed isn't a smart way to handle temporary cash flow problems.

In a nutshell, opt for delayed payments only if it will result in a real benefit. Not paying your vendors on time can damage the entire supply chain.

Final Thoughts

According to the IACCM article, late payment remains a chronic concern for companies, and the industry landscape has now shifted in favor of fair and timely payment.

A proper invoice automation solution like Aavenir Invoiceflow helps to integrate the payments strategy to reduce the likelihood and consequences of late payment:

A centralized invoice approval process
Automated Invoice data extraction, entry, and 2-way/3-way match
Monitor invoice status and track payments

These actions, as mentioned above, put the onus on the finance function of a business but, in the long run, will benefit both the supplier and the financial health of the company. So here's to getting paid more quickly in the future.

How to Guard Organizations Against Accounts Payable Risks?

Fraud is on the rise, with 74% of organizations being targets of a Payments Fraud Attack in 2020.

With the slight decline of accounts payments fraud in 2020, it is evident that 74 percent of companies continue to have fallen victim to such attacks. As the entire world began to grapple with the COVID-19 pandemic in 2020. The potential for increased occurrences of payments frauds was certainly on the radar for treasury and finance professionals. They were busy organizing how their staff could continue to function as seamlessly as possible as they worked “from home” without adversely impacting the organization’s operations.

actual payments fraud — Source: JP Morgan

Three Biggest Accounts Payable Risks to look out for

1. Missed Invoice Due Dates

One of the never-ending risks that accounts payable departments face is that of organization and maintenance of a sound payables process. Late payments on invoices due to missed dates can make a big difference in the company’s cash flow, affecting the budget and even daily operations. Due dates are a big part of the Accounts Payable process of getting invoices paid on time.

Penalty late fees are also added to the invoice after the due date in order to encourage the payment to be made quickly. The late fee will then be added to the total of the original invoice, so the company will be required to pay the former total as well as the late fee on top.

2. Identifying Mal-Practices

Fraud Suppliers & Invoices (External Party)

Duplicate payments: This has been identified as one of the top payment pain points for companies. Suppliers can be paid more than once due to receiving the same invoice in different formats, or because of employee error.
Unapproved Suppliers: This happens when a payment is made to a fictitious or unauthorized supplier for non-existing or fraudulent goods and services.

Raising Concern over Fraudulent Invoices (Internal Party)

False billing: This occurs when false invoices are created for self-payments. In this type of fraud, we generally see an employee working independently, or in collusion with an external party.
Fraudulent payments: An employee can make unauthorized payments, usually via check or automated clearing house (ACH). Businesses should regularly audit rapid or unusual changes in financial reports.
Tampering with financial reporting: Takes place when an employee makes unapproved changes to financial data after payments have been processed.

3. Invoice Payment Visibility

Invoice visibility continues to be a common pain point, due to widespread manual account payable processes. Manually-driven invoice processes lead to errors, rework, late fees, and missed savings that eat up AP team’s day while negatively impacting the bottom line. This lack of visibility into invoice payment status can cause problems across the organization, such as:

Increasing AP resources needed to respond to supplier queries
Impairing ability to forecast
Issues in identifying liabilities and closing the books

Best Practices to Mitigate Accounts Payable Risks

Organizations can take the following steps to improve their Accounts Payable risk management and avoid fraud:

Use artificial intelligence (AI) or machine learning (ML)-powered automation software to monitor spend. Advanced software can identify any duplicate invoices, extra charges, or suspicious activity, as well as complete regular spend analysis.
Verify vendors: AP and finance professionals should take care to only add vendors to the system that are approved and verified. Accounts Payable management software can ensure there is no repeated contact information, suspicious addresses, etc.
Move Accounts Payable to a digital environment: With electronically based AP processes, payables operations aren’t at the mercy of paper, its inefficiencies, and its security concerns.
Automate approval process: With an automated routing process, organizations can track every movement of an invoice and any user’s activity regarding it, including when invoices are submitted, approval thresholds for payment amounts. CFOs have tighter control of who approves invoices, and when payments are made, so they can manage risk and financial loss to the company at a broader level.
Use advanced reporting functionality to continuously improve processes: AP managers and finance executives should regularly evaluate and analyze data surrounding invoice activity and make incremental improvements that address any problems or inefficiencies.
Constantly review transactions, randomly audit, and create electronic audit trails. Organizations should adopt an AP management solution that can automatically create a searchable audit trail of all invoices and payments.

Conclusion

With globalization and technology transforming markets, supply chains, and business operations, AP departments should think proactively about risk and fraud management, as well as more strategically overall. Adding transparency and tighter control throughout the financial process will strengthen organizations against risk and loss, and prepare them for an increasingly diverse and digital business world.

Aavenir’s Invoiceflow Solution is looking to improve organizations' management of accounts payable risk and fraud prevention through the steps listed above.

Sourcing in Healthcare – Fast Track Vendor Selection using RFI/RFP/RFQ

For sourcing teams working in the healthcare industry, the importance of exchanging information quickly and accurately goes beyond cost savings. Consequently, it should come as no surprise that the Healthcare RFP is a popular tool for organizations looking for the perfect vendor for healthcare needs. So, it’s crucial to have an efficient and effective process for handling RFPs.

In this blog post, you’ll learn the ins and outs of the Healthcare RFP. First, we’ll explore the basics of RFP, then we’ll discuss the 5 big Benefits of the Healthcare RFP.

What is a Healthcare RFP?

A healthcare request for proposal (RFP) is a systematic way for organizations to collect information and evaluate potential vendors. The RFP is typically presented as a questionnaire and also provides background and project scope information to guide vendors.

For healthcare organizations, this question-and-answer format provides a clear side-by-side vendor comparison for evaluation. For the vendors who serve these organizations, each RFP is an opportunity to win new business.

Why use the RFP process in Healthcare?

When healthcare organizations seek out new vendors, there are a lot of factors they must consider. The RFP process provides an easy way to collect and evaluate a vendor’s background, experience, product or service quality and consistency, capabilities, customer service, security, and more. In addition, the healthcare RFP provides vendors with valuable information about the needs and requirements of the customer.

What are the Healthcare RFP categories?

There are 22 different RFP product and service categories. These RFPs cover a wide range of product and service types:

Medical and Surgical equipment sourcing
Facility maintenance services
Professional services
Technology – Healthcare Software or Hardware Procurement
Laboratory and Blood-related Equipment's
Consulting Services
Infrastructure construction services
Pharmacy procurement / services
Physician /other medical practitioner services
Food services
Radiology services
Transportation services

What are 5 Big Benefits of the Healthcare RFP?

1. Cost Reduction

A primary goal of the healthcare RFP is to reduce costs. Accordingly, the process provides a competitive environment that ensures healthcare organizations find the right vendors at the best possible price.

2. Verify Vendor Reliability

In healthcare, reliability is one of the highest priorities. If a product or service is late or inaccurate, the consequences may be dire. After all, life may literally be on the line. RFPs enable organizations to evaluate customer satisfaction as well as the qualifications and experience of a vendor in a structured way.

3. Build A Backup Plan

If after the RFP is closed, the selected vendor fails to perform, the RFP process enables the sourcing team to act quickly. Indeed, the organization can identify an alternate provider and accelerate contract negotiations simply by referring back to the initial RFP results.

4. Ensure Transparency And Regulatory Compliance

Unlike many other industries, healthcare organizations are subject to state regulations that may require them to conduct an RFP for certain products or services. In addition, many have organizational initiatives to ensure fairness in vendor selection. The RFP provides clear documentation of the vendor selection process and vendor compliance. So, any questions can be cleared up quickly.

5. Manage Risk

Healthcare RFPs empower organizations to apply an objective, data-based approach to sourcing. As a part of the healthcare RFP process, many organizations require the completion of vendor security questionnaires to further reduce risk. Additionally, the detailed nature of RFPs reduces the chances of getting stuck with the wrong vendor partner.

Are you ready to start winning new opportunities with RFPs? Aavenir provides up-to-date RFP data so that your company can find the right opportunity, right when you want it.

What are Invoice Frauds?

“Cybercriminals conduct business email compromise costing US businesses more than $2 Billion.” Large companies with the best technology face the same problem as small businesses. Google and Facebook just got tricked out of $123 million by a scam that costs small businesses billions every year. The companies were scammed out of the payments by a technique known as business email compromise or invoice fraud. “Invoice fraud is where a criminal poses as a vendor and convinces a company to wire huge sums of money to an offshore account as “payment” for services that were never rendered.” Invoice fraud results in an immediate financial loss to the companies. And it’s on the rise with increasing digitalization.

3 Types of Post Contract Invoice Fraud

An average large company processes 1000s of invoices every month. The sheer volume makes it impossible to closely examine each invoice that comes through the door. Invoice scams involve a variety of tactics that can sneak a phony invoice past even the most experienced Accounts Payable teams. Here are some common types of fraud and tips to make your company safe.

1. Inflated Invoices

The most popular tactic is to submit a phony invoice with inflated prices. While this may seem easy to spot, it usually isn’t. Typically, the amounts aren’t inflated significantly enough to raise red flags. The idea here isn’t to get a big payout. Scammers rely on volume to get away with as many small amounts as possible.

Tips: The easiest way to deal is:

Review the purchase order (PO) thoroughly and invest in automated invoice matching
Be on the Lookout for Red Flags which include a logo that doesn’t look correct, poor grammar, different bank account numbers, varied contact information, invoices in even amounts, and spotting the same numbers over and over.

2. False Vendor Invoices

The most glaring of the scams is that of false vendor invoices. Invoices appear to be charged for legitimate goods or services. In this case, however, no product was ever delivered. What makes this trick so difficult to spot is that the invoices come from vendors the company regularly uses. Knowing this, the scammers rely on the chances that no one will question the validity of the invoice.

Tips: One giveaway of this tactic is:

When the goods listed on the invoice can’t be accounted for in inventory, or there is no PO to match the invoice in question.

3. Duplicate Invoices

Duplicate Invoices are a huge source of leakages for big companies. 2 % of a typical corporation’s A/P invoices may be duplicate, reports AuditNet. An inside connection to the business makes it easier to get away with this blatant deception, but external parties often try to get away with the crime by submitting invoices for amounts low enough that they’ll fly under the radar. Not all duplicate invoices are fraud, of course, but sneaking duplicate invoices under the radar as a popular tactic for criminals on the inside and outside of organizations.

Tips: Solve invoice fraud by taking the following steps:

Establish a company-wide, standard policy for invoice numbering
This policy should establish definitive guidelines for entry of an invoice number when one already exists, as well as rules for capitalization and punctuation entry.

How AP Automation Can Help Reduce Invoice Frauds?

Although invoice fraud is prevalent, there are things you can do to prevent your company from becoming a victim. Prevention starts with a thorough review process to filter out the problem. Three-way matching is a technique that requires the invoice to be matched with the purchase order and the receipt of the goods.

Combating invoice fraud with AP automation is about verifying invoice information, knowing if the order was received and the PO is accurate. It’s about making the team run as efficiently as possible by allowing them to accomplish more in less time and hopefully with fewer errors.

Aavenir’s AI-powered Accounts Payable solution significantly increases visibility and communication about invoices throughout the company. With Aavenir, there is a centralized place for the receipt of invoices. That way, every invoice enters the company through a standard method that makes it easier to spot something that doesn’t quite fit.

Next, the solution automates the approvals process by routing the invoice errors to the appropriate stakeholders for corrections. Reviewers, both inside and outside the company, can view, update, or add supporting documents, and comment on invoices. Lastly, AP automation comes with built-in AI technologies that automatically identify discrepancies between invoice data and supporting documentation, while also recognizing instances of fraud and notifying the appropriate parties.

Want to learn more about how Aavenir can help leading organizations of the world strengthen their defenses against invoice fraud by talking to one of our AP experts today.

Real-World Success Story: Leading Manufacturing Company T.D. Williamson eliminated the chances of duplicate payments

TDW’s accounting team processes and manages approximately 50,000-60,000 invoices per year received at 7 different email inboxes associated with respective business units, but much of its AP processes were manual. Each invoice had to be manually coded and routed for approval. There have been instances where multiple copies of the same invoice(s) were received in different inboxes resulting in the possibility of duplicate payment. Most of the activity was email-based and had very limited tracking or the ability to measure the process. This resulted in lost, late, or delayed invoices. Moreover, manual validation of invoice information with the POs from 5000+ vendors worldwide is a time-consuming process.

TDW chose Aavenir because it was built on ServiceNow, which is a core foundational platform for TDW. Aavenir Invoiceflow quickly automated the AP process, leveraging AI for invoice coding, categorization, approver selection, and sending approved invoices for payment.

Want to know how TDW, the most trusted manufacturers and services organization serving the gas and pipeline industry worldwide, automated invoice data extraction, validation, and approvals workflow for vendor invoices on ServiceNow?

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Accelerating Strategic Sourcing on ServiceNow

2021 is bringing unimaginable change to the world. No one can deny the impact this year has on sourcing and supply chain management, but what will 2022 hold for sourcing teams? Is there any light at the end of the tunnel? Want to explore more about strategic sourcing on ServiceNow?

The answer depends on how much we’ve learned over the past year. COVID-19 pandemic fundamentally changed where and how we work, and will likely shape sourcing and purchasing for years to come.

In response, companies are digitizing their sourcing and purchasing in order to operate in new and faster ways, pivoting their processes and business models to compete or even survive.

Challenges in Managing Strategic Sourcing within the Enterprise

Companies with global and complex supply chains are increasingly concerned about the threat that potential supply chain disruptions pose to revenues and profits. Emerging markets, globalization, and the quest for cost savings are but some of the multitude of drivers behind what many companies now face: lean, long, yet brittle supply chains.

The struggle seems real when these companies collaborate with suppliers on one hand and then internally with the stakeholders. There is an unreasonable waste of time – in collecting and consolidating feedback from all stakeholders and finally coming out with the top two or three suppliers. It is a nightmare – especially if the sourcing team is just using Outlook, Word, and Excel?

Few common challenges faced by the sourcing team are mentioned below with their resulting trade-offs:

How to Build a Resilient Strategic Sourcing in Supply Chain Management?

Although disruptions are inevitable, the sourcing team is often not prepared to respond. Organizations that can quickly identify, diagnose, and resolve these issues will be in the best position to weather the storm

Businesses need a modern solution that can support their digital transformation journey that

Connects the enterprise with digital workflows across enterprise-wide use cases
Delivers great user experiences across modalities to unleash productivity
Has built-in machine learning and AI
Integrates easily with the existing IT ecosystem
Provides a platform for building new apps that fuel innovation

Aavenir from the onset has been uniquely differentiated in the marketplace to help businesses become modern enterprise-ready for the challenging times ahead. Aavenir RFPflow is attempting to address precisely those issues. The RFPflow product has 4 stages: Prepare, Publish, Collaborate and Evaluate. For understanding these stages in detail and knowing how effective RFP solution is to solve the procurement challenges to deliver immediate ROI, please refer to details of RFP Procurement Software.

Aavenir is uniquely qualified to help you be:

Hyper-Fast: through rapid, proactive, automated
Agile: by being flexible, responsive, leading change
Resilient: meaning your durable, consistent, secure
Human: empathetic, experience centered, real
Connected: friction-free, breaking down silos, agnostic and open, end to end, anytime, anywhere

Conclusion

In a highly competitive global marketplace, in which there are greater demands of an organization’s sourcing department to deliver value, Aavenir’s RFPflow solution will streamline the Procure-to-Pay process. The result will be greater sourcing efficiency and more time for sourcing professionals to focus on the complexities of more strategic acquisitions.

You can seamlessly start your RFx management journey by getting the app right away from the ServiceNow store.