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Issue 6 2015 - Freight Business Journal


Towards a united Europe


EnVista’s business in Europe is growing fast and a distinct business model for the region is emerging, says Dominic McGough, managing partner for the global freight audit and pay provider and supply chain consultancy in Europe, Middle East and Africa (EMEA). “We are seeing an increase in freight auditing services, but many of the customers want to keep the payment side of things in-house – and we are very comfortable with that.” Last year US-based enVista


opened an EMEA office to extend its full range of services, including its sophisticated integrated warehouse and transport management suites, as well as traditional freight audit and pay services into the European market. There is a lot more emphasis


on information and automation of processes in Europe, says McGough. EnVista has expanded its service offering to include integration of multiple business documents in the supply chain.


“Freight audit management is


about more than just the invoice – it’s about the complete process – and customers are really hungry for the analytics we can provide.” The FAP business in North


America has been very much driven by the desire to recover money from ‘service failures’ – for example, express package firms charging for a ‘before 10.30 am’ service but actually delivering later than that. “While this can lead to an antagonistic relationship between FAP companies and service


providers, a more


analytics-led approach enables shippers to make more informed transportation decisions,” argues Dominic McGough. He adds: “It’s different in Europe,


because we don’t have that ‘service failure’ approach and before 10.30- type services are not as common. What we do have are a lot of good BI (business intelligence) tools and we’ve put a lot of emphasis on getting customers on board in a quick and easy way. It involves


understanding the customer’s business rules, how they process documentation, whether they insist on proofs of delivery as part of the invoicing process and so on. And it’s where the freight audit technology aspect of our business is winning customers; we can integrate our FAP solution with anything from a simple application to a complex database.” EnVista has targeted customers


in a number of industry verticals, such as pharmaceuticals and retailing. While it had many customers in the latter sector in North America, what is really gratifying to Dominic McGough is the number of new mainly- European customers that have come on board since he became enVista’s EMEA region - it’s not just US firms with operations in North America. A typical customer, says


Dominic McGough, is the healthcare firm with a $75 million annual freight spend. “Their freight invoices were traditionally


processed through their finance department, which only looked at things such as whether it was an approved vendor or whether there was a purchase order number. We did a full service audit by line item, considering whether the Incoterms were correct, and we found incorrect billing, on $2.3 million-worth of invoices – out of a total spend of $6.6m – and an overcharge of $375,000. This was an audit system that met all the finance department’s criteria, but which nevertheless contained serious errors – and I would say


///FREIGHT AUDIT & PAY


that’s fairly typical of what we find. I would say error rates on freight invoices are 2-4% for most companies. Errors included mis- billing and expired rates; purely finance systems are not designed to pick these up.” Increasingly, freight audit clients


are integrating these systems with transport management systems (TMSs), adds Dominic McGough. There’s no reason why IT systems cannot be set up to handle both the financial aspect and the execution functions typically associated with a TMS, he argues. “In fact, freight audit and TMS are increasingly being seen as one system. We ourselves are developing an order management system that


will


easily integrate with a TMS – aſter all, it’s the same data.” It’s also not just something for


the big boys – in fact, the process is easier for smaller companies, he believes. “The cost of systems and applications is coming down all the time, and smaller companies are now able to use soſtware as a


service models that allow them to perform a ‘technological leapfrog’.” Air and ocean carrier systems


are also getting slowly better and better able to integrate with customer systems, though progress is never as quick as everybody would like. “Cooperation is improving, but there’s still an enormous amount of paper in the supply chain, partly because of customs and other regulatory requirements.” EnVista has in fact created a


subsidiary, Enspire Commerce, to address gaps in omni-channel retail. McGough says: “One of our cloud-based soſtware solutions helps companies manage trading partner relationships with a managed file transfer solution that goes beyond EDI data exchange. “This benefits our FAP clients in that enVista is able to readily translate, send and receive files, such as invoices, in each shipper’s preferred file format, reducing any effort on the shipper’s end – and there’s been a good take-up.”


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