Equity Insurance Group Improves Financial Control with PROACTIS
Equity Insurance Group streamlines its procurement system
and replace its manual staff expenses process.
Equity Red Star, a Lloyds of London underwriting business, is
the UK's sixth largest motor insurer and has been providing
insurance products in the UK for over 60 years. Equity Insurance
Brokers is the eighth largest personal lines broker in the UK.
Operating through affinity partners, the Internet, 60 High Street
branches and a call centre, the business provides over 750,000
policies throughout the UK. Together, Equity Red Star and Equity
Insurance Brokers make up Equity Insurance Group, with 1,555
employees and an annual turnover of £333 million providing
insurance to nearly two million policyholders.
Due to significant growth through acquisition since 2003, the
Group had outgrown its historic purchasing and expenses processes.
A new solution was needed that would streamline its procurement
system, reduce its core number of suppliers and replace its manual
staff expenses process.
Furthermore, the Group observed that significant cost savings
and control improvements could be achieved by using technology to
help ensure approval before purchase, approval limit maintenance,
the use of preferred suppliers and, fundamentally, the
standardisation of purchasing.
"Our legacy purchasing model was a spend approval list that
was maintained and referred to by Accounts Payable when paying
invoices once they had been signed off by the relevant
manager," explains Richard Smith, Finance Systems Manager,
Equity Group. "There was no computer system controlling the
pre-approval of spend. In addition, paper invoices were more likely
to get lost when they were sent out to managers, resulting in
higher processing overheads for the Accounts Payable department who
then had to spend time locating the invoice."
The Group needed to be able to process staff expenses more
effectively. Previously a paper-based manual system was used.
"It was a labour-intensive process that could be slow and expensive
for the Group payments team who had to check and code every expense
claim," says Smith.
The cost of deployment and maintenance was a major factor in the
choice of the new system as was the interoperability and
interconnectivity with the Group's existing SunSystems finance
solution, supplied and supported by PROACTIS partner, Touchstone
Group. "We already enjoyed a good working relationship with
Touchstone", explains Smith. "They had previously
demonstrated their commitment by helping us to identify a solution
that would provide both the short-term improvements we needed,
whilst laying a foundation for future development."
After considering the Group's needs, Touchstone consultants
recommended PROACTIS, a procurement solution with reporting and
invoicing modules together with DocLink 4, a document imaging
system for supplier invoices that would simplify invoicing methods
and reduce the use of paper.
"The use of an integrated document imaging system has been
very popular as paper-based invoices are replaced by electronic
images that can be viewed on-screen by managers," explains
Smith. "The system has also reduced the number of invoices that
managers need to view because if the supplier invoice matches the
purchase order and the goods have been receipted, the invoice is
automatically processed for payment according to the credit
In addition, the expenses module of PROACTIS was rolled-out to
over 600 employees in order to streamline and reduce the cost of
processing staff expense claims. Once the payment is authorised,
employees automatically receive notification by email.
The deployment of PROACTIS was carried out by a cross-functional
team led by Purchasing and included members from Finance and IT in
conjunction with Touchstone consultants. A staged implementation
over the course of a year was planned that would gradually roll-out
to all parts of the business and could be extended to include new
acquisitions. The system is now used by over 500 people in the
company's three main offices and 60 High Street branches.
To ensure the smooth operation of the new system, key users from
each department were initially trained in small groups. "On
Touchstone's advice, we dedicated one member of the Purchasing
department to training and supporting new users during the
deployment of the system - this proved an extremely effective
tactic," comments Smith.
However, rolling-out the Expenses module presented a different
challenge with over 600 potential users on different sites moving
from paper-based expenses to electronic claims filing. A simple
document containing lots of screenshots that detailed how to submit
an expenses claim was created.
"This document was really successful, not only did it
demonstrate how easy PROACTIS is to use but it ensured roll-out was
also low cost," says Smith. He adds: "Furthermore, the use
of the document means that we now have something that individuals
can refer to time and again, should they need to."
Commenting on the technology selection and implementation
process, Adrian McNay, Divisional Managing Director, Touchstone
Group, explains: "Mid-market companies have, to date, been in a
difficult position where they have almost been forced into
accepting the traditional technology vendor's product-based sale.
Touchstone can offer our clients so much more than that. By truly
understanding our clients' business needs, and because of our
technology independence, we were able to help Equity Group effect
the changes they really need to underpin business growth and
The PROACTIS system enforces strict controls regarding the
approval of expenditure before a purchase is made and this has
resulted in significant improvement in financial control. Record
keeping is easier and faster to manage as the system provides an
accurate record of every order placed with each invoice matched to
it along with approval. The document imaging system has replaced
traditional paper-based storage of supplier invoices and forms,
saving money and storage space as well as reducing the use of
PROACTIS also gives the Group full visibility of its number of
suppliers, and the relative amounts spent with each of them. This
has enabled the Group to reduce its number of core suppliers and
negotiate better rates. The Group has also experienced an
improvement of accuracy in their financial and management accounts.
"The managers of the business units have experienced the
benefits of controlling their own costs through online order
approval," Smith explains. "Now they really feel in
control of their own budgets and expenditure."
Smith concludes: "Overall the implementation and integration
of the new system by Touchstone Group has led to massive cost
savings from improved processing, prevention of unnecessary or
unauthorised spending and greater control over our suppliers. In
addition, the technology has helped us to realise a number of more
intangible benefits. We are seeing greater staff satisfaction
because they are more in control than they have previously been,
greater productivity because we have minimised the amount of time
our employees spend processing paper, and critically, because of
the control we now have over our spend and invoicing, we have
improved financial compliance."