Photo of Adam Smith, Microsoft.

Microsoft has taken a complex and disparate card payments system and simplified it into a single card mechanism that has saved its procurement team over 78,000 days annually and more than US$1m of operational costs.

Microsoft’s tiered approach for non-PO card usage eliminates bureaucracy, increases efficiency and enhances control

The challenge

Microsoft’s business continues to accelerate in its innovation and agility. However, the company’s purchasing processes, including purchase order (PO) creation and supplier set-up in its procurement system, have increasingly required a more efficient, less complex payment solution to meet the needs of the business. Adding to the complexity of the incumbent model were different processes for PO requirements, each being based on a region, across the company’s global operations.

The solution

The solution to this issue was found in Microsoft’s ‘One Card Solution’. This methodology was championed and led by Adam Smith. As part of the answer to procurement’s needs for efficiency and simplicity, One Card applies a tiered approach for card usage when a PO is not required. This is controlled within a given band of payment thresholds, set for low, medium and high-risk countries respectively.

Starting with the principle of “what do we not need to do”; many antiquated process, controls and policies were eliminated. Microsoft leadership embraced a simplified approach to eliminating unnecessary burdon by trusting and empowering employees to do their best work.

The solution eliminates bureaucracy, increases efficiency, and enhances controls through a simplified procurement policy that supports Microsoft employees in delivering on the company’s mission of empowering individuals and businesses with technologies and products to increase productivity and innovation.

“We achieved the right level of visibility and transparency for employees to understand when a PO is not required,” said Adam Smith, Sr. Procurement Program Manager – Corporate Card Program, Microsoft. “In balancing the agility with controls through Microsoft Azure and Power BI, Microsoft is able to quickly and efficiency calculate, ROI, risk, savings, and rebates.”

Best practice and innovation

Best practices are demonstrated in One Card through the following achievements:

• The simplification of the company’s payments process into a one card solution.
• The means by which Microsoft’s procurement team has been able to focus on low risk versus low dollar.
• The demonstration of a successful partnership between procurement and controls and compliance functions.

Key benefits

• Embraced the culture and sprit of Microsoft’s mission, changing the paradigm of card purchases at Microsoft.
• Accelerated the time to market of purchasing by over 78,000 days annually.
• Purchase order no longer needs to be set up for covered purchases.
• Reduced Microsoft’s operational costs by more than US$1m.
• Added to Microsoft Procurement’s revenue share.
• Sheer simplicity of the solution has allowed one policy to scale across all 96 markets where Microsoft uses corporate cards.

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