Photo of Ankur Gupta, Bank of America Merrill Lynch collects the award on behalf of BHP.
BHP solution is not simply about the introduction of a new global payment card to replace a fractured legacy regional programme. It is about a team that has successfully strived to harness the introduction of a new payment card to drive a far-reaching review of the firm’s global expense management.
Manager, Global Category Management – Travel & Expense
BHP, formerly known as BHP Billiton, is a dual-listed, Anglo-Australian multinational mining, metals and petroleum company, headquartered in Australia. In 2017 BHP ranked as the world’s largest mining company based on market capitalisation.
in partnership with
How BHP got its global expense management under tight control
As a company with more than 60,000 employees and contractors spread across the globe, managing spending by personnel has always been a challenge. When Joanne Taylor took over as Head of Travel & Expense Management in 2015, the company had already begun a process of streamlining and globalising many of its processes and payment cards were an obvious candidate for review.
The first steps were to make sense of a fractured, siloed approach to expenses that had generated some confusion over what should be managed regionally – such as car leasing – and what should be global, such as travel and expenses (T&E). The less time-consuming and resource-intensive process that would emerge from this review would fit the company’s global objective to optimise working capital.
Implementing the new approach meant not only putting in place a fresh procurement card solution but, at the same time, working with the new provider to draft both an expenses policy and a supplier enablement programme, aiming to move as much spend as possible away from purchase orders – of which the company issues hundreds of thousands annually – and onto procurement cards.
The mandated selected provider was Bank of America Merrill Lynch which provided a Mastercard branded card programme. Expenses in all four of BHP’s regions are managed centrally through the bank’s global reporting and account management platform, which links to the company’s SAP One installation.
There was an additional benefit to moving more spend onto cards. Given the organisation-wide mandate to look for working capital efficiencies, the procurement team was keen to increase days payable outstanding (DPO) without adversely affecting supplier payment terms. With a widely-adopted card programme, suppliers would get paid on the due date but BHP would have up to 60 days to pay the card issuer. This way, a 30-day payment term could be extended up to 90 days with no impact on the supplier.
Best practice and innovation
Along the way, the BHP team identified areas where greater efficiency could reap maximum rewards for the business, driving out bad practice to create a set of expense policies that are clear and easy to implement for any team, anywhere in the world.
The results are already being felt in greater efficiency and in working capital benefits – and, given the global scale of BHP’s operations, the new programme is set to deliver still greater benefits in the years ahead.
BHP has done far more than simply replace one card programme with another. Instead, the combined project team has used the payment card introduction as a catalyst to review its entire spend management process, identifying along the way several areas that are ripe for improvement.
For example, the company’s spending on charter aircraft to reach remote mining sites runs to many millions and was still largely carried out through purchase orders. Switching to payment cards will save both time and money on this significant spend item.
Greater control and visibility.
Reduced administrative burden.
Better working capital management.