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Process Improvements and Purchase Orders for the Bottom Line: Interview with Shahbaz Saadat

Process Improve­ments and Pur­chase Orders

Shah­baz Saa­dat works as the Asst. Con­troller of Finance as well as man­ages and
over­sees the process improve­ment func­tion at TJ’s Oil­field Con­tract­ing Ltd.

See how he saved his com­pany over $50,000 dol­lars in just a few months by imple­ment­ing Procu­rify, a cloud-based, spend man­age­ment soft­ware solu­tion.  

shahbaz saadat

Q. Tell me about your pro­fes­sional back­ground, both here at TJ’s and ear­lier in your career?

Shah­baz Saa­dat: I am a finance guy, and have spent the past 9 years in indus­tries span­ning con­struc­tion, air­lines, oil/gas and beyond. When I joined the com­pany, TJ’s was going through a tran­si­tional phase after a major growth spurt in 2010/2011. It became clear that imple­ment­ing new processes to opti­mize effi­ciency in the orga­ni­za­tion was going to be the key to con­tin­ued growth and pros­per­ity. The envi­ron­ment was going to need to become more cor­po­rate and struc­tured — and less of a free for all.  The own­ers at this point had spent a great deal of time and money work­ing with con­sul­tants to achieve this. When I started, we had a con­sul­tant firm work­ing on an imple­men­ta­tion of Microsoft NAV, an ERP sys­tem, and devel­op­ing processes and pro­ce­dures that worked around the ERP in han­dling var­i­ous func­tions in the orga­ni­za­tion. Unfor­tu­nately though, the own­ers were not sat­is­fied with the per­for­mance of the con­sul­tants and their approach to solv­ing the prob­lems we needed to address for the suc­cess of the orga­ni­za­tion; at that point we decided it was time to take con­trol of the project I was asked to take the place of the con­sul­tant and act as a liai­son between the man­age­ment of TJ’s and the soft­ware developers.

Q. What is TJ’s?

Shah­baz Saa­dat: TJ’s is an abo­rig­i­nally owned and oper­ated com­pany that han­dles log­ging, mulching, con­struc­tion and gen­eral con­tract­ing. The com­pany was founded 14 years ago by a hus­band and wife duo — Ter­rance and Jamie Harpe, from where the name TJ’s orig­i­nated. The com­pany now has over $50 mil­lion in annual rev­enue and over 300 employ­ees in peak sea­son. Ter­rance han­dles most of the oper­a­tions and Jamie takes care of the admin­is­tra­tion. Over the last 2–3 years hav­ing seen the processes in the com­pany grow and become increas­ingly com­plex, Ter­rance and Jamie knew that it was finally time to inte­grate automa­tion and processes beyond the ad hoc phone calls, emails and paper-based com­mu­ni­ca­tion that had been used since the company’s inception.

Q. As far as pur­chas­ing goes — how was this man­aged with the emails, phone calls and paper?

Shah­baz Saa­dat: Basi­cally, if some­one needed to pur­chase some­thing, they would have to go ask Jamie or Ter­rance to get approval. Ter­rance was receiv­ing hun­dreds of phone calls a day ask­ing for pur­chase order num­bers. It was time con­sum­ing, dif­fi­cult to man­age and a paper­work night­mare. Keep­ing track of orders and expenses was nearly impos­si­ble. He used to carry with him mul­ti­ple books of pur­chase orders that he would write every­thing down in. There was really no way of match­ing the pur­chase orders to invoices effec­tively, it was slow and a lot of num­bers were off - it’s not crazy to think that we had no idea what the com­pany was really spending.

Even after the imple­men­ta­tion of NAV, its mod­ule for pur­chase orders wasn’t what we needed to really solve the prob­lem. It was still essen­tially a mat­ter of email­ing the pur­chase orders for approval when nei­ther Jamie nor Ter­rance were around. We needed some­thing mobile, because run­ning a com­pany this size means that those two are almost always on the go. There is no time to answer 500 phone calls or leaf through books of pur­chase orders.

Q. Did you know that there was a solu­tion to the mobil­ity problem?

Shah­baz Saa­dat: No, the con­sul­tants even went so far as to rec­om­mend that we build our own mobile app — which would have cost us between $45,000 and $50,000 dol­lars. I thought this seemed exces­sive and decided to start look­ing on my own for some­thing that I knew must be out there. That is when I found Procu­rify, and real­ized that it just might be exactly what we needed. It turned out to be every­thing we needed and more, with­out being cum­ber­some and bulky. Procu­rify had mobile, was able to give us some cus­tom fields and even inte­grate seam­lessly with our ERP system.

Q. Was the solu­tion a good fit for the type of peo­ple on your
team?

Shah­baz Saa­dat: Absolutely — a lot of the peo­ple we have mak­ing pur­chases are the blue col­lar guys on the ground that need some­thing they can use quickly and eas­ily. They would never have been so recep­tive to a legacy sys­tem like NAV. Procu­rify feels just like shop­ping on Amazon.

Q. What about Jamie and Terrance?

Shah­baz Saa­dat: Actu­ally, Jamie’s first words were: “this is pretty!” She liked the ease of use and how every­thing was set up to make the process flow sim­pler. Both the own­ers were so impressed with the ini­tial pre­sen­ta­tion that they decided imme­di­ately to imple­ment the software.

Q. How long did it take to implement?

Shah­baz Saa­dat: We have been using the soft­ware since Novem­ber 1st; and because it came with most of the fea­tures we wanted out of the box it took only about a month to get every­thing inte­grated and set up, which is really rel­a­tively fast for any kind of major soft­ware implementation.

Q. How have things been since the implementation?

Shah­baz Saa­dat: Well, first of all, we saved about $50,000 right off the bat by not need­ing to develop our own appli­ca­tion! Ter­rance is also espe­cially sat­is­fied with the fact that he is no longer get­ting 500 phone calls a day for req­ui­si­tions — he can eas­ily han­dle the same num­ber of requests in about 15 min­utes — whether he’s at the office, his cabin, or at home, using his mobile, his iPad or what­ever is most convenient.

We also saw the over­all num­ber of pur­chase orders gen­er­ated decrease dra­mat­i­cally. Every­one has become more aware of what they’re spend­ing. Now they have to do their research before­hand, and fig­ure out exactly what they need and what it will cost by call­ing ven­dors prior to gen­er­at­ing a pur­chase order request.

Q. What would you say are some of the most use­ful fea­tures for your team?

Shah­baz Saa­dat: We love the reports gen­er­ated through Procu­rify, they give us a quick, accu­rate snap­shot of the company‘s spend­ing before it’s too late. Now we can iden­tify prob­lems early. We had been toy­ing with the idea of imple­ment­ing depart­ment based spend­ing bud­gets but were lacked a start­ing point of ref­er­ence. Now that we finally have his­tor­i­cal reports, we can use them to cre­ate bud­gets and plan our resources bet­ter in the future.

Another huge ben­e­fit is that we’ve man­aged to catch a bunch of dupli­cate orders; for exam­ple, one pur­chase order would some­times end up hav­ing the order put through more than once - whether it was because of the ven­dor or mul­ti­ple com­mu­ni­ca­tion chan­nels over­lap­ping with phone, email and more than one per­son set­ting up the same order. Some­times even two peo­ple would do the pick­ups, so we would order dou­ble the items for one sin­gle pur­chase order. We’ve caught 4000–5000 dol­lars worth of dupli­cate orders in the last three months. We have been dou­ble charged more times than we can even fig­ure out, even by big ven­dors; some­times it is easy to for­get that the big multi-million cor­po­ra­tions can make mis­takes too.

Now we can see the company’s expenses from a macro level, every­one on the team knows their role, author­ity, job, and lim­i­ta­tions. So this means that we as a com­pany can start imple­ment­ing policies.

Q. One more ques­tion, after this major process improve­ment suc­cess, where do you see your career going now? What’s next for Shahbaz?

Shah­baz Saa­dat: I def­i­nitely see myself remain­ing in finance and work­ing with num­bers. Process and pol­icy improve­ment and imple­men­ta­tion in orga­ni­za­tions with the goal of improv­ing their finan­cial stand­ing is some­thing I enjoy and would love to keep doing. I believe that sound and well-planned busi­ness processes can become the next big com­pet­i­tive advan­tage for companies.

http://www.tjsoilfield.com

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