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Mission Possible: You Can Achieve Touchless Invoice Processing

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If you’re ready to move on from paper invoice processing, this session is for you. Hear from customers that have automated their accounts payable operations to accelerate invoice processing, eliminate invoice errors and exceptions, improve on-time payment performance, and more.

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Mission Possible: You Can Achieve Touchless Invoice Processing

  1. 1. Mission Possible: You Can Achieve Touchless Invoice Processing Chris Rauen, Solutions Marketing, SAP Ariba Kim Berg, Director, Financial Services, Bemis Jeremy Henkel, Director, Procurement Services, Holiday Retirement Kathy Hinton, Vice President, Supply Chain Management, Tesoro Companies / March 15, 2016 Public
  2. 2. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 10Public “Nearly 56% of all incoming invoices are still paper based.” - TAPN 2014 “30% of invoices have exceptions” - AberdeenGroup “$9 million in contract leakage per billion in spend on average.” - The Hackett Group “80% of early payment discount opportunities missed.” - SAP Ariba High Cost of Paper Invoices Too Many Exceptions Lack of Compliance Lack of Control Receipt & Capture Matching & Approvals Inquiries & Exceptions Discounts & Payments A broken process
  3. 3. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 11Public “Other” GST/VAT Compliance PO & PO-Line Match Buyer Match (non-PO) UOM & SKU Change Currency Match Sub Total & Total Amount PO-Line Change Line & Total Consumption Thresholds Shipping & Tax Thresholds Invoice Number Bill To / Ship To PO Number Requestor (Non PO) Invoice Date VAT / GST IDs Account Coding Contract & Receipt Match Price & Tax Compliance 98%+ Auto Post Network-centric payables
  4. 4. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 12Public Buyer & Seller Benefits $2 million discount savings per $1B spend DSO Reduction of over 6 Days Spend Savings $400K+ in AP Error & Fraud Elimination per $1B in spend $4M per $1B of contract leakage avoidance Effectiveness Gains 98%+ touchless processing 70% decrease in approval times Efficiency Gains 60 – 80% operational cost takeout in AP “Nearly 56% of all incoming invoices are still paper based.” - TAPN 2014 “30% of invoices have exceptions” - AberdeenGroup “$9 million in contract leakage per billion in spend on average.” - The Hackett Group “80% of early payment discount opportunities missed.” - SAP Ariba High Cost of Paper Invoices Too Many Exceptions Lack of Compliance Lack of Control Receipt & Capture Matching & Approvals Inquiries & Exceptions Discounts & Payments Capture 100% of your invoices in a digital format from any supplier regardless of volume, location or capabilities Resolve invoice errors at point of submission with self-serve supplier portal and over 80 Network business rules Match invoices against POs, Contracts, Service Sheets. Workflow routing and approval Control payment timing and maximize early payment discount capture Eliminate & Digitize Paper Capture & Correct Exceptions Systemic Compliance Control Payment Timing Fixing a broken process
  5. 5. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 13Public Best-in-class results Metric All Others Best-in- Class SAP Ariba Cost to process an invoice $15.96 $2.94 <$2 Time to process an invoice 16.6 days 3.6 days Minutes Invoice exception rate 19.1% 9.8% <2% % invoices process straight through 17.3% 54.1% 98%+ Source: Ardent Partners, SAP Ariba
  6. 6. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 14Public Bemis Company NYSE: BMS Supply packaging for food, consumer, medical and pharmaceutical companies worldwide Based in Neenah, WI 2014 net sales $4.3 billion 60 locations – 11 countries 17,000 employees worldwide
  7. 7. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 15Public BEMIS: A BETTER WAY Our customers Our Mission Passionate commitment to the growth and success of our customers will make Bemis the clear choice for inspired packaging solutions
  8. 8. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 16Public Financial services strategy Provide premier financial transaction - master data services for business units Productivity: Provide first quartile cost performance as benchmarked against the industry Service: Documented service levels through Service Level Agreements, and regular reporting of results. Control: Maintain controls that fully meet internal and external audit requirements
  9. 9. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 17Public Need for procure-to-pay automation strategy Indirect space in the middle: many fragmented systems & processes, many of which are paper-based. $$’s Suppliers Raw Materials. Few transactions, big $’s: MRP Many low $ transactions: P-Cards
  10. 10. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 18Public Procure-to-pay project charter Automate the indirect procure-to-pay process with best-in-class technology that is a scalable solution providing information for advanced sourcing, transactional process efficiency, contract pricing visibility for low-cost item requisitioning and ease of use
  11. 11. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 19Public Systems and applications SAP SRM • One foundational system for document of record SAP Ariba • Sourcing Professional • Ariba Network • PO Automation • Invoice Automation • Procurement Content (Catalog) Environment • Multiple ERPs • Multiple purchase order systems • Multiple purchase order methods and processes • No integration • Lack of visibility to data • Manual 3-way match • No automation
  12. 12. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 20Public Project leadership Steering committee CIO, Functional VPs Business sponsors Director of Procurement Director of Financial Services A Procurement and Finance led project. Strong top-down alignment required.
  13. 13. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 21Public Project team Core team Business sponsors, Project manager and IT lead SMEs: Procurement, Finance, Maintenance Support: Internal audit, master data, training SAP Ariba: Project management and supplier enablement Deployment team Core team Site champion Pay-it-forward resources Local cross functional team of key users and end users Change management requires high end- user involvement and ownership.
  14. 14. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 22Public Results Financial Services Automation = headcount reduction = lower transactional costs Improved internal controls. Procurement Improved information and greater spend leverage Contract price and terms compliance Operations Standard processes Improved controls for receiving
  15. 15. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 23Public Accounts Payable headcount timeline Concur SAP Ariba SAP, P-card Scan and Capture SAP Ariba, P-card Standardized and Improved Processes
  16. 16. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 24Public SAP Ariba 73.2% 44,973 pCard 4.2% 2,554 Non-SAP Ariba 22.7% 13,950 Percentage & Count of Indirect Line Items iSave: Network usage KPIs Original Success Criteria: Purchase Order Line Items through Ariba Network Year 1 – 60% Year 2 – 75% Current State – 73.2%
  17. 17. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 25Public Lessons learned Assure top-down alignment Drive a focused deployment process Use pay-it-forward and local teams Conduct closed-loop testing Maximize catalog content Comprehensive training and support Close the gap between current / to be workflows Start small with current requestor base CHANGE MANAGEMENT
  18. 18. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 26Public About Holiday Retirement Founded in 1971 to create independent living lifestyles Second-largest operator of senior living communities in the U.S., with 308 communities
  19. 19. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 27Public Invoice processing challenges Front-end AP process Decentralized and manual Predominantly paper-based No workflow tools to streamline approval process Limited visibility into liabilities Excessive costs
  20. 20. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 28Public Solution approach Centralized AP system end-to-end Ariba Procure-to-Pay Supplier enablement Target suppliers with large volumes of paper invoices to move to an electronic process
  21. 21. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 29Public Results Payments made within vendor terms Faster processing, with fewer invoice duplications and exceptions One workflow – multiple product types Improved efficiencies for managers and field members Tightened controls in AP Detect duplicate payments Reliable approval process Costs reduction of >60%
  22. 22. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 30Public Lessons learned Know your desired outcome Carefully plan your deployment Impact of business decisions on how items are processing Connect with companies that have made the transition Serve as mentor for your deployment
  23. 23. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 31Public Next steps Expand catalogs-PO invoicing to improve compliance Transition JD Edwards PO system to SAP Ariba Target new spend categories such as maintenance Goal of cleaner transactions Continue P2P integration with sourcing-contract modules Convert more ICS suppliers to transact electronically Improve capture of early payment discounts
  24. 24. Tesoro Corporation Fortune 100 company Independent refiner and marketer of petroleum products Operates six refineries in western US Combined capacity of 850,000 barrels per day 35% ownership in Tesoro Logistics LP (NYSE: TLLP) 2300 retail stations under ARCO, Shell, Exxon, Mobil, USA Gasoline and Tesoro brands
  25. 25. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 33Public What we do Through our advantaged crude supply and integrated value chain, we’re positioned for strong growth potential Operate six refineries in the western United States Refine up to 875,000 barrels of oil per day that we market wholesale, commercially and at retail Gather, transport, store and distribute crude oil and refined product through Tesoro Logistics LP, formed by Tesoro to own, operate, develop and acquire logistics assets Supply more than 2,300 retail stations in 18 U.S. states, branded Tesoro®, Shell®, ARCO®, Exxon®, Mobil® and USA Gasoline™
  26. 26. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 34Public Our SAP Ariba story Implemented Ariba Sourcing, Ariba Contract Management, Ariba Supplier Performance and Information Management in 2014 Loaded over 10,000 documents in contract repository Set up templates for RFPs and contracts Established supplier self-registration site powered by SAP Ariba In 2015, we implemented Ariba Procurement Content, launching 12 new catalogs and began the Ariba Invoice Professional design In 2016, we are implementing Ariba Invoice Professional
  27. 27. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 35Public Overview The SAP Ariba implementation will generate value for the organization by automating manual Finance and Supply Chain processes and increasing the level of accuracy in the accounts payable process. Value will be generated by: • Increasing processing efficiencies • Improving overall contract compliance • Allowing for more focus on strategic activities Ariba PO and Invoice Automation will be used to: • Transmit POs electronically and receive invoices submitted electronically by suppliers through the Ariba network • Process other electronic transactions, such as Order Acknowledgements Ariba Invoicing Professional will be used to: • Validate invoices (pricing, quantities, terms) prior to the invoice being transmitted to Tesoro • Workflow invoices internally for review and approval Ariba Procurement Content will be used to: • Generate touchless POs using catalogs with content provided electronically from suppliers Project Overview Primary levers: • Increase process efficiencies • Eliminate scanning, matching and manual entry of invoices by Accounts Payable staff • Decrease number of incorrect invoices received, reducing internal stakeholder review time • Increase contract price compliance • Increase the accuracy of POs received by suppliers • Reduce incorrect payments to suppliers by auto- matching invoices against Ariba-issued POs • Dolphin retirement savings Secondary levers: • Reduce effort required to perform initial tests performed by contract auditors • Increase saving by reducing the effort spent by field Supply Chain staff on generating POs and allowing effort to be refocused on more strategic activities Value Creation Levers
  28. 28. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 36Public Current P2P processTesoro Logistics Rockies P2P Process - Invoicing Supplier Vendor TesoroMailRoom ScanTeam APCentralized ServiceEntryTeam Requisitioner Receive Invoice Deliver Service Receive & Open Invoice in CSE workflow Review PTS Record Do PO/SO has enough funds? Send Invoice to Tesoro Mail Room Date and Scan Invoice Send Invoice to Requisitioner with a PTS Note $ Request Additional Funds Approval Select PO/SO Line Begin SE Do value tab matches total? Review SE for Errors Send for Review and Acceptance NO Invoice is in Dolphin Receive Invoice via link in e-mail Log into Dolphin Review Invoice Approve or Reject Log into Dolphin Read PTS notes NO Funds Approved Issue an invoice Supplier Inquiry Receive Invoice via link in e-mail YES YES Funds added To PO/SO Save SE Do PO/SO has enough funds? Contact PM to request Additional Funds YES NO Service Delivery is in Progress 1 Link Symbol Count Description Legend Subtitle Legend
  29. 29. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 37Public $$$M Total Process Improvement Benefits Process improvement benefits Purchase Order Processing $  Reduce buyer time by automating the PO, Order confirmation and Advanced Shipping Notice  Reduce time for line of business people to reconcile invoice issues. Eliminate 4,000 of the 6,000 hours currently spend on this activity,  Eliminate lost POs Invoice and Receipt & Processing $  Reduce work related to invoice scanning  Automate invoice receipt and data entry  Reduce supplier inquiries to A/P, buyers and stakeholders SES Receipt & Processing $$$  Reduce Service Entry Sheet workload  Reduced reconciliation expense by creating SES against contract terms
  30. 30. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 38Public Invoice automation challenges Current state - Process Invoices can be submitted through email box or paper Scanning done in house Invoices are loaded in Dolphin. Vouchered against POs, GRs, SEs Routed for approval Matching issue resolution Time spent on managing matching holds Implementation challenges Complex invoice types – it’s not just about procurement Issues with accounting treatment SAP integration – Service Entry Sheet Tesoro’s supply base Culture of nice
  31. 31. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 39Public Where are we now? As of mid February First set of suppliers for goods went live – Next wave of non-PO suppliers scheduled for early March Moving open POs and associated documents with each wave Performed cut-over of SAP Ariba and SAP Managing progress of SAP Ariba fixes for Services Supplier Enablement/Change Management 261 of 349 (75%) suppliers completed Trading Relationship Requests (TRRs) 126 suppliers signed contract amendments; 81 suppliers w/o contracts will receive PO T&Cs 169 of 349 (48%) suppliers ready for enablement Multiple training sessions for A/P, SCM, stakeholders and suppliers on going Communicating change with each batch to stakeholders, executives and core team
  32. 32. Questions?
  33. 33. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 41Public Please complete session survey Locate Session Click Surveys Button Select Breakout Survey Rate Session

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