Solution Workshop – Measuring Network Success


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This session is focused on establishing attainable and measurable goals, documenting and tracking against these goals, and translating it into the benefits for your organization. A group activity will be conducted where participants are asked to develop a scorecard, track results, and present to leadership.

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  • The challenges that most of your prospects will share across the invoice-to-pay process can be boiled down into four major categories:Too much paper – paper invoices are the most expensive to process when compared to e-Invoicing. Companies across the globe still have about 80% of their invoices coming in as paper. Too many exceptions – Paper handling is inefficient, and it also introduces additional cost and effort for AP for handling invoice exceptions. According to a recent TAPN survey, about 15% of invoices have errors and exceptions on average. And it costs anywhere between $20 and $200 to address each error. So for 100K invoices that is about $300K in incremental cost. At a conference last year, I heard someone say that at HP they have errors and exceptions on 39% of their invoices. 39%!Lack of ComplianceComplying with preferred vendors and pricing can also lead to significantly higher costs. A recent Hackett Group study shows that companies lose over $4 million per billion in spend under contract by paying for invoices that don’t comply with negotiated prices. For poor performing organizations, that leakage figure is many times larger.Too many missed discounts and late payments Early payment discount and dynamic discounting is an emerging best practice that can deliver over $2 million per billion in discountable spend. But most companies simply can not approve and pay their invoices on time, and miss over 50% of their discount savings.So as your listening to your prospects share their problems, dig into the pain, ask them to expand on a day-in-the-life of the invoice receipt process. Get your prospects to think about these inefficiencies, the cost, the waste, the missed opportunities.===================================================
  • Discount capture - ($2M for every $1B)Working Capital - ($2.7M for every $1B per day of improvement of DPO, DSO, DIO)
  • Solution Workshop – Measuring Network Success

    1. 1. The Ariba Network: ScorecardWorkshopChristine OShea, Sr Manager, Network Enablement andPrzemek Skinder, Manager, Buyer Enablement© 2013 Ariba, Inc. All rights reserved.
    2. 2. Objectives• In today’s session, you will:Learn about KPIs to measure your e-commerce programUnderstand the best in class benchmarks surroundinge-commerceCraft components of an executive level scorecard© 2013 Ariba, Inc. All rights reserved.2
    3. 3. Inquiries& ExceptionsDiscounts &PaymentsMatching &ApprovalsCommon Challenges That Lead toan E-Commerce Program3Inquiries& ExceptionsDiscounts &PaymentsMatching &ApprovalsReceipt &CaptureReceipt &CaptureHigh cost ofPaper InvoicesLack ofComplianceToo manyExceptionsLack ofControl“Nearly 77% of allincoming invoicesare still paperbased.”- Aberdeen, 2012“15% of invoiceshave exceptionsadding 6.6 days tothe cycle.”- TAPN, 2010“50% ofprenegotiateddiscounts arenever captured.”- Aberdeen, 2012“$4.6 million incontract leakageper billion inspend onaverage.”- The HackettGroup, 2012
    4. 4. Objectives and Metrics forBest-in-Class E-Commerce Programs© 2013 Ariba, Inc. All rights reserved.4Objective Metric Best in ClassProcessEfficiency% of Addressable spend that is automated 80%% of Electronic Invoices 67%Invoices per FTE 33,000% of Invoice Exceptions 12%Days to approve Invoices 4.1Touchless Invoice Processing 85%ComplianceContract leakage savings 0.46%% of spend under management 55%CashManagementDiscount capture 0.20%Working Capital 0.27%Source:The Hackett Group, Aberdeen, Ariba
    5. 5. Proven Approach to LeveragingYour Scorecards© 2013 Ariba, Inc. All rights reserved.5ReportresultsImplementincentivesDefineBaselineSelectMetricsAlign onObjectivesConfirmExecutiveSponsors
    6. 6. Example Executive Dashboard© 2013 Ariba, Inc. All rights reserved.6
    7. 7. Group Assignments• Group 1% of Addressable Spend that isAutomated% of Electronic Invoices• Group 2Invoices per FTE% of Invoice Exceptions• Group 3Days to approve InvoicesTouchless invoice processing© 2013 Ariba, Inc. All rights reserved.7• Group 4Contract leakage savings% of Spend Under Management• Group 5Discount captureWorking capital
    8. 8. Group Activity• Discuss the impact of the metric and documentthe following:Which sponsors care?Where and how can the data be obtained?What trends should you see over what time frame?How frequently should this be tracked?How can you incent teams/individuals?© 2013 Ariba, Inc. All rights reserved.8
    9. 9. Please Complete Session Survey© 2013 Ariba, Inc. All rights reserved.9Find Sessionin ScheduleClickChoose oneRateSessionThank you for joining usClick Survey andSelect BreakoutSession Survey