How can you transform your accounts payable function from a cost center to a profit center? A successful initiative involves a commitment to business process improvement, effective use of collaborative technology, and supplier engagement through an e-commerce channel. Hear best practice approaches from Ardent Partners Managing Partner Andrew Bartolini, and Ariba customers discuss strategies and results from automating their accounts payable operations, and opportunities for future expansion.

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@ariba
#AribaLIVE
@ariba
Beyond Scanning: Enabling Straight-
Through Invoice Processing across
All Spend Categories
Chris Rauen, Solutions Marketing, Ariba – an SAP company
Ed Aderman, Financial Program Manager – Global
Procurement, Reed Elsevier
April 9, 2015
© 2015 Ariba – an SAP company. All rights reserved.

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Problems with Paper
• Improper coding
• Lack of terms
• Wrong amount
• Post-audit recovery
• Exceptions,
exceptions,
exceptions
• Long…cycle…
times
• What invoice?
• Lack of visibility
• Lost discounts
• Overpayment/
duplicate payment
I know.. SCAN
the paper!

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Powerless with Paper
© 2015 Ariba – an SAP company. All rights reserved.3

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True Costs of Paper Invoicing
“Nearly 80% of all
incoming invoices
are still paper
based.”
- The Hackett Group
Receipt &
Capture
Receipt &
Capture
High Cost of
Paper Invoices
“$4.6 million in
contract leakage
per billion in
spend on
average.”
- The Hackett Group
Matching &
Approvals
Matching &
Approvals
Lack of
Compliance
“15% of invoices
have exceptions”
- TAPN
Inquiries
& Exceptions
Inquiries
& Exceptions
Too Many
Exceptions
“80% of early
payment discount
opportunities
missed.”
- Ariba
Discounts &
Payments
Discounts &
Payments
Lack of
Control
© 2015 Ariba – an SAP company. All rights reserved.4

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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%+ touch-less processing
70% decrease in approval times
Empowered with E-Invoicing
“Nearly 80% of all
incoming invoices
are still paper
based.”
- The Hackett Group
Receipt &
Capture
Receipt &
Capture
High cost of
Paper Invoices
“$4.6 million in
contract leakage
per billion in
spend on
average.”
- The Hackett Group
Matching &
Approvals
Matching &
Approvals
Lack of
Compliance
“15% of invoices
have exceptions”
- TAPN
Inquiries
& Exceptions
Inquiries
& Exceptions
Too many
Exceptions
“80% of early
payment discount
opportunities
missed.”
- Ariba
Discounts &
Payments
Discounts &
Payments
Lack of
Control
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 Ariba 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
Efficiency Gains
60 – 80% operational cost takeout
in AP
© 2015 Ariba – an SAP company. All rights reserved.5

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Realize the Business Case
“1-for-1”
Process Cost
Containment
$1M per $1B in
spend process
efficiency savings
Discount
Capture
“2-for-1”
$2M+ in discount
savings for every
$1B in discountable
spend
Working
Capital
“3-for-1”
$2.7M in working
capital impact per
$1B per day of
improvement in
DPO, DSO, DIO
Contract
Compliance
“4-for-1”
$4M in savings
leakage for every
$1B in spend under
contract
$10+ Million Savings per $1 Billion Targeted Spend
© 2015 Ariba – an SAP company. All rights reserved.6

7. Embrace the Power of Networked E-Invoicing
DISCOUNT
MANAGEMENT
WORKINGCAPITAL
COMPLIANCE
SUPPLIER
MANAGEMENT
PROCESSSAVINGS
ELECTRONIC INVOICING
SPENDANALYSIS

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© 2015 Ariba – an SAP company. All rights reserved.8

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What is Elsevier?
• The Premier Scientific, Technical and Medical Information Provider
 20,000+ books
 Over 2,000 journals per year
 Electronic databases
© 2015 Ariba – an SAP company. All rights reserved.9

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Invoice Automation Objectives
• Reduce manual invoice processing
 Reduce reliance on scanning – OCR
 Reduce cost of manual invoice processing
• Standardize invoice processing “streams”
 Indirect, services, book production, journal production
• Improve opportunity to take advantage of early pay discounts
© 2015 Ariba – an SAP company. All rights reserved.10

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Ariba E-Invoicing Program Overview
• Oracle ERP system
• Over 30,000 suppliers
 Spread across six continents and every time zone
• Over 250,000 invoices annually
 Customized procurement processes for creative material
 Highly detailed manufacturing specifications unique per product
 Complex invoice flows and approval processes
© 2015 Ariba – an SAP company. All rights reserved.11

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A Global Program
• Time Zones
• Language
• Currencies
• Training
• Support
© 2015 Ariba – an SAP company. All rights reserved.12

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Unique Challenges of a Creative
Environment
• Each product is a custom item
• Thousands of individual creative people
• Standardization can be a challenge
• Identifying the ordering systems and invoice flows
 Indirect
 Direct – Books, Journals, Electronic
© 2015 Ariba – an SAP company. All rights reserved.13

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Analyzing the Procurement Channels
• Standard POs for indirect spend
© 2015 Ariba – an SAP company. All rights reserved.14
Purchase Orders
Book Orders
Journals Orders
• Specialized ordering processes
with unique custom requirements

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Preparing Supplier Data
• Categorizing suppliers by type (POs, books, journals)
• Unique approach for each
• Preparing the data
 Identifying the correct contact at each supplier
 Working with the supplier relationship manager
 Follow up, follow up, follow up
 Timing has to be right too
© 2015 Ariba – an SAP company. All rights reserved.15

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PO-Flip® with Ariba
• Where purchase orders are available
 Primarily indirect spend
 20% of orders and invoices
 Targeted large order/invoice volume suppliers first
 Thousands of small suppliers
© 2015 Ariba – an SAP company. All rights reserved.16

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Journal Production
• Custom ordering process flow
 Each journal, volume and issue a unique project
 Tracking of inputs and costs to the journal, volume and issue
• Invoice process template for production
 Typesetting and printing invoices
 Training suppliers how to use the template and the data for each
custom field were keys to success
• Invoice approval process
 Each product unique approval flow
© 2015 Ariba – an SAP company. All rights reserved.17

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Book Production
• Custom ordering process
 Unique specifications for each project
• Invoice template for producers
 Typesetters and Printers
 Training
• Invoice approval process
 Large number of approvers
 Each product unique approval flow
© 2015 Ariba – an SAP company. All rights reserved.18

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Production Invoices Input
• Integrated book or journal invoice suppliers
 cXML
 EDI
 CSV
• Manual entry suppliers for both books and journals
 Books – ISBN and printing
 Journals – Journal number, Volume and Issue
© 2015 Ariba – an SAP company. All rights reserved.19

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• Highlighted items for each required data field
• Bulleted instructions for required data in each field
Manual Entry Guide
© 2015 Ariba – an SAP company. All rights reserved.20

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Summary of Benefits
• Driving to 99% on-time payment performance
• Flexible invoice formats to accommodate all suppliers
• Real-time invoice status for suppliers, eliminating calls to AP
• Improved PO compliance
• Reduced processing cost of invoices
© 2015 Ariba – an SAP company. All rights reserved.21

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Lessons Learned
• Data preparation
 Cleaning supplier data
 Having the correct supplier contact
• Communication
 Internal as well as external
© 2015 Ariba – an SAP company. All rights reserved.22

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Next Steps
• Expanding the program to other divisions
• Contract templates
 Link non-PO invoices to contracts to extend touchless processing
• Expanding the suppliers involved
• Expand early payment discounts
 Earn greater discounts to improve cash flow
© 2015 Ariba – an SAP company. All rights reserved.23

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Questions?
• Ed Aderman
e.aderman@reedelsevier.com
© 2015 Ariba – an SAP company. All rights reserved.24