Sometimes your P-card program seems robust but is realizing low-level savings, and you may think it’s exposing you to fraud. How do you rationalize control? In this session, discover how to make your P-card program the most effective it can be, by hearing how one company dramatically increased spend over their P-cards, removed noise (i.e. low dollar, frequent purchases) and freed up its staff to concentrate on more strategic procurement initiatives. Learn how to: - Set the controls you really need to manage your program globally - Use mandatory and non-mandatory messages to maximize supplier adoption - Communicate and train your business on how to correctly comply with your P-card program

1. From Chaos to Control -- Moving from a disparate,
multi-ERP environment to a standard and stable
ERP for P2P
presented May 23rd, 2012
Paul Williams
Director of Global Source-to-Pay Business
Process Management and Catalyst
Kraft Foods

2. Agenda
• Background
• Process Improvement Approach
• Key Learnings
• Questions

3. Kraft Foods
Fact figures
3

4. An Amazing Brand Portfolio
•12 brands with more than $1 billion in revenue
•70+ brands with more than $100 million in revenue
•40 brands over 100 years old
•80% revenue from #1 share positions
4

5. Background and Objective
Objective: Move from numerous disparate global processes
and ERP systems to globally standardized processes across 3
instances of SAP.
Background:
• 5 Regions -- North America (KFNA), Latin America (LA), Asia Pacific
(AP), Europe (KFE), Central Europe Eastern Europe Middle East and
Africa (CEEMA)
• 100,000 employees; 1,000 Procurement employees
• Starting point: 17 Source-to-Pay Process maps, 120
Procurement systems
• Key activities during the transition:
– Divestiture of the Pizza business unit
– Acquisition and integration of the Cadbury business
– Spin off of North American Grocery business (pending)

6. Agenda
• Background
• Process Improvement Approach
• Key Learnings
• Questions

7. P2P Process Improvement Approach
1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local
governance definition
3. Establish baseline metrics and targets before making any
process changes
4. Establish a cross-functional working team and steering
committee.
5. Effective Change Management is critical and multifaceted
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8. Take a true view of your end-to-end process
• Solicit input from process owners, inputters, and customers.
• Perform real work observation to check for “ghost
processes”, i.e. undocumented variations.
• Prepare for surprises.
View of the Accounts Payable FI Invoice Coding Process
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9. P2P Process Improvement Approach
1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local
governance definition
3. Establish baseline metrics and targets before making any
process changes
4. Establish a cross-functional working team and steering
committee.
5. Effective Change Management is critical and multifaceted
9

10. Define the To-Be Process with clear Governance
Look at P2P in the context of a broader source-to-pay process

11. Define and Align to Functional Handoffs
Everyone must understand their role in the process or P2P will be deprioritized
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12. P2P Process Improvement Approach
1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local
governance definition
3. Establish baseline metrics and targets before making any
process changes
4. Establish a cross-functional working team and steering
committee.
5. Effective Change Management is critical and multifaceted
12

13. Establish Baseline Metrics and Targets
before making any process changes
Who’s
# Metric P2P Area Jun-11 2011 YE Target Best in Class Average
Responsible
1 # of New Vendors Created Master Data 924 NA NA NA Procurement
70% 2011 YE / 80%
2 % PO Invoices PO Processing 74%
(Q1 2012)
79 - 90% 64% Procurement
Accounts
3 Open Invoice Counts Accounts Payable 24,557 27,000 – 36,000 n/a n/a
Payable
% 1st first pass match for PO
4 Accounts Payable 49% 65% 93 - 95% 65 – 80% Procurement
spend
Due date 53%
Accounts 64% / TBD on the 7 Accounts
5 % On Time Payment 95 - 98% 80 – 87%
Payable 7 day day buffer target Payable
83%
buffer
FI 8.8 7 days Accounts
Accounts Payable
6 Average Invoice Cycle time Payable
4 days 7 days
(BU and Mfg)
MM 6.7 7 days
Procurement
7 % OB10 Invoices Accounts Payable 14% 35%, 80% 30%
Accounts
8 % EFT Payments Cash Disbursements 30% 35% 57 - 58% 9-37%
Payable
Data available
Accounts
9 Duplicates Cash Disbursements starting in 0.1% TBD TBD
Payable
Aug 2011
Data available Baseline & Target
Accounts
10 Payment Accuracy Cash Disbursements starting in to be established by 98 – 99.9% 90 – 95%
Payable
Sept. 2011 Oct. 2011
44.8 (Q211), 44.2 Corporate
11 Days Payable Outstanding (DPO) Cash Flow 41.8 Days
(Q311), 43.1 (Q411)
45 Days 35 -40.2 Days
Finance
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14. P2P Process Improvement Approach
1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local
governance definition
3. Establish baseline metrics and targets before making any
process changes
4. Establish a cross-functional working team and steering
committee.
5. Effective Change Management is critical and multifaceted
14

15. Governance Structure
Having a cross-functional sponsorship and operating team is critical
Finance

16. P2P Process Improvement Approach
1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local
governance definition
3. Establish baseline metrics and targets before making any
process changes
4. Establish a cross-functional working team and steering
committee.
5. Effective Change Management is critical and multifaceted
16

17. Effective Change Management is critical and
multifaceted
Business Engagement and Readiness
• Early business engagement driven by Procurement Leads
• Trained and properly rewarded Key User network
• Detailed cutover readiness metrics with pre-determined escalation
points in each BU and function
• Monthly business readiness review with each part of the business;
more frequently close to cutover
• Upfront, tracked, mandatory training.
Partnership Alignment
• Clear alignment on support expected from internal and external
partners during cutover and stabilization
• Clear, vetted contingency plan with measurable trigger points.
Communication
• Robust internal and external communication plans
• Simplified, “Twitter-level” monthly Newsletter
• Repeat. Repeat. Repeat…

18. Agenda
• Background
• Process Improvement Approach
• Key Learnings
• Questions

19. Key Lessons Learned
1. Business Partner Support:
– Be very explicit about expectations for input into design and go-live support
– Dedicated Key User for onsite issue resolution
2. Stakeholder Involvement in Design:
– Change management: go directly to end users to establish awareness
– Process design: ensure adequate end-user input to design and review of new process
and system
3. Training:
– Mandatory awareness training on process change in A/P, context in the business setting
and systems environment, and the tools to support
– Mandatory classroom training for Key Users, high/med impact end users
– Track training participation and retention
– Get end user feedback on training materials prior to go-live
4. Testing:
– Focus testing on the most complex scenarios
– Test a broader range of situations and volume to get an accurate picture of potential
issues
– Despite three test cycles and end-to-end regression analyses, not all interdependencies
were identified
5. Cutover:
– Prioritize complex issues in legacy system clean-up
– Confirm all contingent master data elements are active, as expected
– ReadSoft tool under-delivered on reporting capabilities
6. Vendor Readiness:
– Prioritize key/critical vendors against business disruption risk
– Work closely with Procurement for supplier change readiness & impact assessment
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20. Agenda
• Background
• Process Improvement Approach
• Key Learnings
• Questions

21. Questions?