Touching your invoices? You don’t need to. 14 'how to’s' to touchless processing

Touching your invoices? You
don’t need to. 14 ‘how to’s’ to
touchless processing
James Copeland
VP FSSC BMC Software Inc.

Agenda

BMC
SSC at BMC
Change of process
The problem
Invoices on hold
First pass yield
Results to date
Questions?

© Copyright 11/7/2012 BMC Software, Inc 2

BMC by the numbers

Founded in 1980, 8th largest
independent software company
with over $2.0 billion in total
bookings and revenue (Fiscal Year
March 2012)
Corporate headquarters in
Houston, with more than 6,000
employees around the world
IT needs to be structured,
managed, staffed and deployed as
a service – a service that business
leaders can leverage to achieve
their goals and objectives
- That’s exactly what we do.
We serve
- 15,000 customers in 132 countries
- Fortune 100: 94%
- Fortune 500: 81%
- Forbes Global 100: 96%
- Forbes Global 500: 86%


Shared services profile

IT
- Classic IT role FSS
CI
- Customer-facing role
- R&D-facing role
OM
IT People by
Key business processes function
- Order management (OM)
- Global procurement (GP)
GP
- Financial shared services (FSS)
Corporate initiatives (CI)
- Process improvement
Europe
- Cross departmental initiatives
Asia Pacific
People
- 789 employees Israel People by
- 36 offices Americas region
- 23 countries
India


Financial Shared Services profile

FSSC - Pune FSSC – Houston
- Global accounts payable
 Invoices (TTM) 116k
Revenue accounting
– Manual inv (TTM) 58k (50%) - Staff 4
iExpense (TTM) 72k
 Professional services accounting
 39 countries - Staff 4 (Houston)
 Staff 19  1 (Amsterdam)
- Global fixed assets  1 (Pune)
 32 countries
 Staff 3 Capitalized software accounting
- General ledger - Staff 7
 EMEA region Key financial applications
– 25 countries
- Oracle11i single WW instance
– Staff 10
 Single chart of accounts
- Cash application EMEA & APAC
- Hyperion HFM and planning
 Staff 2
- BlackLine account reconciliation
- India statutory accounting
- IT2 treasury system
 Staff 5


Get control of your processes – roles &
responsibilities

CFO Legal HR BU 1 BU 2 BU 3 Operations

CAO Sales IS&T

FPA Mktg Order Mgmt

Tax R&D GP
Back Office
Treasury FPA
Accounting
Risk
Mgmt
Acctg

Moved FPA to the BU’s. Moved Back Office Accounting to Business Ops.


Objective

Reduce Touch
- Best case – don’t touch the invoice
 Current scenario
– 30,000 invoices per quarter
» 15,000 are manual

Increase P2P first pass invoice yield (target > 90%)
- If we have to touch it – we only want to do it once


Symptoms of the problem
Historical trend of invoices on hold
600

500

400

300

200

100

0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
09 09 09 09 09 09 09 09 09 10 10 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11


Increase FPY

• 1 - Train procurement, facilities and other key users
• 2 - Restrict WebReq access to “Superusers”
• 3 - Notify suppliers that “No PO - No Payment” is our policy
• 4 - Implement the Oracle iSupplier Portal
• 5 - Adopt/Require “Tiered Routing” globally for all categories
• 6 - Auto close for aged PO’s
• 7 - Issue Weekly Report that shows violators of “No/Late” PO policy
• 8 - Ensure procurement professionals are NOT entering their own
name on ANY Oracle WebReqs – that is, ALWAYS enter the name of
the actual requisitioner
• 9 - Revise process/procedure on 2-3 way match PO’s and
communicate/train users


Decrease touch

• 10 - Develop & implement a systemic solution to the “Fieldglass
Receipt” issue
• 11 - Evaluate alternative front end AP process
• 12 - Implement Kofax scanning improvements
• 13 - Formal plan/approach to accelerate the rate of catalogue
integration outside of the USA
• 14 - Need formal plan and execute a “Supplemental P-Card (MC or
VISA) in large International Countries


Historical trend – all regions and total

Year over year decrease – 76%
From December High – down 83%

The holds problem was primarily Region Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
APAC 7 2 0 6 4
India, EMEA and North America. ISREAL 7 9 2 9 8
Significant improvement in North INDIA 31 12 8 4 6
EMEA 29 39 29 60 7
America. LAM 0 4 0 7 1
NA 80 85 97 126 11
Total 154 151 136 212 37

© Copyright 11/7/2012 BMC Software, Inc INTERNAL USE ONLY © Copyright 11/7/2012 BMC Software, 12
12
Inc.

North America Region

81% drop in holds for the quarter.
No expense reports on hold. This
was during Q4, a high volume
invoice and expense report
period.

For North America (US + Canada) total 11 invoices amounting to $65K are on Hold.
No invoices for US/ CA are above 30 days hold.

Specifics for North America (7 invoices)
2 No PO
4 Insufficient funds on PO
1 No receipt
There are no expense claims on hold

13
Inc.

North America – Process Control Chart

Green Line is the average
Red Lines are the UCL and LCL
- Set 3 standard deviations from the mean
Data points outside the red lines indicate something outside the norm has happened
- Only 5% chance that this was a random event

1st Time Pass Rate for this Week is 89.08 %, Average for END of FY12Q4 84.34 %.

14
Inc.

North America – Invoices on hold greater than 30 days

30 •Objective was to
eliminate any holds
25
greater than 30
What Changed? days
20 •No excuses weekly
video conference
15
with the P2P team
•Deep dive in all
10 older invoices
•Pick up the phone
5

0
24/10/2011 24/11/2011 24/12/2011 24/01/2012 24/02/2012 24/03/2012

15
Inc.

Identification of offenders - suppliers

Top 3 Reasons Invoices went on Hold this week:

Receipting not PO’s short of No PO / Invalid
done funds PO on invoices
Grand Total 11 4 33
Hold % age 22 % 8% 65 %

Top 7 Vendors Contributing 57 % of the Issues:

% age against
Invalid PO on Receipting not PO’s short of 1st time pass % Age against
VENDOR_NAME Total holds Grand Total total invoices
invoices done funds invoice total holds
of same vendor

Vendor 1 15 15 3 18 29% 83%

Vendor 2 3 3 10 13 6% 23%

Vendor 3 3 3 3 6% 100%

Vendor 4 1 1 2 1 3 4% 67%

Vendor 5 2 2 2 4% 100%

Vendor 6 2 2 2 4% 100%

Vendor 7 2 2 2 4% 100%
Total 23 6 0 29 14 43

16
Inc.

Identification of offenders - employees

Top 10 People: who are contributing 27 % of the holds
% age
against
1st time % Age
Invalid PO on Receipting PO’s short of Grand total
MIN_REQUESTER Department Total holds pass against
invoices not done funds Total invoices of
invoice total holds
same
vendor

5011-10010-PUBLIC
Employee Name 3 3 3 6 6% 50%
RELATIONS

5011-60009-AMERICAS CS -
GEO

5011-40649-IS AND T -
Employee Name ENTERPRISE PLATFORM 2 2 2 4% 100%
SVCS AG

5011-60009-AMERICAS CS -
GEO

5011-40012-GLOBAL
CORPORATE SERVICES CC
Employee Name 5011-40089-IS AND T - PMO 1 1 1 2% 100%
5011-40012-GLOBAL
CORPORATE SERVICES CC

5011-40649-IS AND T -
Employee Name ENTERPRISE PLATFORM 1 1 1 2% 100%
SVCS AG

5011-40650-IS AND T -
CUSTOMER OPERATIONS

5011-40254-WW OEM
ROYALTIES
Total 4 9 1 14 37 51

17
Inc.

Assess your metrics weekly

Week Week Week Week Week Week Week Week Week Week
29 05 12 19 26 04 11 18 25 01
Measurement details Jan Feb Feb Feb Feb Mar Mar Mar Mar Apr

Invoice Volumes 262 435 422 567 341 538 329 471 288 467

82.06 79.08 83.41 82.19 83.28 87.83 84.50 85.99 84.72 89.08
1st Time Pass Rate % % % % % % % % % %

Cycle Time (Avg./ St Dev) Days
– Invoice went on Hold to Hold 8& 10 & 13 & 17 & 21 & 7& 15 & 9& 12 & 15 &
resolved date 11 14 26 32 36 10 16 11 10 21

Total Hold Invoices Received in
Week 47 91 70 101 57 87 51 66 44 51

Total Holds Resolved 56 63 105 65 97 56 80 92 69 61

58 & 72 & 73 & 84 & 57 & 86 & 65 & 79 & 84 & 66 &
PO Vs Non PO (%) 42 28 27 16 43 14 35 21 16 34

18
Inc.

First Pass Yield

92%
90%
90% Objective is 90% FPY for FY13
88% 87%
86% 86%
86% 85%

84% 83%
82%
82% 81%

80%

78%

76%
Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13

Actual Plan

Assuming 5,000 manual invoices Per month, we will need to eliminate:

From our low of 81% - need to eliminate 450 exceptions per month
From our year end metric of 86% - we need to eliminate 200 exceptions per month


Closing thoughts

Single largest contributing factor to success

No PO No Pay
Employee contact


Learn more at www.bmc.com


Touching your invoices? You don’t need to. 14 'how to’s' to touchless processing

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