Leveraging BPM Workflows for Accounts Payable Processing BRAD BUKACEK - TEAM LEAD FISHBOWL SOLUTIONS, INC.

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1 Leveraging BPM Workflows for Accounts Payable Processing BRAD BUKACEK - TEAM LEAD FISHBOWL SOLUTIONS, INC. i

2 Fishbowl Solutions Notice The information contained in this document represents the current view of Fishbowl Solutions, Inc. on the issues discussed as of the date of publication. Because Fishbowl Solutions must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Fishbowl Solutions, and Fishbowl Solutions cannot guarantee the accuracy of any information presented after the date of publication. This Whitepaper is for informational purposes only. FISHBOWL SOLUTIONS MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Fishbowl Solutions Inc. Fishbowl Solutions Inc. may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Fishbowl Solutions, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property Fishbowl Solutions Corporation. All rights reserved. Fishbowl Solutions is a registered trademarks or trademarks of Fishbowl Solutions Inc. in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners Fishbowl Solutions Corporation. All rights reserved.

3 Contents 1 Introduction Executive Overview 1 2 Background 2 3 Technical Discussions and Examples Overview Technology A/P Automation Levels A/P Imaging How to Start ERP Integration Workflow BPM Form Conclusion 7 4 Notes Error! Bookmark not defined.

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5 1 Introduction Executive Overview Accounts Payable departments are looking to create a more streamlined and paper-less business process. By achieving this, an AP department, along with HR and many other departments, are seeing huge ROI when converting from paper to digital management, but one key piece remains - the approval workflow of these documents. Oracle Business Process Management (Oracle BPM) along side of Oracle WebCenter Content: Imaging helps trigger an approval workflow to many different approvers to be acted upon. This white paper will describe how BPM workflows can be used for Accounts Payable (A/P) processing and how they can be implemented with popular ERP applications like PeopleSoft and E-Business Suite. The paper is intended for application architects, developers and integration specialists implementing business processes using Oracle Business Process Management. Readers of this white paper will come away with the following: Understand the business impact of paper-based processes. Overview of Oracle Business Process Management (BPM) Understand the core features of BPM and how they help solve A/P s business problem.

6 2 Background Enterprise Resource Planning (ERP) systems are very important to many businesses and organizations because it helps them manage and maintain information for specific lines-ofbusinesses. One specific line-of-business is accounts payable, which is a core function of most businesses today. The data flow for accounts payables is critical and needs to be done easily with little complexity so workers can enter data manually and approve invoices. ERP systems help automate these functions but don t achieve the flexibility that most businesses need today because of how quickly changes can occur. The biggest problem for most businesses is the fact that paper is still being passed from deskto-desk and through the mail. This means that the process is slow and not fully automated. This has major cost impacts and creates inefficiencies within the accounts payable department. The importance of this has risen over the years because of the immediate benefits of automating and the quick ROI that can be realized. By using a combination of tools like Oracle Business Process Management, WebCenter Content: Imaging, WebCenter Capture, and WebCenter Forms Recognition, businesses can implement a solution that allows the full automation with their business applications. 3 Technical Discussions and Examples 3.1 Overview Oracle BPM 11g helps organizations achieve process management success with a complete solution for all types of business processes. It helps starting at the beginning with modeling and optimizing a business process to fully automating and executing across divisions and business units. It provides full control to business owners from start to end to ensure organizational goals are being met. Oracle BPM also helps bridge the gap between the business and IT by creating a collaborative environment through Oracle JDeveloper. Some major benefits of implementing BPM for A/P: Approval workflow outside of the ERP system Provide standards-based integration with Oracle Service Oriented Architecture (Oracle SOA) Increased efficiencies within A/P department because of less paper and data entry Monitoring and tracking of invoices 3.2 Technology Oracle BPM 11g is part of the Oracle Fusion Middleware stack, which includes other popular products like WebLogic Server, SOA and many more. As with most Fusion Middleware products, Oracle BPM is deployed to WebLogic and runs within a managed server. The unique part about this managed server is that Oracle BPM 11g is installed on top of Oracle SOA to provide a rich application integration capability. This becomes

7 very useful when creating BPM applications, especially for A/P approval workflows, because that extra step of automation can occur by pushing data to ERP systems like PeopleSoft or E- Business Suite. A couple of key tools in Oracle BPM include: BPM Studio A comprehensive modeling and development environment for process-based applications. Process Composer Exposes modeling aspects that are typically of interest to business analysts. This is mainly for contributors that do not have to deal with an IT system. Use of Oracle ADF Oracle Application Development Framework (ADF) to build web applications and forms that end users can interact with. Process Analytics Provides the insight into the working of processes to track process performance. Oracle Business Activity Monitoring (or BAM) Provides dashboards for stand process metrics. 3.3 A/P Automation Levels There are many factors to consider when determining the level automation that wants to be achieved. Typically the decision will be made based on how many invoices are being processed a week. If there is a high volume of invoices being processed justification can be made for more automation. Below is a table that explains different levels of automation and the benefits: Level Description Benefits Low Level of Automation Invoices Processed Manually No change to current A/P Process Reduce amount of misplaced documents and physical storage space Improved document security Mid Level of Automation High Level of Automation Invoices Scanned Upon Receipt, Routed for Data Entry, and Indexed Indexing process triggers workflows routing work for coding, review and approval Removes paper from the process Speeds data entry in the ERP Expedited invoice review and approvals Ensures data integrity Workflows further expedite invoice review and approval process leading to vendor discounts for invoices paid early Reduced late payment fees Accelerated invoice exception processing Better visibility

8 3.4 A/P Imaging There many areas of a A/P project that need to be considered but most importantly is the approval workflow because this where most of the value is going to be seen. Most A/P departments are doing workflow by passing paper around, from desk to desk, which is inefficient and hard to track. This is where BPM truly provides the most value. However, for a lot of companies the question becomes where to start? There are couple of areas to be considered, but first what needs to be determined is what level of automation as discuss above is desired. There are really two different types that could be considered: 1 Approval workflow of Invoices only: Once approval has occurred the document will be sent to A/P clerks for manually data entry into ERP system. 2 Approval workflow of Invoices and data synchronization into ERP system. Once approval has occurred, document related data will be sent to ERP system and will be updated appropriately. Clearly, the second option is more complex than the first because of the integration with the ERP system, but it will provide the most value. 3.5 How to Start Almost all A/P Imaging projects will be driven by the Finance department therefore the conversation needs to start there. Typically the best things to do during initial requirements gathering is the following: What is the current process today? How is the approval process handled today? Who has the ability to approve invoices? What are the business rules for approving invoices? These questions are important because they help shape how the workflow will be developed and potentially what Oracle BPM forms will need to be created for approval processing. However, another thing to consider is what if integration with the ERP system is necessary to provide that additional layer of value. 3.6 ERP Integration As stated earlier, BPM 11g is installed on top of SOA 11g therefore the ability to provide a rich integration exists and helps in the case of integrating with an ERP system. Lots of consideration needs to be made when taking on the integration with an ERP system because most ERP systems can be configured differently. Some key questions that would need to be considered to understand the complexity are the following: Does the ERP system have available web services? If not, what does the database table structure look like?

9 How are vouchers created online? What database tables support a voucher creation? What does the data format of voucher look like? For example, if integrating with an ERP system like PeopleSoft, a provided service exists called the Voucher Build Process. A voucher can be created through a web service call to PeopleSoft. It can retrieve the request from the BPM approval process through a component called the integration broker and then submits the final data into staging tables. A daily batch process is ran to create the vouchers and put them into the application tables within PeopleSoft. When doing any type of integration the most important part is the data and a good suggestion when creating the technical requirements document is to provide an data mapping spreadsheet because more than likely the data that is supporting the approval workflow process is different than what is in the ERP system. A spreadsheet could be easily created in Microsoft Excel and look similar to do this: The purpose of this is to show the XPath syntax and how it maps to the corresponding elements on each side, the approval workflow and ERP system. 3.7 Workflow The workflow is a very important part for this fully automated solution because this is where a lot of the tracking and analytics can be made visibile driving decisions that can be made on moments notice. The critical piece of the workflow component is the integration with the ERP system because for most organizations the ERP system is the main business application for all financial data. There are so many capabilities of BPM at this layer. You can send information to the vendor about where there invoice is at in the process by sending s through the User Messaging Service in Oracle Fusion Middleware or call others systems to gather more information so decisions can be made. The project is created through Oracle JDeveloper using BPM Studio. Once a workflow project has been created a developer can create the business objects that are needed and determine what systems need to be connected. The flow of business rules are also defined during the requirements phase. An example of the workflow could look something like this:

10 How this workflow gets initiated in an imaging project is from WebCenter Content: Imaging. When documents get received via or from a scan station, the option to get them into the document repository is via the Input Agent that is part of the imaging system. Documents will then get captured and stored in the content repository. Based on each application defined a workflow configuration can be setup so that for every document committed to that application it will start a workflow. That is how the above workflow gets started. 3.8 BPM Form Another aspect of fully automating this solution is the actual human interaction because at least one person from A/P will need to see the actual invoice to ensure correctness of all the data before sending it to the financial system. It s the final and critical check that needs to happen. As stated before, the form is typically created in Oracles development framework called Application Development Framework or ADF. This framework allows for rapid development without having to creating each piece of code from scratch. The form could look something like the one below with the image being to the right of the data. The purpose of seeing the image along with the data is to ensure that the data was extracted correctly during the WebCenter Forms Recognition stage of the automation process.

11 This full automation is new to most organizations, so a general rule of thumb it is best to start small and build it into phases. This is a very complex solution, but the ROI that can be seen by building something like this is extremely beneficial. 3.9 Conclusion A/P approval workflows can be extremely complex but very beneficial to businesses looking to remove paper from every day processing. The purpose of this whitepaper was to provide an introduction on how Oracle BPM 11g can be leveraged for A/P processing with integration into the ERP system. As Oracle continues to develop new features sets in the Fusion Middleware stack it will help with integrating with ERP systems like PeopleSoft.