Best-in-Breed P2P Automation:! A PwC Perspective! Best of Breed P2P Automation PwC

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1 Best-in-Breed P2P Automation:! A Perspective! Best of Breed P2P Automation 1

2 Managing Director, US Leader Shared Services and Outsourcing Advisory, Founder and President, Direct Commerce

3 We frequently help clients with the following solutions Holistic assessment and design of back, mid and front office structure and strategy Enabling client success by leveraging point solutions that are best of breed including bolt-ons or those that integrate with core processing platforms Enabling revenue through optimizing components of SG&A through organization, process, and technology across all functions including F&A, HR, IT, R&D, Procurement, Legal, etc. Technology Enablement SG&A Optimization Operating Model Transformation Cross Functional Enterprise Services Geographic Footprint Advisory Alternative Service Delivery Process Optimization Supporting clients through each phase of the shared service center, outsourcing or hybrid model lifecycle Define opportunities in current state processes and create streamlined and standard future state processes Analysis of current and future state locations (onshore/offshore) to enable growth and cut costs 3

4 Operating Model Perspectives Best of Breed Automation September

5 Increasing appetite for cross-functional approaches and end-to-end process integration Overarching business model influences the direction, scale and structure of the optimum EBS approach. September

6 Market demands, cost factors and growth imperatives are driving organizations to adopt a hybrid target operating model Activities Simple Optimized Hybrid Model Prevalent Growing Emerging Strategic Knowledge-based Transactional Legend Performed within SSC/ Outsourced Retained in-house Performed using automation Performed in regional hubs From This Cost out/ labor arbitrage Single function (F&A, IT, HR) SSC or outsourcing Lift & shift To This Revenue growth/ innovation SG&A rationalization/optimization Efficiency & effectiveness Control & compliance Global end-to-end processes Multiple functions/ central governance Best of breed technology Asset lite models SSC and outsourcing September

7 Currently Deployed and Evolving Operating Models Prevalent Growing Emerging Op Models Function Specific Operating Models Multi-Functional Services (End to End Focus) Enterprise Business Services (Best of Breed) Value Drivers Process Standardization Labor arbitrage Highly customized at a functional level Process transformation Simplified user experience Streamlined governance model Eliminates redundancy Technology supported process enablement Re-architected enterprise applications SaaS based tool deployment Highly flexible delivery model September

8 Comparing different approaches to automation Attribute Monolithic Best of Breed Process Tightly defined and integrated process Little customization Technology Tight integration at a data model layer Industry specific adaptation Labor Highly optimized standard process Labor may be required to handle exceptions Adaptable to specific use Less disruptive to current operation Integration occurs at data exchange level Encompasses latest user interface ability Broader view of end to end process Labor reduction is significant Fewer exceptions Best of Breed Automation September

9 P2P Considerations Best of Breed Automation September

10 What does good look like Source to PO process Source-to-PO Procure-to-Pay Invoice to-disbursements Procurement strategy Strategic Sourcing PTP master data Vendor Set Up & Mgmt Req to PO Process Contract Approval Workflow PO Hygiene Receipt Services Procurement Invoice and expense processing e-invoice & 3 rd Party Payment Stakeholder Comms PTP process Strategic Objectives Improve key supplier relationships & establish favored terms Improve customer service Streamline/automate processes Reduce transaction costs Reduce re-work Maintain compliance and control Improve cash flow Align e2e PTP function Enabling Practices & Technologies Vendor rationalization efforts Single supplier database Establish corporate purchasing agreements Web based procurement software with auto-approvals via workflow Purchase Order (PO) usage required (exclude non-po items) POs sent to suppliers electronically Electronic invoicing where possible ERS and P-card to reduce volumes Automated invoice validation /matching Exception process formally documented and communicated Measure internal customer satisfaction Explore re- alignment under a Process Ownership model People & Organization Link Strategic Sourcing, Procurement and AP Create a Purchasing User-Group to provide input on changes to policies Solicit feedback on vendors utilized Implement a Center of Excellence organizational model (Shared Service) Executive Procurement Council established Corporate supported effort should be developed to drive best practices across BUs KPIs % of spend with suppliers having agreements or contracts % of spend managed or controlled by purchasing % PO usage Average number of days for PR/PO to be approved # invoices that did not match 1st time Processing cost per invoice Average Invoice processing time % of After the Fact POs Number of duplicate & rejected payments Number of days between invoice receipt and authorization and posting Procurement Finance 10

11 The P2P vendor market is changing with the rise of a new breed of P2P specialists that offer unique value propositions End-to-end P2P solutions Manage spend, suppliers, contracts, sourcing, shopping, inventory, and accounts payable with a single application SaaS delivery model Offers simplified implementation, pay-for-consumption pricing, and easier updates and upgrades Compatible with existing applications Integrates with most ERP systems and many ancillary support applications (e.g., HR, Inventory, Point of Sale) Free supplier network Enables rapid onboarding of new suppliers, which reduces transaction costs for both buyers and suppliers 11

12 Integration with other systems and enabling your supplier network are often considered the most important criteria for P2P system selection Integrates seamlessly with other systems Enables effective collaboration with Suppliers Enforces fiscal policies P2P system Offers intuitive and accessible interface Enables procurement controls Enhances data visibility and reporting Deploys easily The automation tool must be Fit for Purpose 12

13 Source to PO Technology Choices Adapted from the Gartner Hype Cycle for PTP 13

14 Critical factors for P2P automation success Separate process standardization from flexibility An industry standard process may not work for your company Enforcing a rigid, cumbersome process may encourage workarounds Adoption rates of automation tools Adoption rates represent a combination of factors flexibility, user friendly interfaces, effective E2E process coverage Monitor supplier user satisfaction Best of Breed Automation September

15 epurchasing Solutions Overview epurchasing solutions (eprocurement, Supplier Network, einvoicing, and EIPP) aim at improving the P2P process. The marketplace is populated with ERP providers with add-on purchasing front-end, epurchasing specialists, and SaaS based providers P2P Process Supplier Enablement Catalog Requisition and Purchase Order Invoice and Payment Processing Value Prop Facilitate end-to-end transaction processing Reduce costs and processing time through self-help capabilities Enable routing and electronic approval Increase spend compliance and transparency Which solution should I pick? Best of breed vs End-toend? What are the selection criteria? 15

16 Supplier Enablement Buyers can onboard and communicate with suppliers through supplier network, allowing them broaden supplier base and reduce transaction costs. P2P Process Selection Criteria Supplier Enablement Catalog Supplier Network Number of suppliers in network Ability to process POs Ability to process invoices Ability to transact with other networks Requisition and Purchase Order Invoice and Payment Processing Supplier Onboarding Fees to join the network Ease of enrollment Onboarding customer support 16

17 Catalog Buyers can collaborate with suppliers real-time to ensure catalog content information is upto-date, accurate and transparent. P2P Process Selection Criteria Supplier Enablement Catalog Requisition and Purchase Order Invoice and Payment Processing Manage Content Ability to import with different upload formats Ability to track / validate data Ability to filter permitted items Manage Transactions Ability to download PO and acknowledge PO ASN Invoices Provision of dynamic discounts Submission of queries and disputes 17

18 Requisition and Purchase Order epurchasing solutions automate requisition process and simplify approval work flow, creating a more agile procurement organization. P2P Process Selection Criteria Supplier Enablement Catalog Requisition and Purchase Order Invoice and Payment Processing Requisition Ability to support self-requisitioning process Ability to support multiple approval process flows Effectiveness of approval process PO Ability to convert approved requisition to PO Ability to track requisition and PO status Ability to track contract compliance 18

19 Invoice and Payment Processing Buyers and suppliers can gain significant efficiency and accelerate payment cycle through automated invoice processing work flows. P2P Process Selection Criteria Supplier Enablement Catalog Requisition and Purchase Order Invoice and Payment Processing Invoicing Ability to support multiple invoice submission approaches Ability to streamline invoice capturing and processing Ability to automate invoice validation process Payment processing Ability to streamline payment processes and reduce transaction costs Ability to optimize Days Payable Outstanding (DPO) while avoiding late payment fees 19

20 Questions? Best of Breed Automation September

21 For more information contact: Mark Russell Business Development phone number: