Paper was yesterday: The future is einvoicing

Transcription

1 Paper was yesterday: The future is einvoicing James Marland, Vice President, Network Growth, SAP June 2014

2 Legal disclaimer The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP's strategy and possible future developments, products and or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information in this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP s willful misconduct or gross negligence. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forwardlooking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions SAP AG. All rights reserved. 2

3 Before we start All webinar attendees are muted Please address your questions through the chatbox We ll answer your questions at the end of the webinar The webinar will be recorded Everyone will get the link to the recorded session 2014 SAP AG. All rights reserved. 3

5 Agenda The Scale of the Paper Problem Possible Solutions o Shared Service Centre o Scanning o Portal Introducing the Ariba Business Network Building the Business Case Q&A 2014 SAP AG. All rights reserved. 5

9 Challenges to optimal accounts payable processes Receipt & Capture Inquiries & Exceptions Matching & Approvals Discounts & Payments High Cost of Paper Invoices Too Many Exceptions Lack of Compliance Lack of Control Nearly 80% of all incoming invoices are still paper based. The Hackett Group 15% of invoices have exceptions. TAPN $4.6 million in contract leakage per billion in spend on average. The Hackett Group 2014 SAP AG. All rights reserved. 9 80% of early payment discount opportunities missed. Ariba

10 The Shared Service Scanning Centre Advantages Paper in one place Scales well across EU countries Centralise expertise Disadvantages No Paper eliminated Error processing vs Error Reduction No visibility for suppliers Efficient Workflow Single Help Desk for Suppliers Focus on back-end integration Links to Purchasing Company Codes Accounting (e.g. Cost Centres) Allocations 2014 SAP AG. All rights reserved. 10

12 Ariba, Inc. All The Scanning Process Document preparation PO Box management Sorting, unstaple documents etc. Scanning Conversion of paper documents into digital images (non coded information / NCI) Optical Character Recognition (OCR) Conversion of image into data (coded information / CI) Data extraction Find and extract correct invoice fields (content recognition) Data validation Automatic verification of invoice fields based on data templates Manual validation Verification and quality check to ensure high quality data Paper returned for archiving Returned to customer

14 How to Eliminate Errors Errors Eliminated Not an invoice at all Incorrect Date Format Supplier Unknown Missing Invoice Number Blank Quantity field No Purchase Order No PO : No Pay But can lead to inefficiencies Pushes work to Procurement dept Errors not Eliminated Error with OCR scan Supplier not valid for this company code Quantity invoiced doesn t match quantity shipped PO referenced has been cancelled Incorrect Tax specified Contract Number referenced has hit maximum threshold for month Invoice Number is a duplicate SAP AG. All rights reserved. 14

15 Let s Build a Portal? 3000 Connections Supplier Registration Supplier Profiles I forgot my password Bank Details Supplier Help Desks DMZ & Firewall config Web Servers Load Balancing Performance Monitoring Business Rules Patches & Upgrades Supplier Training Supplier Tools One Connection

17 Collaborative invoice management solutions and benefits Receipt & Capture Inquiries & Exceptions Matching & Approvals Discounts & Payments Eliminate High cost & Digitize of Paper Paper Invoices Capture Too many & Correct Exceptions Systemic Lack of Compliance Control Lack Payment of Control Timing Efficiency Gains Capture 100% of your invoices in a 60 digital 80% format from operational any supplier cost takeout regardless in AP of volume, location or capabilities Effectiveness Gains Resolve invoice errors at point of submission 98%+ touch-less with selfserve processing supplier portal and 70% over decrease 80 Network in approval business times rules Spend Savings Match invoices against PO s, $400K+ in AP Contracts, GR s Error & Fraud Workflow Elimination routing per $1B and in approval spend Flexible $4M per on-premise $1B of or contract cloud deployment leakage avoidance Buyer & Seller Control Benefits payment timing and maximize $2 early million payment discount discount savings per capture $1B spend Electronic payment DSO with Reduction detailed of over remittance 6 Days 98% customer retention rate Eliminate the paper with einvoicing Business rules enable 98% touchless processing. Invoice status and full P2P document support significantly reducing inbound calls. Invoice process significantly streamlined to within 3-5 days 2014 SAP AG. All rights reserved. 17

18 Hybrid flexibility: Cloud capture + on premise processing cxml EDI CSV P2P Docs and Status P2P Docs Discounting Ariba Network Buyer Portal Supplier Enablement SAP Business Suite Supplier Portal SAP II The Ariba Network 98% Clean Invoices Invoice Processing Automated Reconciliation & Posting Y $ Pay ERP SRM FAX Paper SAP Invoice Management ERP (FI/AP) Fax Document Archiving & Viewing e.g. SAP Archiving by OpenText 2014 SAP AG. All rights reserved. 18

19 Hybrid flexibility: Hybrid capture + processing cxml EDI CSV Supplier Portal SAP II The Ariba Network P2P Docs and status 98% Clean Invoices Invoice Recognition P2P Docs Discounting Ariba Network Buyer Portal SAP Business Suite Invoice Processing Supplier Enablement Payment Y $ FAX Document Scan Automated S A P reconciliation I n v o i c e t o and P a y posting Paper e.g. SAP Archiving - Enterprise Scan OCR Option for SAP Invoice Management SAP Invoice Management by OpenText ERP (FI/AP) Fax Document Archiving & Viewing e.g. SAP Archiving by OpenText 2014 SAP AG. All rights reserved. 19

20 Your RULES PO & Invoice Automation Goal : TOUCHLESS processing Faster Cycle Times Lower Risk Collaborative Commerce Ariba 98% + Auto Post Line & Header Tax Tax Code Compliance Contract Compliance Sub Total Amount Total Amount Consumption Variance Receipt Remit Access PO Line Reference Unit Of Measure Price Variance Currency Supplier Name / ID Bill To / Ship To PO Number Non-PO Contact Invoice Number VAT / GST ID s Exception Exception Invoice Exception Suppliers AS2 cxml HTML EDI Exception Paper CSV 2014 SAP AG. All rights reserved. 20

23 Best-Run Procure-to-Pay Performance Best-in-class organisations have significantly higher performance across critical business performance measures than lagging performers. Moving the needle in these areas can drive dramatic performance improvement in efficiency and effectiveness. Area Metric Laggard Best in Class Average Project Sourcing Savings % 8% 14% Procurement Spend Under Management 32% 89% % of Spend on Contract / Catalogue 0% 58% % of Electronic POs 50% 82% % of Electronic Invoices 7% 55% Finance and Accounts Payable No. of Invoices per AP FTE 9,109 Each 32,830 Avg. Invoice Approval Days 33 Days 5 Days WCM and Discounts % of Spend on Discount Terms 2% 15% 2014 SAP AG. All rights reserved. 23

24 Bottom-Line benefits of collaborative invoice management Invoice automation powers financial transformation 1. Process 2. Discount 1-for-1 $1M per $1B in spend for average to large Payables and Procurement organization 2-for-1 $2M+ in discount savings for every $1B in discountable spend Automates labor-intensive invoice reception and reconciliation Frees line operations from finance administration work The ability to control and anticipate Comprehensive overview of all invoices across the corporation Increased control of time-to-payment Allows for better cash usage based on comprehensive insight 3. Working Capital 4. Compliance 3-for-1 ~$3M in working capital impact per day of improvement of DPO, DSO, DIO for every $1B spend 4-for-1 $4M in savings leakage for every $1B in spend under contract State-of-the-art delivery platform SAP architecture enables leverage economies-of-scale SAP automation improves efficiency in administrative processes Single, integrated platform fits seamlessly within SAP environment to deliver value across entire Invoice to Pay process $10m Savings per $1 Billion spend captured by automating the invoice to pay process (Efficiency savings, increased discount capture, working capital improvement and contract compliance capture of savings leakage) Ariba Performance Benchmarking 2014 SAP AG. All rights reserved. 24

25 Case Study Case Study einvoicing Challenge High cost of paper-based, manual invoice processing Difficulty in managing orders generated by SAP Interest in improving system ease-of-use Approach Target geographic regions with strong, growing presence Ariba Network for invoice automation as a first step Move PO automation from SAP to Ariba Mandate use of electronic POs and invoices Company Deutsche Bank Profile Leading global investment bank Ariba Commerce Cloud Features Ariba Network Ariba PO and Invoice Automation Results On boarded 3,700 suppliers onto the Ariba Network Reduced BPO costs by 35% Now processing ~ 500k invoices/year electronically Went from 100% paper to nearly 60% e-invoicing in target regions, with goal of 80% electronic processing Consolidate PO and invoice processing on Ariba Improve ease of use globally Drive 70% of invoice transactions off POs 2013 SAP AG. All rights reserved.

26 Who is Ariba, an SAP Company? The World s Business Commerce Network 5 million users from 1M+ companies use the Ariba Network for better business commerce In next 24 hours, Ariba customers will: Manage >$1.4 Billion B2B transactions conduct >100,000 purchase, sales, and financial transactions manage >4 million contracts finance $500,000 in receivables save their companies >$65 million >1.4 million Connected Companies >60% Global million Annual Invoices 40+ million Annual Purchase Orders 190 Countries > Half Trillion In Annual Commerce 2014 SAP AG. All rights reserved. 26

27 The Recommended Journey Future Phases Improve Sourcing Improve Supplier Management Early Phases Improve Automation Connect ERP to Network for PO to Invoice processes 80% electronic 98% touchless 60-80% process cost reduction Maximize Discounts $ Optimise Pay Terms take advantage of Dynamic Discounting $2-3M savings per $1 billion targeted 24%+ annualised rate of return on cash 25% of targeted suppliers participating Improve Procurement Increase Catalogs Materials & Services Enable Supplier Self Service of content Increase compliance during transaction process materials & services (POs and Invoice against Contracts) Eliminate over-spending from contract rates Enrich, rationalise and identify sourcing opportunities to drive down costs 30% decrease in sourcing cycle time RFX creation and management Identify and qualify suppliers, negotiate bestvalue agreements Implement supplier agreements, track savings, and manage supplier performance Manage the entire supplier life cycle from discovery to on-boarding to risk and performance management Unify supplier profiles across the company Determine if suppliers deliver on contract Have fact-based conversations with suppliers regarding performance 85% reduction in supplier management costs 2014 SAP AG. All rights reserved. 27

29 Thank you James Marland VP, Network Strategy +44 (0) Read my Blog: Follow me on

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