TF1 Publicité optimizes invoice-to-cash cycle with SAP and IBM

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1 TF1 Publicité optimizes invoice-to-cash cycle with SAP and IBM TF1 Publicité is the advertising sales division of TF1, France s largest free-to-air broadcaster in terms of audience share. In addition to selling ad space on behalf of TF1 Group companies, TF1 Publicité acts as a broker for external clients, such as other television broadcasters, radio broadcasters and web publishers. Ad sales make up more than 90 percent of TF1 Group s revenues, and TF1 Publicité s role is critical to the success of the business as a whole. The challenge of complexity Working in a fast-moving environment, TF1 Publicité must ensure the timely booking and placement of 150,000 ads monthly across numerous TV, radio and web channels. In addition to traditional ad spots, the company also manages brand sponsorship of TV programs, further increasing complexity. The business effectively has three sets of clients: advertisers, ad agencies (which place business on behalf of brands), and broadcast clients (channels belonging to the TF1 group and other broadcasters and web publishers). In the past, each subset of ad sales for example, TV spots with monthly billing, TV sponsorship, radio ads had its own tailored reservation processes and billing models, and separate applications handled invoicing. TF1 Publicité set out to consolidate its invoicing and accounts receivable systems into a single solution, in a transformation program called project Gamma. Estève Vidal, Director of project Gamma at TF1 Publicité, explains: For this enterprise project, the key goals were to rationalize, simplify and optimize our billing system, in order to improve client satisfaction. We had billing systems that had been built in silos and in a Overview Challenge Handling client billing in multiple systems caused delays, inflexibility and inefficiency at TF1 Publicité, preventing the agency from meeting client expectations for automated electronic invoicing. Solution TF1 Publicité transformed the speed and efficiency of its invoice-to-cash cycle by consolidating and automating billing processes, based on SAP for Media, with help from IBM Global Business Services. Key benefits Cuts monthly billing cycle by 50 percent and automates recovery process, reducing processing time and targeting 100 percent of receivables. Case study

2 Business Challenge Without a single, standardized process for invoicing clients, TF1 Publicité could not optimize billing processes or meet client expectations around automation and the introduction of electronic billing. To maintain its position in the French market, the company needed to rationalize and simplify the invoice-to-cash cycle, automate its processes and enable greater flexibility and granularity in invoicing. heterogeneous manner, and it was vital to move to a standardized, harmonized set of business processes, running on modern IT solutions. Frédéric Testu, CFO of TF1 Publicité, adds: From a finance point of view, the overarching objective was the rationalization and homogenization of our numerous different invoicing processes. In addition to consolidating all of the existing tools into a single one, we wanted to optimize the billing and revenue recognition processes, in order to better manage the whole invoice-to-cash cycle. We also sought improved traceability and auditability for finance operations, and to produce simpler, more readable invoices for our clients. The expected outcomes were gains in efficiency, productivity and speed. Choosing IBM and SAP The TF1 Group had recently decided to deploy SAP ERP, including applications for Materials Management (MM), Sales and Distribution (SD), and Financials and Controlling (FICO), to around 40 subsidiaries. TF1 Publicité selected the SAP for Media industry solution with a view to Working with IBM Global Business Services and SAP to deploy SAP for Media has produced significant benefits both for TF1 Publicité and for our clients. Frédéric Testu CFO TF1 Publicité ensuring coherence and traceability for accounting flows with the Group, as Estève Vidal explains: We chose SAP for Media in part because it integrated well with the SAP FICO corporate financial systems, but also because it responded to our strategic needs, covering all of the business functions we required. The SAP Pre-Sales team made a very strong case for the solution, and we felt confident that it would support us in building and maintaining competitive differentiation. Migrating TF1 Publicité s tools to the SAP landscape was a critical step in the larger SAP deployment. As a 2

3 perfectly complemented the functional knowledge of the SAP team. This was a really tight-knit engagement from two major vendors who worked together very well. 50 percent faster monthly billing true multimedia advertising business, TF1 Publicité does not fit the classic sales model, requiring instead the industry-specific approaches embodied in SAP for Media. Following a formal RFP process, the TF1 Publicité judged the joint offer from IBM Global Business Services and SAP to be the best. There were several factors in favor of the IBM and SAP proposal, recalls Estève Vidal. We felt that IBM Global Business Services had the experience and knowledge necessary to handle a large enterprise project, with a complete mastery of the SAP toolbox. Other strong points were IBM s project management methodology and knowledge of the SAP software, which End-to-end solution The deployment of SAP for Media (project Gamma) began during the rollout of the core SAP ERP solution across all Group companies (project Sigma). Project Gamma covers order- to-cash flows, revenue recognition and sales agent settlement, making it TF1 Publicité s sole invoicing system. The project lasted two years and involved both business and technical specialists from IBM, SAP, TF1 Publicité and the broader TF1 Group. We drew on the expertise of senior managers from Finance, Accounting and IT, as well as the services directly impacted by the change: Sales Administration and Media Buying-Planning, says Estève Vidal. IBM Global Business Services acted as the prime contractor for project Gamma, taking overall responsibility for delivery, as well as designing and deploying the architecture and platform, executing development, configuration Solution TF1 Publicité engaged IBM Global Business Services and SAP to deploy a consolidated billing, revenue recognition and debt recovery system based on the SAP for Media solution. Over the course of a two-year project, the combined team developed a sophisticated solution that integrates complex multi-channel advertising order data from three major operational systems and automates both invoicing and recovery. 3

4 Key Solution Components Industry Media & Entertainment Applications SAP for Media Services IBM Global Business Services and testing work, and overseeing the functional design carried out by SAP. The media advertising management (MAM) component of the SAP for Media solution is a specialized solution that is closely tuned to the specific requirements of media industry businesses. This meant that the deployment required significant functional expertise from the SAP team particularly given TF1 Publicité s ambitious plans for the solution. There was a strong commitment to success from IBM and SAP, with senior management attention from both organizations, says Estève Vidal. There was also a second systems integrator involved in the project, and IBM showed that it could work extremely effectively in an environment where it did not have complete control. The major differences between TV advertising, TV sponsorship and radio advertising made this almost like having three separate projects, each with its own iterative prototyping and testing stages. IBM Global Business Services ensured that the project partners worked together in a coordinated manner, and that the project ran smoothly. There was a strong commitment to success from IBM and SAP, with senior management attention from both organizations. IBM Global Business Services ensured that the project partners worked together in a coordinated manner, and that the project ran smoothly. Estève Vidal Director of project Gamma TF1 Publicité Consolidated data flows and business processes A key challenge was to model and develop the primary feed into Gamma, taking huge volumes of data from completely different systems for TV advertising, TV sponsorship and radio advertising. The goal was to automatically execute all data processing the capture and 4

5 Services was to design and deploy the primary data feed, based on a monolithic interface. Automated 99 percent of client invoicing integration of data, invoicing, revenue recognition, payments to publishers (TV channels and radio stations), and electronic document management between the first and fourth of each month. The first is the date on which all the required information on broadcast advertisements is available, while the fourth is TF1 Group s mandated deadline for closing the monthly books. Given the large daily volumes of transactional data and the size of the accounts team at TF1 Publicité, the main process of billing the advertisers and making the corresponding payment to the publishers needed to be at least 99 percent automated. The primary technical challenge addressed by IBM Global Business The feed comes from 50 database tables, each with approximately 40 fields, across three completely different systems: Optipub for standard TV advertising, Gaspar for sponsorship and Trafic for radio advertising. These underlying systems continue to be used for booking the ad space, but the billing functionality they previously included is now handled by SAP for Media. IBM and SAP worked together to design a solution which enables us to process a considerable volume of data within a matter of hours, and to deliver detailed invoices to our clients that go down to a daily level of granularity, says Frédéric Testu. Immediate success On deployment, TF1 Publicité s integrated billing solution based on SAP for Media seamlessly handled the full monthly billing cycle of more than EUR 150 million. The new SAP for Media solution is fully integrated with the core accounting and financial systems used by TF1 Group, Business Benefits Cuts monthly billing cycle by 50 percent. Automates 99 percent of invoicing to clients, saving time and effort on both sides. Automates recovery process, reducing processing time and targeting 100 percent of receivables. Enables more flexible, readable and detailed invoices, boosting client satisfaction. Automates repayments for radio editors, reducing time spent on manual, non-value-add tasks by a factor of seven. 5

6 helping to guarantee the traceability and auditability of group financial information. With the new solution, we no longer have any disconnect between the invoice and the recognition of revenue: there is now a complete, end-to-end chain, says Frédéric Testu. This makes it easier to trace orders through the system and to close our books faster. The solution also provides greater efficiency and control, and users in finance very much prefer the interface to previous systems. Compared with the siloed process we had before, SAP for Media provides a single, high-performance tool for managing the full invoice-to-cash cycle, enabling users to work in a more versatile way. Simplification and automation By simplifying processes throughout the entire invoice-to-cash cycle and enabling the automatic payment of publishers and electronic exchange of invoices with the ad agencies (through EDI), the IBM and SAP solution improves efficiency and speed for TF1 Publicité and for its internal and external clients. The introduction of automated recovery We felt that IBM Global Business Services had the experience and knowledge necessary to handle a large enterprise project, with a complete mastery of the SAP toolbox... This was a really tight-knit engagement from two major vendors who worked together very well. Estève Vidal Director of project Gamma TF1 Publicité processes allows the company to target 100 percent of receivables and has drastically reduced processing times. Each month, the debt collection team is now able to send approximately 300 receivables statements before the due date and 300 letters after the due date, with average processing 6

7 IBM and SAP worked together to design a solution which enables us to process a considerable volume of data within a matter of hours, and to deliver detailed invoices to our clients that go down to a daily level of granularity. Frédéric Testu CFO TF1 Publicité time reduced by a factor of 10. The time saved allows debt collectors to focus on more productive work, such as following up with clients on a one-to-one basis by mail or phone, accelerating payments and reducing overdue invoices. Introducing SAP for Media and re-engineering our business processes with IBM was a considerable improvement for our agency clients, and we made sure that we handled the transition in a very joined-up way with them, says Frédéric Testu. For this reason, we were able to provide a solution that ties in perfectly with the tools and specifications of our biggest clients, helping them to work with us in tackling the move to electronic, paperless billing. As an ad broker, TF1 Publicité sends out invoices to the brand owners for the ad space, and receives invoices from the corresponding media owners. With the automated invoicing solution in place, TF1 Publicité is able to calculate the media owners invoice amounts and complete the settlements. For companies within the TF1 Group, the solution creates the invoice, matches the transactions completes an intercompany transfer to settle the bill. Our publisher clients expect us to promptly pay them the money that we have received on their behalf from the advertisers, explains Frédéric Testu. Automatic invoicing has made the process much simpler and faster, eliminating manual work on both sides. We also worked on the format of the invoice, which had not evolved 7

8 Copyright IBM Corp IBM Deutschland GmbH D Ehningen ibm.com/solutions/sap for a long time. This included a more detailed breakdown by product within each invoice something our clients had specifically requested. We have received positive feedback from clients about the improved simplicity and readability of the invoices, which has helped them save time in reconciling invoices with orders. He concludes: Working with IBM Global Business Services and SAP to deploy SAP for Media has produced significant benefits both for TF1 Publicité and for our clients. IBM, the IBM logo, ibm.com, and Global Business Services are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at Copyright and trademark information at com/legal/copytrade.shtml Other company, product or service names may be trademarks, or service marks of others. This case study illustrates how one IBM customer uses IBM and/or IBM Business Partner technologies/services. Many factors have contributed to the results and benefits described. IBM does not guarantee comparable results. All information contained herein was provided by the featured customer and/or IBM Business Partner. IBM does not attest to its accuracy. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. This publication is for general guidance only. Photographs may show design models. As we expand the solution to cover our online advertising in the near future, we will extend the advantages of automation and harmonization into new areas of the business, further stretching our lead over competitors SAP SE. All rights reserved. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, StreamWork, SAP HANA, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE in Germany and other countries. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. SPC03508-WWEN-00 (November 2014)