Implementing SAP Vendor Invoice Management by OpenText in the Public Sector. Maria Hourani & Trent Ryan Employment and Social Development Canada

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2 Implementing SAP Vendor Invoice Management by OpenText in the Public Sector Maria Hourani & Trent Ryan Employment and Social Development Canada SESSION CODE: PS533

3 AGENDA Who We Are Business Blueprint and Realization Business/Solution Architecture Operating Model VIM Architecture, Components and Processes Our Procure to Pay Process VIM in the SAP Landscape VIM in your Archiving Strategy

4 WHO WE ARE Public Sector Canadian Government Canadian citizen facing services department Our Line of Business Employment Insurance Old Age Security Canada Pension Plan Student Loans

5 LEARNING POINTS Architecture Approach to Procure to Pay Procurement Justification The VIM Components and how they work

6 BEST PRACTICES Alignment with SAP Roadmap Vendor supported Best of Breed Solution Horizontal alignment of the VIM Components

7 Enterprise Management Solution myems Implementation - April 1, 2014 Major Components ECC Portal (ESS/MSS) BW, BOBJ IDM, GRC Solution Manager Vendor Invoice Management by Open Text

8 Organization Value Potential Business/Solution Architecture Operating Model Business Approach Solution Approach* If the business functions, processes, steps or activities are unique to a Department s mandate, and they can t be standardized due to legal or regulatory requirements. Drivers: Compliancy If the business functions, processes, steps or activities are subject to common GC requirements for a custom government-wide approach and solution. Drivers: Compliancy, Reporting If the business functions, processes, steps or activities should operate effectively at the lowest possible cost while still meeting all compliance requirements. Drivers: Standardization, cost cutting and effectiveness Develop Own Practice to ensure wished results/benefits Program Systems Program Receivables Adopt/Adapt GC Practice to ensure wished results/benefits Receiver General Interfaces, CFMRS Trial Balance IFMS Bolt-On for Salary Management (SFT) SAP/PeopleSoft Interoperability Government of Canada Pay Interface Follow ERP Best Practice ( Out of the Box ) to ensure wished results/benefits Standard configuration options Development allowed using approved exit points and ERP supported tools ERP endorsed 3 rd Party Tools Organization Cost Potential Examples: Vendor Account Groups, Budget Management Workflow, Enterprise Portal for Click, Call Consult, Person Profile Management, Job Opening * Over time, there may be opportunities to move to ERP Best Practice from Own Practice & GC Practice as the environment changes.

9 Organization Value Potential Business/Solution Architecture Operating Model Business Approach Solution Approach* If the business functions, processes, steps or activities are unique to a Department s mandate, and they can t be standardized due to legal or regulatory requirements. Drivers: Compliancy If the business functions, processes, steps or activities are subject to common GC requirements for a custom government-wide approach and solution. Drivers: Compliancy, Reporting If the business functions, processes, steps or activities should operate effectively at the lowest possible cost while still meeting all compliance requirements. Drivers: Standardization, cost cutting and effectiveness Develop Own Practice to ensure wished results/benefits Program Systems Program Receivables Adopt/Adapt GC Practice to ensure wished results/benefits Receiver General Interfaces, CFMRS Trial Balance IFMS Bolt-On for Salary Management (SFT) SAP/PeopleSoft Interoperability Government of Canada Pay Interface Follow ERP Best Practice ( Out of the Box ) to ensure wished results/benefits Standard configuration options Development allowed using approved exit points and ERP supported tools ERP endorsed 3 rd Party Tools Organization Cost Potential Examples: Vendor Account Groups, Budget Management Workflow, Enterprise Portal for Click, Call Consult, Person Profile Management, Job Opening * Over time, there may be opportunities to move to ERP Best Practice from Own Practice & GC Practice as the environment changes.

10 Business Blueprint Phase During the Blueprint Phase of the project, the ESDC myems (SAP) team in consultation with the business process owners identified the need to streamline its accounts payable (AP) operations. The existing accounts payable processing method was characterized by manual paper based data capture and approval procedures that resulted in inefficient payment processes. With the implementation of SAP, the opportunity for process optimization was realized.

11 Business Process Optimization - Realization Phase Vendor Invoice Management by OpenText (VIM) is an SAP supported best practice solution. VIM aligns with our organization cost potential principle for standardization and provides significant process optimization.

12 Procurement Justification VIM is an SAP Best Practice VIM an integrated SAP solution supported by Active Global Support SAP and OpenText (formerly IXOS) - 20 years of partnership VIM Solution aligns with the SAP Roadmap Fully supported by SAP in an upgrade Solution Extension Partnership (Reselling)

13 VIM Architecture

14 SAP Components

15 OpenText Components

16 OpenText Add-on

17 Scanning and Archiving

18 Scanning and Archiving Enterprise Scan Scanning desktop component Mass scanning and indexing of documents Communicates with VIM through ArchiveLink to initiate the processing of invoices and storing them in the Archive Server Archive Server

19 Scanning and Archiving ArchiveLink ArchiveLink links archived documents to SAP documents ArchiveLink was co-developed by SAP and OpenText Archive Server

20 Scanning and Archiving Document Pipeline Component of the Archive Server Batch mode import of electronic documents Processes the documents in the background, archives them, and links to SAP Highly scalable It can be centralized or remote configuration Archive Server ESDC uses centralized

21 Scanning and Archiving OpenText Archive Server Enables storage, management and retrieval of archived documents Scalable, integrated service for archiving all enterprise content Secure document repository to guarantee safe storage of documents for retention period Archive Server

22 Scanning and Archiving Archive Server

23 Invoice Capture Center (ICC) - OCR Option Procurement Note: SAP sells the ICC - OCR Option separately

24 Invoice Capture Center (ICC) - OCR Option The Invoice Capture Center (ICC) automates the capture of the data from scanned paper invoices. ICC uses OCR to extract invoice data and reduce human intervention in the invoice capture stage of AP processing. It uses rule-based classification, extraction, and verification. ICC has a high success rate on of accuracy and can learn invoice formats to improve accuracy.

25 Invoice Capture Center (ICC) - OCR Option

26 SAP VIM Automated Invoice Reconciliation

27 Business Transformation Consolidated Accounts Payable processing functions to 5 processing centres Montreal and Winnipeg handling Accounts Payable and Travel Claims Toronto and Moncton handling DARS (Departmental Accounts Receivable System) overpayments of repayments from clients (CPP, OAS, EI) National Headquarters performing all functions

28 Procure-to-Pay Process Flow at ESDC The following is a walk-thorough of the P2P Flow at ESDC, which incorporates: Procurement processes Workflow Electronic Approvals Vendor Invoice Management Payment

29 Procure-to-Pay Process Flow at ESDC Procurement Planning & Requirement Definition (e.g. SOW) Enter Purchase Requisition in SAP Portal Approve Purchase Requisition in SAP Portal - Tender Contract - Evaluate Bids - Award Contract - Issue / Create Purchase Order in SAP Provide Goods / Services - Invoice sent directly to AP Centre - Confirm Goods / Service Receipt in SAP - Invoice scanned - Process invoice using VIM - Review & Approve Invoice in SAP 9 Receive Payment

30 Archiving Strategy Archive Server Enterprise Class Archiving Solution Legal Retention periods can be applied to all objects Electronic Invoices FSA Signature Cards Travel Documents SAP Data Archiving Objects Baseline component for OpenText Document Management Solution

31 Archiving Strategy SAP ERP SAP Document in the SAP ERP System Archive Server Electronic Invoice in the Archive Server

32 Archiving Strategy SAP ERP After 2 Years Archive Server Archive the SAP Document in the Archive Server

33 Archiving Strategy Archive Server Delete After 5 Years, Delete both the SAP Document and the to Electronic Document

34 Data growth in Archive Server Based on 150,000 scanned documents alone: 20GB per Month 240GB per Year = 1.7TB in 7 years

35 Outcomes Over 150,000 invoices processed in our first year 75-85% accuracy with ICC Significant reduction in time for processing of invoices Return on Investment being realized Minimal cost for scanners - As vendors convert to sending pdf; more efficient An outsourced scanning service could be used with VIM, but limited to image scanning only

36 RETURN ON INVESTMENT Centralization of Invoice Payment services Reduced time and effort for management of Procure to Pay Support for Data Archiving for managing database growth.

37 KEY LEARNINGS Engage and Transform Early Centralization began 12 to 15 months in advance Well defined and communicated business process Public Sector integration with Funds Management Required Function Module Bring in experienced people Knowledgeable consultants. Seek Advice Third Party Implementation Assessment Perseverance Work together Continuous Improvement Feedback from the Processing Centres

38 Questions

39 STAY INFORMED Follow the ASUGNews team: Tom Chris Craig

40 THANK YOU FOR PARTICIPATING Please provide feedback on this session by completing a short survey via the event mobile application. SESSION CODE: PS533 For ongoing education on this area of focus, visit