Más contenido relacionado La actualidad más candente (20) Similar a From Silo to Synergy: How E-Invoicing Drives Value into a Larger Procure-to-Pay Initiative (20) From Silo to Synergy: How E-Invoicing Drives Value into a Larger Procure-to-Pay Initiative1. From Silo to Synergy
How E-Invoicing Drives Value into a Larger Procure-to-Pay Initiative
James McDonald, Director, Procurement, ING
Shelly Pratt, Controller, Flint Hills Resources
Zach Turner, Procurement, Flint Hills Resources
#AribaLIVE
@ariba
© 2014 Ariba – an SAP company. All rights reserved.
4. Businesses Struggle with Inter-Enterprise
Collaboration
Buyers
Manual Paper-based
Collaboration
Point to Point EDI, Portals &
Single Process Solutions
Higher Operating and Supply
Chain Costs
Missed Sales Opportunities
Wasted Time and
Resources
Delayed Payments,
Overpayments, and Missed
Discounts, Slow Cash Flow
Limited Visibility and
Elevated Risk
4
4
© 2014 Ariba – an SAP company. All rights reserved.
Suppliers
5. The Solution: The Business Network
Business Networks facilitate inter-enterprise
collaboration between trading partners
Buyers
Suppliers
“65% of Best in Class companies have the capability to
effectively collaborate with their network of suppliers
versus only 21% of laggards.”
B2B Integration and Collaboration: Strategies for Building a ROI Business Case,
Aberdeen Group. June 2011
6. Commerce Level 1: Concentrated
Siloed Processes
Sourcing &
Procurement
Mail
Scan
OCR
Mail
Email
Fax
AP
Supplier
6
© 2014 Ariba – an SAP company. All rights reserved.
7. Commerce Level 2: Connected
Supplier Portals
Sourcing &
Procurement
Send PO
Invoice
Receipt &
Status
AP
Supplier
7
© 2014 Ariba – an SAP company. All rights reserved.
8. Commerce Level 3: Collaborative
Closed Loop Value Chain
Analyze
“Actual”
Spend
Data
Source
Contract
Defined & Approved
catalogue Content
catalogues
Pay
Manage/ Approve
© 2014 Ariba – an SAP company. All rights reserved.
Order Acknowledgement &
Ship Notice
Supplier
Perfect Invoice
Match
Invoice Receipt
Order
Perfect
PO
Payment
Visibility,
Execution &
Remittance
8
Requisition
10. Shelly Pratt, Controller/AP Manager, Flint Hills Resources
Zach Turner, Procurement Manager, Flint Hills Resources
FHR: AP CAPTURING AND ADDING
VALUE TO PROCUREMENT
10
© 2014 Ariba – an SAP company. All rights reserved.
11. Flint Hills Resources – Background
FHR is a direct, wholly owned subsidiary of Koch Resources LLC, which is wholly
owned by Koch Industries, Inc, a privately held company involved in most aspects of the
oil and gas industry. The operations of FHR and its subsidiaries include the following:
Three crude oil refineries (approximately 816,525 bpd of crude oil refining capacity);
Six chemical production facilities;
Five ethanol production facilities and two biodiesel facilities;
A 50% interest in Excel Paralubes, a general partnership engaged primarily in the
manufacture of lubricant base oils;
Proprietary pipelines and pipeline investments (located principally throughout the Midcontinent and Gulf Coast regions of the United States);
FHR’s is the United States’ 9th, and the World’s 24th, largest refiner. In addition, FHR is
the United States’ 5th largest producer of ethanol. FHR is also a leading producer and
marketer of petrochemicals, producing about nine billion pounds of building-block chemicals.
11
© 2014 Ariba – an SAP company. All rights reserved.
12. Why did FHR implement Ariba?
•
Growth in business increased the volume of manual transactions; the
incumbent electronic commerce solution was being discontinued.
Manual transactions would lead to increased staffing for invoice input.
Incumbent system was no longer an option.
•
12
FHR wanted to move past basic electronic commerce into a
value-added method of transacting with suppliers. FHR felt we could
create a competitive advantage in our PP process by optimizing
our processes and leveraging new tools.
© 2014 Ariba – an SAP company. All rights reserved.
13. Why did FHR implement Ariba?
Purchasing
• Confirmation that Purchase Orders
•
•
•
•
13
were received
Inconsistencies with process to
confirm POs
Inconsistencies with process to
handle price discrepancies
Processing time for manual
confirmations
Better visibility to vendor data
© 2014 Ariba – an SAP company. All rights reserved.
Accounts Payable
• Efficiency
• Enhanced supplier communication
• Supplier billing improved
• Prevent processing and
•
•
payment delays
Capture discounts
Focus on value-added tasks rather
than data entry
14. Flint Hills Resources – Journey
•
•
•
•
•
14
Limited use of a tool that was being discontinued.
Growth caused an increase in manual transactions.
A robust electronic solution was needed.
Ariba fit the need for both Purchasing and AP. A team approach
was taken for planning and implementation with Purchasing leading
the project.
Continue the team approach with AP taking the lead on Ariba
administration and supplier enablement.
© 2014 Ariba – an SAP company. All rights reserved.
15. 2,000
-
15
1,2701,667
1,667 1,692
1,667
1,667
May-11
Jun-11
Jul-11
Aug-11
Sep-11
© 2014 Ariba – an SAP company. All rights reserved.
5,000
5,000
5,000
Jul-13
Aug-13
Sep-13
6,667
5,000
Jun-13
Nov-13
5,000
May-13
6,667
5,000
4,498
2,907
5,137
5,094
3,659
3,870
3,880
4,030
3,680
2,469
2,851
1,427
1,750
2,577
4,554
4,487
3,032
3,319
3,240
2,347
3,515
3,659
2,038
2,089
2,009
8,000
Oct-13
5,000
Apr-13
3,333
Sep-12
Mar-13
3,333
Aug-12
5,000
3,333
Jul-12
Feb-13
3,333
Jun-12
5,000
3,333
May-12
Jan-13
3,333
Apr-12
5,000
3,333
Mar-12
Dec-12
3,333
Feb-12
5,000
3,333
Jan-12
Nov-12
3,333
Dec-11
5,000
3,333
Nov-11
2,164
4,082
6,000
Oct-12
3,333
Oct-11
4,000
3,032
2,108
1,667 744
Apr-11
Touchless Invoices
12,000
10,000
Above
Plan
Plan
16. 16
© 2014 Ariba – an SAP company. All rights reserved.
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
Cancel/Rejection Rate
8.0%
7.0%
6.0%
5.0%
Cancel Rate
4.0%
Reject Rate
3.0%
Target Line
2.0%
1.0%
0.0%
17. Achieved Value Proposition
•
Payable invoice automation/optimization through electronic processing.
•
Buyer optimization
•
Data Visibility
•
Forced business process consistency
17
© 2014 Ariba – an SAP company. All rights reserved.
Reduction in staffing due to decrease in data entry, mail and scanning.
Improved supplier billing through validations and instant feedback.
More timely payment/capture of discounts.
Reduced supplier inquires to AP regarding the status of invoices.
Through the automation of the confirmation process we have freed up, on average, 2 hours per day for each
buyer (we expect to capture more value in this area as we enable additional suppliers).
By having suppliers return their catalog code and contract/catalog price on the confirmation, we can better
analyze the data. Prior to Ariba we had limited visibility to detail spend data unless we asked the supplier for the
information (high number of “material” orders).
By taking in the supplier’s price we can see where we have issues between our expected price and the supplier’s
ask price. Using this data to better manage our suppliers.
Internal – all our sites to conform to an agreed upon standard process, with few exceptions.
External – suppliers to transact in a compliant manner (accurate and complete data)
18. Lessons Learned
•
It is a team effort. AP, purchasing, suppliers and Ariba are key to success.
•
Supplier enablement is also a joint effort between Purchasing and AP:
•
Follow-up and Monitoring:
18
© 2014 Ariba – an SAP company. All rights reserved.
All players in the game have different reasons for wanting the implementation of Ariba but they share a common goal.
Understand the benefits to each group and process for optimal value and cooperation.
Engaging AP and Purchasing in the implementation prevented biased decision making.
Knowledge sharing that came out of the implementation helped us identify and proactively solve processing concerns.
The cooperative relationship between purchasing and AP has continued past implementation.
Finding the correct contacts in the supplier’s company in critical. Engaging both the AP contacts and the buyer
contacts will help reach the right people (Billing, Order Fulfillment, supplier’s accounting team / AR)
Communicate with Corporate & Local branches.
Volume of transactions should not be the only consideration when setting priorities on which supplier to enable.
Monitor first transactions to ensure code rolled to production correctly (data mapping issues).
Early monitoring for new suppliers will catch potential issues.
Continue to communicate between AP, Purchasing and the Supplier.
19. Future Strategy
Continue to enable vendors that meet our invoicing and PO threshold
Work with our top 10 vendors (which account for 80% of our
transactions) to improve their transactional efficiency
Drive down support costs
–
–
–
–
19
Better selection of the “right vendors” to bring on
Collaborate with other buyers to find best practices
Build training materials for the vendor to use for “how to’s” on YouTube
Suggest improvements to Ariba to the network to encourage easier use
© 2014 Ariba – an SAP company. All rights reserved.
20. James McDonald, Director – Procurement Operations, ING
ING: PROCUREMENT & AP
DRIVING NETWORKED RESULTS
20
© 2014 Ariba – an SAP company. All rights reserved.
21. ING Background
•
Our company
•
•
•
•
Procurement/Finance structure
•
•
•
21
7000 employees
$850M total spend
$500M PO spend
Centralized Procurement
Decentralized buying
Centralized Accounts Payable
(AP), Atlanta, GA
© 2014 Ariba – an SAP company. All rights reserved.
•
Systems
•
•
•
Ariba Buyer (Invoicing) 9r1
Ariba Network (330 active supplier
relationships)
PeopleSoft Financials (AP, GL) 9.1
22. ING’s Journey
•
•
•
•
•
•
22
Baseline – Situation prior to Ariba
Challenges
Overall solutions sought
Results
Lessons learned and key insights
Future strategy
© 2014 Ariba – an SAP company. All rights reserved.
23. Baseline
•
•
Decentralized AP – no managed Procurement function
“Authorization Tables” to identify who had the authority to approve
which invoices (manually maintained)
No automation
No technology enabled to support process
Only had controls around approving and paying
PROCURE
23
© 2014 Ariba – an SAP company. All rights reserved.
APPROVE
RECONCILE
PAY
24. Challenges
Capturing
controllable
spend on PO
24
Integrating PO
and Invoice
processes
© 2014 Ariba – an SAP company. All rights reserved.
Improving
invoices per AP
FTE (lower cost
per invoice)
Establishing
standardized
P2P policies and
processs by
expense type
Building
governance over
P2P process in
decentralized
buying model
25. Solutions Sought
•
We first changed our organization
Procurement
goal
AP
goal
• Buy right good/service
• Buy from right supplier
• Buy at the right price
• Pay right supplier
• Pay right amount
• Pay at right time
At first glace, the goals of Procurement and AP seem independent:
…but Procurement and AP objectives and processes are actually
INTERDEPENDENT
25
© 2014 Ariba – an SAP company. All rights reserved.
26. Solutions Sought
•
•
Centralized AP
Managed Procurement
- Decentralized AP
- No managed
procurement
function
•
26
- Centralized AP
- Managed
Procurement
- AP reporting into
Procurement
Procurement
Services
- Strategic Sourcing
- P2P Operations
- AP
-Travel
We made an investment in technology to integrate and automate
procure-to-pay (P2P) using Ariba
© 2014 Ariba – an SAP company. All rights reserved.
27. Solutions
Challenge
Solution
Solution details
Establish P2P standardized
processes/policy
“Procurement Guide”
•
Comprehensive listing of all expense types with associated
process and tool referenced
All controllable spend
requires PO
•
Invoices without PO for a controllable expense type were
rejected and PO forced to be entered and approved prior to
resubmitting invoice
•
Implemented Ariba Buyer to capture all spend to begin
consolidating spend onto one platform with associated workflow
controls.
Greater visibility of spend both in process and reporting to assist
Sourcing
Capturing spend on PO
Ariba Buyer
- AP policy for PO invoices
Integrate PO and Invoice
processes
Ariba Invoice
Improve invoices per FTE
eInvoicing
•
•
Non-PO processing
27
© 2014 Ariba – an SAP company. All rights reserved.
Embracing the “1:many” low-maintenance integration to Ariba
Network (over 330 active suppliers)
Resources redeployed from processors to enablers
•
Distributed Keying via Ariba eForm
•
28. Solutions
Challenge
Solution
Solution details
Build governance
Procurement Operations
•
•
•
•
•
Enhance value
PCard
Manage compliance
28
© 2014 Ariba – an SAP company. All rights reserved.
P2P process and technology owner ensures “somebody
watching the shop” at all times
Focus is on the customers’ needs and satisfaction - #1
metric is customer satisfaction
Build compliance through education and awareness
Manage supplier enablement campaigns to increase
eInvoicing and Pcard suppliers
Manage Pcard program and all Ariba enhancement
requests and issues
•
•
$65M program, over 62K transactions/yr
Various solutions include Ariba-embedded ghost cards and
single-use accounts
•
Drive compliance through “awareness campaigns” and
active reporting
30. Results
Process efficiency
•
•
Receipt-to-approve days: automated workflow via e-procurement
Invoices per full-time staff: touch-free e-invoices
Results
#
Electronic straight through invoices
78%
Active AN-e-Invoicing suppliers
330
Invoices converted to Pcard
58%
Invoices per AP FTE
15,000
Best Practices
•
•
Use PO and e-invoicing
Align AP with Procurement
•
PCard 2011 Innovation Award
recipients (JPMC)
31. Lessons Learned/Key Insights
•
Ensure strategy drives efforts and resource allocation
Make e-invoicing and AP automation a priority
–
Identify strategic goals; build into employee objectives
Look to redeploy processors as automation enablers
–
Ariba Network enablement, PCard growth
Aggressively manage compliance
–
–
31
Mandated training
Compliance KPIs
© 2014 Ariba – an SAP company. All rights reserved.
32. Future Plans
•
Improve reporting
Data Warehouse reporting
•
Continue efficiency and value efforts
Continue Ariba Network campaigns
Implement Ariba ICS
Dynamic discounting
Utilize Ariba Value Realization to optimize use of Ariba
32
© 2014 Ariba – an SAP company. All rights reserved.
Notas del editor DREW DREWFrom a technology perspective, business networks help solve this by connecting people and processes across silos internally and with external partners as well. Business networks are about automating and improving processes and connecting the right information to the right people at the right time within the right process to make the right decisions to obtain the right results. Why is this important?... Because with the Rise of the Networked Economy come significant, concrete benefits for those companies that embrace networked collaboration. DREW