Procurement and AP operate in low power mode when paper PO’s and invoicing are the fuel that drives the engine. This session will examine the strategic components and key performance measures for moving beyond productivity to improved compliance, cost savings, and working capital optimization across the P2P function. Attend this session to learn breakthrough strategies to “turn on the power” in across your P2P processes.
2. There are people who see the world differently.
They see things in new ways.
They invent, create, imagine.
We make tools for these kinds of people.
Because while some might see them as the crazy ones,
we see genius.
5. #AribaLIVE
Inquiries
& Exceptions
Discounts &
Payments
Matching &
Approvals
Common Challenges in Invoice-to-Pay
Processing
5
Inquiries
& Exceptions
Discounts &
Payments
Matching &
Approvals
Receipt &
Capture
Receipt &
Capture
High cost of
Paper Invoices
Lack of
Compliance
Too many
Exceptions
Lack of
Control
“Nearly 77% of all
incoming invoices
are still paper
based.”
- Aberdeen, 2012
“15% of invoices
have exceptions
adding 6.6 days to
the cycle.”
- TAPN, 2010
“50% of
prenegotiated
discounts are
never captured.”
- Aberdeen, 2012
“$4.6 million in
contract leakage
per billion in
spend on
average.”
- The Hackett Group,
2012
6. #AribaLIVE
The Strategic Weapon: Business Network
Leading the Networked Economy Transformation
“ Networked enterprises
are 50% more likely to be
a market leader. ”
7. #AribaLIVE
The Business Case for Success
It’s as easy as 1+2+3+4 = $10M Savings / $1B in Spend
Ariba, Inc. 2013 All rights reserved.7
CHALLENGE SAVINGS OPPORTUNITY SUCCESS
1. Process $1M per $1B in spend for average to large Payables
and Procurement organizations - Billentis
2. Discount $2M+ in discount savings for
every $1B in discountable spend – Aberdeen,Ariba
3. Working
Capital $2.7 million in working capital impact for every $1 billion
per day of improvement of DPO, DSO, DIO
4. Compliance $4M in savings leakage for
every $1B in spend under contract – Hackett
“4-for-1”
“1-for-1”
“2-for-1”
“3-for-1”
Source: Billentis, The Hackett Group 2011 P2P Benchmark Report, Aberdeen, and Ariba results
Republic Service
Processing invoices without purchase orders presents challenges for any organization. In this session, you will learn how contract invoicing with Ariba allows you to build invoices off contracts to improve compliance and prevent tens of millions of dollars in contract leakage from rogue spend.
According to a recent survey 59% of finance leaders think that the AP function could become more strategic, and that an improved AP performance can have a positive impact on profitability. There is a clear need for automation of the P2Pfunction. But we must think different. In 2005 Apple launched an ad campaign called “Think Different”. It’s commercial played a pivotal role in helping Apple achieve one of the greatest corporate turnarounds in business history.
Moneyball
Inspirational thinking…What is a strategic weapon? When is it used? How is it used? Who uses it? The Executive (i.e. POTUS, CEO/CFO, etc.). Give example of a company (i.e. ING – that thinks of turning AP/SS into a strategic weapon)Traditionally, AP has been thought of as …, Capital One humorously portrays Vikingsas savvy warriors of financial management. For Ariba’s James Tucker, this analogy of savvy financial warriors armed with the right weapons aligns with his vision of transforming Finance and Accounts Payable (AP) functions into strategic weapons for companies. James is the global director for Ariba’s network and finance solutions and he’s a passionate advocate for helping financial professionals unleash the prowess within their functions. With data visibility, process automation and trading-partner collaboration powered by business networks, Finance and AP can become unshackled from the burdens of too much paper, too many people, and inefficient processes. The results transform Finance and AP into nimble functions that are skilled at slashing costs and capturing more cash. Doing so, Finance and AP help enable innovation and business growth.
The challenges that most of you share across the invoice-to-pay process can be boiled down into four major categories:Too much paper – paper invoices are the most expensive to process when compared to e-Invoicing. Companies across the globe still have about 80% of their invoices coming in as paper. Too many exceptions – Paper handling is inefficient, and it also introduces additional cost and effort for AP for handling invoice exceptions. According to a recent TAPN survey, about 15% of invoices have errors and exceptions on average. And it costs anywhere between $20 and $200 to address each error. So for 100K invoices that is about $300K in incremental cost. At a conference last year, I heard someone say that at HP they have errors and exceptions on 39% of their invoices. 39%!Lack of ComplianceComplying with preferred vendors and pricing can also lead to significantly higher costs. A recent Hackett Group study shows that companies lose over $4 million per billion in spend under contract by paying for invoices that don’t comply with negotiated prices. For poor performing organizations, that leakage figure is many times larger.Too many missed discounts and late payments Early payment discount and dynamic discounting is an emerging best practice that can deliver over $2 million per billion in discountable spend. But most companies simply can not approve and pay their invoices on time, and miss over 50% of their discount savings.So as your listening to your prospects share their problems, dig into the pain, ask them to expand on a day-in-the-life of the invoice receipt process. Get your prospects to think about these inefficiencies, the cost, the waste, the missed opportunities.===================================================
Michael Martin Hammer (13 April 1948 – 3 Sept 2008) was an American engineer, management author, and a former professor of computer science at the Massachusetts Institute of Technology (MIT), known as one of the founders of the management theory of Business process reengineering (BPR).[1]Reengineering the Corporation: A manifesto for Business Revolution, the book written by him in 1993 along with James A. Champy was instrumental in capturing the focus of business community towards BPR
AP – Redeployment or not replacing/adding with acquisitionsBuyer regionalization in storerooms