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Blast  Off!  How  to  get  your  AP  Automa5on  Project  off  the  Ground  

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•   Introduc5ons  •   What  are  You  Seeking  to  Fix…and  Why?  •   Automa5on  Choices  –  Payments,  eInvoice,  Workflow  •   Automa5on  Op5ons  –  Cloud  or  Licensed  •   Selec5ng  the  Right  Technology  Provider  

Agenda

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PayStream  Advisors  is  a  provider  of  independent  research  and  automa5on  assessments  for  financial  automa5on  technology  to  business  leaders  in  finance  and  procurement.  

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Financial    Automa-on  Architects  

About PayStream

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We’re Swimming in Paper

•  78  percent  of  business  to  business  invoices  s5ll  involve  paper  processing  

•   Paper  is  killing  AP  produc5vity  •   Paper  limits  AP  effec5veness  •   What  are  you  going  to  do  about  it?  

“We don’t have the time to implement something new even if it is the right thing to do.” - Susan, AP Manager Fortune 1000 Manufacturer

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The  AP  Process  Today…    

The  Current  AP  Process  

v   Data  Entry  v   Reconcilia5on  v   Risk  v   Did  we  account  for  it  properly?    v   What  did  we  buy?  

v   When  is  the  invoice  due?  v   When  should  we  pay?  v     How  should  we  pay?  v   Why  did  we  buy  that?  

The  Future  AP  Process  

And  Tomorrow  

Working Capital

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US  AP  Automa5on  Adop5on  Rate  by  Industry  

*Selected industry with at least 10 responses Automation adoption rates by company size have been estimated based on PayStream’s surveys on Imaging automation, eInvoicing and ePayments with total number of response of more than 1,000.

Market  adop5on  rate:  46%   Below  average  

adop5on  

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•  AP  automa5on  con5nues  to  increase  (2010-­‐2011):    –    Twenty-­‐two  percent  increase  in  Purchasing  Cards      –    Thirteen  percent  increase  in  e-­‐Payments    –    Twelve  percent  increase  in  Automated  Workflow  –    Twelve  percent  increase  in  OCR/Automated  Data  Capture  –     Thirteen  percent  increase  in  Front-­‐End  Imaging  

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Adoption is on the Rise

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North American P2P Industry is highly Fragmented

eProcurement   ePayment  

AP  Automa5on  

Electronic  Invoice  

Banks  

EDI  Networks  

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OCR/Data    Capture  

Invoice  Document    Management  

 PO  Matching  &    ERP  Integra5on  

   

eInvoicing    Networks*  

ACH  &  P-­‐Card  

Discoun5ng  &  SCF    EDI  Invoicing  

AP Automation

Outsourced    Document    Conversion  

*  Includes  PO  transmission  

   Approval    Workflow  

 

Paper  Invoice    Management  

 

Matching  &    Workflow   Electronic  Invoicing   ePayments  

AP  AutomaAon  Invoice  &  Payment  AutomaAon  

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Organiza5ons  are  in  varying  stages  of  AP  automa5on    Introduc5on   Growth   Maturity   Decline  

1 2 3 4

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PayStream  Advisors  

PayStream Innovation Lifecycle

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Tracking AP Metrics

Metric   Laggards   Mainstream   Innovators  

Average  processing  5me  from  invoice  receipt  to  approval  

45  days   23  days   5  days  

Average  processing  costs  (combina5on  of  paper  and  electronic)  

$22.75   $13.70   $2.36  

Percentage  of  invoices  received  electronically  

3%   9%   32%  

Percentage  of  invoices  with  discrepancies  

25%   16%   4%  

Percentage  of  discounts  captured   18%   40%   75%  

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How to Begin

Best  PracAces  •  Do  internal  work  first  •  Don’t  issue  blind  RFI/RFPs  •  Have  a  qualifying  mee5ng  and/or  call  with  poten5al  suppliers    •  Be  willing  to  share  your  vision  of  success  

–  Number  one  barrier  to  adop5on  is  the  belief  that  current  process  works  

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The Foundation

•   Assess  where  you  are  today.  –   Consultants  call  this  “a  current  state  assessment”  –   Benchmarking  can  help  

•   Iden5fy  where  you  want  to  be.  •  Are  you  centralized?  •   Iden5fy  what  technology  fits  your  needs  best.    •   Define  the  project.  

–   Involve  the  right  players  (procurement,  IT,  finance)  •   Jus5fy  the  investment.  

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Assessing where you are Today

•  What  are  your  current  costs?  –   You  need  to  understand  your  current  cost  of  doing  business  

•   Document  the  facts  &  figures  (metrics)      –   Determine  the  right  project(s)  for  you  –   Help  you  priori5ze  those  projects  –   Build  your  case  

•   Learn  how  to  communicate  AP  to  the  Steering  Commiqee  –   Execu5ves  may  not  understand  what  you  do  but  they  

understand  sta5s5cs  –   Measure  the  success  of  your  changes  

•   What  do  the  Stakeholders  care  about?  –   Know  your  audience  

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Functional Scope to Communicate with Vendors Invoice to Pay Automation Requirements

Approval Workflow

Requisitions + Order Management

eInvoice Payment Management

Vendor Self Service

Automated Matching

Invoice Submission

Approval Workflow

Exception Management

Electronic Remittance Advice to vendors

Transaction Status to Vendors

Dynamic Discounting

eInvoice Portal

Onboard high volume supplier

Supplier Collaboration

Vendor Registration

Bank Account Validation

Electronic Invoice Receipt

Transaction Status to Vendors

Purchase Order Transmission

PO Confirmation

Vendor Communication

Document Capture & Data Extraction

Scan Invoices

Pre-validation

Header and line item extraction

Image Archival & Retrieval

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Internal  Change  

Best  PracAces  •  Iden5fy  all  organiza5onal  and  procedural  changes    •  Communicate  internally  what’s  changing  and  the  benefit  to  

the  organiza5on  •  Communicate  externally  to  vendors  before,  during  and  aser  

the  change  •  Make  doing  things  the  right  way  easy    •  Include  some  of  your  “tough  customers”  early  on  •  Communicate  twice  as  much  as  you  think  is  adequate  

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Involve Suppliers

•  Keep  Suppliers  in  the  loop  from  the  beginning  •  Even  as  you  are  evalua5ng  solu5ons,  contact  your  strategic  

suppliers  to  gauge  their  interest  and  their  ability  to  come  onboard    

•  Leverage  the  exper5se  and  best  prac5ces  provided  by  the  technology  provider  

•  Supplier  segmenta5on    •  Ac5va5on  campaigns  

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Realistic ROI

Best  PracAces  •  Understand  your  own  internal  process  for  getng  a  project  

approved,  including  the  required  ROI  metrics.  •  Internally  benchmark  your  current  process  to  get  a  first  pass  

at  your  cost  and  throughput  •  Highlight  hard  and  sos  cost  reduc5ons.  

“Your Numbers + Our Calculator = Massive Savings” – Technology Solution Provider

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Best Practices

•  Be  realis5c    •  Don’t  automate  a  bad  process  •  Automa5on  will  not  solve  all  your  problems  •  Set  reasonable  expecta5ons    •  As  issues  arise,  measure  them,  document  them,  and  put  

a  plan  in  place  to  address  them  in  priority  order  

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Key Players in the North American  AP  Automa5on  Market  End-­‐to-­‐End   Electronic  

Invoicing  Only  Electronic  Payments  

Dynamic  DiscounAng  and  SCF  

�  Ariba  

�  ADP  

�  Basware  

�  JPM  Chase  Order  to  Pay  

�  Direct  Commerce  

�  iPayables  

�  Syncada    

�  Direct  Insite  

�  CiA  

�  GHX  

�  BoOomline  Technologies  

�  PNC  Bank  

�  OpenText  

�  Kofax  

•  OB10  

�  Sterling  Commerce  

�  GXS  

�  Coupa  

�  Transcepta  

 

�  SunGard  

�  BoOomline  Technologies/Paymode  

�  American  Express  

�  Syncada  

�  MasterCard  ePayments  Gateway  

�  CiA  

�  Bank  of  America  

�  Wells  Fargo  

�  PNC  Bank  

�  Taulia  

�  Pollenware  

�  Prime  Revenue  

�  The  Receivables  Exchange  

�  CiA  

�  JPM  Chase  

�  BMO  

�  Direct  Commerce  

�  Direct  Insite  

�  ADP  

�  Ariba  

16 Market Participants and Solution Strength

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Automation Options in AP

•  Technology  Implementa5on  –  Licensed  Sosware  

•  Sosware  solu5ons  that  are  implemented  within  the  company’s  firewall  •  Hosted  and  maintained  by  the  company  resources  

–  Sosware-­‐as-­‐a-­‐Service  (SaaS)  -­‐  Cloud  •  System  is  hosted  on  the  solu5on  provider’s  end  not  within  the  firewall  •  Maintenance  is  handled  by  the  technology  provider  •  True  SaaS/Cloud  is  Mul5-­‐tenant    

•  Business  Process  Outsourcing  –  Service  provider  takes  on  the  en5re  process  that  is  being  handled  by  your  staff  

•  Areas  to  consider  for  BPO  –  Scanning  and  Data  Entry  –  Check  Prin5ng  and    Mailing  –  Expense  Report  Audi5ng  –  U5lity  /  Freight  Payments  –  Post  Payment  Audit  

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Sec5ons  for  RFP  

RFI Structure

Outsourced Scanning & Data Entry Capture

Document Imaging Support for mail processing and imaging of invoices in different formats

Data Extraction Use tools or labor for data entry, indexing and validation against CIBC vendor/approver data

Pre-Validation Capture data mapping and preparation of invoices

Content Management Centralized repository to store invoice images and information, ability to search and retrieve

Matching & Workflow

Invoice Matching Two-way or three-way matching based on pre-defined criteria and tolerance levels

Approval Workflow Workflow configuration and support for multiple levels of approval

Exception Handling Exception workflow and interface to aid in the dispute resolution process

eInvoicing Network

Supplier Network Shared network supporting many-to-many relations between buyers and suppliers

Supplier On-boarding Services provided around supplier recruitment – vendor segmentation and activation campaigns

E-Invoicing Allow suppliers to submit electronic invoices through multiple methods

Dynamic Discounting Dynamic discounting capabilities and the ability to recruit suppliers to enroll in discounting

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Implementa5on  Roadmap  

“Quick  Hit”  Porvolio  Items:    Conduct  Spend  Opportunity  Assessment  to  iden5fy  opportuni5es.  

Form  Steering  Commiqee,  develop  goals  and  success  metrics.  

Develop  new  Policies  and  Procedures  that  address  the  automated  requisi5on/purchasing  process.  

Document  imaging  of  PO  documents  (SharePoint  or  LiveLink).  

Work  on  detailed  design  for  E-­‐Procurement  System  

Develop  RFP  for  E-­‐Procurement  System  

3 – 6 months

Quick Hits/Gems

6 - 12 Months

Porvolio  Items:    Begin  tracking  success  metrics.  

E-­‐invoice  Pilot  PO:  Invoices/NE&O  (AP).  

Implement  E-­‐Procurement.  

eRequisi5ons  pilot.  

Change  management,  communica5on,  &  training.  

 

   

Development & Rollout

Porvolio  Items:    Supplier  Self-­‐Service  (AP)  

Pilot  catalog  punch-­‐out  to  validate  benefits.  

Repor5ng  &  Analy5cs.  

Discount  Management  (AP)  

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•  Plan  your  Implementa5on  Thoroughly  •  Today’s  systems  are  powerful,  so  design  for  the  future  •  Ensure  sponsorship  of  the  program  at  appropriate  levels  •  Ease  employees/users  into  adop5on—start  with  the  basics  and  introduce  new  features  

and  func5ons  over  5me  

•  Gaining  User  Acceptance  •  Change  management  cannot  be  an  aserthought  to  implementa5on  •  While  planning  for  implementa5on  and  roll-­‐out,  also  plan  on  how  you  will  bring  employees  

on-­‐board  •  Communicate  to  employees  how  the  system  will  improve  their  experience    

•  Managing  Supplier  Behavior  •  Enforcement  of  policies  through  rewards  for  using  system  (faster  payment)  •  Educa5on  on  how  it  helps  the  supplier  

Maximizing  your  Investment  in  Automa5on  

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Conclusion

•  Choosing  the  right  P2P  Automa5on  solu5on  can  bring  value  to  your  organiza5on  for  years  to  come.  

•  Complete  a  current  statement  assessment  before  communica5ng  with  providers  

•  Leverage  peers    •  Design  high  level  future  state  •  Engage  providers  to  help  finalize  future  state