PRGX%ACCOUNTS%PAYABLE% PRODUCTIVITY%INDEX% %PERFORMANCE%&%BEST%PRACTICES% · PRGX%ACCOUNTS%PAYABLE% PRODUCTIVITY%INDEX% %PERFORMANCE%&%BEST%PRACTICES%!!! ©2012%PRGXUSA,%INC.%%ALL%RIGHTS%RESERVED.%

PRGX ACCOUNTS PAYABLE PRODUCTIVITY INDEX

PERFORMANCE & BEST PRACTICES

©2012 PRGX USA, INC. ALL RIGHTS RESERVED. PRGX CONFIDENTIAL AND PROPRIETARY. UNAUTHORIZED USE, REPRODUCTION OR TRANSFER OF THIS MATERIAL IS STRICTLY PROHIBITED.

May 14, 2012

2 ©2012 PRGX USA, INC. ALL RIGHTS RESERVED. PRGX CONFIDENTIAL AND PROPRIETARY. UNAUTHORIZED USE, REPRODUCTION OR TRANSFER OF THIS MATERIAL IS STRICTLY PROHIBITED.

Our Panelist of Top Performers

Suzanne Fassler, Accounts Payable Director, jcpenney Company, Inc.

Tom Lyman, Director Accounts Payable, Safety-‐Kleen Systems Inc.

Eric Jones, Director Corporate Payables, Lowes Companies, Inc.


PRGX Accounts Payable ProducHvity Index (APPI) Study

375 ParHcipants

16 Industries

535 Million Invoices

$900 Billion Purchases

Unmatched insight into Payables Performance Improvement


APPI Measures Payables Performance

Across ten key metrics… categorized and weighted to measure Effec.veness and Efficiency


Top to Median Performance Comparison

Top Performance increased 5.5%, and is 28% higher than Median Performers

51.0

65.4

50.9

64.8

51.1

65.2

Median Top Performers

APPI EffecHveness Efficiency

APPI 2010 Median and Top Performer Scores


APPI Efficiency -‐ Process Cost

$9.59

$7.28

$9.24

$7.00

$9.52

$5.06

$3.29

$5.60 $4.21

$6.08

All Regions US Rest of Americas Asia-‐ Pacific EMEA


Cost per AP Invoice

Top Performers are 50% more cost efficient than Median Performers

Annual Revenues

Less than $500 Million

$500 Million to $1 Billion

$1 Billion to $5 Billion


Greater than $10 Billion

Top Performers $5.04 $4.72 $3.67 $4.42 $2.50


APPI Efficiency -‐ Process ProducHvity

Top Performers process 65% more invoices per FTE than Median

Number of AP Invoices Processed by AP FTE Annually

Annual Revenues






Top Performers 11,465 14,387 18,449 20,919 34,564

9,552 12,484

8,879 6,857 6,944

15,831

19,966

11,556 14,375

10,757




APPI EffecHveness -‐ Error Free Disbursements

98.4% 99.0%

98.2% 98.0% 97.9%

99.6% 99.8% 99.9% 99.3% 99.2%



Percentage of Disbursements Issued First Time Error Free

Marginal differences exist in disbursement error rework

Annual Revenues






Top Performers 99.8% 99.6% 99.6% 99.7% 99.3%


What Drives Top Performance?

Eight “best pracHces” consistently observed in Top Performers

¨  Lean process design

¨  Enterprise process standardizaNon

¨  Shared Services/Global Business Services deployment

¨  Electronic invoice presentment for payment

¨  Rules based matched excepNons and automated workflow management

¨  Advanced data capture (OCR and imaging)

¨  Electronic catalogues (web based purchasing)

¨  Supplier self service


Let’s Gain Insight from our Panelist

How has your organiza.on leveraged these best prac.ces in your Journey to Top Performance?....

Which have had the greatest impact for your

organiza.on?


What challenges did your organiza.on experience in deploying these best prac.ces?...

How did you overcome the challenges?

Panelist will respond to quesNons

QuesHons from the Audience


Thank You

David Paul Managing Director Business AnalyNcs & Advisory Services Atlanta, GA [email protected] 404.395.4738 (mobile) 770.779.3166 (office)

Bruce Kelly Managing Director Business AnalyNcs & Advisory Services Dallas, TX [email protected] 214.675.8696 (mobile)


Appendix: AddiHonal APPI Best PracHce UHlizaHon StaHsHcs


Shared Services/Global Business Services Deployment

w  88% of Top Performers deploy shared services operaNng model for accounts payable processing

w  67%, take advantage of favorable labor and operaNng cost structure globally to deliver AP services

88%

12%

Deploy Do Not Deploy

Percent of Top Performers Deploying Shared Services Model

67%

33%


Percent Leveraging Favorable OperaHng Cost Structures Globally


Electronic Invoice Presentment for Payment UHlizaHon

w  Top Performers receive 73% of invoices electronically from suppliers. Best Performers can achieve 90+% EIPP

w  64% of Top Performers deploy ongoing programs to acNvely promote and expand e-‐invoicing receipt from suppliers

64%

36%


Percent of Top Performers Deploying EIPP Expansion Programs

42%

73%

All Industries Median Top Performer

Percent of Supplier Invoices Received Electronically


Rules Based Matched ExcepHon and Automated Workflow Management

w  95% of Top Performers leverage automated matching funcNonality and excepNon based management rules

w  86% of Top Performers effecNvely deploy automated workflow soluNons to effecNvely manage invoice excepNons

72%

95%


Percent of OrganizaHons Using Auto Matching and ExcepHon Rules

69% 86%


Percent of OrganizaHons Using Roles Based Workflow Management


Advanced Data Capture OCR and Imaging to Manage Paper Invoices

w  78% of Top Performers deploy advanced data capture, document scanning, and opNcal character recogniNon for iniNal paper invoice digiNzaNon

w  Investments in advanced data capture techniques are more prevalent in “indirect spend” invoice processing

w  Many organizaNons prefer selecNve outsourcing of these acNviNes than invesNng in internal capabiliNes and technologies.

43%

78%

All Industries

Median Top Performer

Percent of OrganizaHons UHlizing Advance Data Capture


Electronic Catalogues for Web Based Purchasing

w  42% of Top Performers uNlize electronic based catalogues for web based purchasing and electronic sejlement

w  Electronic catalogues are heavily used in “direct materials” and some categories of “indirect materials”

w  Electronic catalogues are becoming more prevalent in “indirect services” purchases

23%

42%

All Industries


Percent of OrganizaHons Using Electronic Catalogues for Purchasing

69%

31%


Percent of Top Performers Deploying E-‐Catalogue Expansion Programs


Supplier Self Service

w  55% of Top Performers deploy some form of supplier and internal customer self service tool to provide insight and informaNon into status of invoice processing and payment acNvity

w  Does your organizaNon uNlize deploy supplier self service: – As a plalorm for supplies to view payment status and review/ retrieve payment debit memos issued

– As a plalorm for suppliers to communicate short payment reimbursement requests

37%

55%

All Industries


Percent of OrganizaHons Deploying Supplier Self Service

32%

68%


Percent of Top Performers Deploying Self Service Expansion Programs


Standard Process UHlizaHon

w  99% of Top Performers deploy standardized global procurement and accounts payable processes

w  87% of Top Performers uNlize a standard core ERP Procure-‐to-‐Pay applicaNon somware

56%

99%


Percent of OrganizaHons Using Standard P2P Processes

64% 87%


Percent of OrganizaHons Using Standard P2P ApplicaHons


There Are No Silver Bullets to Achieve Top Performance

Define service requirements, service delivery, and management model to meet strategic objec.ves

3

1

2

Eliminate unnecessary complexity and work and adopt/deploy proven best prac.ces

People

Process

Technology

Enablers

Reduce manual effort, minimize errors, and enable leveraged service delivery

Core ERP ApplicaNons

Systems IntegraNon

AutomaNon Extension Tools & ApplicaNons

Enablers

Standardize

Simplify & Streamline

Automate

Leveraged Services

Strategic Alignment

Performance Management

4 Global Service Delivery Model

Americas

GU

GU

GU

GU

Regional Center

Global Service Center

Delivery through best service points to deliver op.mal business value § Global Service Center

§ Centers of Excellence § Centers of Competency § Specialized BU Support § BPO Partners § Corporate

5 Con.nuous performance management and quality control

Understand Service ExpectaHons

Define and Agree Upon Service Levels

Measure Service Performa

nce

Communicate

Service Performance and Drivers

Change Process and

Behavior to

Enhance Performa

nce

Customer-‐centric, Service

Expecta.on Cycle

Customer & Service Management Cycle

The Journey to Top Performance is consistent and the path is proven … however, the speed of execuRon has increased and the importance of the value delivered enhanced.

Documents

PRGX%ACCOUNTS%PAYABLE% PRODUCTIVITY%INDEX% %PERFORMANCE%&%BEST%PRACTICES% · PRGX%ACCOUNTS%PAYABLE% PRODUCTIVITY%INDEX% %PERFORMANCE%&%BEST%PRACTICES%!!! ©2012%PRGXUSA,%INC.%%ALL%RIGHTS%RESERVED.%