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1. The Need to Optimize the Cycle2. Value Proposition of SAP Invoice Management by Open Text
2.1 Strategic Arguments2.2 Functions and Features
3. Achieving Results with SAP4. Summary
Agenda
© SAP 2008 / Page 2
1. The Need to Optimize the Cycle2. Value Proposition of SAP Invoice Management by Open Text3. Achieving Results with SAP4. Summary
Agenda
© SAP 2008 / Page 3
Does this scenario look familiar?
CEO“Our cost of capital andmaterial costs are too high.”
CFO“My cost of accounts payables isnot state-of-the-art and neither isour cost of goods purchased.”Financial Analyst
“Use of cash discounts islow, cost of capital is rising.”
Supplier“Doing business with thatcompany is difficult as theyare unable to tell when theypay their invoices.”
Accounting“We cannot say which invoices we have receivedacross different departments and we have nocontrol over the time-to-payment.”
Purchaser“We could lower the cost of goodsif we could make systematic useof cash discounts.”
Accounts Payables“We spend more than 50% of ourtime responding to calls andemails from suppliers requestingstate of invoice or complainingabout late payment.”
Is this organization prepared to:
Increase process efficiency
Reduce finance operating costs
Make use of cash discounts
Is this organization prepared to:
Increase process efficiency
Reduce finance operating costs
Make use of cash discounts
© SAP 2008 / Page 4
Poor vendor relations
Excessive cost per invoice
Difficulty in preparingaccruals
Fragmented stand-alonesystemsNo workflow or datamanagementNo integration withGeneral Ledger (GL) orAccounts Receivable(AR) systems
Inadequate APprocess control(compliance risk)
Limited visibility of liabilities
No insight into processbottlenecks
Fragmented andinefficient
Paper-based and labor-intensive
Lack of standardization
Typical barriers to efficientAccounts Payable (AP) operations
Result:
High Cost ofFinance Operations
Bad Vendor Relations
© SAP 2008 / Page 5
Result:
Efficient OperationsReduced Costs
Improved VendorRelations Integrated systems and
processes
Global visibility intoliabilities
Consistent payment behavioracross countries andorganizations
Systematic, collaborativeapproach to collections anddisputes
Standardization andgreater automation
Streamline manual, paper-based processes
Workflows that minimizereconciliation time
What it takes to optimizethe AP invoicing process
© SAP 2008 / Page 6
SAP Invoice Management by Open Text value:Process optimization
Issue addressed SAP Invoice Management Value achieved
Compliance - InadequateAccounts Payable ProcessControl
Implement system-driven processbased on pre-configured business rules
Extensive reporting available on theprocess. Complete audit trail available
Excessive Cost-per-Invoice Optimized process solution ensuresleverage of cash discounts, eliminatesdata entry errors and duplicate invoices
Reduction in AP cost, structured usageof cash discounts, significant staffredeployment
Limited Visibility of Liabilities Status of all invoices received is visiblethrough one screen
Improved ability to plan cash demand.Invoices are processed accurately andpromptly, so that they are always paidper the cash management design
Difficulty in PreparingAccruals
Centralized, controlled invoiceprocessing assures that invoiceaccruals are determined effortlesslythrough liability reporting
Shorter closing cycles
Poor Vendor Relations Invoices are processed accurately andpromptly – vendor payments aretriggered on time
Vast amount of cost caused by statusrequests and complaints from vendors iseliminated. Procurement can negotiateimproved pricing and payment terms.Credit ratings improve through on-timepayment
Manual Invoice Processing is inefficient and posesserious risk to your business operations
© SAP 2008 / Page 8
Time-consuming historical research
Belabored vendor communications
Documentation and other requests for additional information from multiple parties
Manual routing
Labor-intensive monitoring and updates on unpaid invoice status
Scalability through headcount
The result:
Inefficient, labor-intensive processes associated with the receipt-to-pay process
Inability to optimize cash-flow and vendor relationships
Inability to improve overall business transparency for more accurate financial reporting
Lack of overall process control introduces compliance risk
Manually managing invoices processes drains both internal andvendor resources:
Benefits of fully optimized andautomated AP process
Pay problem invoices on timeStreamline and automate communication within the organizationPush responsibility to appropriate individuals
Reduce cost per invoice and grow volumes without adding peopleSupport consolidated shared service AP processing centerCapture early-pay discounts and eliminate duplicate invoicepayments
Implement paperless processingEliminate data entry and rework due to keying errorsInstill consistent worldwide standardized processes and trainingMove from doing busy work to analytical work – reduce errorsAutomate follow-up and escalation
View total liabilities accuratelyAccess process status immediatelyImprove accrual and cash flow decisionsUtilize metrics for root-cause analysisAssist with Sarbanes-Oxley / internal controls compliance
© SAP 2008 / Page 9
Improve AP process
Reduce cost
Become more efficient
Increase decisionmaking ability
Overcoming barriers in the financial supplychain becomes a competitive differentiator
Financial Institutions
Customers Suppliers
Treasury
Physical Supply Chain
Credit2Cash
Financial Supply Chain
Invoice2PayManaging Cash
Leading organizations will use the Financial Value Chain to improve theefficiency of the Finance function and to optimize working capital.”
John E. Van DeckerGartner, 2006
“© SAP 2008 / Page 10
Sources of Cash Uses of Cash
Transparent invoice reconciliationbecomes a competitive differentiator
SAP Invoice Management by Open Text allows customers to:Improve on measurable KPIs like discount leverage, cost of capital, cost per invoiceand bank transaction feesStreamline internal and external communication regarding invoicesEstablish closer cooperation with suppliers
…IT Barriers
…Process Barriers
…Organizational Barriers
…Insight & Control Barriers
Helps to overcome…
SAP Biller Direct
InvoiceReconciliation SAP Bank Communication
Management
ReceiveInvoices
ResolveExceptions
Settle &Pay ReconcileApprove
Invoices
© SAP 2008 / Page 11
Invoice Management is the Most CommonlyShared Finance Process
AP / Invoice Management is the most commonlyshared or outsourced Finance process
38%
38%
18%
29%
33%
44%
29%
38%
50%
68%
64%
65%
44%
50%
50%
50%
50%
50%
58%
58%
58%
67%
67%
67%
75%
83%
Data analysis & reportingtools
Data warehouse
Internet
KPI Dashboard and ServiceLevel Management tool
OCR
e-Invoicing
Intercompany re-conciliationtools
Intranet
ERP
Imaging / Scanning
Workflow
Automatic matching &payment allocation tools
Continuous improvement /quality program
World-Class
Peer Group
Source: Hackett Finance SSC Study Source: Hackett Finance SSC report 2005
Projected finance processes covered byShared Service Operations within 2-3 years
27%
43%
48%
50%
52%
52%
64%
68%
73%
73%
73%
73%
80%
86%
Other entry
Customer billing
Tax filing and reporting
Credit management
Frieght payment
External reporting
Cash management
Collections
Cost accounting
General accounting
Travel & expense
Fixed assets
Accounts receivable
Accounts payable
Peer Group
+4
+5
+3
+5
+7
+7
+4
+5
+0
+4
+2
+3
+4
+0
(multiple answers possible)
Agenda
1. The Need to Optimize the Cycle2. Value Proposition of SAP Invoice Management by Open Text
2.1 Strategic Arguments2.2 Functions and Features
3. Achieving Results with SAP4. Summary
© SAP 2008 / Page 13
Differentiators of SAP Invoice Management byOpen Text
The only one-stop-shop solution from your landscape vendor:
Harmonized look-and-feel – familiar to your SAP users, thereby reducing training efforts
Reduced cost of operation – proven SAP technology, instead of technology clutter
No integration risk – this not available from any other vendor
No maintenance risk – one source of customer support, service packs and upgrades
Reduced vendor obsolescence risk – SAP’s proven track record reduces risk ofvendor obsolescence
Grows along your business needs:
Supports multiple back ends (SAP, non-SAP) achieving invoice transparency across thecorporation
Supports multiple languages and in-country rules and regulations regarding invoice handling
Scalable to the highest invoice volumes
Future proof – will work with future SAP Enhancement Packs and ERP releases
© SAP 2008 / Page 14
What your organization gains from SAP InvoiceManagement by Open Text
Simplify and optimize the entire invoice management process:
Create workforce efficiencies through an automated, streamlined process with or without theadded benefits of Shared Services
Improve working capital management through better visibility to cash requirements
Cut costs through process automation and control
Reduce costly manual errors
Optimize cash discount utilization
Improve business processes while reducing compliance risks:
Enable more accurate financial reporting through complete visibility
Segregate duties through workflow control – invoice processor and all process constituents
Monitor across all steps of the invoice process comprehensively
Provide complete audit trail – from receipt through settlement
© SAP 2008 / Page 15
What your Finance Shared Services Organizationgains from SAP Invoice Management by Open Text
© SAP 2008 / Page 16
CostCost of errors drastically reduced
Costly focus and follow-up on numerousstatus calls and complaints from suppliersavoided
Need to install more instances whenadding countries avoided through localization
RiskOne place to monitor all invoices
Platform for central service delivery, enabling selective process harmonization
Transparent routing of invoices to process constituents across the corporation
QualityProcessing capacity grows with volume, without need to grow headcount proportionally
Consistent service provision adhering to KPIs and SLAs
SAP Invoice Management by Open TextAutomated paper-to-post invoice management
© SAP 2008 / Page 17
Einlesen CommentTrigger workflows Post invoices
InvoiceInterpretation
InvoiceMonitoring
InvoiceClosing
CollaborationInbox(incomingmail / fax)
Archivierung
OCR frontend (Dec 2008) ERP
Payment
Invoice Cockpit
Prüfung und
Vervollständigung
UMWANDLUNG
PREPARE Verify andcomplete
ExceptionHandling Approval
Automated reconciliation and posting
Auswertung
Umwandlung
TRANSFORM
Payment
AP/FI
Non-SAPBackend
Backend
Backend
SAP Invoice Management byOpen Text Architecture
Post
Post
Post
Archiving (HTTP Content Server)e.g. SAP Archiving by Open Text – Archive Server
Scanning Interpretation Process allincoming invoices
Automaticallypost invoices
Processexceptions
Clearingexceptions
Comments Automaticallypost invoices
Resolveexceptions
InvoiceInterpretation
InvoiceMonitoring
InvoiceClosing
CollaborationInbox(incomingmail / fax)
Archiving
OCR front-end (Dec 2008) ERP
Transform
Payment
Payment
Invoice Cockpit
MONITOR WORKFLOW MONITOR AP / FITRANSFORMPREPARE
EDI Crossgate
SAP PI (XI)
Scanninge.g.
SAP Archivingby Open Text– Enterprise
Scan
FAX
Paper
© SAP 2008 / Page 18
Benefits you gain throughout the entireinvoice management process
Familiar SAP Look and Feel
Full Access to Familiar SAP Functionand graphics (somewhat related toabove) provide
One-Click Access To
User Friendly GUI/screens/dialogboxes make it easy to
Role-based routing
Automated routing
© SAP 2008 / Page 19
Standard SAP tools are included for sort, filter, print, email, export
Complete history of all processed invoicesSummary overview of invoices, including the number of and value ofinvoicesAudit history with commentsAt-at-glance reportingApproval history at a glance
Approve or reject dataPrior approvalsLocate necessary supporting documentation, including invoice image,purchase order, goods receipt, SAP invoice, comments and completehistory
Process dataAnalyze dataComment on dataValidate data
Accurate team review, resolution and approval
Efficient processing
Document processing – duplicate check
© SAP 2008 / Page 20
Familiar SAPLook & Feel
Early &AutomatedDuplicateDetection
Automated orManual Data
Entry
ImmediateData
Validation
Exception processing – price discrepancy
© SAP 2008 / Page 21
One-clickAccess toSupportingInformation
CompleteProcessHistory
Role-BasedProcessOptions
BestPracticesExceptionHandling
TransparentRole-Based
Routing
Invoice approval with assignmentof accounting information
© SAP 2008 / Page 22
Approve inPreferred UI -
Portal orSAPGUI
One-Click toApprove or
Reject
EasyDelegation to
EnterAccounting
ApprovalHistory at a
Glance
One-Click toAdditional
Information
ConciseInformation,
Easy to Grasp
ImmediateData
Validation
Analytics and monitoring
© SAP 2008 / Page 23
Analyze KPIswith SAPGraphics
Analyze UsingOver 50Criteria
Full Access toSAP Functions
CompleteOverview of All
ProcessedInvoices
Your Choiceof Reporting
Currency
Total ProcessSummary
One-ClickAccess to
Invoice Details
Liability report
© SAP 2008 / Page 24
AnalyzeLiabilities for
AccurateAccruals
Full Access toSAP Functions
AssessLiability by
GeneralLedger andCost Object
SupportsAudit for
Accrual Entry
Support large and/or distributedorganizations with transparent routing
Shared Service CenterAP clerk in Russia
Routes to buyer in USRoutes to approver in Argentina
Approver inArgentina gives OK
Buyer in USsolves exception
Invoice received inLondon, UK
Is scannedWorkflow in SSC inRussia started
22
11
33
© SAP 2008 / Page 25
1. The need to optimize the cycle2. Value proposition of SAP invoice management by open text
3. Achieving results with SAP4. Summary
Agenda
© SAP 2008 / Page 26
Customer return on investment
© SAP 2008 / Page 28
Typical customer realizes >50% cost-per invoice decrease and return-on-investmentin <12 months through:
25%-50% FTE Headcount redeployment
(20-50%) Lower cost per invoice reconciled
(<75%) Lower cost of errors
Reduce Duplicate invoice processing
Improved vendor relations50-75% less Vendor hotline traffic
Less follow-up effort On vendor status requests and complaints
Realize Increased cash discounts
Lowe cost Through better pricing and terms
Tighter controlsReduce Non-PO invoices
Reduce Maverick buying
Support SOX compliance
** Numbers based on aggregated market insight
Sample ROI
Invoice reconciliation cost structure$10,000,000,000 Annual sales (worldwide manufacturing company)
$3,000,000,000 Total invoice value
2,000,000 Invoices / year
12,000 Invoices / AP clerk / year
70% / 30% MM invoices / FI invoices
2% Invoices require vendor status calls, 10 minutes each, 3.2 FTE
3% Invoices have errors (double payments, wrong payment) 15 minutes each, 7.2 FTE
$5,000,000 Labor cost per year (fully loaded FTE = $30,000 / year)
10% Share of invoices for which an avg. of 3% cash discount applies
Savings$2,000,000 40% lower cost / reconciled labor
$108,000 50% error reduction
$4,500,000 Cash discount savings for additional 5% of invoices
$48,000 50% reduced vendor status calls
Investment$TBD Software licenses (add ongoing below)
$TBD Deployment
$TBD Administration and maintenance** Numbers based on aggregated market insight
Agenda
1. The need to optimize the cycle2. Value proposition of SAP invoice management by open text3. Achieving results with SAP4. Summary
© SAP 2008 / Page 30
The bottom line
The ability to control and anticipate
Comprehensive overview of all invoices across the corporation
Increased control of time-to-payment
Allows for better cash usage based on comprehensive insight
State-of-the-art shared services delivery platform
SAP architecture enables leveraging economies-of-scale
SAP automation improves efficiency in administrative processes
Invoice automation powers financial transformation
Automates labor-intensive invoice reception and reconciliation
Frees line operations from finance administration work
© SAP 2008 / Page 31
Automated or manual datacapture of invoice metadata
Early and automated duplicatedetection
Configurable input for non-SAPinvoice data fields such aspriority setting
Enforcement of mandatorydata input
Application of 35 configurablebusiness rules
Configurable SAP workflowcollaboration to ensuredocumented input from allprocess participants
Document processing function
© SAP 2008 / Page 33
Features
Alternative slides for 20-24
Exception processing function
© SAP 2008 / Page 34
Immediate routing to 16configurable business roles forresolution
Dashboard with configurable bestpractice resolution exceptionhandling options
Documented collaborationutilizing SAP workflow to ensureinput for all process participants
Features
Alternative slides for 20-24
Invoice approval and accounting
© SAP 2008 / Page 35
Easy delegation to enteraccounting
Immediate routing for coding andapproval
Immediate coding validation
Invoice approval driven byconfigurable delegation ofauthority matrix, regardless ofwhere this information is storedwithin the corporation
Documented collaborationutilizing SAP workflow to ensureinput of all process participants
Features
Alternative slides for 20-24
Analytics function
© SAP 2008 / Page 36
Analyze using over 54 criteria
Your choice of currency reporting
Information can be limited toopen items, resolved items or allitems
Information can be reviewedbased on a workflow processview or from a document view
The individual items can bedisplayed in a document currencyand report currency
Cycle time and current processparticipant are available
© SAP 2007 / Page 36
Features
Alternative slides for 20-24