© 2012 financial operations networks llc automation case study: don’t touch that invoice!...
TRANSCRIPT
© 2012 Financial Operations Networks LLC
Automation Case Study:Don’t Touch That Invoice!
Paperless Invoice Processing at Maxim Healthcare
www.TheAPNetwork.com
About Your Presenter
Chris RauenSolutions Marketing Manager, Network & Finance Solutions, Ariba
Chris is responsible for product marketing of Ariba’s electronic invoicing solutions. He brings more than 15 years of experience in B2B marketing for technology innovators. Before Ariba, Chris served as corporate marketing manager for Xign Corporation, an electronic payables company that was acquired by JPMorgan, and he held a similar role at Documentum, now part of EMC. Chris holds a B.A. in Economics from the University of California, Santa Barbara, and is often seen outside of work on the tennis court.
www.TheAPNetwork.com
About Your PresenterJeff Halper, Director of ProcurementMaxim Healthcare Services
Jeff is responsible for sourcing and procurement as well as the overall Ariba P2P process and relationship at Maxim Healthcare. Jeff has served in procurement and supply chain roles with organizations such as HMSHost and Johnson & Johnson, building experience in forecasting, distribution, planning, and vendor management. Jeff has a Bachelor’s degree in Operations Research and Logistics from the University of Maryland, and in his spare time tries to stay in shape by competing in triathlons and chasing after his three daughters.
Crowded and Confusing E-Invoicing Solution Options
Invoice PrintingCollection Services
Post Audit Recovery
EDI/VANsArchiving Services
Scanning ServicesBanks
ERP Integration
Software Houses
Digital Signature Providers
Evaluated Receipt Settlement
Consultants
F&A BPO
E-Invoicing Networks
Supplier Portals
Workflow Services
How Do You Compare?
Best-in-Class (Top 20%)Average time to process an invoice: 5.3 daysAverage cost to process an invoice: $7.78Invoices paid early enough to secure early payment discount: 60%
Industry Average (Middle 50%)Average time to process an invoice: 10.2 daysAverage cost to process an invoice: $12.05Invoices paid early enough to secure early payment discount: 9%
Laggard (Bottom 30%)Average time to process an invoice: 24.5Average cost to process an invoice: $37.45Invoices paid early enough to secure early payment discount: 2%
Source: Aberdeen Group, E-Payables 2011 Report
Learn more: http://resourcecenter.aberdeen.com/GL/28-invoice-management
Solution: Smart Invoicing The best invoice solution is the one that is TOUCHLESS!
Ariba Smart Invoicing drives auto post rates of 98% compared to less than 60% with other solutions
Faster billing and receivables processing
at lower cost
~1 million Global Trading Partners
Supplier
Supplier
Supplier
Supplier
Supplier
Invoice
Customer
ERP
AP
NetworkAdapter
98%... Touchless
Lower AP Cost Faster Cycles Lower Risk
AccountCoding
Contract Match
Price - Tax
Compliance
GST/VAT Compliance
Sub Total Amount
Tax Thresholds
InvoiceNumber
Bill To Address
Requester
InvoiceDate
VAT / GSTIDs
Pay
Business rules
by country
Withholding tax support
Total Amount
Shipping Thresholds
Ship to Address
Supplier
match
Supplier
match
Country-specific templates
PO
MAXIM Healthcare Services
• Largest privately held healthcare staffing company in U.S.
• Maxim has 400 offices located throughout the continental U.S.
• Approximately 3500 internal employees and 25,000+ external employees
• Provide integrated healthcare staffing solutions
• Assist hospitals, nursing homes, school systems, and other medical facilities
• Provide in-home nursing care
"Creating Success By Leading and Serving Others"
Business ChallengesPrior to Ariba implementation
• Disconnected purchasing and payment processes• No standard way for contracted vendors to transact with Maxim
¨ Fax, phone, email, website, paper
• Thousands of vendors¨ Most not contracted and sending paper invoices
• No enforcement of contracted vendor compliance• No formal process to control spend • Too much time and resources spent coding invoices into GL
¨ Coding after expense was already incurred
• Very limited data
Business Objectives
• Simplify the Procure-to-Pay process• Provide a single site to access contracted vendor catalogues• Automate invoice matching• Streamline the AP process• Optimize and standardize approval process• Eliminate paper processing costs, phone and fax orders• Decrease Procure-to-Pay time• Increase on-time payments• Capture and analyze data!!!
Metrics
• Measure suppliers that submit invoices that don’t match POs¨ Require exceptions that need manual intervention
• Invoice conversion time (scan-to-electronic record)• PO approval time• Invoice approval time• Time to pay an invoice
¨ Manage payment cycle time
Business Benefits
• One stop shopping, elimination of guesswork by field offices• Visibility to line level data through reporting
¨ Drives valuable spend analysis
• Measurements of contract compliance• Paid all but $239 inside of 30-day terms
¨ Discount capture is in progress
• Employee utilization, reassignment, add value
Key Learnings
• Believe in the change, and bring people along with you¨ This may even include your boss!
• Understand your existing processes and what is important to your internal customers
¨ Don’t be afraid to make changes¨ Document your ideal processes and pick the system that will get
you there
• Involve key players from Day 1 ¨ (RFP phase, not just implementation)
• Recognize supplier limitations and nervousness• Communicate 4x more than you think you should• Assign a dedicated Project Manager – 80-90% of time
Key Learnings
• Don’t be afraid to make policy as you go ¨ Be ready to enforce it¨ Have a roadmap before the RFP process
• Training, training, and training¨ Provide AP teams with time to test to assist in transition
• Replicate many scenarios on test site • Plan transition during the early weeks of deployment
¨ Be flexible… it does get better!
Vision / Next Steps
• Moving past the process• Focus on vendor management
¨ Value add versus coding
• Use the data!¨ Spend management¨ Vendor consolidation
• Discounts • Resource allocation• Switch vendors to EDI billing
Back Office Systems
The Ariba Network and Invoice Management SolutionsThe Largest Business Network of its kind with Smart Invoicing
© 2012 Ariba, Inc. All rights reserved.
NetworkAdapter
Invoice Automation
Payment Automation
PO AutomationSRM
Buyer/P2PBuyer
AP
B U Y E R S
Procurement
Finance
IT
I n d i r e c t
C o m p l e x
D i r e c t
PO-Flip® , Contract-Flip™
HTML, CSV
Paper / Fax
S U P P L I E R S
~1M trading partners $300B+ annual Spend 65M+ annual invoices Supplier self-administration Real-time transaction status Easier reconciliation Improved cash forecasting
EDI , cXML
Electronic feed of all invoices PO, contract and receipt Matching Scanning & Workflow Reporting and analytics Detailed remittance VAT Compliant Invoice archival
N E T W O R K ®
Buyer Portal Supplier Portal
Sales/MktgBilling
ARIT
Customer Success
EQUIPMENT MANUFACTURER
• Huge A/P staff for manual P2P processing
• Large volume of non PO invoices
• Lack of global spend visibility• Risk over ability to conform to
VAT requirements• Lost discounts
Before After
• 75% reduction in A/P headcount• 90% global spend Networked• Improved price, vendor, and VAT
compliance• Capturing prenegotiated
discounts • Reduced vendor management
costs
GLOBAL INVESTMENT BANK
Before After
• Enabled 4K suppliers onto Network• Reduced BPO costs by 35%• Now processing ~ 500k invoices/year
electronically• Went from 100% paper to nearly 60%
e-invoicing with goal of 80% electronic• Drive 70% of invoice transactions off
POs
• High cost of paper-based, manual invoice processing
• Difficulty in managing orders generated by SAP
• Interest in improving system ease-of-use
• Lack of visibility into orders and invoices
• 5% lost POs• 7 FTEs just to track orders • Order/Invoice process delays
revenue• Invoice exceptions cause raw
materials or equipment delays
• Reduced Days Sales Outstanding (DSO) by 5 days
• Improved PO and contract matching to invoice
• Redeployed 6 employees• Eliminated vendor credit holds
since all POs and invoices now visible and managed
• Expanding solution deployment to Europe
Before After
WATER TREATMENT
• 970 supplier relationships established in < 1 year
• Handling 12K POs and 15K invoices per month
• Self-service Supplier Portal reduces costs
• PO-Flip® option virtually eliminating invoice exceptions
• 99% straight-through processing • “Much better option than build solution
ourselves in SAP”
• Paper invoice costs too high • Unable to deliver and monitor
PO’s through SAP • Too many missed discounts
due to long invoice process times
• Poor on-time payment statistics
• Need one global system
HOUSEHOLD PRODUCTS
Before After
© 2012 Ariba, Inc. All rights reserved.
The High-Level Business Case $15 Million impact for every $1 Billion in Spend
CHALLENGE OPPORTUNITY
Process Efficiency $1 million is process cost take out for
Top Performers and Non-Top Performer Performance
Discount Capture $2 Million in discount savings for
every $1 Billion in discountable spend
Contract Compliance $9 Million in contract leakage savings for
every $1 Billion in spend under contract
Working Capital $2.74 Million in working capital impact for 1 day of payables
extension (DPO) on every $1 Billion in spend
3-for-1“
“1-for-1“
“
2-for-1““
9-for-1“
“
Source: The Hackett Group 2011 P2P Benchmark Report and Ariba Results
© 2012 Ariba, Inc. All rights reserved.
Q&A
Free Business Case Assessment• PO, Invoice and supplier ramp assessment• Discount savings estimate• Business case and ROI
Chris RauenSolutions Marketing ManagerAriba Network & Finance [email protected]
Download free copy: “Beyond EDI: How a Smart Invoice Network Reorders P2P to Drive Global e-Invoicing and Collaboration with All Suppliers” at http://www.ariba.com/resourcelibrary
Learn more about e-invoicing success: http://www.ariba.com/go/e-invoicing_success
© 2012 Financial Operations Networks LLC
Thank You!
The Accounts Payable Network2100 RiverEdge Parkway, Suite 1010Atlanta, GA 30328Contact: [email protected] 770-984-1184www.TheAPNetwork.com
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