take your supplier information process to the next level

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CONFIDENTIAL 2015 LIVE WEBINAR Speakers: Jon Casher, Casher Associates, Inc. Josh Morrison, Lavante Inc. June 23, 2015 Take Your Supplier Information Process to the NEXT LEVEL

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Page 1: Take Your Supplier Information Process to the NEXT LEVEL

CONFIDENTIAL 2015

LIVE WEBINAR

Speakers:

Jon Casher, Casher Associates, Inc.Josh Morrison, Lavante Inc.

June 23, 2015

Take Your Supplier Information Process to the NEXT LEVEL

Page 2: Take Your Supplier Information Process to the NEXT LEVEL

WebEx Webinar Interface

Listen–only mode teleconference

Ask Questions• Question function in WebEx Webinar at the

bottom of your console• Submit questions privately• We will answer them during the presentation

as well as at the end

Listen through your computer or use the conference dial in #• Please use the dial in number provided

Ask Question Here!

Panelists

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Page 3: Take Your Supplier Information Process to the NEXT LEVEL

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How to Earn Your CPE Credits

1. Must participate in all polling questions.

2. Attend the webinar for 50 minutes or more.

Page 4: Take Your Supplier Information Process to the NEXT LEVEL

Introductions – The Panelists

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Josh Morrison, Sr. Consultant, Lavante• Former F200 AP & Strategic Sourcing Senior Manager• Extensive background in Procure-to-Pay & Supply Chain Relationships• Expertise in Audit Controls, Compliance & Enterprise P2P Systems• Leading Process Improvement and Business Strategy Thought [email protected]://www.linkedin.com/in/joshmorrison

Jon Casher, President, Casher Associates• Founded Casher Associates,1976–System & back office automation• Co-founded RECAP, Inc. 1988–A/P audit recovery firm• Director of NASDAQ company, 2000-2006–Audit committee head• Current consulting focus on Finance, AP, AR, Treasury and P2P

[email protected]://www.linkedin.com/in/joncasher

Page 5: Take Your Supplier Information Process to the NEXT LEVEL

Agenda

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Take Your Supplier Information Process to the NEXT LEVEL

• Overview Discussion

• The Changing Business Landscape

• Understand Criticality – Why We Care

• Evolution of Supplier Information Management (SIM)

• Six Key Tenets

• Where to Start

• Conclusion

• Next Leadership Series Events

Page 6: Take Your Supplier Information Process to the NEXT LEVEL

Overview Discussion

• Prerequisite– We’ve talked about vendor data criticality, detox, standardizations

• Today’s focus– Evolution of vendor master file management

– Supplier Information Management (SIM)o Cloud, controlled, secure, supplier self-service, real-time, data validation, fraud

mitigation, decision support and strategic KPI management

– Six Tenets: Defining what an optimized SIM process looks like

• Three Pillars Maturity Model– Program migration and management over time

– Graduate from the past, create learning and building blocks

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Page 7: Take Your Supplier Information Process to the NEXT LEVEL

The Best-In-Class SIM Process

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• Duplicates

• Missing Data Points

• Inactive Accounts

• Inter-relationships

• Duplicates

• Missing Data Points

• Inactive Accounts

• Inter-relationships

SYSTEMS, GOVERNANCE, TRANSACTIONS, ANALYTICS, PEOPLE

BEST-IN-CLASS VENDOR MASTER FILE PROCESS

SANITIZE

• Naming Conventions

• Segregation of Duties

• Add/Change Workflows

• Profile Completion

• Naming Conventions

• Segregation of Duties

• Add/Change Workflows

• Profile Completion

STABILIZE

• Regulatory Compliance

• Validation at On-Boarding

• Fraud Protection

• Supplier Self-Service

• Regulatory Compliance

• Validation at On-Boarding

• Fraud Protection

• Supplier Self-Service

OPTIMIZE

The Three Pillars

Page 8: Take Your Supplier Information Process to the NEXT LEVEL

Typical State• Large, Outdated

VMF• Few Controls• Low Automation• High Risk of Fraud,

Lost Profits

Sanitize• Duplicates Removed• Relationships

Identified• Validation Points• Aged Vendors Purged

Stabilize• Naming Conventions• Workflows• Complete Profiles• Segregation of Duties• Centralization• Reporting• Transparency

Optimize • On-Boarding• Fraud Protection• Supplier Self-

Service• Data Collection• Data Validation• Roles &

Permissions• GRC Controls• Integrated

Workflow• 3rd Party Validation• Enterprise

Collaboration

Supplier Information Process Maturity Model

Reactive

Define Measure Analyze Improve Control

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Tactical Strategic

Page 9: Take Your Supplier Information Process to the NEXT LEVEL

The Changing Business Landscape

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AP & PO had separate systems & VMF

One vendor record created for each unique vendor address

Little focus on data quality & standards

Minimal governance, compliance, risk mgt, or spend mgt

Before 1990

New concerns about controls & quality of data

Emerging focus on regulatory compliance, primarily around 1099 tax reporting

Early articles about governance, risk management & leverage but few acted

Some AP Audit Recovery firms began to do vendor file cleanups and provide analytics and spend management reporting

1990-1995

FA and ERP systems began to enhance P2P functionality

Wide-spread system upgrades in 1998-1999 to address Y2K concerns

Frauds and Sarbanes-Oxley greatly increased pressure to improve controls and governance and perform some analytics

9/11 Anthrax scares raised awareness of regulatory compliance issues such as OFAC but compliance was low

1995-2005 Companies began to

realize that FA and ERP systems did not adequately address most of the six tenets

More began to focus on Procure-to-Pay as a more comprehensive view at financial operations

Software-as-a-Service (SaaS) cloud solutions began to provide flexible alternatives to shortcomings of FA and ERP systems

Portals allowing suppliers to retrieve invoice and payment status information became available

2005-2010 Companies realized

that on-boarding suppliers was a significant barrier to e-invoicing, payment, and other supplier programs

Leading firms identified SIM as key to a controlled, efficient and effective P2P process

Use of vendor portals and SIM has grown explosively

New and changing domestic and international tax and regulatory laws and mandates

2010-Today

“Before we know where we are going, we have to know where we have been”

Page 10: Take Your Supplier Information Process to the NEXT LEVEL

Facing Modern Challenges

The Times they are a Changin’

• New and changing regulations, increased focus on compliance– Tax (1099,FATCA/W-8), exclusions (OFAC,SAM,OIG), updates

(Cuba, Russia), conflict minerals, Sunshine Act, privacy

• New international & domestic mandates for e-invoice/payment– US is laggard, will have to catch up w/ S. America & Europe– SupplierPay: supply chain finance, slow to ramp– State requirements: sales tax and withholding in many states

require e-pmt.; municipalities will hop on same bandwagon– Main driver is tax evasion and fraud

• Record retention and destruction– IRS rules are from 90’s and earlier

• Cyber security, fraud/risk mitigation• Increasing speed/globalization of business

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Page 11: Take Your Supplier Information Process to the NEXT LEVEL

Future of AP Top 5 – 2010 vs. 2015

2010 Future of AP Top 5• Increased attention on accurate supplier information management• More focus on a supplier network• Increased levels of automation in AP• Increased buyer/supplier collaboration• Finance and Procurement cooperating more closely

2015 Future of AP Top 5• An End-to-End Network Centered P2P Solution • More Value from the Vendor File• A Path for Supplier Self Service• Growing Importance of Commerce Networks• Unlocking New Value Streams

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Page 12: Take Your Supplier Information Process to the NEXT LEVEL

Key Understandings for Tomorrow

Knowledge is Power

• Data is key– Good data empowers world class organizations

– Bad data is expensive and risky

• Supplier data continues to become more important– Supplier self-service and integrated validation capabilities

– Quality will improve significantly

• Elevated focus on SIM and P2P Automation– Foundation for driving improved controls and governance

– Critical to regulatory and corporate compliance

– Essential in tactical and strategic KPI’s

• Supplier/Customer Information Ecosystem– Adaptability, agility, scalability

– Collaborative, cooperative, aligned

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Page 13: Take Your Supplier Information Process to the NEXT LEVEL

Understand Criticality

Why We Care

• Stakeholders and decision support

• P2P cycle impact

• Evolution of industries, data, and responsibilities

• Create the right processes

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Page 14: Take Your Supplier Information Process to the NEXT LEVEL

VMF Impacts on Enterprise Decisions

Decision Support ScenariosScenario 1 Purchasing needs to have accurate expiry information to manage supplier contracts for Legal

Scenario 2 Strategic Sourcing needs to analyze supplier spend and usage data to reduce costs for HR benefits

Scenario 3 Executive Mgt. needs to report diversity and charitable contributions to support Compliance and Tax as well as Sales initiatives with Customers

Scenario 4 Operations needs to find a new service provider for security services to protect their Employees and engages AP or Purchasing

Many Others….

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Impacted Areas

Page 15: Take Your Supplier Information Process to the NEXT LEVEL

VMF Impacts on P2P Functions & Processes

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The Supplier Affect

Agreements

• Document Retention• Terms & Expiry• Deliverables Management• Notifications• Service Levels

• Contract Compliance• Business Segment Alignment• Pricing & Specifications• Statement of Work/Effort• Change Collaboration & Management

Systems

• Vendor Master File• Data Collection & Validation• Approvals & Workflows• Notifications• Regional & Local Considerations

• Accurate Capture of Agreement Terms• Accurate Capture of Pricing & Attributes• Supplier Collaboration• Updates & Change Management• Supplier Self-Service

Transactions

• Purchase Orders• Order Confirmations• Hosted Shopping (Punch-Out)• Shipments & Receipts• Invoices

• Payments• Bank Reconciliations• Discrepancy Management• Quality & Errors• Contract Compliance

Analytics

• Effectiveness & Quality• Efficiency & Throughput• Service Levels• Risk & Fraud Mitigation• Regulatory Compliance

• Benchmarking & Scorecards• Growth & Development Strategies• Trending & Forecasting• Value Chain Partner Alignment• Corporate & Social Responsibility

Relationships

• Quality• Service Levels• Errors• Defects & Returns• Strategic Alignment

• Growth & Development Partners• Preferred Supplier/Customer Designation• Operational Continuity• Risk & Fraud Mitigation• Cash & Working Capital

Suppliers & Supplier Relationships

Page 16: Take Your Supplier Information Process to the NEXT LEVEL

Evolution of Supplier Information Management (SIM)

What is SIM?

• SIM Defined: – Governance, controls, SOD’s, compliance, streamline, normalize,

scalable, configurable, agile– Supplier self-service– Dynamic supplier onboarding– Progression:

o Manual > Automatedo Controlled > Cloud-Based, Real-Time, Validationso Fixed > Agile, Scalable, Normalized

• Who does it impact and how?– AP: Payment timing and accuracy– Procurement/Sourcing: Spend management, strategic relationships– Tax: Accurate tax withholding and reporting– GRC (Legal, Internal Audit, Risk): Compliance

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Page 17: Take Your Supplier Information Process to the NEXT LEVEL

2015 Hackett Report

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Page 18: Take Your Supplier Information Process to the NEXT LEVEL

Best Practices for SIM

Create a Lasting SIM Program

• Focus on master data– Allow ability to opt in complimentary services for

downstream transactions, reporting, and analysis

– Adoption of Hub Concept

• Consider the entire process– End-to-end, configurability, self-service, real-time, supports

multiple stakeholders and SOD’s, adds value for suppliers, enables e-commerce, e-sourcing, e-document management

• Role of a SIM solution should be to– Facilitate all other dependent functions– Provide a strategic lever for organizational initiatives– Solicit and collect, validate, store, manage over time

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Page 19: Take Your Supplier Information Process to the NEXT LEVEL

Four-Step Approach

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• SUPPLIERS

• SYSTEMS

• GOVERNANCE

• TRANSACTIONS

• ANALYTICS

• PEOPLE

Page 20: Take Your Supplier Information Process to the NEXT LEVEL

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Dynamic Supplier Onboarding

• Simple process that integrates with your ERP system• Define Strategy for

– Walk Up Supplier Credentialing

– New Supplier Invite

– Existing Supplier global data requests

• Configurable Multi-Parametric Workflow and Notifications– By Location

– By Supplier Type

– By User Type

– By Time

– By Status

– By Supplier Scorecard

• Room to grow – Configurable & Expandable Data Controls

– Document Repository

– Configurable Internal / External Workflow

– Integrated Communication Engine

– Full Reporting

– Audit Trail

“The only constant is change itself”

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Managing for Success

Make Sure You

• Account for both new and existing suppliers

• Create change notifications and alerts

• Leverage SIM for strategic management and visibility

• Engage and educate internal and external stakeholders

Third Party Validation

Supplier On-Boarding

Vendor Self-Service

WorkflowInternal / External

Profit Recovery

Supplier Information ManagementVendor Communication

Analytics & Reporting

Internal ControlsSOX Compliance

Payment Visibility

ACH Payments Conversion

P Card Distribution

Page 22: Take Your Supplier Information Process to the NEXT LEVEL

Six Key Tenets

What does an Optimized SIM Process Look Like?

1. Reaching a Stable Environment

2. Comprehensive Compliance

3. Supplier Collaboration

4. Change Management

5. Analytics & Spend Management

6. Strategic Leverage

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Page 23: Take Your Supplier Information Process to the NEXT LEVEL

Reaching a Stable Environment

Sanitize & Stabilize

• Standardization, normalization– Processes, data values, field types, SOD’s, workflows

• Identify gaps, inconsistencies, inefficiencies– Look for opportunities for improvement and cost savings

• Perform VMF cleanse– Duplications, inactive, incomplete, trends for process

improvement and risk mitigation

• Create new controls– File and field security, data normalization,

standard processes and workflows, audits

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Page 24: Take Your Supplier Information Process to the NEXT LEVEL

Comprehensive Compliance

Governance & Controls

• Sarbanes-Oxley– SOD’s, Audit Trail, Normalized Processes

• GRC Challenges– Overcome Barriers to Compliance

o Lack of Awareness of Regulatory Compliance and Reporting Requirementso Technical Limitations of ERP and Financial Accounting software

– Need to Manage Vendor Risk– Policy, Contract, Regulatory– International, Domestic, State– Tax withholding and reporting– Privacy (HIPPA, PII)– Sunshine (HCP)

• Get It All!– Capture & validate: payment, regulatory, risk, diversity, insurance,

certifications, expiration, GL coding, categorization, demographics

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Page 25: Take Your Supplier Information Process to the NEXT LEVEL

Supplier Collaboration

Success is Built Upon Great Partnerships

• Strategic supplier management– SRM, Sourcing, negotiations, supply chain operations/finance, preferred status

• Defining rules of engagement– T&C’s, code of ethics, policies, NDA, conflict

• Keeping information current– Contacts, names, addresses, banking, W9’s, W8’s, COI’s, contracts

• Leveraging automation– Outreach, communication, workflows, entire supplier base, self-

service, SLA’s

• Adding supplier value– Diversity (minority, small business), single-source, non-prohibitive

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Page 26: Take Your Supplier Information Process to the NEXT LEVEL

Change Management

Keeping Up with the Times

• Supplier information is always changing

– Identify critical data points

– Define methods of updating and validating

– Generate change alerts and notifications

• Standardize handling and approvals

– On-boarding, changes, inactivation, etc.

• Communication for internal and external stakeholders

– Dashboards, KPI’s, visibility

• Effective capture and implementation of changes

• Audit trail and accountability

• Don’t leave change up to chance

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Page 27: Take Your Supplier Information Process to the NEXT LEVEL

Analytics & Spend Management

Generate Supplier Intelligence

• Related parties– Parent-child, subsidiary, holding, affiliate, same owners, multiple names,

franchisees, factoring and assignment

• Spend consolidation

– Price and terms negotiations, Strategic Sourcing, normalizations

• Service levels/SRM

• Working Capital and Supply Chain Finance

• Process efficiency and accuracy; process improvement

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“If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t

control it. If you can’t control it, you can’t improve it.”

Page 28: Take Your Supplier Information Process to the NEXT LEVEL

Strategic Leverage

The Power of Supplier Information

• Fraud detection and prevention

• Strategic Suppler Relationship Management (SRM)

• Create value chain partners, improve working capital

• Improve accuracy of business transactions

• Document solicitation and retention

• (W9, W8, COI, Diversity)

• Accurate metrics and analyses

• Spend management

• Sourcing strategies

• Exclusion list management

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Page 29: Take Your Supplier Information Process to the NEXT LEVEL

Where to Start

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Typical State• Large, Outdated

VMF• Few Controls• Low Automation• High Risk of Fraud,

Lost Profits

Sanitize• Duplicates Removed• Relationships

Identified• Validation Points• Aged Vendors Purged

Stabilize• Naming Conventions• Workflows• Complete Profiles• Segregation of Duties• Centralization• Reporting• Transparency

Optimize • On-Boarding• Fraud Protection• Supplier Self-

Service• Data Collection• Data Validation• Roles &

Permissions• GRC Controls• Integrated

Workflow• 3rd Party Validation• Enterprise

Collaboration

Reactive

Define Measure Analyze Improve Control

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Tactical Strategic

Page 30: Take Your Supplier Information Process to the NEXT LEVEL

Conclusion

Data, systems, processes, strategies, and people; it all fits together...

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SIM - On-boarding, Self-Service, Cloud, Validations, Real-Time, Collaborative, Agile, ScalableVMF- Data Controls, Process Norms, Visibility+Accountability, Security, Single-SourceP2P - Systems Agreements, Transactions, Analytics, Relationships Stakeholders - AP, Procurement, Sourcing, Legal, Tax, GRC, Internal AuditStrategic Initiatives - Strategic Sourcing, Fraud, Risk Mitigation, Working Capital, Growth+Expansion, Comprehensive Tactical Efforts - Taxes, Regulatory|Corporate|Contract Compliance, Timely, Accurate TransactionsFoundational - Supply|Value Chain, People+Partners, Customers, Markets

Page 31: Take Your Supplier Information Process to the NEXT LEVEL

Next Thought Leadership Events

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"Secrets You Need to Know About your Vendor Master File." March 26, 2015 - 11am PST

"Detox Your Vendor File." April 30, 2015 - 11am PST

"Take your Supplier Information Process to the NEXT LEVEL" June 23, 2015 - 11am PST

“Managing Compliance and Risk Today and Into Tomorrow" End of JulyJosh Morrison will join Steven Mercatante Esq., Principal and Founder of

TIR Consulting, LLC, to discuss what all organizations need to know about regulatory and compliance changes in the national and international landscape. This essential session will provide information you must know to protect your business, its partners, and its people as you help to navigate it through more complex industries and markets.

Page 32: Take Your Supplier Information Process to the NEXT LEVEL

Thank You – Q/A

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Josh Morrison, Sr. Consultant, Lavante• Former F200 AP & Strategic Sourcing Senior Manager• Extensive background in Procure-to-Pay & Supply Chain Relationships• Expertise in Audit Controls, Compliance & Enterprise P2P Systems• Leading Process Improvement and Business Strategy Thought [email protected]://www.linkedin.com/in/joshmorrison

Jon Casher, President, Casher Associates• Founded Casher Associates,1976–System & back office automation• Co-founded RECAP, Inc. 1988–A/P audit recovery firm• Director of NASDAQ company, 2000-2006–Audit committee head• Current consulting focus on Finance, AP, AR, Treasury and P2P

[email protected]://www.linkedin.com/in/joncasher