More Related Content Similar to Breaking Bad: How to Turn Your AP Operations into a Center of Excellence (20) Breaking Bad: How to Turn Your AP Operations into a Center of Excellence1. Breaking Bad: How to Turn Your AP
Operations into a Center of Excellence
Chris Rauen, Solutions Marketing Manager, Ariba
Patricia Hutton, Vice President of Global Procurement, GAF
Dennis Glenn, Manager, Procurement Systems, GAF
#AribaLIVE
@ariba
© 2014 Ariba – an SAP company. All rights reserved.
2. The View from AP?
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© 2014 Ariba – an SAP company. All rights reserved.
4. Invoice Processing: What Can Go Wrong?
No requester name, contact data
No purchase order number
No order confirmation
No advance ship notice
Wrong supplier
Wrong price – quantity
Exceeds contract total amount
Missing tax amount or Tax ID#
Net amount exceeds sub-total
Missed early payment discount
What invoice?
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© 2014 Ariba – an SAP company. All rights reserved.
5. The Path to Touchless Processing
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© 2014 Ariba – an SAP company. All rights reserved.
6. The Path to Touchless Processing
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© 2014 Ariba – an SAP company. All rights reserved.
7. The Business Case for Success
It’s as easy as 1+2+3+4 = $10M /$1B in Spend
CHALLENGE
1. Process
2. Discount
3. Working
Capital
4. Compliance
OPPORTUNITY
“1-for-1”
60-80% cost take out – or about $1M per $1B in spend for average to
large Payables and Procurement organizations
“2-for-1” for every $1B in discountable spend
$2M+ in discount savings
“3-for-1”
$2.7 million in working capital impact for every $1 billion per day of improvement
of DPO, DSO, DIO
“4-for-1”
$4.6M in contract leakage savings for every $1B in spend under contract
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© 2014 Ariba – an SAP company. All rights reserved.
8. About GAF
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Largest roofing manufacturer in N. America
Founded in 1886 – HQ in Wayne, NJ
$3 billion in sales – 23 plant locations
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Broad industry recognition (Named – Rated #1)
Shingle quality by contractors and home builders
Innovation for shingles and ridge ventilation by home builders
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© 2014 Ariba – an SAP company. All rights reserved.
9. Business Challenge
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GAF is a lean organization
AP moved to an external invoice processing system
Reduced AP headcount
New system touchless processing rate was at 8%
Pushed more invoice processing to Buyers
Further increased transactional activities of Buyers
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Result: Procurement handled problem invoices
© 2014 Ariba – an SAP company. All rights reserved.
10. Business Challenge (continued)
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Too many resources expended on transactional activities
Diverts focus from buying activities
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Interest in reducing rogue spend
Drive to national contracts
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© 2014 Ariba – an SAP company. All rights reserved.
11. Business Goals
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Free up procurement to drive strategic buying
Maximize spend with key suppliers to lower prices
Expand use of catalogs and extend purchasing to
casual user
Check-to-ACH payment initiative
© 2014 Ariba – an SAP company. All rights reserved.
12. Solution Approach
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Ariba Network Adapter
Connect Maximo and PeopleSoft systems to Ariba Network
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Ariba PO and Invoice Automation
Automate PO delivery from Maximo/PSOFT to Ariba Network
Smart invoice business rules for automatic validation, touchless
processing
PO-Flip® for perfect payable
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Ariba Procurement Content
© 2014 Ariba – an SAP company. All rights reserved.
13. GAF Environment
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© 2014 Ariba – an SAP company. All rights reserved.
14. Results
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From 8% to 67%+ touchless invoice processing
Automate 60% of MRO transactions, 80% of Maximo spend
Ease of use – plant stores personnel, casual users
Enforce compliance – better spend management
Dramatically reduced rogue spend
Lower pricing from higher spend volume with select suppliers
Improved supplier relationships
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© 2014 Ariba – an SAP company. All rights reserved.
15. Vendor Managed Inventory – MRO
Vending Machines
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Legacy process – Blanket P.O.
Monthly summary invoices with line item details as attachments
Time consuming – manually reconciled
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Now, supplier posts quote in Ariba Procurement Content
Punch out to vendor and turn quote into detailed, line-item P.O.
Automatic P.O. – invoice match
100% straight-through processing!
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© 2014 Ariba – an SAP company. All rights reserved.
16. Next Steps
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Extend automation to direct materials spend
Increase touchless processing rate to 80%+
Expand system access to new users
Drive more savings by consolidating spend
Continue check-to-ACH conversions
© 2014 Ariba – an SAP company. All rights reserved.
Editor's Notes #1 – paper –based – highest cost and lowest level of automation with the highest amount of manual process (i.e. touch)#2 – scanning/workflow – lower cost to process than paper only; however, still high-touch high-cost; and with in-house scanning solutions high-capital costs#3 – paper free - is getting to AP faster#4 – Zero Touch - is getting through AP faster