Contenu connexe Similaire à Closing the Invoice-to-Contract Cycle Similaire à Closing the Invoice-to-Contract Cycle (20) Closing the Invoice-to-Contract Cycle1. B MC Closing the
Invoice-to-Contract
Cycle for Huge Savings
Ashley Miller
SunTrust Bank
© 2012 Ariba, Inc. All rights reserved.
2. Agenda
• SunTrust at a Glance
• State of Spend Management before a Spend Management Strategy
• Goals and Benefits of a Successful Spend Management Program
• Ariba Solutions Deployed
• Spend Profile for a Financial Services Organization
• Evaluation of Procurable Spend
• How Did We Get Started with Invoice to Contract?
• Good Candidates for Invoice to Contract
• How We Use Invoice to Contract
• Metrics Tracking
• Best Practices
2 © 2012 Ariba, Inc. All rights reserved.
3. SunTrust at a Glance
• The most direct corporate ancestor, the Trust Company of
Georgia, was founded in 1891, and merged with SunBanks, Inc
of Florida in 1985 to form SunTrust Banks, Inc
• Having total assets of $172.6 billion it is one of the nation's
largest and strongest financial holding companies.
• Employs approximately 30,000 teammates
Diversified Business and Corporate & Wealth &
Product Mix Retail & Household
Investment Investment
Commercial Lending
Banking Management
SunTrust National National National
Footprint
Full line of Residential Full array of
1,658 investment mortgages, c private wealth
Branches banking ommercial management and
products lending institutional
2,889 ATMs
and services solutions including
Mortgage
800+ personal and
servicing
Relationship institutional
portfolio of
Managers investment
$163B
management
3 © 2012 Ariba, Inc. All rights reserved.
4. State of Spend Management before
a Spend Management Strategy
Lack of robust spend visibility –
• Limited product / Line Item visibility
• Imperfect visibility to what was being purchased and at what price
No formal means for spend / contract compliance –
• Contracts negotiated, but limited ability to match invoice to terms
No centralized contract repository –
• Had a paper contracts room, no automation to manage compliance
No place to store sourcing project documents & deliverables –
• Limited access and infrequent updates to online tool
4 © 2012 Ariba, Inc. All rights reserved.
5. Goals and Benefits of a Successful
Spend Management Program
1. Contract Compliance – ensures financial stewardship and expense
management of Supplier Spend; Invoices are matched to negotiated
Contract Rates with preferred suppliers
2. Increase Spend Visibility – implement process and reporting that
ensures detailed information on our Spend (What was bought, How
much was paid, How many received, Who consumed, Supplier utilized)
Procurable Spend
The Plan for our Effort 80%
45%
Identify Solution Commodities 20%
Enable Suppliers
Transact via the Tool
Continuous Improvement
5 © 2012 Ariba, Inc. All rights reserved.
6. Ariba Solutions Deployed
• Supplier Management • Procurement
Performance Surveys Catalog & Non-Catalog Purchase Orders: Punch-
Scorecards out, supplier hosted, custom workflow, etc (approx.
Repository for all macro data on SRM managed suppliers 200,000/yr. and 5,000 users/mo.
Functionality Not Used: For supplier “collaboration” with
• Sourcing
specific modules for service categories (i.e. Temp
Project Management: Reporting, timeline, Save Labor, Print, etc.)
Tracking, Project Artifact, etc
Standardization in Process & Templates: Sourcing
• Accounts Payable
Library Invoice Processing: Invoices matched to PO
and/or Contract
Performance of RFI, RFP, and Auctions
Invoice Workflow: Exception handling, approvals, receipt
Document Archival
verification
Functionality Not Used: Tasks, Workflow
Payment Terms: Prompt payment & Dynamic Discounts
• Contract Management • Ariba Network
Contract Administration: Storage, Archival, & Retrieval
eBilling: 94% volume of invoices are eBilled and about
Establishes linkage between Master & Sub-Agreements 50% of spend is eBilled
(approx. 11,000 agreements)
Electronic issuance of POs, Contracts, etc
Contract Compliance: Invoice to Contract Match
Electronic Supplier Connectivity: EDI, cxml, csv uploads
Reporting: Expiring Contracts, Contracts by
Catalog Maintenance: Supplier managed
Supplier, LOB, etc.
Functionality Not Used: Contract Templates, Clause
Library, Contract Authoring & Workflow through
Process, eSignature
6 © 2012 Ariba, Inc. All rights reserved.
7. Spend Profile for a
Financial Services Organization
• $2.1 Billion
of procurable spend
with over 13,000 suppliers
• 80% of spend concentrated
with 400 suppliers
• Critical suppliers account
for approximately
40% of total spend
Traditional “Purchase Order” transactions accommodates only
10% to 20% of our spend
7 © 2012 Ariba, Inc. All rights reserved.
8. Evaluation of Procurable Spend
Out of Scope
Total Out of (Commodities
2500
Scope deemed out of
Spend Alternative Scope because we
$2,162 $434 have no control
Compliant
over pricing):
2000 System
Sponsorships, Direct
$300 Solutioned in or Fees, Employee
Ariba Relocation, Taxes, H
$1,428 ealthcare Services &
1500
Plans, Legal
VMS,
Settlements, Loan
eCounsel,
Brokers, Postage
Asentinel, Alternate
1000 ERS, FedEx Compliance
Systems (where we
get Contract
500
Compliance and
Spend Visibility):
Temp
Labor, Telecom, Lega
0 l Services, Employee
Total Spend Out of Scope Alternate Compliance System Solutioned in Ariba Expense
Reimbursement
Numbers in Millions
8 © 2012 Ariba, Inc. All rights reserved.
9. How Did We Get Started With
Invoice to Contract?
• Majority of our spend is services
• Services does not always work well
with PO solution so Contract
Compliance or Invoice to Contract
solution is the solution for the bulk of
our contracts and spend
• As part of our Commodity Onboarding
effort, we assembled team who would be
responsible for determining method of
Procurement (Catalog, Non-
Catalog, Contract Compliance) and team
implemented designs on how to get the
contract and spend into Ariba
Charts are FY 2011 data
9 © 2012 Ariba, Inc. All rights reserved.
10. Good Candidates for Invoice
to Contract
• Use for recurring fixed and variable expenses on a month
over month basis; where there is no Work Order or
Purchase Order Requirement.
• This enables invoices to match directly to the Contract (no
Requisition or PO required, after contract and budget
approval has been obtained)
• Good examples are: Maintenance Agreements (IT &
Non-IT), Time & Material Services, Janitorial
Services, Agency Agreements, Auditing Services, Legal
Services, Consulting, etc.
10 © 2012 Ariba, Inc. All rights reserved.
11. How We Use Invoice to Contract
New Contracts
Procurement Set Up
Identify Sourcing Contract Procurement Contract Engages Publish
Notified
Contract Invoice Payment
Need Process Negotiated Assigned LOB / SFO / Request Contract
Supplier
Procurement
Set up
Task
Identify Sourcing Contract Procurement Contract Engages Publish
Contract Invoice Payment
Need Process Negotiated Notified Assigned LOB/SFO/Su Contract
pplier
Request
Method
Owner/
Commodity Procurement Procurement Procurement Procurement Supplier /
Requestor Commodity Manager SunMart AP
Manager SME Buyer Buyer Buyer / SME LOB
• Identifies • Defines • Obtain alignment • Upon creation • Procureme • Validate setup • Build contract • Internal quality • Supplier • If LOB
need for opportunity with LOB on award of Contract nt SME of Contract in system control tollgate submits approves
purchases with LOB recommendation Workspace reviews invoice invoice or
and negotiation (CW), SunMart contract • Engages LOB • Scope, Terms, • Verifies electronical if invoice
• Must be • Analysis & strategy sends an email request and to get Effective/Expir information is ly matches
done requirements notification to assigns accounting ation accurate the
before definition • Negotiate business Procurement contract information Dates, Billing • If contract,
• Contract # (C#)
Key Points
goods/servi and legal terms Frequency, Inv applicable,
ces are • Identify supply
team request to a • Work with LOB oice approvals is generated LOB
the
• Finalize supplier Procureme to define invoice s
committed base • Supplier is receives
selection and make nt Buyer invoice • Identify pricing notification
paid
• Engage • Gather data & contract award approvals if characteristics notified via electronic
email with to approve ally
Strategic evaluate applicable
Sourcing market • Create CW in • Sourcing instructions on invoice
SunMart & load • Contact provides how to invoice
• Perform draft word version supplier & signed contract against the
competitive of contract and supplier contract (C#)
sourcing PCAR enablement • Submit CR for
events teamto P2P quality control
(RFI, RFP, Auc enable supplier
tions) in SunMart
Strategic Strategic Strategic
Contact
Procurement Procurement Procurement Procurement Procurement Supplier AP
Sourcing Sourcing Sourcing
11 © 2012 Ariba, Inc. All rights reserved.
12. How We Use Invoice to Contract
Ongoing Process for Capturing Existing Contracts
Identify Commodities & Suppliers By Leaking Spend (Not going through process)
Review “Leakage” Report & Report Out on Non-Compliant Suppliers
By pulling data, determine if Suppliers are Enabled & if Suppliers Need to Be Enabled
Pull Data & Enable Suppliers
Pull Spend & Commodity Data
Pull Overall Spend & Commodity Data from Spend Visibility Tool
Identify if a Design for Getting Spend into Ariba exists & Determine, if Relevant
Review Previous Commodity Onboarding Work, if Applicable
Create Design for Getting Spend into System, if Necessary
Work with LOB Contact & Supplier
Quality Control of Design & Creation of Contract
Quality Control, Send to Procurement to create C, Send C to Supplier, Train Supplier
12 © 2012 Ariba, Inc. All rights reserved.
13. Metrics Tracking
Procurement Monthly Metric Executive Summary
Contract Compliance Cycle Time Contract Compliance Production
25.00 600
500
20.00 20.74
400
16.75 416
16.35 300
15.00 14.88
12.83 13.73 200
10.00 100
133
0
5.00
0.00
Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 New Contracts Change Order Contracts
Contract Compliance Quality Monthly Analysis
50.00% • Contract Compliance Cycle Time
45.00%
Cycle Time decreased by 7 days since last month
40.00%
35.00% SLA: 7 Calendar Days (5 Business Days)
30.00%
25.00%
• Contract Compliance Production
20.00% Number of new contracts increased by over 30 while change order
15.00% contracts increased by over 100 since last month
10.00% 10.93%
5.00% • Contract Compliance Quality
0.00% % of denials continued to go down month over month
Feb12: 549 Approved / 60 Denied
SLA: 2-5% Denied in a Month
% Denied
13 © 2012 Ariba, Inc. All rights reserved.
14. Metrics Tracking
Contract Compliance Task Cycle Time
January 2012
Task Names Average of sum Project Task Duration Count of Contract Id • Report shows tasks
Triage
Request Contract Documents
0.85
1.09
36
28
cycle time in days of
Assignment 0.15 88 tasks that were in
Assignment - Restricted 0.00 8 Completed status only
•
Supplier Enablement 0.25 23
Analyze Contract 0.30 19 New Task names
Request Accounting and Approver Information 0.24 14 went into effect 1/5/12
•
Confirm Executed Contract 0.00 71
Submit Contract 0.98 39 As adoption of using
February 2012
tasks increases, task
Task Names Average of sum Project Task Duration Count of Contract Id reporting will be able
Triage 1.30 124 to be used to identify
Triage - Restricted 0.00 17
Request Contract Documents 1.55 102 issue areas
Assignment 1.33 119
Assignment - Restricted 1.01 17
Supplier Enablement 0.66 132
Analyze Contract 1.73 124
Request Accounting and Approver Information 2.54 116
Confirm Executed Contract 0.00 128
Submit Contract 0.06 128
Project Task Duration measured in calendar days
14 © 2012 Ariba, Inc. All rights reserved.
15. Best Practices to Be Successful
When Using Invoice to Contract
• Important to create a strong connection / • Ensure you have executive buy-in to your
line of communication between Sourcing, company’s P2P policy
Procurement, AP • Establish standardized communications for new
suppliers to Ariba
• Important to get Procurement engaged
BEFORE (early in Sourcing process) the • Look at getting Ariba for Supplier Enablement
services to help with onboarding and training
contract is signed to begin work creating new suppliers
electronic contract • Establish an exception handling process for
• Understand what commodities work best those times when invoices do not match
with each Procurement solution (Catalog, the contracts
Non-Catalog, Contract Compliance) • Create a No PO or C, No Pay policy to let
• Create stop gap for suppliers you know are suppliers know you will not pay them without a
PO or a C number in advance
set up to process invoices in Ariba to
prevent them from circumventing the • Cease accepting paper invoices for suppliers
where you have an Ariba relationship
system and your process
• Realize P2P Strategies for Services likely
• Workflow and tasks are good for requires a phased approach with a solution that
tracking cycle time and ensuring matures in cycles of process improvement
standardized processes
15 © 2012 Ariba, Inc. All rights reserved.
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17. B MC
Appendix
© 2012 Ariba, Inc. All rights reserved.
18. Session Overview
• We all know that contract leakage provides a significant
opportunity for savings. In fact, it represents nine
million dollars of savings for every billion in spend.
If your company has many contracts but the
invoice-to-contract linkage is still wide open, then this
session is for you. Join us to learn how SunTrust
bridged this process to load contracts and automate
the invoice-to-contract process for nearly one billion
in spend.
18 © 2012 Ariba, Inc. All rights reserved.
20. Contract Creation Phases / Tasks
• When Sourcing creates a CW, Procurement receives a task notification that the CW has been created.
Procurement’s tasks are divided into Phases:
Contract Triage
• Review of attached documents
• Assignment to a Procurement Buyer
Contract •
•
Supplier enabled (if applicable)
Contract analyzed
Configuration
• Contract terms created in Ariba
• Accounting & Approver requested
Contract • Performed by Contract Administrator
• Contract Administration Requirements
Administration
• Confirm executed contract, create PDF, upload final signed copy & advise
Procurement when done
• Submit draft contract for publishing
Publish Contract
• Contract is reviewed (QC) and published
• Contract number is communicated to the supplier, commodity manager, LOB
20 © 2012 Ariba, Inc. All rights reserved.
Notes de l'éditeur Procurable SpendTotal procurable spend: $2.1BTotal addressable spend in scope: $1.7BTotal % of spend under management: 84.5%% Enabled Spend Invoiced via Ariba vs. Oracle: Monthly Ariba invoice amount processed as a percentage of total Oracle invoice amount processed All new Contracts are Sourced, Contracted, Invoiced and Paid in AribaProcurement team engaged early and helps Sourcing to design contracts so that they fit well with Contract ComplianceProcurement is engaged by using workflow and tasks so when Sourcing creates a CW, Procurement is notified so Sourcing doesn’t have to remember to engage Procurement Ongoing Process for Capturing Existing Contracts we discover or catching previously onboarded contracts that have invoices going around the system What Metrics We Track and Why they Are ImportantCycle Time What is it: Time Contract Enters Contract Room (has been executed) and time C is published. Important Because: Speed. We want to make sure suppliers can invoice as soon after the contract is signed and executed as possibleProductionWhat is it: Number of new Cs created in a month and number of Change Orders executed in a monthImportant Because: Need to be able to track production per FTE and gauge volume coming in vs. volume going outQualityWhat is it: % of Contract Requests (CRs) submitted for publishing that are denied in Quality Control checkImportant Because: Want to make sure team is continuing to improve with time and be more accurate in CRs submitted (ultimately impacts cycle time)