Choosing the Right Vehicle for Change. Your Technical Guide to Purchase-to-Pay Automation in SAP
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- Eleanore Porter
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1 Choosing the Right Vehicle for Change Your Technical Guide to Purchase-to-Pay Automation in SAP
2 What s Inside Getting Traction with Your IT Committee... 3 Looking Under the Hood: Capture Technology... 4 Testing the Horsepower: Automated Workflow... 7 Kicking the Tires: ERP Integration... 8 Try Out the Keyless Entry: Self-Service Supplier Portal... 9 Turn On the Cruise Control: Robotic Process Automation Taking a Test Drive: Solutions from Kofax
3 What s the Right Vehicle for Your Business to Take Off In? You can name a thousand reasons why automating purchase-to-pay will help your organization outperform. But you need an understanding of the key components of P2P automation solutions if you want to cruise through meetings with your IT committee. A Few Things Your IT Committee Will Want to Know: Will the solution work with your SAP system? Has the software been successfully implemented previously? What kind of support is offered for implementation and SAP integration? Improving your knowledge of the technology involved in automation will help you fine tune your approach to evaluating vendors and proposing solutions. So do your P2P processes need a V8 engine or four wheel drive? Let s take a look at the available specs and decide. 3
4 Looking Under the Hood: Capture Technology What Is It? Advanced FPA (Financial Process Automation) capture is the transforming of documents into financial transactions in an ERP target system. It consists of classifying and separating documents, extracting and validating the data from those documents, and connecting that data to either a workflow system or importing it directly into the host ERP application. Types of Documents That Can Be Captured: Inbound (AP) invoices Bills of lading Sales orders Inbound purchase orders Remittance documents Ship notifications And any document that creates a financial posting in SAP Ways to Feed Documents Into Your Capture Technology: Scanners EDI 4 Lexmark, FPA Capture Product External Overview, 2016
5 Know Your Capture Terminology Mobile Capture Application that lets customers use a mobile phone or tablet to send pictures, text, and customer input to initiate a wide range of business processes. In practice: Snap an image of the financial document you need to get into the system. Send it via a mobile app or . The capture technology automatically recognizes and extracts the relevant information. 25% in of AP departments plan to deploy a mobile capture solution for the approval of supplier invoices the next months. 1 OCR (Optical Character Recognition) The machine recognition of printed characters. In practice: The software scans and recognizes images of documents and then converts them into computer-editable text that is input into your system with little or no manual processing required. 53% time-intensive of enterprises have adopted automated data capture and extraction solutions, which use OCR to reduce or eliminate manual data entry IFO, Accounts Payable Efficiency Study, Ardent Partners, epayables 2016: Eyes on the Prize, 2016
6 Know Your Capture Terminology Intelligent Capture Uses advanced pattern recognition techniques to accurately extract data from any type of document, without the need for templates. In practice: A vendor sends an invoice that does not follow standard templates. The software learns to read the new document and extracts the correct data. 42.6% complexity. of survey respondents identified complex invoices as a driver of AP processing 1 Cloud-Based Capture Documents are scanned and uploaded into a cloud-based, software-as-a-service (SaaS) web application for data extraction and verification. In practice: Your company subscribes to an application that is owned, updated and hosted by a third party SaaS vendor. You receive invoices, scan them and upload them to the application via the internet. The documents go through the capture process within the web-based application. 33.3% processing of survey respondents will be using cloud-based invoice within two years IFO, Accounts Payable Efficiency Study, 2015
7 Testing the Horsepower: Automated Workflow What Is It? In invoicing, automated workflows allow the user to: Create business rules that determine how long an invoice will stay in an approver s queue Define approvers based on various criteria Establish standards for automatic approval of invoices Workflow Makes It Possible To: Shorten invoice cycle time by speeding approvals and quickly addressing invoice exceptions Lower processing costs Increase employee productivity 14.8% of survey respondents said that automating workflows for invoice approval is their AP department s top automation priority. Another 14.8% indicated that document imaging was number one on the list. These are the top two priorities overall for AP departments in the next 12 months IFO, Accounts Payable Efficiency Study, 2015
8 Kicking the Tires: ERP Integration Your automation vehicle needs to be able to travel seamlessly within your SAP system, instead of having to take overpasses and back alleys to work around it. The Benefits of SAP Integration: Increased visibility to current data in a usable format Unified processes and information Access to information trapped in unstructured content Improved functionality of existing systems Tight SAP Integration Creates Optimal Workflow By: Operating within your SAP system, not outside of it Offering complete visibility into processes so that you can see where bottlenecks are taking place Creating an intuitive interface that matches the look of SAP 8
9 Try out the Keyless Entry: Self-Service Supplier Portal What Is It? A supplier portal enables an organization to provide key P2P information visibility to their supply base by allowing each vendor to have access to their own transactions and to submit invoices through the portal. It provides visibility for the supplier to the status of purchase orders or invoices and allows the supplier to submit invoices based on existing purchase orders. Supplier Portals Deliver: More efficient use of resources Improved data quality More satisfied suppliers Better purchasing controls 47% of enterprises expressed interest in implementing a supplier portal in the next months; this is the highest level of interest of any epayables technology Ardent Partners, epayables 2016: Eyes on the Prize, 2016
10 9 Supplier Portal Capabilities to Consider 1 : 1 Submit invoices and set up and maintain supplier contact and payment/banking information using online forms and utilities 5 Tracking of order history and status 8 Gathering of additional data necessary for risk analysis is automatically triggered 2 Payment/banking information automatically verified 6 Tracking invoice receipt, approval and payment status 9 Supplier performance reporting 3 4 Supplier onboarding workflow for approvals Direct supplier/customer communication via a two-way message board 7 Existing supplier master records maintained 2.4 The number of times more likely a best-in-class AP team is to utilize a selfservice supplier portal The Hackett Group, Five Myths Stifling Adoption of Supplier Self-Service Tools for Invoice Automation, Ardent Partners, epayables 2016: Eyes on the Prize, 2016
11 Turn on the Cruise Control: Robotic Process Automation What Is It? RPA is a software application that runs on an end user s computer, laptop or other device, emulating tasks executed by human operators, just like a user would perform the task through the application interface. Its purpose is to integrate or automate the execution of repetitive, rule-based tasks or activities. RPA neither requires development of code nor any form of direct access to the code or database of the applications. 1 45% purchase-to-pay organizations believe it (RPA) will be one of the areas with the greatest impact on the way its work gets done in the next decade. 1 RPA s Best Uses in Purchase-to-Pay Include 1 : Supplier onboarding Master data management Supplier interaction support Expected Benefits 1 : Increased efficiency and productivity Lower cost of processes Boosted accuracy and quality More productive employees with greater opportunities to engage in valueadded activity Better visibility into data and process management Approvals, exceptions and dispute resolution Sales order validation AP Integration Heightened ability to trace information and comply with regulations The Hackett Group, What Source-to-Pay Leaders Need to Know About Robotic Process Automation, The Hackett Group, Process Automation Taking it to the next level with RPA, Webinar, 2016
12 Taking a Test Drive: Solutions From Kofax One Model Doesn t Fit All. Kofax offers a line-up of top-tier solutions that can be customized to the needs of any enterprise, large or small. Just about the only thing we can t deliver is heated seats. Kofax Solutions are SAP-Certified. SAP certification means that our software is integrated and validated by SAP. You can be confident that our solution allows a seamless flow of business data through SAP software and SAP components via open interfaces. No extra integration development work necessary. 1 Our SAP-Certified Solutions Offer 1 : A familiar environment that mirrors SAP and encourages user adoption A ready-to-use set of country-specific settings, including VAT rates, date formats, currency characters, and more Flawless integration that is preconfigured and ready to run The ability to manage workflow tasks without actually going into SAP Elimination of manual rekeying of data Reduced risk of inconsistencies between solutions Real-time visibility into processes and data for management 12 Kofax, Why should you automate AP processes in SAP?
13 Remember, You re Not Just Looking for Four Shiny New Car Doors and Part of an Engine. You Need the Whole Vehicle to Get to Your Destination PURCHASING LOGISTICS ACCOUNTS PAYABLE Create purchase requisition Process incoming order confirmation Process incoming delivery notes Process incoming invoices Gain payment approval for invoices Accounts payable automation is just one part of the larger purchase-to-pay cycle. 13
14 Kofax Solutions Automate End-to-End P2P Processes in SAP, Including: Purchase Requisition Automation The automation of purchase requisition processing makes it possible for a user to create a purchase requisition for an approved item via SAP or a simple web application with access to existing online catalogs. This initiates an automated approval workflow and records approvals in an audit trail. A purchase order is generated automatically in SAP upon approval. Benefits: Costs lowered for purchasing, logistics and accounting Supplier selection optimized Improved foundations for price and contract negotiations Simplified process, resulting in better user adoption and compliance Processing of incoming invoices is improved and better reporting is enabled Reduced total cost of ownership with SAP integration Order Confirmation Automation Order confirmations are easily scanned and the relevant information is captured and matched automatically against the purchase order and existing master data in SAP. Confirmations are posted to SAP if they are a 100% match. If they have discrepancies, they are put into a manual approval process and posted to SAP once validated. An audit trail provides visibility into the entire process. Benefits: Reduction of order confirmation processing times Better data quality Order confirmation data automatically matched with corresponding purchase order Transparency and traceability of process Risk of production stops or oversupply is minimized Timely information if a supplier cannot meet the order terms 14 Lexmark, Driving more value from ERP system investments, 2015
15 Kofax Solutions Automate End-to-End P2P Processes in SAP, Including: Automated Delivery Note Processing Delivery notes are digitally captured upon receipt, and automatic extraction of required data fields takes place. Data is put into SAP, and digital images are automatically archived and linked to SAP transactions. Warehouse deliveries are compared against delivery notes. Any discrepancies are addressed by resolution workflows that are automatically initiated before the GRN is posted. Benefits: Deliveries automatically posted with extensive verifications for consistency inside SAP Errors/exceptions identified early to provide more accurate data for other P2P processes Manual data entry reduced Historic documents from SAP transactions can be accessed with one click, adding transparency for other P2P departments, as well as for suppliers Processing times shortened and costs lowered through delivery note archiving Payment Approval Automation A single ledger shows all proposals and an automated approval workflow is initiated. Users with permission can view the proposal at line-item level and an image of the original invoice. After workflow completion, information that was gathered is transferred to the payment proposal. A record of the workflow history is stored with the SAP payment run, fulfilling SOX requirements. Benefits: Eliminates printing of paper documents Workflow tasks easily accessible in SAP via a web browser or mobile device Direct access to original invoice image and related information in the workflow Higher rate of adoption by users, compared to ERP-only transactions Ensures that business requirements and rules are met SOX payment approval requirements are fulfilled 15 Lexmark, Driving more value from ERP system investments, 2015
16 Shift Your Test Drive Into Overdrive With Real Results... With Perceptive Intelligent Capture in place, we re handling automation for up to 50 fields on an invoice, finding every field and validating every field on the document. Simeon Weibler Senior Project Manager Siemens Global Shared Services Now we have a better view of what we owe our vendors. All those stacks of invoices are now in Process Director as lists so I can see the high-profile vendors, identify severely past due invoices. Cash flow management is also easier. Marc Nellett Accounts Payable Manager Arkema Inc. Today our productivity is at least three times better than with the old manual process. Jean Garcin Manager of New Technologies Schneider Electric 16
17 ...Results That Accelerate Into Best-in-Class Territory W.R. Grace & Co. is a worldwide specialty chemicals leader with 6,000 employees, $3.2 billion in net sales, and a presence in 40 countries. They Used a Kofax Invoice Processing Solution To: CUT invoice processing costs from more than $7 to $1.50 in Asia & Europe CUT invoice processing costs from $5 to $2.25 in the United States SLASH invoice cycle time with 83% of invoices received electronically BOOST their discount capture rate from 40% to 85% OUTPERFORM by giving all stakeholders 100% visibility into invoice processing 17
18 Forming alliances with IT and other business stakeholders gives you a fighting chance to tame chaos and break silos that keep you from outperforming across the purchase-to-pay cycle. Get these key players in your corner. THE IT CHAMPION The Rocky Balboa of the IT department. Any IT staff member or manager. This IT heavyweight can help you: Build a rock-solid business case Time-box the project Phrase the project in IT terms Proof points for software solution Blueprint of automated vs. manual process flows Proactive professional services budgeting that avoids scope creep Thorough software implementation plan, accounting for technical training and change management Best practices for purchase-to-pay automation In the words of our customers The solution has been instrumental in transforming our complete purchase-to-pay process and has allowed our company to drive significant bottom-line savings while also allowing significant improvement in other key Comprehensive purchase-to-pay automation for SAP metrics. The solution has also allowed us to improve our internal control while making it more efficient to process invoices. David Faturos, Controller Rich Products THE IT THE BACKCHANNEL COMMITTEE RESOURCE Evaluates the cost and A colleague with his or scope of the project. her ear to the ground at Members include: an executive level. Can Business unit leaders tell you what actual for programs like SAP, budget availability or SalesForce, etc. constraints might be in Enterprise Architects relation to business Run servers; foundational to the enterprise priorities. Project Managers Ensures things get done and projects stay on schedule Business Analysts / Department Managers spending is Intermediaries between expected to technical staff and increase in 2017, senior leadership according to Forrester. That means you need to make a very strong case for your automation project. Like Muhammad Ali-strong. Executives evaluate the recommendations of the IT committee and determine whether You re well on your way to matching your specific business needs with the right vehicle for change. Ready to put your foot on the gas and realize your automation goals? Let us steer you in the right direction. Getting IT in your corner Ensure your purchase-to-pay automation project scores a total knockout. Build Your Outperformance Entourage What keeps the entourage off the ropes: Ringside Judges: 2.9%: The amount tech Getting IT in Your Corner Form alliances with the IT committee and other key stakeholders to ensure the success of your P2P automation project. Download the infographic Turbo Charge Your SAP Purchase-to-Pay Machine Visualize automation opportunities within SAP. View the gifographic Best-in-class advantage: Best-in-Class Advantage: Comprehensive Purchase-to-Pay Automation for SAP Learn how automating from start to finish can make your processes outperform. Read the brochure 18
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