Improving effectiveness and adoption in ERP procurement to drive increased savings

Transcription

1 E-Book Improving effectiveness and adoption in ERP procurement to drive increased savings Your ERP is great for streamlining processes inside your company. But it doesn t facilitate collaboration between trading partners on a large enough scale. That s a problem. Because to prosper in the days ahead, your company must work faster and smarter with its entire supply chain. You should find out how other companies are extending their ERP investment to enhance trading-partner collaboration. This ebook provides tips on how to increase the value of your ERP and your supply chain with tools for more effective collaboration. As you know, better collaboration up and down your supply chain is essential for growth and prosperity in the days ahead. Readers will learn: Automate collaboration with your suppliers Optimize working capital Bring more spend under management Sponsored By:

2 E-Book Improving effectiveness and adoption in ERP procurement to drive increased savings Table of Contents Invoice automation and connectivity in SAP and Oracle procurement deployments Supplier onboarding with Oracle and SAP procurement Quick ROI supply chain projects in SAP environments Resources from Ariba, Inc. Sponsored By: Page 2 of 12

3 Invoice automation and connectivity in SAP and Oracle procurement deployments By Jason Busch, Contributor Invoice automation and connectivity systems do more than reduce paper-based processes. They can also serve as a foundation for transforming the accounts payable (A/P) function by bringing new levels of operating efficiency to Oracle and SAP procurement and finance organizations (e.g., reducing costs per full-time equivalent, the total cost of operations, etc.) and the overall effectiveness of the function (e.g., by improving working capital, enabling an ability to profit from receivables through either treasury or third-party funded early payment, among other things). More on SAP procurement Despite the often significant hard-dollar savings and working capital improvements that invoice automation and supplier network connectivity solutions can bring, SAP and Oracle remain behind providers in delivering capabilities that can help address supplier enablement as a preceding component of the invoicing process. Processes in this area require complex invoice workflow, matching, approvals and overall process management that optimizes the linkage between procurement, payables and treasury requirements, and priorities. They also require the capability to enabling electronic invoicing for all suppliers and the enablement of scanning, capture and conversion to electronic invoices for middle-tier suppliers sending 500-1,000 invoices per year, as well as smaller suppliers that typically send (or fewer) invoices per year. Invoice management and connectivity tools should also allow direct integration into supplier systems for high-volume suppliers, as well as interoperability and document exchange between internal and external supplier systems. In addition, companies should look for systems that also enable: Connectivity to existing network operators VAT, tax and related jurisdictional payment matters Working capital management visibility and strategies Both dynamic and fixed discounting programs Sponsored By: Page 3 of 12

4 To address these shortcomings in their own solutions, SAP and Oracle have partnered with OpenText and Transcepta in addition to providing partial solutions of their own within their procurement suites. Yet ERP customers should not limit themselves to these recommended options. Many SAP customers also use SAP partner Hubwoo, for example, which has broader capability than OpenText. In addition, Basware, which many analysts and observers say have the strongest invoice automation solution, has extensive experience with enabling the electronic invoice presentment and payment and connectivity process within complicated SAP environments for both high-volume and low-volume suppliers. Ariba has a proven network system as well, although recent price increases for suppliers do not make it as economical as in the past, especially for vendors that submit high-dollar value invoices. For further reading regarding Ariba s price increase and both buyer and supplier views of the costs and benefits, read Ariba Network Price Hike: Plan for Increased Supplier Fees in September In addition to Ariba, Amalto, Elemica, Ketera, Kofax, OB10, Pagero, Perfect Software, and Quadrem, among others, are all worthy of consideration. New specialists such as Oxygen Finance and Pollenware offer their own unique capabilities in the discounting and benefits capture area. As a final point of recommendation, we suggest to clients operating globally, especially in the European Union, that they make sure that the providers they work with in the European markets have the ability to integrate with local network operators and providers in specific countries and regions. For a complete, comprehensive look at this subject beyond this article, download our Compass Research Paper. If you re interested in learning more about procurement systems that can enable the ERP ecosystem in general, we would encourage you to download our latest Compass research on the subject. Sponsored By: Page 4 of 12

5 About the Author: Jason Busch is Principal Analyst at Spend Matters. His contributions are based on Spend Matters Compass research, which examines a range of procurement and supply-chain technology solutions and trends. Sponsored By: Page 5 of 12

6 Commerce Is Hard. Ariba Makes it Easier. Whether you re looking to control supply chain costs, increase sales, or enhance cash flow and operations, you can do it better with Ariba. Ariba delivers the technology, capabilities, and global community of trading partners you need to buy, sell, and manage cash more efficiently and more effectively than ever before. And because it s delivered as a flexible cloud-based service, you can get results that fit your needs, your budget, and your infrastructure. There s no hardware to install. No trading partner integration to manage. And an array of business intelligence, expertise, and skills you can dial up to speed results. And dial down as your needs change. 94 of the Fortune 100 and more than 300,000 other companies rely on Ariba to do commerce better. Why not join them? 910 Hermosa Court Sunnyvale, CA Toll-free (USA): Outside USA:

7 Supplier onboarding with Oracle and SAP procurement By Jason Busch, Contributor When it comes to getting a purchase-to-pay environment up and running, supplier onboarding is a critical yet often overlooked enabler of bringing spend under management. Many companies that have gone down the ERP procurement path in the past were not able to onboard suppliers as quickly as they had hoped, resulting in implementations with only a small subset of the planned supply base integrated into the system. This is because initial supplier enablement (i.e., capturing and validating supplier information) is often trickier and more time-consuming than it appears. When it comes to the supplier onboarding process, companies must consider, as a foundation, the ability to capture global and local regulations and factor them into requested information (including tax and VAT requirements, such as TIN validation in the U.S.). In addition, they should prioritize the collection of information that often must connect and feed into multiple internal systems. Systems should also enable multiple parties at the supplier to complete different components of enablement-related questionnaires, requests for information or the like. At the same time, systems should enable a common, single environment to update and manage supplier profile information on an ongoing basis that can populate and update other source systems. Many companies often leverage these tools to carry out the onboarding process with shoestring resources (often contractors and no additional full-time employees), while at the same time balancing the needs of finance (accounts payable), procurement, legal and other stakeholders when it comes to collecting the right information about suppliers without a process that creates onerous registration steps or unnecessary onboarding delays. The most experienced provider in the market in terms of supplier enablement, going to back to its founding, is Aravo. Before it branched out to become a supplier information management provider, the company focused almost exclusively on enabling Ariba implementations. Today, there are dozens of vendors focused on the enablement process. Sponsored By: Page 7 of 12

8 SAP procurement customers can turn to SAP partner Hubwoo, along with a range of other providers like AECSoft, Aravo, Ariba, CVM Solutions and Hiperos. The general universe of supplier information management and supply base management vendors (e.g., Lavante) can help solve this problem as well, although the above-mentioned vendors have the most experience targeting the specific challenge as a whole. In addition, invoice automation, connectivity and electronic invoice presentment and payment (EIPP) specialists such as Basware, OB10, and numerous others are experienced in solving parts of the whole challenge (depending on vendor) in ERP environments. Last, a number of peer-to-peer providers have extensive experience (e.g., Perfect, SciQuest, etc.) as well. Oracle customers can turn to third parties or leverage Oracle s own capabilities including isupplier Portal or Supplier Management Hub. Sponsored By: Page 8 of 12

9 Quick ROI supply chain projects in SAP environments By Alan Earls, Contributor Supply chain projects around collaboration with suppliers, contract lifecycle management and transportation management can provide a quick return on investment (ROI) for SAP shops looking to enhance the supply chain, according to interviews with SAP consultants. Companies trying to find supply chain management (SCM) improvement opportunities should begin by examining their business processes, according to Manish Agarwal, head of the SAP practice at IT services company Nagarro. Begin by looking for any manual processes that could be automated, as well as disconnected processes -- those spanning several participants or involving hand-offs -- and any error-prone processes, such as manual data entry. Keep an eye out for processes needing timely alerts or notifications to allow for remedial action, as well as processes involving strategic decision making that require access to overviews of historical data. Taking advantage of the SAP value engineering program -- a free consulting service provided by SAP -- can help organizations identify quick-win projects, according to Valerian Harris, vice president for enterprise solutions at IT consulting firm Patni. It is a common practice in IT organizations to build a business case before initiating such projects, he said. The difficult task is always in identifying projects that can provide the maximum business value. Building a supplier collaboration portal can facilitate the exchange of business data with vendors -- forecasts, schedules, purchase orders, advanced shipping notices, returns, invoices, and payment status. Likewise, a field sales portal or means of mobile access could allow sales force and channel partners to read business data from SAP. Gaining access to inventory availability, prices, customer order status, service order status and customer contracts can improve sales, Agarwal said. Sponsored By: Page 9 of 12

10 Increased collaboration, in turn, provides savings by reducing lead times and providing the flexibility to change supply plans based on real-time visibility of changing demands. There are two specific supply chain projects that can be built on standard SAP SCM 7.0 functionality and standard SAP NetWeaver Business Warehouse (BW) software that companies already have, Harris said. The first involves implementing SAP SCM Supply Network Collaboration (SNC) functionality around the standard Supply Network Inventory; this will integrate critical partners for inventory and order updates. This project can be completed within 14 weeks, Harris said. Another potential project aims to enhance the inventory supply chain visibility by deploying standard out-of-the box Supply Chain Operations Reference/Supply Chain Performance Management (SCPM) based on the new SAP Business Information Warehouse (BIW) SCPM business content. The project can be completed within three months from initiation to deployment, according to Harris. We recommend making use of the standard SAP BIW SCPM business components, Harris said. Customers can make use of the SAP ASAP (Accelerated SAP) methodology from blueprinting right through the rollout and the project can be completed within a budget of $500,000. Increased supply chain visibility brings improved supply and demand Deployment of what Harris referred to as a Clear to Build functionality can also provide quick ROI. This can be achieved by leveraging the SAP Advanced Planning and Optimization Capable-to-Match engine for constrained planning and availability check, in conjunction with the SAP SNC for component stock availability. By deploying the Clear to Build functionality, customers will experience improved supply and demand match and improved visibility of stockout situations, he said. Implementing the functionality takes between 12 and 16 weeks and costs $500,000 to $800,000, according to Harris. Sponsored By: Page 10 of 12

11 Another supply chain project with quick ROI is improving or initiating approval workflows within the organization, such as purchase requisition to the purchase order cycle or travel expense approvals, Agarwal said. It ll improve the purchasing cycle and vendor contracts adherence through analysis of purchase orders and alert the business of important events, such as goods in transit, according to Agarwal. For cross-border shipments, alerts can significantly assist in speeding up the customs clearance, arranging compliance paperwork and coordinating the different agencies involved, he said. Transportation optimization another road to fast ROI Another quick-win project is a contract life cycle management (CLM) implementation, said Sachin Shetty, a principal consultant and manager of SAP supply chain practice at Infosys. Customers can implement SAP CLM within two to three months, Shetty said, which can help them contain contract leakage and ensure better contract compliance. If that kind of spending is a little too much for your budget, Shetty stressed there are low budget alternatives because SAP implementations often have features and functions which customers don t always use. By extending implemented solutions to use those existing functions, you can extend the capability of what you have without the need to buy anything new, he said. In addition, Shetty noted that these kinds of projects can often be executed fairly quickly. Ultimately, the choice of which supply chain projects to pursue -- small and quick or larger and slower -- is that of the SAP shop. In our experience, we have seen that there are two ways to approach this. One is to go for the low-hanging fruit, which can deliver measurable benefits quickly, Shetty said. The other way is to focus on projects with large impacts, but break them down into chunks that can deliver measurable benefits in a shorter time. Either approach can be helpful. Sponsored By: Page 11 of 12

12 Resources from Ariba, Inc. Increasing the Value of ERP with Cloud-Based Business Commerce Solutions The Push to the Cloud: ERPs, ecommerce & the CIO Increase User Adoption of Your SAP SRM or Oracle iprocurement System About Ariba, Inc. Ariba, Inc. is the leading provider of collaborative business commerce solutions. Ariba combines industry-leading technology with the world's largest web-based trading community to help companies discover, connect and collaborate with a global network of partners all in a cloud-based environment. Using the Ariba Commerce Cloud, businesses of all sizes can buy, sell and manage cash more efficiently and effectively. Over 700,000 around the globe use the Ariba Commerce Cloud to simplify inter-enterprise commerce and enhance results. Why not join them? To get on the path to Better Commerce visit: Sponsored By: Page 12 of 12