P2P Program within AkzoNobel

Transcription

1 P2P Program within AkzoNobel Objectives 1. Better quality and transparency in transactional data 2. Higher compliancy rate 3. Substantial increase in operational efficiency Purchase to Pay Program 1

2 1. Who is AkzoNobel 2. The P2P Program 3. Business impact and expected benefits 4. Next steps 2

3 Our strategic ambition is to be Purchase to Pay Program 3

4 AkzoNobel key facts 2010 Revenue 14.6 billion 55,590 employees EBITDA: around 2.0 billion* Net income: close to 0.8 billion Around 40 percent of revenue from high-growth markets One of the leaders in sustainability Revenue by business area EBITDA* by business area 33% 33% 30% Performance Coatings 44% Decorative Paints Specialty Chemicals 34% 26% * Before incidentals Purchase to Pay Program 4

5 Trusted portfolio of global brands Purchase to Pay Program 5

6 1. Who is AkzoNobel 2. The need to start improving our P2P process 3. The P2P Program 4. Business impact and expected benefits 5. Next steps 6

7 Why starting the P2P project A key element of the AkzoNobel Onefinance program and the AkzoNobel sourcing 3 year functional strategy is to improve the efficiency of the function Efficiency can be achieved by standardizing main transactional processes. The P2P process qualifies for standardization containing significant number of transactional activities and having the least of impact for the business. This program is fully embraced by Sourcing, IM and Finance, considered as a key enabler for their functional strategies. Purchase to Pay Program 7

8 Benchmarking show key areas for improvement Standardized ways of purchasing within AkzoNobel. Full integration with suppliers All spend based on purchase orders Maximize automation of all P2P transactions Centralization of transactional activities in central back offices Standard process-supporting tools across the company Implement common Master Data governance Maximize benefits across the value chain Purchase to Pay Program 8

9 A step change in the P2P process is crucial Meeting AkzoNobel strategic ambitions leaves no room for scattered and non uniformed P2P processes Top quartile safety performance Grow to 20 billion revenues Increase EBITDA each year, maintaining 13-15% margin Reduce OWC/revenues by 0.5 p.a. towards a 12% level Pay a stable to rising dividend Top position in sustainability Top quartile performance in diversity, employee engagement, and talent development Top quartile eco-efficiency improvement rate Purchase to Pay Program 9

10 1. Who is AkzoNobel 2. The need to start improving our P2P process 3. The P2P Program 4. Business impact and expected benefits 5. Next steps 10

11 What is Purchase to Pay? AkzoNobel Definition P2P represents all the transactional activities from creating purchase requests until supplier payment. P2P drivers Supplier Systems (ERP) Person (SRM) Purchasing requests Delivery & Receipt Invoice Processing Supplier Expense (Concur) Master Data Maintenance Monitoring performance Not in scope: Tax Salaries Bank charges Interest Treasury payments (Financial Items) Government charges Purchase to Pay Program 11

12 Objective of the P2P program The overall objective of the P2P program is to design, build and implement by the end of 2013, the global standard P2P process for the whole of AkzoNobel including the supporting systems and organizations in order to: 1. Deliver high quality information supporting our businesses and global functions in achieving AN midterm plan; 2. deliver transactional efficiency benefits; 3. ensure compliance to the functional policies and procedures. This will be done by building on the existing P2P related initiatives Purchase to Pay Program 12

13 P2P related initiatives have so far not been fully aligned VMI OneChain OneChain Concur BW E-invoicing SRM OneHub P Card E-invoicing Amex Credit Card E-PO OneStep E-invoicing factory 1F initiatives Information Management Sourcing Finance Treasury Purchase to Pay Program 13

14 P2P managed as one program PO Invoice MD & Analysis ERP System Driven VMI & e-po OneHub E-invoicing Factory BI BW SRM Person Driven OneStep E-invoicing OneHub Factory BW P Card Concur Expense Driven Travel Amex Booking tool Amex Credit Card Factory Concur exp. approval P Card Purchase to Pay Program 14

15 Leading to logic building blocks for integrated P2P program PtP Leadership Team (PLT) Steering Committee PtP Organizational transformation & Communication Program Management PMO PO Invoice MD & Analysis Business Lead Technical Lead ERP System Driven VMI & e-po OneHub E-invoicing Factory BI BW ERP Lead / Expert / Support SRM Person Driven OneStep E-invoicing OneHub Factory BW P Card SRM Lead / Expert / Support Concur Expense Driven Travel Amex Booking tool Amex Credit Card Factory Concur exp. approval P Card Expense Lead / Expert / Support MDM Lead / Expert / Support Invoice/ Lead / Expert / Support Purchase to Pay Program 15

16 Business Impact 16

17 Business impact: System (ERP) driven purchase process Supplier Systems (ERP) Person (SRM) Personal (Concur) Purchasing requests Delivery Invoice & Receipt Processing Master Data Maintenance Monitoring performance Supplier Mainly product related (PR) spend Current status Important changes Purchase orders not directly linked with corresponding purchase contract leading to non compliancy risk common standard for use of contracts in the system resulting in 100% PO/contract compliance High number of manual actions in supplier communications (PO, vendor acknowledgements, receipts etc.) Most of the POs or receipts do not match invoices Integration with suppliers by fully automated communication Complete receipts, correct POs and invoices enable 3-way match for all ERP transactions. Purchase to Pay Program 17

18 Business Impact: Person (SRM) driven process Supplier Systems (ERP) Person (SRM) Personal (Concur) Purchasing requests Delivery Invoice & Receipt Processing Master Data Maintenance Monitoring performance Supplier Mainly non product related (NPR) spend Current status Important changes The current organization is not correctly reflected in the SRM system. Less than 10% of the person driven demand is handled via SRM. Use of SRM is optional and position unclear Fragmented PR/PO handling Master data management to ensure organization alignment in SRM system Enhance functionality and content to drive 100% use of SRM and PO compliance SRM is one the mandatory purchasing channel for all person driven demand Centralized PR/PO handling (e.g. P2P desk at cross BU level) Purchase to Pay Program 18

19 Supplier Business Impact: Invoice handling process Systems (ERP) Person (SRM) Purchasing requests Delivery & Receipt Invoice Processing Supplier Personal (Concur) Master Data Maintenance Monitoring performance Current status of AP processing locations of AP processors - low AP productivity vs. peers - high cost per invoice vs. peers - Labor intensive transactional processes - Limited 3-way matching, resulting in additional approval flows - Paper invoices Important changes - Network of central back offices for transactional processes - Standardized tooling and processes supporting the scanning / OCR and workflow approval process - Automated 3-way match is the standard, workflow approval is an exception - Standardized platform for automated exchange of supplier invoices (e-invoices) Purchase to Pay Program 19

20 Role of Elemica in P2P our business 20

21 Solution: One single B2B gateway to the outside world via Elemica Purchasing Delivery & receipt Outline agreement Site level BU level Central level BU level Site level Deco India Deco EMEA WFA AkzoNobel platform 1 Hub Industry platform Elemica DSM Resins Chemica ls DOW Logistics (LSP) Settlement: transport, orders, receipts and invoices Purchase to Pay Program 21

22 Next steps 22

23 Next steps 1. Execute full P2P program 2. Connect all our sites with all our raw and packaging suppliers via Elemica 3. Increase use of Elemica VMI-web portal 4. Start testing invoicing via web portal Purchase to Pay Program 23

24 Questions & Answers Purchase to Pay Program 24

25 Appendix 25

26 Purchase to Pay Program 26

27 The challenge: Getting rid of paper and manual work through automated ordering and invoicing Orders ERPsystem APprocess ARprocess Customer Logistics (LSP) Goods Supplier ERPsystem Invoices Purchase to Pay Program 27