How AP Can Lead the Way in Procure-to-Pay Linking AP and Procurement for the Perfect, On-Line Match

Transcription

1 How AP Can Lead the Way in Procure-to-Pay Linking AP and Procurement for the Perfect, On-Line Match Speakers: Richard Waugh, VP Corporate Development, Zycus Krissti Turpeau, Procurement Manager, QTS Data Centers

2 Richard Waugh Vice President - Corporate Development, Zycus Extensive background in B2B e-commerce Helped Launch GE's TPN, first on-line Marketplace for Sourcing & Procurement Co-Founder of B2eMarkets First SaaS Sourcing Suite providers Industry Analyst in Supply Management market for the Aberdeen Group

3 Krissti Turpeau, Procurement Manager, QTS Data Centers Expertise in procurement operations, P2P implementation and strategic sourcing Looks into improving relations between Sourcing, Accounting, Legal and Internal Customers Has held key positions in Procter & Gamble, Porsche, Fiserv and Sage Key focus areas: Maximizing process efficiencies, enhancing speed, optimizing negotiation strategies, enabling strategic decisions

4 Today s Agenda: 5 Step Guide to P2P Success #1 Ensure Procurement & AP Alignment Prioritize Goals and Objectives, Define Success Metrics Visualize and Benchmark Current State Process CASE STUDY: Data at the Center of Procurement for QTS Data Center Business Design Simplified, Optimal To Be Buy-Pay Processes Develop Robust ROI/Business Case Justification

5 #1 Ensure Procurement & AP Alignment

6 Procurement & AP Processes Linked Requisition & PO Processing Supplier Master Mgmt Customer Inquiry and Response Supplier Scheduling Invoice Pre- Processing File, Store, & Retrieve End-to-End Purchase to Pay Process Receipt Processing Verification and Approval Reconciliation, Accrual and Compliance Item Master/ Content Mgmt Invoice Processing Pcard Management Catalog Mgmt Discrepancy Resolution Supplier Payment Purchasing Operations Accounts Payable Contract Master Mgmt Source: The Hackett Group

7 AP s Top Priorities

8 Areas Currently Managed or Supported by AP

9 P2P Technology Adoption Procurement Leads, Payables Lags

10 Procurement & AP Alignment = P2P Success Source: The Hackett Group

11 Prioritize Goals and Objectives, Define Success Metrics

12 Prioritize Goals and Objectives, Define Success Metrics Enforce Budget Control Maximize Early Pay Discounts or DPO Ensure Process & Regulatory Compliance Reduce Maverick Spending Achieve Process Efficiency Drive User/ Supplier Adoption Gain Real- Time, Granular Spend Visibility

13 Visualize and Benchmark Current State Process

14 P2P Benchmark Jeopardy

15 Data at the Center of Procurement for QTS Data Center Business A Case Study

16 About QTS

17 Key P2P Challenges Faced High-Volume Paper Processes Lacking Audit Trail/ Business Controls Lost Savings/Time due to Non- Compliance Limited Spend Visibility M&A/Expansion Growth Precludes Leveraging One Version of Truth Little Supplier Collaboration

18 Vision for P2P Transformation Single, Integrated S2P Platform: One Version of the Truth: Business Case Achievement: Enhance User Experience: Focus on P2P but prioritized S2P suite One place to go for auditability, accurate reports 5-10x ROI Payback Year 1 Provide better UX/drive enterprise-wide adoption

19 The Yin-Yang of P2P Transformation for Procurement & AP

20 Biggest Challenge is Change: Best Practices in Change Management Executive sponsorship a must C-Suite Champions for Change C-Level requests for reports demonstrate Data is Power Key stakeholders involved up-front IT, Finance, Legal and other functions in selection and requirements process AP not consulted early enough and initially resistant AP fully on-board when engaged and needs addressed Brand the project and promote regularly Promotions proclaiming Zycus is Coming Users encouraged to play with tool in Sandbox Train habitually Conducted internal training sessions continuously for 1 st 3-4 months Staffed internal help desk support for real-time troubleshooting

21 Project Summary Lessons Learned/Next Steps Kick-Off Requirements Gathering Solution Configuration User Training Supplier Onboarding ERP Integration Go Live on Full S2P in 6 months Project Phasing vs. Big Bang Recommended AP & Procurement Need to be Equal P2P Partners from the Outset Seeking Opportunities to Change Process and Enable with Technology vs. Simply Automating Existing Process

22 Design Simplified, Optimal To Be Buy-Pay Processes

23 AP Efficiency has Key Dependency on PO Process Effectiveness

24 Optimal Buy-Pay Processes Require Multiple Workflows For Some Purchases a 2- Way not the Traditional 3-Way - Match is Optimal. How Can Approval Workflows and Buy/Pay Processes be Optimized Based On: Purchase Type (Opex/Capex, Project) Category $ Amount BU/Geo/Dept. Source: Hackett Group P2P Performance Study 2017

25 How It Works: Configurable Workflows Drag and Drop creation of category-specific workflows to govern buy/pay process Reduced cycle time due to automated approval workflow & mobile approvals Real-time, graphical view of approval status with automated alerts and reminders

26 Few Very Effective at Guided Buying Process Top Performers are more than 3X more likely to be very effective in driving requisitioners to the preferred buy/pay channel what best practices account for the disparity?

27 How It Works: Guided Buying GUIDED BUYING AI suggests relevant categories based on user s natural language search term and organizational buying patterns Steer users to approved suppliers and Buy/Pay channel for the category Invoke category-specific workflows, map to GL account and default bill to/ship to based on user profile

28 Maximizing E-Catalog Use a Best Practice, Not a Silver Bullet Indirect E-Catalog Transactions 25% Peer 49% Top Performer Indirect E-Catalog Spend 10% Peer 15% Top Performer Catalog vs Free-Text Content for Indirect Requisitions 41% Peer 63% Top Performer If even the Top Performers capture just 15% of Indirect Spend through Catalogs, how can they ensure compliance on the non-catalog purchases that account for 85% or more of Indirect Spend? Source: Purchase-to-Pay Study, The Hackett Group, 2017)

29 How It Works: Non-Catalog Requisitions NON-CATALOG REQUISITIONS Present category-specific guided form based on user s natural language search term Prompts user for required product or service specifications/attributes

30 How It Works: P2P/Contracts Integration for Non-Catalog ContractLock : P2P/Contracts Process Integration PURCHASE ITEMS DIRECTLY FROM CONTRACTS (Non-catalog Purchases) VIEW TIERED BASED PRICING FROM CONTRACTS REVIEW TERMS AND CONDITIONS IN CONTRACT ATTACHMENTS WHILE ORDERING VIEW PAST AND EXISTING REQUISITIONS TAG THE CONTRACT NUMBER IN ALL PURCHASE REQUESTS LINK NON-PO INVOICES WITH EXISTING to flip for non-catalog for contract for non-po invoice resolution

31 Develop Robust ROI/Business Case Justification

32 Business Case for Achieving Best-in-Class P2P Performance Efficiency Impact - Processing Cost & Cycle Time 15 $ Req-to-Order (Days) 3 Order-to-Pay (Days) PO Processing Cost ($) $4.58 Invoice Processing Cost ($) $4.80 $2.27 Current Estimate Post Genesys Savings Impact: 2-3% per $100M Spend $2,320,000 $2,682,400 $108,000 $254,400 Early Payment Discount PO & Invoice Processing Contract Compliance Total Savings

33 Thank You