Are P-cards the answer to making payments easy? What about losing control? And what about fraud?
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Transcript of Are P-cards the answer to making payments easy? What about losing control? And what about fraud?
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presented May 23rd, 2012
From Chaos to Control -- Moving from a disparate,
multi-ERP environment to a standard and stable ERP for P2P
Paul Williams Director of Global Source-to-Pay Business Process Management and Catalyst Kraft Foods
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Agenda
• Background
• Process Improvement Approach
• Key Learnings
• Questions
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Kraft Foods Fact figures
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•12 brands with more than $1 billion in revenue
•70+ brands with more than $100 million in revenue
•40 brands over 100 years old
•80% revenue from #1 share positions
An Amazing Brand Portfolio
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Background and Objective
Objective: Move from numerous disparate global processes and ERP systems to globally standardized processes across 3 instances of SAP.
Background:
• 5 Regions -- North America (KFNA), Latin America (LA), Asia Pacific (AP), Europe (KFE), Central Europe Eastern Europe Middle East and Africa (CEEMA)
• 100,000 employees; 1,000 Procurement employees
• Starting point: 17 Source-to-Pay Process maps, 120 Procurement systems
• Key activities during the transition:
– Divestiture of the Pizza business unit
– Acquisition and integration of the Cadbury business
– Spin off of North American Grocery business (pending)
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Agenda
• Background
• Process Improvement Approach
• Key Learnings
• Questions
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P2P Process Improvement Approach
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1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local governance definition
3. Establish baseline metrics and targets before making any process changes
4. Establish a cross-functional working team and steering committee.
5. Effective Change Management is critical and multifaceted
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Take a true view of your end-to-end process
• Solicit input from process owners, inputters, and customers.
• Perform real work observation to check for “ghost processes”, i.e. undocumented variations.
• Prepare for surprises.
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View of the Accounts Payable FI Invoice Coding Process
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P2P Process Improvement Approach
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1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local governance definition
3. Establish baseline metrics and targets before making any process changes
4. Establish a cross-functional working team and steering committee.
5. Effective Change Management is critical and multifaceted
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Define the To-Be Process with clear Governance
Look at P2P in the context of a broader source-to-pay process
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Define and Align to Functional Handoffs Everyone must understand their role in the process or P2P will be deprioritized
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P2P Process Improvement Approach
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1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local governance definition
3. Establish baseline metrics and targets before making any process changes
4. Establish a cross-functional working team and steering committee.
5. Effective Change Management is critical and multifaceted
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Establish Baseline Metrics and Targets before making any process changes
# Metric P2P Area Jun-11 2011 YE Target Best in Class Average Who’s
Responsible
1 # of New Vendors Created Master Data 924 NA NA NA Procurement
2 % PO Invoices PO Processing 74% 70% 2011 YE / 80%
(Q1 2012) 79 - 90% 64% Procurement
3 Open Invoice Counts Accounts Payable 24,557 27,000 – 36,000 n/a n/a Accounts
Payable
4 % 1st first pass match for PO
spend Accounts Payable 49% 65% 93 - 95% 65 – 80% Procurement
5 % On Time Payment Accounts
Payable
Due date 53% 64% / TBD on the 7
day buffer target 95 - 98% 80 – 87%
Accounts
Payable 7 day
buffer 83%
6 Average Invoice Cycle time Accounts
Payable
FI 8.8 7 days
4 days 7 days
Accounts
Payable (BU and Mfg)
MM 6.7 7 days
7 % OB10 Invoices Accounts Payable 14% 35%, 80% 30% Procurement
8 % EFT Payments Cash Disbursements 30% 35% 57 - 58% 9-37% Accounts
Payable
9 Duplicates Cash Disbursements
Data available
starting in
Aug 2011
0.1% TBD TBD Accounts
Payable
10 Payment Accuracy Cash Disbursements
Data available
starting in
Sept. 2011
Baseline & Target
to be established by
Oct. 2011
98 – 99.9% 90 – 95% Accounts
Payable
11 Days Payable Outstanding (DPO) Cash Flow 41.8 Days 44.8 (Q211), 44.2
(Q311), 43.1 (Q411) 45 Days 35 -40.2 Days
Corporate
Finance
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P2P Process Improvement Approach
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1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local governance definition
3. Establish baseline metrics and targets before making any process changes
4. Establish a cross-functional working team and steering committee.
5. Effective Change Management is critical and multifaceted
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Governance Structure
Having a cross-functional sponsorship and operating team is critical
Finance
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P2P Process Improvement Approach
16
1. Detailed “As-Is” process mapping is the critical key first step
2. Define the “To-Be” process with clear regional and local governance definition
3. Establish baseline metrics and targets before making any process changes
4. Establish a cross-functional working team and steering committee.
5. Effective Change Management is critical and multifaceted
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Effective Change Management is critical and multifaceted
Business Engagement and Readiness • Early business engagement driven by Procurement Leads
• Trained and properly rewarded Key User network
• Detailed cutover readiness metrics with pre-determined escalation points in each BU and function
• Monthly business readiness review with each part of the business; more frequently close to cutover
• Upfront, tracked, mandatory training. Partnership Alignment
• Clear alignment on support expected from internal and external partners during cutover and stabilization
• Clear, vetted contingency plan with measurable trigger points.
Communication • Robust internal and external communication plans
• Simplified, “Twitter-level” monthly Newsletter
• Repeat. Repeat. Repeat…
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Agenda
• Background
• Process Improvement Approach
• Key Learnings
• Questions
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Key Lessons Learned
1. Business Partner Support: – Be very explicit about expectations for input into design and go-live support – Dedicated Key User for onsite issue resolution
2. Stakeholder Involvement in Design: – Change management: go directly to end users to establish awareness – Process design: ensure adequate end-user input to design and review of new process
and system
3. Training: – Mandatory awareness training on process change in A/P, context in the business setting
and systems environment, and the tools to support – Mandatory classroom training for Key Users, high/med impact end users – Track training participation and retention – Get end user feedback on training materials prior to go-live
4. Testing: – Focus testing on the most complex scenarios – Test a broader range of situations and volume to get an accurate picture of potential
issues – Despite three test cycles and end-to-end regression analyses, not all interdependencies
were identified
5. Cutover: – Prioritize complex issues in legacy system clean-up – Confirm all contingent master data elements are active, as expected – ReadSoft tool under-delivered on reporting capabilities
6. Vendor Readiness: – Prioritize key/critical vendors against business disruption risk – Work closely with Procurement for supplier change readiness & impact assessment
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Agenda
• Background
• Process Improvement Approach
• Key Learnings
• Questions
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Questions?