NETWORKING EVENTS - SIGsig.org/docs2/SIG Ariba 1062015 Webinar.pdf · • Data entry –fixing...

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In the meantime, please take a look at the upcoming SIG networking events listed on the right side of your screen

and plan to join us if you are in one of these cities this fall.

NETWORKING EVENTS

GLOBAL SUMMITSOct 27-29 – Huntington Beach

SYMPOSIUMS

Oct 15 – New York, NY

Nov 10 – San Francisco Bay Area

REGIONAL ROUNDTABLES

Nov 5 – Raleigh, NC

For more information and to register for all SIG events:

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RECENT POSTINGS

The SIG Career Network is

bursting with opportunities.

New jobs are posted daily by some

of the best known global companies in the world for those

seeking careers in sourcing, outsourcing, procurement and

related functions.

For more information go to: www.sig.org/career-center.php

NEW to the Career Network!

• Best Buy Co., Inc. - posted September 29:

• Sr. Manager – IT Sourcing, Software

• UnitedHealth Group – posted September 24

• Sr. Sourcing & Procurement Consultant

• Otsuka – posted September 23:

• Associate, Finance Rotation Program

• US Cellular – posted September 15:

• Category Manager II

• Best Buy Co., Inc. - posted September 10:

• IT Sourcing Category Manager, SAAS

• Staples, Inc. – posted September 8:

• Project Manager, BPO

• Senior Sourcing Manager

• American Family Insurance – posted Sep 3

• Sourcing Manager

• NB Ventures, Inc. – posted September 3:

• Sr. Solutions Consultant, Technology

• Associate Director, Technology

• Director, Consulting

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bit.ly/SIGBlog

New Topic Each Week2:00 pm Eastern

(11:00 am Pacific)

Upcoming Free SIG Webinars:

October 8, 2015Supply Chain Risk Management: How to Turn Current Practices into Best PracticesPresented by riskmethods

October 13, 20156 Benefits Driving Procurement Away From Contingent Labor Towards Managed ServicePresented by Canon Business Process Services

October 15, 2015All About Staffing Suppliers: Driving Toward Optimization StrategiesPresented by Fieldglass

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Upcoming Town Hall Teleconference:

October 14th

50 Shades of Stakeholder Management:

Turning Reluctant Acquaintances into Long-Term

Partners

Presented by: Kristin Gallagher

Director, Global Sourcing & ProcurementRussell Investments

SIG Town Hall Teleconferences

bring a small group of buy-side ONLY attendees together for a facilitated

discussion on top-of-mind issues in an open-mic, private conversation. Town Hall Teleconferences are NOT recorded.

Calendar of Town Hall Teleconferences

Taking place at 1:00 pm Eastern on the following dates:

February 11 August 12 April 8 September 9May 13 October 14

June 10 November 11July 8 December 9


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SIG Symposiums and Regional Roundtables provide education and local networking for members and invited non-member corporate users

Symposiums 2015:

Minneapolis, MN – Mar 25

Toronto, Canada – June 1

Columbus, OH – Sep 17

New York, NY – Oct 15San Francisco Bay Area – Nov 10

Regional Roundtables 2015:

Chicago, IL – April 29

Atlanta, GA – May 6

Houston, TX – May 13

London – Sept 16Raleigh, NC – Nov 5


www.sig.org

SIG Global Summits are semi-

annual events with 350-450

decision-makers in attendance

• Non-commercialized

• Hundreds of industry thought

leaders

• 70% buy-side

• 4-5 keynote sessions

• Global brands

• 3 days of networking

• CPO Roundtables

• Nearly 50 breakout sessions

69% of delegates are director level or above, of which 43% are VP/C-level

www.sig.org/fall15

Recent speakers include:

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For more information go to: www.sig.org/siguniversity

Online learning environment

Sourcing and Governance certifications with Professional and Executive level courses

Modules with lessons, formative assessments, summative testing and final proctored exam

Certification good for 5 years

Interested in providing input?

Let us know!

For more information go to: sig.org/student-outreach.php

Partnering with Universities

Introducing students to seasoned supply chain executives

Sharing thought leadership with students in class, SIG University courses and at SIG events

Giving access to internship and job postings on the SIG Career Network

Allowing students to get real world insight into supply chain careers

Finding tomorrow's supply chain professionals today

What Procurement Doesn’t Know About

Payables (And May Be Afraid to Ask)Chris Rauen and Robert Banther – Ariba, an SAP company

© 2015 Ariba – an SAP company. All rights reserved. 11Public

Agenda Today’s Presenters

Chris Rauen Robert Banther


The Problem: Major Pain Point(s) to Achieving P2P Process Benefits

Payables Best Practices and Leading Indicators

Stakeholder Value Proposition: Qualitative and Quantitative

Recap – Final Thoughts

Agenda Agenda


Mind The Gap!


Poll Question #1: How aligned is AP and procurement in

your organization?

1. Tightly aligned: reporting to same executive

2. Good alignment: but report to different executives

3. Not well aligned: interact only to resolve problems

4. No alignment: operate independently with no interaction


Invoice Cycle: Days… Weeks… Months?



Code Invoice

Receive Invoice

Deliver to Approver



Code Invoice

Receive Invoice

Deliver to Approver

Sort and Scan

Key


90:10

Invoice Processing Performance: Fair or Foul?


• Invoice sent to remote location – misplaced

• Invoices not matched to POs or contracts

• Who needs to approve?

• Account codes applied are often incorrect

• Data entry – fixing invoice errors/exceptions

• Procurement diverted from strategic buying to

resolve invoice errors

• Too many payment status calls

• Contract leakage can cost you tens to

hundreds of millions of dollars annually

• Invoice data can’t be delivered to the sourcing

group to better manage spend

• You can’t capture early payment discounts to

lower costs, increase cash returns.

Procure-to-Pay Process: What Can Go Wrong?

© 2015 SAP AG. All rights reserved. 22

Invoice Exceptions: Where Do You Stand?

162,000 @ $3.24M

162,000 @ $32.4M


Problem Invoices, Fortune 500 Company,

45,000 invoice per month… and costs to resolve them

Invoice Exceptions: Where Do You Stand?

162,000 @ $3.24M

162,000 @ $32.4M


Poll Question #2: How effective are you in capturing the

savings you’ve negotiated in contracts?

1. Very Effective. We capture most savings from the contracts we’ve

negotiated.

2. Average. We capture some savings from our contracts.

3. Poor. We have no way of tracking contract savings.


Deposit “Slip”


Hidden Costs of Contract Leakage

$159,800,000


Contract leakage, Fortune 500 Company, $8.5b in spend

Hidden Costs of Contract Leakage

$159,800,000


Business Networks – Onramp to the Digital EconomyConnecting people, systems and processes to simplify business commerce


“Other”

GST/VAT Compliance

PO & PO-Line Match

Buyer Match (non-PO)

UOM & SKU Change

Currency Match

Sub Total& Total Amount

PO-Line Change

Line & Total ConsumptionThresholds

Shipping & Tax Thresholds

Invoice

Number

Bill To /

Ship To

PO

Number

Requestor

(Non PO)

Invoice

Date

VAT / GST

IDs

Account

Coding

Contract &

Receipt

Match

Price & Tax

Compliance

Network-Centric Payables in Action


“Other”

GST/VAT Compliance

PO & PO-Line Match

Buyer Match (non-PO)

UOM & SKU Change

Currency Match

Sub Total& Total Amount

PO-Line Change

Line & Total ConsumptionThresholds

Shipping & Tax Thresholds

Invoice

Number

Bill To /

Ship To

PO

Number

Requestor

(Non PO)

Invoice

Date

VAT / GST

IDs

Account

Coding

Contract &

Receipt

Match

Price & Tax

Compliance

98%+ Auto Post

Network-Centric Payables in Action


“Nearly 56% of all

incoming invoices are

still paper based.”

- TAPN 2014

“30% of invoices have

exceptions”

- AberdeenGroup

“$9 million in contract

leakage per billion in

spend on average.”

- The Hackett Group

“80% of early payment

discount opportunities

missed.”

- Ariba

High Cost of

Paper InvoicesToo Many Exceptions Lack of Compliance Lack of Control

Receipt &

Capture

Matching &

Approvals

Inquiries

& Exceptions

Discounts &

Payments

Systemic Compliance Control Payment Timing

Fixing a Broken Process


Buyer & Seller Benefits

$2 million discount savings

per $1B spend

DSO Reductio of over

6 Days

Spend Savings

$400K+ in AP Error &

Fraud Elimination per $1B

in spend

$4M per $1B of contract

leakage avoidance

Effectiveness Gains

98%+ touchless

processing

70% decrease in approval

times

Efficiency Gains

60 – 80% operational cost

takeout in AP

“Nearly 56% of all

incoming invoices are

still paper based.”

- TAPN 2014

“30% of invoices have

exceptions”

- AberdeenGroup

“$9 million in contract

leakage per billion in

spend on average.”

- The Hackett Group

“80% of early payment

discount opportunities

missed.”

- Ariba

High Cost of

Paper InvoicesToo Many Exceptions Lack of Compliance Lack of Control

Receipt &

Capture

Matching &

Approvals

Inquiries

& Exceptions

Discounts &

Payments

Capture 100% of your

invoices in a digital

format from any

supplier regardless of

volume, location or

capabilities

Resolve invoice errors

at point of submission

with self-serve supplier

portal and over 80

Network business

rules

Match invoices against

POs, Contracts,

Service Sheets.

Workflow routing and

approval

Control payment

timing and maximize

early payment

discount capture

Eliminate & Digitize PaperCapture & Correct

ExceptionsSystemic Compliance Control Payment Timing

Fixing a Broken Process


“1-for-1”

Process Cost

Containment

$1M per $1B in

spend process

efficiency savings

Discount

Capture

“2-for-1”

$2M+ in discount

savings for

every $1B in

discountable

spend

Working

Capital

“3-for-1”

$2.7 million in

working capital

impact for every $1

billion per day of

improvement of

DPO, DSO, DIO

Contract

Compliance

“4-for-1”

$4M in savings

leakage for every

$1B in spend under

contract

Business Case: Network-Centric Payables


“1-for-1”

Process Cost

Containment

$1M per $1B in

spend process

efficiency savings

Discount

Capture

“2-for-1”

$2M+ in discount

savings for

every $1B in

discountable

spend

Working

Capital

“3-for-1”

$2.7 million in

working capital

impact for every $1

billion per day of

improvement of

DPO, DSO, DIO

Contract

Compliance

“4-for-1”

$4M in savings

leakage for every

$1B in spend under

contract

$10+ Million Savings per $1 Billion Targeted Spend

Business Case: Network-Centric Payables


The Problem: Major Pain Point(s) to Achieving P2P Process Benefits

Payables Best Practices and Leading Indicators

Stakeholder Value Proposition: Qualitative and Quantitative

Recap – Final Thoughts

Agenda


• An approved invoice is a strategic asset

for a company

• Unlock additional value by taking

a liability and turning it into a

value creator

• All suppliers want visibility into invoice /

payment status, financing and payment

Every Company Has Strategic Assets….


Poll Question #3: How many different payment terms are set

up in your payables or ERP system?

1. Less than 5

2. 5-10

3. 11-25

4. 26-49

5. >50


Payables Best Practices & KPIs

KPI’sBest-In-Class Capabilities

• 90% electronic invoices

• 50K+ invoices per FTE

• 75% of PO & Invoice lines

against item Master/

Catalog/ Contract

• Discounts: 10% of spend

• SCF: 10% of spend

• Card: 5% of spend

• Net Terms: 75% of spend

• DPO = 50 days

• 60-80% reduction in

supplier inquires

• +90% of payment are

automated

• Electronic Invoice

Submission

• Intelligent error recognition

• Predefined line items

• Pre-approval on PO &

contract

• Pay electronically to maximize

payment window

• Rich payment remittance

details

• Secure bank account storage

• Create a significant

payment window for

working capital optimization

B

C

D

0 Days

5 Days

50 Days

Invoice

Approval

Net Terms

Payment

Delivered

Invoice &

Capture Date

Options:

Discount, SCF,

or Card

Payment

Delivered

Best-In-Class

A

B

C

D

0 Days

5 Days

25 Days

35 Days

Invoice

Capture

Invoice

Approval

Net Terms

Payment

Delivered

Invoice Date

Typical


DPO & Discounts are 12 – 14x

more valuable than trx’l automation

(Source: Blue Hill Research) CEO

CFO

VP Shared

Services

Corporate

Controller

Director,

Accounts Payable

TreasurerCPO /

VP Supply ChainSuppliersCIO

Assistant

Treasurer

Assistant

ControllerDir, Sourcing /

eBusiness

Director,

Finance I/T

Accounts

Receivable

• Increase margins and earnings per share

• Extend DPO: Income Statement & Balance Sheet Benefit

• Transform A/P from a cost center to profit center

• Enhance controls / risk mitigation

Payables

Outcomes

> touchless invoices

> discounts earned

< A/P Inquiries

Optimize DPO

Investment return:

12% - 36%, risk free

Risk Mitigation:

Bank Account Mgmt

Provide suppliers

early pay alternative

Payment visibility

1 platform:

Buy Right, Pay

Right Lower TCO

Get paid faster

Easier reconciliation

Improve cash flow

forecasting

Payables Stakeholders & Outcomes


Payments:

200,000Risk Mitigation

Total: $4,345,890

eInvoices:

70% = 280,000

Invoice

Savings:

$1,400,000

Savings Per

Invoice:

$5.00

ePayments:

70% = 140,000

Payment

Savings:

$350,000

Savings Per

Payment:

$2.50

3rd Party Fees &

Lawsuits

Risk Premium

Brand equity /

Perception

Other Benefits

Free Up A/P Help

Desk Staff

Redeployment

of Scarce

Resources

Collection of Tax

Reporting Info

Invoices:

400,000

Income Statement Impact

Spend:

$1 Billion

10% Adoption =

$100,000,000

Average Discount =

1.50%

Gross Discount:

$1,500,000

Spend Extended:

$250 Million

20 Days Term

Extension

Weighted Average

Cost of Capital = 8%

Return Earned:

$1,095,890

1 Day DPO

DPO Extension

A/P Balance

Increase=

~$3,000,000

Balance

Sheet Impact Added Benefits

Business Case Example:

Invoices, Payments, & Payables Working Capital


>8 million users from

1.8M+ companies …

… use the

Ariba Network …

… for better business

commerce

In next 24 hours,

Ariba customers will:

• Manage >$2.3 Billion B2B transactions

• conduct >243,836 purchase, sales, and financial transactions

• manage >4 million contracts

• save their companies >$65 million

The World’s Business Commerce Network

68+ million

Annual Invoices

>1.8 million

Connected Companies

150

Countries

>75%

Global 2000

> $800 billion

In Annual Commerce

31+ million

Annual Purchase Orders


Process Savings

ELECTRONIC INVOICING

Embrace the Power of Network-Centric Payables


Discount

Management

Supplier

Management

Compliance

Working Capital

Process Savings

ELECTRONIC INVOICING

Spend Analysis

Embrace the Power of Network-Centric Payables

Q&A

Contact information:

Chris Rauen

[email protected]

650-390-1910

http://scn.sap.com/people/christopher.rauen/content

Robert Banther

[email protected]

678-232-5080

http://scn.sap.com/people/christopher.rauen/content

NETWORKING EVENTS - SIGsig.org/docs2/SIG Ariba 1062015 Webinar.pdf · • Data entry –fixing...

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