March 19 th , 2015 Amy Fong P2P Program Leader How Finance Leaders are Transforming P2P into a High Value Process Sponsored By
Jul 16, 2015
March 19th, 2015
Amy Fong
P2P Program Leader
How Finance Leaders are Transforming P2P into a High Value Process
Sponsored By
Transforming how businesses work
together.
Tradeshift helps buyers and suppliers connect,
transact and collaborate with e-invoicing and
procure-to-pay software.
What are your goals?
● Improve overall P2P performance
○ Improve efficiency (time, cost, productivity, etc)
○ Improve effectiveness (value drivers e.g., on-time payment, first time match)
● Remove paper from the process
● Better connect processes and systems across P2P
● Improve access to data and ability to analyze
● Increase % of early payment discounts captured
● Improve compliance
○ To standardized processes
○ To regulatory requirements
● Improve end-to-end visibility and control
● Improve accuracy of spend data
● Improve ability to collaborate/communicate with suppliers
5 Forces Driving Your P2P Future
Balanced value proposition
Supplier Buyer
Communicate & collaborate directly
with your buyers.
Lower costs for your entire supply chain.Manage and track POs, invoices, get
paid faster and more.
Connect via web, integration or any
accounting software.
Free. No supplier fees. Ever.
Communicate and collaborate with
suppliers.
Innovate past invoicing on top of an
open platform.
One platform for all your B2B
processes & interactions
Reduce cost and friction for your
entire supply chain.
Transform the way you work with suppliers
Tradeshift
Supplier 1
Supplier 2
Supplier 3
Supplier 4
New Supplier Registration
Risk Assessment
Ship Notices
Payment Advice
Supplier 5
Forecast collaboration
Dispute Management
Invoicing Supplier 6
Supplier 7
Supplier 8
Purchase Orders
Better results. Happier suppliers.
Tradeshift
● Connect digitally with your
network of suppliers
● Cut costs with more efficient,
paperless processes
● Make better strategic decisions
with accurate, real-time data
● Save money by capturing more
early payment discounts
● Improve your KPIs with better
analytics and visibility across
the P2P cycle
● Reduce errors, fraud and risk
across financial and supply
chain operations
● Get paid faster
● Gain full visibility into
status of invoice and
payments
● Connect once for multiple
customers
● Work from any device.
Handle business on-the-go.
● Be found by new
customers. Manage your
public and connect with
new customers
For your suppliersFor your enterprise
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Today’s Presenter
Amy Fong
Purchase-To-Pay Program Leader and Senior Procurement Advisor
Ms. Fong is an Advisor for The Hackett Group’s Procurement Executive Advisory
program. She has 19 years of experience in both industry and consulting with a
focus on procurement, supply chain and organizational effectiveness. She has
considerable experience in managing complex global supply chain partnerships,
sourcing, supplier performance & relationship management, outsourcing
evaluation and implementation, sourcing and cost improvement for the North
American, Asian, and South Pacific markets. Ms. Fong holds an MBA from
Vanderbilt University and a BS from Syracuse University
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The Hackett Group – IntroductionLifecycle support bringing intellectual capital and seasoned practitioners to yield sustainable benefits
We are the global leader in operations
improvement strategies, implementation know-
how, and G&A agility
We address both efficiency and effectiveness
improvements to enable strategic business
objectives
Our insights are fact based, from over 7,500
performance improvement consulting
engagements
Our Best Practices Intelligence Center™ is a
significant differentiator and enabler. It contains:
– 20,000+ performance metrics updated annually
– 1,500+ best practices across 95 business processes
– 1,000+ best practice-based process maps,
requirements and configuration guides
– 1,000+ case studies, implementation examples and
research
We deliver results through a global team of senior
practitioners using a consistent methodology and
best practice-based toolset
Hackett Value Grid™
We help companies
establish and implement
business performance
improvements.
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Enabling World-Class: Hackett’s Solution PortfolioBenchmarking, Advisory, Business Transformation
Membership AdvisoryInsight into World-Class Performance
BenchmarkingAssess World-Class Performance
Business Transformation ConsultingTransforms Performance
Deliverables
Peer & world-class comparison
performance metrics
Detailed analysis
Stakeholder survey
Executive presentation
Benefits
Objective comparison to peer
group and world-class performers
Quantify performance gaps
Uncover hidden costs
Prioritization of improvement
initiatives
Deliverables
Strategic direction
Detailed business case
Initiative plans & detailed
designs
Implementation of best practices
Benefits
Reduced cost
Working capital optimization
Enhanced service delivery
Business insight
Sustainable benefits
Speed of solution delivery
Merger integration
Risk mitigation
Deliverables
Best practice research
Advisor access
Best Practice Intelligence Center
Peer interaction
World-Class Progress Report
Benefits
Identify the strategies and
practices employed by Leaders
Validation of current initiatives
Determining what’s possible
(World-Class Performance
Metrics)
Process implementation support
Continuous best practice
adoption
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With so many competing
agendas . . .
1. What is top of mind
with executives?
2. What does World
Class look like?
3. How does the P2P
process support
“Value”?
4. Where do I start?
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The World-Class AdvantageHigher effectiveness levels to the business delivered at lower cost
Hackett Value Grid™
EFFICIENCY
Lower total costs
Faster cycle times
Higher productivity levels
Better staffing utilization
Higher transaction automation levels
EFFECTIVENESS
Access to the right information at the right time
More engaged, more agile workforce
Value-added supplier leverage
Greater tax effectiveness
Better alignment to the needs of the business
Optimized use of working capital
IT Cost (per end user Equivalent)
HR Cost (per employee)
Finance Cost (% of revenue)
Peer Group World Class
1.12% 46%
0.60%
Peer Group World Class
$6.0K$7.7K
22% 19%
0.59%0.73%
Procurement Cost (% of spend)
Peer Group World Class
23%
$1.7K$2.2K
Peer Group World Class
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World Class Companies
Have 47% Less Cost and
the FTEs of Peers
Half the Cost & FTEs
Process are faster (25-50%+)
and more responsive (29%
faster ad hoc requests)
Faster Processes & Support
1/3 less time spent
collecting and compiling
data for analysis vs. peers
More Time to Analyze
2X the average forecast
accuracy of peers; better
quality with SSC (~ 7% annual
quality improvement)
Higher Accuracy & Quality
Word class organization
are 2X more likely to be
aligned with corporate
and strategic goals
Aligned to Strategy
World-Class Finance – It’s More Than Cost, It’s CapabilitiesKey is business partnering and analytic skills required to support the business
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All of the effort is about increasing the value from Finance
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Top 5 Trends To Watch
1. Building capability – to achieve the #1 priority of being a true business partner
2. Increasing the role of technology – to continue to diminish the footprint and expense of
transactional work AND facilitate better access to decision-making information. Technology
transformation in 2015 is focused on strategic planning, creating a long-term technology roadmap and
better data management, not necessarily new implementations
3. Expanding GBS remains a factor - organizations continue to search for the right combination of
outsourcing, in-sourcing, offshore and onshore work. Knowledge-centric work is the new focus
4. Continuing push toward standardization – eliminating complexity BEFORE looking for
technological or service placement solutions
5. Keeping an eye on risk – monitor the environment and company exposure to ensure that effort won’t
have to be redirected from planned initiatives
2015 Finance and Global Business Services Trends
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The Purchase to Pay Process is often under appreciated as a source of business value by both Finance and Procurement
Hackett Purchase to Pay Value Grid™Example of Effectiveness Drivers
• First Pass Match Rate
• On Time Payment Rate
• Level of Spend Visibility
• Streamlined Transaction Strategy
• Level of Centralization
• Training Investment
• Compliance to Preferred Suppliers
• Guided Buying Effectiveness
• Supply Base Consolidation
Example of Efficiency Drivers
• Cost per Transaction
• Transactions per FTE
• Span of Control
• Order Cycle Time
• Invoice Processing Cycle Time
• Percent of Electronic
Transactions
• Level of Automation
Supplier
Master Mgmt
Verification
and
Approval
Invoice
Pre-
Processing
Invoice
Processing
Discrepancy
Resolution
Supplier
Payment
Customer
Inquiry and
Response
File, Store,
& Retrieve
Reconciliation,
Accrual and
Compliance
Purchasing Operations
Accounts Payable
End-to-End Purchase to Pay Process
Requisition
& PO
Processing
Supplier
Scheduling
Receipt
Processing
Item Master/
Content
Mgmt
Catalog
Mgmt
Contract
Master Mgmt
Pcard
Management
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While P2P process cost reduction is attractive, the real payback comes from the benefits seen in the broader source-to-pay context
$3-5 million
$40-61 million
Total: $44-66 million
12-14x Benefits
Value Drivers
Baseline process cost: $26 million
Value Drivers and Savings Potential in P2P for Typical $10B
Consumer Packaged Goods Company
Process Efficiency
AP
En
able
d B
usi
nes
s V
alu
e
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12%
15%
10%
12%
29%
7%
15%
15%
22%
12%
32%
34%
41%
46%
29%
54%
49%
54%
49%
71%
Monitoring supplier financial health risk
Increasing use of shared service centers
Continuing to attract and retain key talent
Standardizing the AP processes
Ensuring external regulatory compliance
Standardizing the purchasing processes
Implementing "guided buying"
Standardizing buy/pay transactional channels by spend category
Ensuring internal policy compliance
Aligning the end-to-end process strategy, metrics and improvementactivities
Business Critical
High Priority
Key Priorities for P2P Organizations in 2014-2015
Key Takeaways
Compliance, both internal and
external, is P2P’s most critical
priority.
A key focus for the next 12
months is to better align the
end-to-end strategy with
success metrics and continuous
improvement activities.
Monitoring supplier financial
health is becoming less of a
concern.
Source: Hackett P2P Key Issues Study
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Longer term, organizations want the P2P process to become more strategic. Outsourcing and offshoring is less of a priority.
Please select all statements that apply to your organization's long-term (the next 5-10 years) P2P strategy.
65%
45%
43%
43%
35%
20%
15%
13%
Our goal is to standardize the end to end P2P processes globally
Our main long-term goal is to evolve the value proposition of P2P to amore of a strategic one
Our long-term goal is to achieve close to 100% automation levels throughtechnology investments
We plan to consolidate all of our disparate P2P systems into a single,global platform
We plan to consolidate the entire P2P organization into a single, globalteam
We do not have a long term P2P strategy or vision
We plan to move the majority of processes into an offshore/low costcountry shared service center
We plan to outsource the majority of the P2P processes to a 3rd partyprovider
Long-Term P2P Strategy (next 5-10 years)
Key Takeaways
Not surprisingly, end-to-end
standardization is the #1 long-term
goal.
What’s concerning is that 20% have
no long-term P2P strategy of vision.
Also, outsourcing and offshoring are
less of a key component of the long-
term strategy than we would have
expected.
Source: Hackett P2P Key Issues Study
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How can we drive value in
P2P?
Process Governance and Standardization– End to End Process
Ownership
– Transactional Channel Strategy
– Payment Strategy
Technology– Invoice Automation
– Spend Visibility
– Self-Service
Process Governance
and Standardization
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At least half of all organizations have end-to-end alignment of Purchasing and Accounts Payables, a key enabler of performance
Strong alignment: Designated
"purchase-to-pay" owner is
accountable for "end-to-end" process
(e.g. single accountability for the end-
to-end process) or “high-level” of
coordination between Purchasing and
AP
Top Performers: 61%
Peer: 48%
23%
38%
38%
0%
19%
29%
40%
12%
Designated "purchase-to-pay" owner isaccountable for "end-to-end" process (e.g. single
accountability for the end-to-end process)
Separate purchasing and accounts payableprocess owners with a high-level of coordination
Separate purchasing and accounts payableprocess owners with a moderate level of
coordination
Separate purchasing and accounts payableprocess owners with minimal level of
coordination
Top Performer Peer
Degree of P2P Process End to End Alignment
Source: Hackett P2P Study
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Designing Effective Process Ownership – The 3 Key Questions
Process Breadth – To what degree
does the process truly extend from
one end of the organization to the
other?
Organizational Reach – To what
extent are elements of the
organization (BUs, GBS and
corporate center) included in the
end-to-end process?
Span of Authority – How are
accountabilities assigned to
effectively manage the end-to-end
process?
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Standardized business processes allow organizations to drive efficiency and effectiveness across the enterprise
43%
18%
18%
21%
Maximum global level achievable (over 80% global)
Predominantly global (51%-80% global)
Mixed global and local (21%-50% global)
Local with global in special cases (6%-20% global)
Predominantly local (less than 5% global)
Level of Standardized Processes and Procedures
Across the Business(Percent of all Participants)
Procurement and Payables Work Together to
Streamline and Simplify the End-to-End Process
67%
89%
Peer Top Performer
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2.5
2.7
2.5
2.6
2.8
2.4
2.3
2.4
2.6
2.3
2.8
3.2
3.4
3.1
3.1
3.3
2.8
2.7
2.6
2.8
2.4
2.4
Reducing and standardizing the number of available'buy-pay' channels
Improving compliance to preferred suppliers andcontracts
Improving cash generation/preservation throughterms extension, payment clock modification and…
Optimizing payment strategies
Improving internal compliance to defined transactionpolicies
Formalizing roles and practices for supply riskmanagement
Improving the ability to take early payment discounts
Continuous improvement such as Lean or Six Sigma
Improving payment and tax recovery auditingprocesses and tools
Implementing or expanding a Pcard program
Improving Travel and Expense process and toolsEffectiveness
Importance
2014 P2P Process Design initiatives will prioritize channel design, compliance, and payment strategy
Importance and Effectiveness of CapabilitiesMean results, ordered by biggest gap between importance and effectiveness
The Biggest Gaps Between
Importance and Effectiveness
0.8
0.7
Effectiveness scale:
1-No capability, 2-Slightly effective, 3-Moderate, 4-High
Importance scale:
1-Not important, 2-Low, 3-Medium, 4-High
0.6
Source: Hackett P2P Key Issues Study
Transactional Channel
Strategy
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Top Performers establish a Source to Settle Channel Strategy then take action to guide requisitioners to preferred suppliers
28% 8% 56%
67%
8%
33%
Non Top performer
Top Performer
No standard buy/pay channels established Not Effective Mostly Effective with gaps Very Effective
How effective are you at driving requisitioners to preferred buy/pay
channels with the right supplier/right price/right buy method?
Source: Hackett P2P Study
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The end result of a source-to-pay channel optimization is a streamlined Source to Pay process to guide requisitioners
Source Buy Pay
Source Requisition BuyTransmit to
supplierReceive Invoice Pay
Strategic
sourcing
Automated
inventory/
MRP
Automated
(no touch)
Automated
(no touch)
System
receipt
entryE-invoice ACH
User-
defined
sourceE-catalog
SRM
sourcing
cockpitManual
Time and
attend.
system
ERS
(no invoice)P-card
Tactical
sourcing
desk
Pull from
stock
P-card or
travel card
No system
receiptPaper
Wire
transfer
Non-
sourced
No system
required
No PO
(invoice
only)No invoice
Paper
check
Source: The Hackett Group
Staff augmentation spend category example
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49%
3%
9%
2%
11%
26%
55%
12% 11%
0%3%
20%
3-Way Match Evaluated ReceiptSettlement
Assumed Receipt Recurring Invoice P-Card (and other) Non-PO
44%
5%9%
0.4%
11%
31%
48%
11%
17%
0.2%
8%
15%
3-Way Match Evaluated ReceiptSettlement
Assumed Receipt Recurring Invoice P-Card (and other) Non-PO
Peer Top Performer
Top Performers have a well thought out, blended transactional strategy that balances efficiency with control
Transactional Strategy
(Percent of Transactions)
Transactional Strategy
(Percent of Spend)
TP = 37% on Optimal Channels
Non-TP = 25% on Optimal Channels
TP = 78% on PO/Contract
Non-TP = 63% on PO/Contract
Source: Hackett P2P Study
Payment
Strategy
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X
X
X
X
The appropriate working capital solutions depend on your cash strategy, degree of automation and supply base composition
Positive
Impact
Moderate
Impact
Neutral
Impact
Negative
Impact
Solution
Payment terms
management
Early pay discounting
Dynamic discounting
Impact on buyer
Working
capital
P&L Process
X
X
X
X
X
X
Impact on supplier
Working
capital
P&L
X
X
X
X
X
X
Purchasing cards1
Optimal purchasing
channels
E-Invoicing X
X
X
X
X
X
Partial Summary of P2P Strategic Levers
X
X
Notes:Partial summary of S2S strategic levers1 Assumes monthly settlement cycle with issuing bank
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Improvements to Working Capital and spend reductions from payment strategy initiatives are relatively easy to measure quantitatively but require end to end collaboration
Percent of Suppliers for Which Standard
Terms are Applied
61%
95%
Peer Top Performer
69%
82%
Peer Top Performer
Early Payment Discounts Taken as
a Percent Of Available
Days Payable Outstanding
40 48
Peer Top Performer
Note: DPO is Self Reported based on internal
methodology
Negotiated
by
Sourcing
Executed
by AP
Source: Hackett P2P Study
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Although pursuing discounts and extending payment terms generates savings and helps manage working capital, for the majority of organizations it is still not a priority
Strategy for Early Payment Discounts(Percent of all Participants)
13%
13%
19%
7%
22%
25%
Aggressively pursue ALL available discounts and focus on expandingthe availability of discounts through supplier negotiations
Aggressively pursue ALL available discounts with little focus onexpanding the availability of discounts
Take discounts when earned with no specific goal of taking ALLavailable discounts
Always take available discounts regardless if paid within discount term
Little focus on taking discounts
Dynamic Discounting Strategies(Percent of all Participants)
19%
14%
30%
42%
Allow suppliers that are setup on standard net payment terms with nodiscount to elect an early payment discount once the invoice isapproved for paymentTake a pro-rated portion of a discount if paid before net term but afterdiscount term (e.g. payment term is 2% 10 Net30, if paid on day 20take a 1% discount)None currently in place but are implementing or currently evaluating
None planned at this time
Source: Hackett P2P Study
Technology
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2.4
2.3
2.1
2.3
2.7
2.1
2.7
3.5
3.4
3.1
3.2
3.5
2.9
3.4
Enabling electronic invoicing through third partynetworks, supplier portals, or EDI
Implementing or expanding use of electroniccatalogues
Introducing technology to promote self-sufficiencyin accounts payable
Guided buying to preferred supplier, pricing andbuying channel
Improvements to the current e-procurement system
Driving supplier adoption of a connectivity strategy
Automating paper-based invoices using imagingtechnology, OCR, or workflow
Effectiveness Importance
The Biggest Gaps Between
Importance and Effectiveness
2015 P2P technology initiatives: A large gap exists between electronic invoicing importance and effectiveness
Effectiveness scale:
1-No capability, 2-Slightly effective, 3-Moderate, 4-High
Importance scale:
1-Not important, 2-Low, 3-Medium, 4-High
How important and effective are the following capabilities for the
success of your organization?
1.1
1.1
1.0
Importance and Effectiveness of Capabilities
Key Takeaways
Electronic invoicing is an important
capability but organizations are
struggling with how to best implement
it.
Enabling supplier adoption of these
solutions is currently ranked lower in
importance. To succeed with these
initiatives, supplier enablement needs
a higher level of attention.
Source: Hackett P2P Key Issues Study
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Cloud Strategy: Most P2P Organizations are planning a hybrid approach to migration to the cloud
Strategy for Adopting Cloud Based Solutions (i.e. Software-as-a-Service)
25%
13%
45%
18%
No plans for cloud adoption - Our P2P solutions are primarilyinstalled on site and will remain that way in the future
Today, our P2P technology is primarily installed on site but we arepiloting cloud solutions
Our strategy is to leverage a combination of on-premise and cloudP2P solutions to best meet our goals
Our strategy is to eventually migrate all P2P solutions to a software-as-a-service or cloud deployment model
For P2P technology, which statement best describes your strategy for adopting cloud based solutions (i.e. software-as-a-service)?
Source: Hackett P2P Key Issues Study
Invoice Automation
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Invoice Automation
Advanced Invoice Processing
Electronic Invoicing
Supplier Portal
Third-Party Network
EDI (via VAN)
File Upload / Self Entry
PO Flip
Invoice Capture
Scan-based
Fax-based
Email-based
Invoice Elimination
Evaluated Receipt Settlement (ERS)
Purchasing Card(P-card)
"Invoice automation" can refer to any solution that is designed to mitigate the inefficiency of traditional paper invoice processing.
Invoice is received in an
electronic format from
the supplier enabling
automated data entry
Invoice is not received from the
supplier
Invoice is received in
a non-electronic
format and/or requires
manual intervention
for data entry
In practice, nearly 60% of all invoice line-items are still
received on paper
The latest generation of imaging technology is
sometimes referred to as intelligent data capture (IDC),
advanced recognition (AR) or intelligent document
recognition (IDR) in Hackett research and elsewhere.
Invoice capture includes imaging of a physical document
(transmitted via mail, fax, email), enhanced recognition of
the image, extraction and validation of digital
information, and workflow connectivity with downstream
systems
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Top Performers leverage electronic transactions for invoicing and payment far more than Peers
Percent of Electronic Invoices and
Invoice-less Transactions*
Percent of Electronic Payments as Percent of
Total Payments
25%
64%
Peer Top Performer
62%
74%
Peer Top Performer
*Invoiceless transactions includes Evaluated Receipt SettlementSource: Hackett P2P Study
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27%
50%
44%
33%
23%
25%
70%
60%
60%
40%
30%
20%
Direct connect through Internet(supplier portal solution)
Email-based solution
Value Added Network throughnon-Internet (EDI through VAN)
Third-Party Network throughInternet (EIPP)
Fax-based solution
Primarily paper based - Noelectronic strategy exists
Peer Top Performer
EDI is no longer the dominant connectivity strategy, Top Performers are leading the transition to web-based solutions
Primary Vendor Connectivity Strategies(Percent of all Participants)
Source: Hackett P2P Study
?
Spend Visibility
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Top Performers have higher levels of visibility to spend at the line item level, a key contributing factor to spend management effectiveness
Percent of Spend Visibility with Supplier,
Category and Line Item Level
54%
64%
Peer Top Performer
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Requisition
1
Order
2
Receive
3
Complete purchase order form
(either paper or electronic)
based on approved Requisition
Route PO to appropriate
management authority for
approval (Requestor should be
different from individual
ordering)
Route order to supplier (either
electronically via EDI or via fax)
Confirm receipt of PO with
supplier
Process received goods or
acknowledge completion of
services
Communicate receipt of
goods or services to AP for
processing
Complete requisition form
(either paper or electronic)
Route requisition form to
appropriate management
level for approval
Route requisition to
Procurement for
processing
Pay
4
Receive invoice from
supplier
Check invoice for accuracy
Perform match (either two-
way or three-way)
Take discount
Send payment to suppliers
either electronically or via
paper check
Manage
5
Conduct spend analysis to
check contract compliance
and continuous sourcing
Review supplier
performance
Manage discounts and
rebates
Assess overall contract
compliance
Spend Visibility Benefits to the Procure to Pay Process
Effective spend analysis creates improvements at almost every stage of the procure-to-pay process:
Introduction
Results in list of
approved vendors
which streamlines
requisition process
Identify and reduce
non-compliant or
“maverick” spend
Reduces financial savings
leakage by driving
compliance to negotiated
contracts
Increased visibility into
enterprise-wide spend and
improvements in reporting
capabilities
Visibility into spend enables the management of expenditures and ongoing spend efficiencies
Benefits of spend analysis
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Benefits achieved through automated spend visibility are significant
Benefit Type Actually Achieved
Reduced the amount of time required to complete spend analysis by: 33.33%
Increased the % of total spend being analyzed and reported on by: 33.67%
Increased the accuracy of spend reporting by: 38.33%
Identified and reduced non-compliant or “maverick” spend by: 18.17%
Identified cost savings opportunities leading to additional strategic sourcing
savings of (on average): 15.17%
Identified opportunities and was able to consolidate the supply base by: 8.00%
Source: The Hackett Group’s Spend Analysis Poll, February 2015
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Fully automating spend analysis has major benefits
Today, only 19% of companies describe their spend analysis process as fully automated.
33% report having a completely manual spend analysis process.
Companies who have highly (versus partially) automated spend analysis solutions experience:
• 258% greater improvements in the time it takes to complete analysis.
• 155% greater increase in the amount of spend being analyzed
• 109% greater improvement in spend reporting accuracy.
Spend analysis is the process of aggregating, cleansing, and analyzing corporate spending data for the
purposes of reducing costs and improving operational performance.
Spend analysis can be an important competitive advantage for companies that use it, especially in highly
competitive industries. It enables companies to out-think and out-execute their competitors by helping them
lower costs and leverage supplier relationships.
Spend analysis (and the visibility it enables) provides the necessary foundation for procurement organizations
to make better, more informed sourcing decisions.
Key takeaways
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Outsourcing spend analysis also drives greater benefits
46
35%
31%
36%
44% 43% 44%
88%
53%
73%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% reduction in the time required to completeanalysis
% increase in the total spend being analyzed % increase in spend reporting accuracy
The Benefits of Implementing a Spend Analysis Tool
Only internal staff are used Partially outsourced Completely outsourced
Key takeaways
Companies who completely outsource
data collection (versus use internal
staff) experience:
• 151% greater improvements in the
time it takes to complete analysis.
• 71% greater increase in the
amount of spend being analyzed
• 103% greater improvement in
spend reporting accuracy.
Source: The Hackett Group’s Spend Analysis Poll, February 2015
Self Service
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Top current and target uses of supplier portals
Onboarding of new suppliers
Maintenance of existing supplier master records
Order tracking (order history, open POs, order acknowledgements, etc.)
Invoice tracking and processing
Supplier performance and relationship management
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Top performers tend to utilize self services solutions more often, and when in use, implement more broadly
56%
21%
5%
8%
8%
3%
46%
22%
14%
11%
6%
"Live" on the first call
Self-service on the Internet /Intranet
Voice response (IVR or VRU)
Voice-mail, requiring a return call
Other means
Peer Top Performer
What percent of inquiries are answered through
the following methods?
(All Participants)
Source: Hackett P2P Study
Average Percent Of Inquires Through Self-
Service
(For Those Using Self-Service Tools)
20%
58%
Peer Top Performer
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Technology Drives Efficiency: Among organizations with the highest level of AP technology implementation, transaction costs are lower and cycle times are faster
$4.95
$8.12
AP Automation Users Non-Automated APOrganizations
Cost per Invoice by Level of AP Automation
9.9
11.2
12.5 13.3
PO InvoicesNon-PO Invoices
Invoice Cycle Time from Invoice Receipt Through Approval for Payment
(Average Business Days)
AP Automation Users Non-Automated AP Organizations
- 40%
Source: Hackett P2P Study
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With so many competing
agendas . . .
1. What is top of mind
with executives?
2. What does World
Class look like?
3. How does the P2P
process support
“Value”?
4. Where do I start?
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Summary of current P2P themes
Strong focus on end to end process standardization, especially globally
Increased focus on external regulatory compliance over the last year,
consistent with our enterprise-level study results
Technology enablement and consolidation is important
E-Invoicing implementation is a still top technology priority; self service
may be next
Wide gaps still exist in buy-pay channel optimization and requisitioner
compliance
Outsourcing and offshoring P2P are still lower on the list for most
companies
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Accounts Payable Capability Development Checklist
Information
Capture spend data necessary for spend analytics and compliance
Standardize and automate supplier validation and onboarding process
Formalize supplier master file maintenance program with well defined
accountability
Governance & Organization
Establish single End-to-end P2P process
accountability at an enterprise level
Standardize processes globally
Service Placement
Activity is centralized across the enterprise
Utilize Center of Excellence and Shared
Service models appropriately
Enabling Technology
Automate invoice receipt, routing and approval workflow
Implement self-service solutions for supplier data updates,
inquiries, and dynamic discounting
Utilize imaging technology for storage and retrieval of invoices
and related documents
Process Design
Centralize invoice receipt
Optimize supplier payment strategy
Develop Source to Pay channel strategy,
leveraging 2 way match where feasible
Skills & Talent
Training and hiring standards to ensure
skill levels of resources are consistently
high
Focus resources and budget more on
planning and strategy than transaction
processing
Process Sourcing
Evaluate outsourcing options where
appropriate
Assess opportunities to offshore
routine activities
Service
Delivery
Components
Information
Service
Placement
Process
Sourcing
Process
Design
Enabling
Technology
Skills &
Talent
Governance
&
Organization
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Amsterdam | Atlanta | Chicago | Frankfurt | Hyderabad | London | Miami
Montevideo | New York | Paris | Philadelphia | San Francisco | Sydney | Vancouver
Amy Fong
P2P Program Leader
+408 887 7335| o
Thank you for attending
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Statement of Confidentiality and Usage Restrictions
This document contains trade secrets and information that is sensitive, proprietary, and confidential to The Hackett Group the disclosure of
which would provide a competitive advantage to others. As a result, the information contained herein, including, information relating to
The Hackett Group’s data, equipment, apparatus, programs, software, security keys, specifications, drawings, business informa tion, pricing,
tools, taxonomy, questionnaires, deliverables, including without limitation any benchmark reports, and the data and calculations contained
therein, may not be duplicated or otherwise distributed without The Hackett Group Inc.’s express written approval.
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