Hyperautomation for Procure to Pay (P2P), Source ... - Mphasis

Hyperautomation for Procure to Pay (P2P), Source to Pay (S2P), Common Business ProcessesWhitepaper by Ranjit Hardikar, Program/Group Manager, Camunda BPM Architect

Contents

Introduction 1

Challenges in Automation of Procure to Pay/Source to Pay 1

Solutions 2

Functional Overview 2

How to Hyperautomate Procure to Pay 3

Conclusion 4

Reference 5

1.IntroductionManufacturing industry covering the entire procurement process (procure to pay) is threatened

by many business challenges such as longer procurement cycles, manual paperwork and

delayed payments. This whitepaper throws light on the technical solution, i.e., Hyperautomation,

to overcome these challenges and its benefits to the business users by using RPA and iBPMS

technology, to provide both generic and specific solutions.

The procure to pay process involves extracting invoice and payment data from multiple systems

like supplier emails, ERP systems, CRM systems, banks, vendors and logistics companies. As not

all these systems provide easy integration methods, they generally involve some amount of manual

interventions - causing process inefficiencies. RPA bots can fill these integration gaps for executing

a seamless P2P BPM process. Since bots work on the front-end, they can provide an easy way to

automate integrations.

Additionally, some of the information coming in will be in the form of forms (e.g., invoices that the

company receives from its suppliers). This data needs to be extracted, validated and enriched.

For example, companies need to assign General Ledger (GL) accounts to invoices without

Purchase Orders (POs). With a fully automated procure-to-pay business process, it can be ensured

that the procurement best practices are followed, and that there is a single version of truth for all

transactions that run across this common business process.

2.Challenges in Automation of Procure to Pay/Source to Pay Here are some of the major challenges faced in automation, during the procurement process:

• Longer procurement process cycle: Involves multiple manual approvals and routings

for signoffs.

• Lack of governance and compliance: Multiple governance and compliance models within

organization confront the within overall standards.

• Data accuracy: Quick access to relevant data is not possible as each department holds

independent data.

• Change management: Interdependency across various departments for process changes

and different systems being used.

• Delayed payments: Due to lack of a single system in place to monitor the vendors, the

payments get delayed - resulting in penalties and loss of early payment discounts.

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• Performance tracking: Performance across departments cannot be tracked as the data is

captured only at department level and not at central level.

• Manual paperwork at various stages: Not all processes are digitized for various reasons and

effectively loss of key data.

3.SolutionsA technical solution built using a combination of RPA and workflow orchestration using iBPMS

tools. The RPA part of technology can be used to read the manual documents and perform

repetitive data entry work at the different systems. The iBPMS tool will connect the different

systems and orchestrate entire process flow. Manual intervention will be required for specialized

cases. This solution will be beneficial for high volumes of purchases with lower tracking costs per

purchase.

4.Functional Overview Below diagram represents the Procure to Pay - Process Flow

Need Offer Order Delivery Invoice Payment

1. Need: Any formal purchase request in the organization.

2. Offer: The needs are verified and are prioritized to create an offer to different suppliers.

3. Order: Based on requirement type (standard/non-standard), the order can be placed

to standard suppliers or vendor search and finalization will be required. Post all internal

approvals, the order can be sent to the supplier.

4. Delivery: Once the supplier delivers the agreed goods, these shall be inspected and the

receipt note can be sent to the supplier.

5. Invoice: Once the goods pass the approval criteria, supplier invoices can be approved for payment.

6. Payment: On approved invoice, the payments team makes the payment, in part or full and

tracks the invoice for closure.

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5.How to Hyperautomate Procure to Pay?Procure to pay above process can use multiple systems at different stages consisting of

data repetition, document reading, intersystem communication, multi-party email and phone

communication for tracking and order fulfillment.

The technology levers can be applied on top of this process as shown in the diagram below:

The solution proposes the use of iBPMS tools such as Pega, Camunda and Appian to orchestrate

the business flow, by connecting the existing systems using RPA calls and microservice

integration.

The BPM layer will enable cross-service monitoring and management of the end-to-end process,

providing alerts for long-running BOTs giving operational visibility.

RPA/BOTs can be used for email exchanges by reading the incoming emails and to update the

system. The external system can be integrated using microservices.

Screen scrapping can be performed by BOTs to complete the repetitive screens. OCRs can

support standard document reading and adding to the systems.

AIML can be used for invoicing for small pattern decision making based on patterns and

historical data. AIML can also save human efforts for payment reconciliation.

Salient Features

1. Full workflow automation of end-to-end procure to pay

2. Ad hoc and planned integrations

3. Case management capabilities

4. Operational reporting/analytics

5. Option to add AI/ML capabilities

Order Delivery

Integration with External Systems

BPM – Pega/Camunda/Appian

To & FroCommunication

CatalogManagement

DeliveryTracking

Scanning,OCR

RPA

RPA

RPAMicroserviceIntegration RPA RPA

Invoice Payment

Approval

Need Offer

Contracts Catalog Receiving Veri�cation Approval

Benefits

Key advantages of using the hyperautomation using RPA and iBPMS are:

1. Improved time-to-market with effective inventory reduction: Based on the order schedule and

vendor supply capacity, the procurement can be managed effectively to minimize the inventory.

2. Reduced manual errors with reduced reworks and checks: Due to data and process

digitization, manual errors can be reduced.

3. Process efficiency at each stage: Process automation through RPA can help run the process

round-the-clock with more accuracy and no manual intervention, effectively increasing the efficiency.

4. Reusing the existing systems: BOTs and microservices integration will enable use of the

existing system with minimal changes.

5. Early alerts for delays in process through SLA: Workflow SLA will trigger notification to the

right audience in advance for any manual activity to be done at a predefined time, or alert in

case of an activity not being performed.

6. Better discounts on early supplier payments: Increases the chances of getting early

payment discounts from vendors.

7. Operational reports to check the performance: iBPMS tools provide operational reports

indicating the process performance at various stages of the process flows.

8. Check for revenue leakage: The operational reports can provide the details in the process

lags and help in improving the process.

6.ConclusionThis whitepaper provides a foundation for building framework for procure to pay consisting of

forms, workflow and AI/ML components and RPA components which should help accelerate

build efforts by 10-15%.

Each organization will have existing systems for different functionalities to realize the procure to

pay in their organization. The proposed framework will enable building a customized orchestration

layer on top of the existing systems. The solution intends to build microservices and BOTs

on existing systems and use iBPMS for orchestration of the overall procure to pay process.

Different clients based on needs and budgets can realize these solutions in different size and

scope. Essentially, this means efficiency savings for procure to pay in the form of reduced manual

work, quick integrations which can further add qualitative and quantitative value to the process.

The solution can be utilized in various pricing modes based on the customer needs such as

monthly fixed fee, annual transaction based or pay-as-you-go models. These kinds of sizing and

pricing can be helpful for mid-size organizations where the transactions are low to medium.

Large organizations can opt for dedicated cloud environments to deploy the solution in a

SaaS-based model. Organizations can also utilize and offer this process as an API service.

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Author

Ranjit is a seasoned technical manager with over 20 years of IT industry experience and has worked on multiple technologies across different projects in Europe and Asia. Extensively worked as a Pega Architect since 2007 to manage projects and taking over/transitions the projects from incumbent vendors. Worked closely with clients in both onshore and offshore models.

Currently working as Camunda Architect for insurance company in Europe for the last 6 months, he has also worked on consulting projects to enable and understand client processes and deriving the business and operational benefits to the customer.

Ranjit Hardikar Camunda BPM Architect

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Reference1 https://www.automationanywhere.com/company/blog/product-insights/the-need-for-speed-in-

procure-to-pay