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"Purchase to Pay"
Tommy Rugsveen
26.10.2011
Agenda
General challenges
Automatic posting and Master data
E-Invoice
Challenges in the Purchase 2 Pay process
– Requisitions and purchase orders
– Goods receipt
– Invoice handling
Demo
Purchase to Pay Challanges
Large proportion of FI Invoices
Reduced usage op MM Purchases due to complexity in SAP
Missing Goods receipts
Automatic posting not possible due to:
– Wrong Master data
• Vendor/Bank info
• Material master
• Prices
Limited use of item scanning and item handling in SAP workflow
E-Invoices slowly evolving
Automatic posting and master data
Why does automatic posting fail?
– Missing/wrong data from scanning
– No line item handling
– Error in master data
– Error in Purchase orders
• Price
• VAT
• Payment terms
– % of FI Invoice to high
How can this be resolved?
Electronic Invoice handling
How to handle E-invoices?
– Will it fit my current invoice handling system
What format should be selected
What are my options
– Point to point
– Usage of a Invoice Hub
Solutions
– Skye solution
– ReadSoft Smart XML
– ReadSoft Collector
Formater – Dokumenter og innhold
UBL 2.0
XML Schema
CENBII Full
NESUBL
XML Schema
EHF/
BII Core
E-invoice Options
How to receive an E-Invoice
Sender
Receiver
Invoice HUB I
Invoice HUB II
INVOICES
Paper
XML
File
ReadSoft Collector
Now also with XML support, directly through collector
Skye Solution for Electronic invoice
Solution Objective
System overview and description
PI based solution
ABAP based solution
Message standards and protocols
Solution package deliverables
Solution Objective
The solution is designed to give SAP customers an easy way of integrating E-invoices into their SAP system using the most common standards for E-invoices.
The end users should have the same look and feel for handling all invoices regardless if they are scanned or received as an E-invoice
Solution is designed to fit most SAP customers regardless of version or invoice handling workflows in SAP
System Overview
System description
Module based solution – Supports Process Integration (PI/XI)
– Supports ERP stand-alone (No PI / XI)
– Can be used with different message protocols
– Compatible with different invoice solutions
• Skye Simple Invoice
• ReadSoft Invoice Cockpit
• Other Invoice workflow solutions
Supports a number of different standards – EHF and E2B (Norwegian standards)
– EDIFACT
– SAP IDOC
PI Based E-invoice solution
PI is used as the recipient of the message from the external E-invoice provider
Standard PI Component for mapping from all supported formats to SAP IDOC or directly to a Function Module
E-invoice will trigger either: – Skye Simple invoice
– ReadSoft Invoice Cockpit
– Any other SAP Workflow solution
Standard Integration process for storing incoming images in Content Server or any other ArchiveLink certified archive, such as Open Text or IBM CommonStore
Standard Style sheets for generating Invoice images based on incoming XML message
ABAP Based E-invoice solution
An ABAP program is used to read the data from a file into SAP.
The communication with the external E-invoice provider is handled through FTP or an other message broker than PI
The ABAP program for E-invoice will trigger either: – Skye Simple invoice
– ReadSoft Invoice Cockpit
– Any other SAP Workflow solution
Standard Integration process for storing incoming images in Content Server or any other ArchiveLink certified archive, such as Open Text or IBM CommonStore
Standard Style sheets for generating Invoice images based on incoming XML message
SAP Processing of E-invoices
Standard SAP IDOC handling in SAP
– Here the invoice is handled as a standard IDOC using the SAP standard functions
Skye Simple Invoice
– A custom cockpit solution for receiving and handling E-invoices without workflow, the data is entered into SAP and standard transactions can be triggered from the cockpit
ReadSoft Invoice Cockpit
– A complete invoice solution for handling all types of invoices
Any other Workflow solution
– The E-invoice can be connected to any existing workflow solution.
Message Standards
Standard SAP PI SAP ECC Stand-alone
Receival of invoice image
Invoice Image generation
E2B Yes Yes Yes Yes
EHF Yes Yes Yes Yes
EDIFACT Yes Yes No Yes
IDOC Yes Yes No Yes
Protocols Overview
Protocol SAP PI SAP ECC Stand-alone
Fil Yes Yes
HTTP(S) (Plain) Yes Yes
HTTP(S) (SOAP) Yes Yes
FTP Yes 3rd party
SMTP (Mail) Yes No
AS2 3rd party No
Solution Deliverables
Solution Package
– SW components
– Best Practices configuration
– Solution design documentation
– Preconfigured standard E-invoice formats
– Image generation component
– System and user documentation
Technical Implementation
– Implementation
– Customer adjustments
The power of ReadSoft
Over 6000 customers
3500+ INVOICES installations
500+ INVOICE COCKPIT Suite installations
Offering SAP Certified products
Member of the SAP EcoHub
ReadSoft leads the market around the world Helsingborg
Amsterdam
Copenhagen
Kuala Lumpur
Frankfurt
Helsinki
London
Madrid
Santiago
New Orleans
Oslo
Paris
São Paolo
Stockholm
Wroclaw
Sydney
Certified by SAP
SAP Certified Software
SAP Software Partner
Member of SAP EcoHub
Our customers – diverse and worldwide
And many
more…
BP Retail
Glaxo Smith Kline
Kellogg's
Coca Cola Enterprises
Areva
John Deere
STARWOOD
Portugal Telecom
Rio Tinto
NZ Telecom
Raytheon
DuPont
Boehringer Ingelheim
BBC
Bank of Ireland
ArcelorMittal
Barclays
Siemens
VW
Thyssen Krupp
Vodafone
Intel
Linde Material Handling
PROCESS DIRECTOR
One thing that most organizations have in common
They are full of business processes and those processes are often full of problems that cause additional expense or worse.
Why PROCESS DIRECTOR?
• Processes run manually and without any way to control them
• Incorrect changes in master data
• People try to bypass established processes
• Maverick procurement
• People avoid using complicated systems
• Quality of service is low or varies in quality and cannot be guaranteed
• Slow processes
• Expensive processes
• No transparency
• Wrong postings and excessive corrections
• Low or no visibility into the process
• Difficulty in maintaining compliance
• Department’s reputation in the organization is harmed
• Phone based service
• Email based service
• Paper based service
PROCESS DIRECTOR - The right solution
Targets and improves business processes
– Uses a common platform approach
– Provides workflows
– Gives you visibility into your processes
– Can be used for processes started internally or externally
– Handles document and request driven processes
Why PROCESS DIRECTOR?
Requisitions
Master data
update/create
requests
SALE
S
CONTROLLIN
G
PURCHASING
BUSINESS
SERVICES RECEIVING
DATA CAPTURE
Incoming
customer
orders
General ledger
correction
requests
DATA CAPTURE
Delivery
notes
Unified process control
PLATFORM
Requisitions Custome
r
Orders
Delivery
Notes
Financial
Postings
Platform &
Custom Processes
Master
Data
Remittanc
e Advices
Requisitions Custome
r
Orders
Delivery
Notes
Financial
Postings
Platform &
Custom Processes
Master
Data
Remittanc
e Advices
Choose a process
Defining the terms
Direct purchasing
– Procurement of materials purchased for use in the manufacturing or distribution supply chain that are directly related to the production of finished goods.
Indirect purchasing
– Procurement of materials not result directly in finished goods. These items include Maintenance, Repair and Operations (MRO) and Operations Resource Management (ORM) items such as…
• Office products
• Travel services
• Replacement parts
• Service
70
%
30
%
66
%
33
%
Total
spend
Transactio
n volume
Direct
Indirect
Requisitions Achieving ROI
Studies by Gartner and Hackett reveal the following:
On average, one third of the total spending comes from indirect spending
On average, 30% to 45% of indirect purchasing is ‘maverick purchasing’ which is ordering over the phone
Investigation shows that maverick purchasing, on average, is 35% higher in price than common comparable agreement prices. This gives a savings potential of 26%
Average indirect order value is $120
Average processing cost is between $20 - $30 per transaction
Average processing costs can be reduced to $10 per transaction
Requisitions
25% Indirect
$400,000,000 total spend
assume
25%
$100,000,000 total indirect spend
$25,000,000 Maverick
spend
10% price
improvement gives
savings of
$2,500,000
$10 reduction in
process costs gives
savings of
$2,080,000
75% non-maverick spend
The spending that does follow an established process can be
improved (perhaps it’s currently via paper or email) and
doesn’t have visibility or has slow workflow processes. Staff
can start spending time on high value work like price
negotiations or supplier rationalization.
Direct spending can also be
executed via PROCESS
DIRECTOR.
75% Direct
spend
When all spending is executed via PROCESS DIRECTOR,
you can have a comprehensive overview of all purchasing,
which gives you the potential to improve total product and
supplier rationalization and bring visibility to the combination
of direct and indirect spending.
208,000 orders (Average $120 per
order)
Achieving ROI
Requisitions
Manual process are slow
People avoid established processes that are too complicated
Difficult to see process, poor visibility
Difficult to achieve good price negotiations when you don’t know what you bought
Business issues with poor requisitioning processes
Requisitions
Controlled collection of all requisitions
Integrated approvals of requisitions by authorized persons
Single point of access for all users in the process
Simple to use web browser interface and a familiar SAP look and feel interface for professional users
Integration to e-catalogs
Requisition creation and approval, good receipt creation, and invoice approval through the same application
Optimization of existing SAP infrastructure
Features
Requisitions
Better basis for price and conditions negotiations
Reduced costs for purchasing, logistics and accounting
Improved incoming invoice processing
Improved reporting ability
Optimized supplier selection
Optimization of existing SAP infrastructure
Low TCO (total cost of ownership)
Key benefits for the PROCESS DIRECTOR solution
Requisitions
Blake Evans is the buyer
and raises the requisition.
Later in the process,
he will create a
goods receipt
Roger Tillman
is his manager
and approves
the requisition and also
approves other invoices
for payment
Barbara Jones is in the
procurement department
and does the final
approval and creates
the purchase order
Demonstration
Collaboration StreamWork
SharePoint
…
Interaction on the go On-Device (BlackBerry, iPhone, Android, iPad)
Mobile applications and functionality
Workflow approval and rejection
Data interaction / drill down
Alerts and metrics
Business Analytics
Solutions for SAP: Moving Forward
Moving forward – Partner portals and building SaaS
Partner communication
Supplier interaction – Invoice and purchase
order inquiries
– Advanced Shipping notifications
– Invoice creation
– Order confirmations
– Dynamic Discounting
Customer interaction – Creating orders
– Checking order status
– Submitting payment advices
Solutions for SAP
Organization External
business
partner
Legacy ERP
Subsidiary
ERP
Leading ERP
Subsidiary
ERP
Questions
?
Technical architecture
alternative
authentication
ArchiveLink
(if required)
Corporate directory
(LDAP, MSAD, SSO supported)
HTTP or HTTPS
Namespace /EBY/
Archive
J2EE compatible Web application server
Intranet Client PC
SAP Optical archive
Web application GUI
SAP Connect
SMTP
Mailserver
Electronic
document
File upload
Catalog
OCI RFC Connection (Data exchange
and authentication based on XML)
PROCESS DIRECTOR
ACCOUNTS RECEIVABLES
LOGISTICS EXECUTION
PURCHASING
Buyer areas
SALES
Supplier areas
Create a quote
Create a sales order
Demand, need or requirement
Create outgoing invoice (bill)
Pay invoice Clear open items
Create remittance advice
Process incoming invoices
Process incoming delivery
notes
Process incoming confirmation
Process incoming quotes
RFP created (optional)
Create PD or SAP PO
requisition
LOGISTICS EXECUTION
ACCOUNTS PAYABLE
Deliver goods or services
Payment
Payment advice
Invoice
Request for
proposal Quote
Purchase order
Order confirmation
Delivery note
Process incoming RFP
Process incoming PO
Various departments
Process PA and find open
items
Create purchase order
Order-to-Cash & Purchase-to-Pay
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