global automation domination: how do you roll out one workflow solution across 20 countries?

Global automation domination:How do you roll out one workflow solution across 20 countries?

The Accounts Payable Tech SummitLondon, UK6th December 2011

By Urs Gräffker, Project Manager at IKEA

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Agenda

IKEA in briefP2P preconditionsDarwin projectDarwin solutionBiggest challengesWhere we are todayKey lessons learned

19-Dec-11Urs Gräffker 2


IKEA – for the many people

OUR VISIONTo create a better everyday life for the many people

OUR BUSINESS IDEATo offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them


125 stores in 15 countries (1996)280 stores in 26 countries (2010)

143 million store visits (1996)

626 million store visits (2010)

2,400 suppliers of commercial goods (1996)

1,000 suppliers of commercial goods (2010)

IKEA is set for growth

Some facts on the P2P status quo


ProcurementGlobal deals sourced from global purchase organisation in SwedenLarge national deals handled by national purchasersThe rest: locallyProcurement tool: iShop –implemented world wideNumber of suppliers: ?

Two Finance BSC‘s(Business Service Centres)

1.Shanghai for Asia Pacific and North America

2.Poznan for Europe

~ 1.5 millioninvoices for indirect material and

services per year

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How have we handled invoices for indirect material and services?

TODAY

In many countries manual handling of indirect material and service invoices

A time consuming and costly adminstrative process

Little control and transparency, due to manual handling

Different working routines and applications for invoice handling

In many countries manual handling of indirect material and service invoices

A time consuming and costly adminstrative process

Little control and transparency, due to manual handling

Different working routines and applications for invoice handling

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TODAY

TOMORROW

Where do we want to be?

System supported and partly automated invoice handling

Increased efficiency in total, and less time spent in local accounting departments

Enhanced control and compliance, as well as increased transparency and quality throughout the P2P process

One way of handling indirect material and service invoices in IKEA

The Darwin project was born with two siblings

Increase number of electronic purchase orders and goods receipts

19-Dec-118Urs Gräffker

DARWIN project

IPi project

Business Service Centre transition

One common electronic workflow for invoice control and posting

Centralise remaining transactional work in shared service centers

The Darwin project in brief

19-Dec-119Urs Gräffker

HISTORY & FACTS

Pilot implementations in spring 2010 in Italy, UK and Ireland

Rollout project started in September 2010

Ambition: Darwin implemented in all countries by April 2013

Project orderer: P2P process owner

PROJECT IDEA

The Darwin rollout project

contributes to a higher cost efficiency in IKEA’s P2P process and

opens up the possibility to concentrate the handling of invoices for indirect material and services in regional business service centres

by implementing the Darwin solution in 23 IKEA group countries

We are on the way


Darwin implemented

To be rolled out

Out of scope

Current rollout

The Darwin solution in a nutshell


iShop

PurchaseOrder

Goods Receipt

Scanning provider

Scanned and verified Invoice

Automatic Matching

Accountant

• Add Tax Master Code

• Perform validation Check

• Transfer to accounting

BookingPayment

BaswareSuccessful

Match


Invoice imported from scanning= fields completed from scanning provider


Master View in Basware


ThinClient view in Basware

The biggest challenges – and how we try to overcome them 1/2


RESISTANCE TO CHANGECountries like their way of working – why would they want to change?

• Show benefits• Work on concerns• Clarify it‘s mandatory• Deliver good examples with successful rollouts

SYSTEM INTEGRATIONFrictions in overall P2P system setup – interfaces and databases

• Implement workarounds• Fix integration issues• Accept issues for the time being

SPECIAL NEEDSMany countries request special functionalities, e.g. based on legal demands

• Identify what requests are really business critical• If certain flows only – handle manually outside

Darwin• Implement workarounds• Change the system solution

CHALLENGES ACTIONS

The biggest challenges – and how we try to overcome them 2/2


BSC TRANSITIONDarwin go live = transition of transactional work into Business Service Centre

• Set up a common steering• Agree on common timeline• Co-ordinate the rollout work• Work on content dependencies

AUTOMATIC MATCHINGMatching rates below expectations in rollouts so far

• Focus more on setting up „contracts“ in Basware• Increase number of electronic purchase orders

and goods receipts• Include additional flows in purchasing tool• Be patient - work continuously on increasing the

rate – after rollout project is closed

CHALLENGES ACTIONS

Where are we today?

Darwin up and running in eight countriesOne legacy invoice handling system closedLow rates of automatic matchingCore solution is stableEnd users are satisfied with functionality and usability of BaswareRemaining transactional work handled in business service centres in Poznan and ShanghaiEfficiency increase not measured yet


Key lessons learned

Difficult to solve issues while running –don‘t start without the right prerequisites (e.g. system integration)

If two changes in one, set it up as one (system rollout + BSC transition)

Don‘t underestimate the need for proper change management

Big changes take time (e.g. automatic matching, BSC transition)

A good solution is what counts long term

We become better with every country rollout!


12/19/201119

“Most things stillremain to be done.A glorious future!”

INGVAR KAMPRADFounder of IKEA.

©In

ter IKEA S

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