November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
P2P and Payables Breakthrough:
Five Proven Strategies for Achieving Accounts Payable Excellence
Chris Rauen, SAP Ariba
Hanif Dhrolia, BC Hydro
November 13, 2017
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Rethinking your payables process in the digital economy
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
What’s driving the digital transformation?
World data doubles every
18 months
75 billion connected devices by 2020
1 billion people connected on
social networks
75% of IT spend will be cloud-based
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Invoice processing performance:
fair or foul
90:10
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Embracing the digital supply chain
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Automation alone isn’t the answer
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Direct & Indirect
Suppliers ERP
Dynamic Discount
s
B2B Payment
The power of payables
Improved DPO
Connected Complianc
e
Smart Invoicing
Strategy #1
Be smart about invoice automation
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Smart invoicing
Invoice
ERP
Buyer
98% touchless
processing
Suppliers 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 consumption thresholds
Shipping & tax thresholds
Account
coding
Workflow
Compliance
Invoice
number
Bill to /
ship to
PO
number
Requestor
(non PO)
Invoice
date
VAT / GST
IDs
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Smart invoicing at BC Hydro
Automating exceptions and driving straight-through processing
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Smart invoicing at BC Hydro
• $1.4 B Enabled Invoice Volume
• 1,150 Suppliers moved
off paper
• >$1M AP cost savings
• 100k Invoices per FTE
Strategy #2
Close the loop to capture value
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Siloed Processes
Analyze Source Contract Order
Fulfill Ship Notify Invoice
Invoice receipt
Manage Match & approve
Pay
Sourcing &
Procurement
AP
Supplier
Fax
Scan
OCR
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Supplier Portals Analyze Source Contract
Ship Notify
Manage Match & approve
Pay
Sourcing &
Procurement
AP
Supplier
Order
Invoice receipt
Invoice Fulfill Invoice receipt
& status
Send PO
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Business Network: Close the Loop to Capture Value
Ord
er
Match Manage/ approve
“Actual”
spend
data
Pa
y
Supplier
Fulfill Ship Notify Invoice PO AR
Perfect
PO
Defined & approved
catalog content
Payment visibility,
execution &
remittance
Perfect invoice
Order acknowledgement
& ship notice
Source Requisition Contract Analyze
Catalogs
Invoice receipt
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Close the loop to capture value
How an airline company’s P2P value took off
Strategy #3
Increase strategic value
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Payment terms
Discounts Invoice
automation
Strategic initiatives to achieve accounts payable excellence
Funding Sources
Suppliers Buyers
Supplier Values
• Optimize DSO and A/R management with early payment or financing options
• Utilizing dynamic discounting and supply chain Finance
• Lower costs and enhance overall access to capital
• Visibility to approved invoices, eliminating invoice status calls
• Payment visibility and access to remittance information
Payment Processing
• Mitigate liquidity risks • True multi-funding options • Low rate funding
• Optimize the payment process • Electronic payments meeting
regulatory compliance
New capabilities to monetize trading collaboration
Buyer Values
• Extend days payable 0utstanding (DPO) - unlocking millions in free cash flow
• Increase EBITDA with dynamic discounting
• Strengthen and tighten relationships with strategic suppliers
• Reduce risk with outsourced supplier bank account info and e-payments
• Increase A/P management efficiency providing visibility through vendor portal and outsourced payment services
Cloud Network
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Strategic initiatives to achieve accounts payable excellence DPO and payment terms rationalization and extension
• Ensures paying suppliers to term and enhancing free cash flow
• Review multiple supplier segments for inconsistencies
• Drives consistent supplier payment experience
• Delivers DPO improvement and uplift adoption for early pay program
• Aligns DPO with industry peers
• Rationalized across all suppliers
• Positions extended net terms to specific suppliers / categories
DPO benchmark
Free cash flow - Every $1 billion of targeted spending extended 15 days = Estimated $40 million in
free cash flow
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Strategic initiatives to achieve accounts payable excellence Supply Chain Finance – Strengthen your Payment Terms Strategy
Buyer electronically
transmits payables data to
the system. No change to
existing invoice approval
process.
At invoice maturity date,
Buyer funds Buyer
controlled clearing
account. The system
executes payment
instructions to pay…
…the Funder, if supplier
has sold receivable
…the Supplier, if supplier
has not sold receivable
Supplier views
receivables via web. Has
option to sell receivables
and determine their
collections date or wait
until maturity.
1 2
3 Funder(s) receives and
processes early payment
requests - provides
funding to Supplier.
4
Supply Chain Finance
Suppliers
Funders
Buyers
Payment terms
Discounts Invoice
automation
Cloud Network
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Increase strategic value
Home building materials retailer keeps on building…
Strategy #4
Transform from cost to value center
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Strategic initiatives to achieve accounts payable excellence Discounting – Drive ROI while focusing on your core business
Current DPO
Automate to minimize
missed discounts 1
Day 10
0%
0.5%
1.0%
1.5%
2.0%
2.5%
Day 30
$$
Pro-rate discount to cover
remaining missed opportunities 2
$$
Ad Hoc captures “as needed” acceleration
for net term suppliers 3
• Available to some or all suppliers
• Delivers client savings and improves ROI
• Improves EPS
• Dynamic / Pro-rated discounts to be earned
at any point up to the invoice maturity date
• Buyer initiated
• Optional program suppliers can use to
manage their liquidity
• Applies to some or all invoices
Discounting Benchmark
Net Income - Every $1b of targeted spend = Estimated
$1 - $2M in discounts
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Transform from cost to value center
How BC Hydro supports supplier cash flow
Strategy #5
Modernize payment for P2P adoption
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Big Blue, Batman, Betamax & B2B Payments
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Buyer
Supplier
Buyer
Bank
Supplier
Bank Credit
B2B payments past: 1970’s innovation
80-140 Characters 80-140
Characters
Connect Data to Payment
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Buyer
Payment instructions
Rich remittance
Track and trace payment status
Bank account management
Invoice status
Purchase orders, invoices,
contracts, and receipts
Supplier
Buyer
Bank
Supplier
Bank
Debit Credit
Integrate Payment with Data
PO’s, Invoices, Contracts, Receipts
B2B payments future: Connecting the credit contextually
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Improving P2P adoption with payment
Why A cell phone network spells P2P backward
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Be Smart about Invoice Automation
Close the Loop to Capture Value
Increase Strategic Value
Transform from Cost to Value Center
Modernize Payment for P2P Adoption
Five proven strategies for achieving
accounts payable excellence
34 © 2016 SAP SE or an SAP affiliate company. All rights reserved.
Going digital…
It feels like this.
November 12-14, 2017
Bellagio Resort & Casino, Las Vegas
Thank you.
Chris Rauen, SAP Ariba
Hanif Dhrolia, BC Hydro