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The role of supplier networks in financial transformation

The role of supplier networks in financial transformation. Agenda. The CFO perspective The HP roadmap Enabling technologies Where the market is headed Potential financial impact. The CFO Perspective. Is A/P More Strategic. Less. More. Same. Source: 2009 Aberdeen Survey.

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The role of supplier networks in financial transformation

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  1. The role of supplier networks infinancial transformation

  2. Agenda The CFO perspective The HP roadmap Enabling technologies Where the market is headed Potential financial impact

  3. The CFO Perspective Is A/P More Strategic Less More Same Source: 2009 Aberdeen Survey

  4. The CFO Perspective Treasury Purchasing A/P Finance Source: 2009 Aberdeen Survey

  5. The CFO Perspective Source: 2009 Aberdeen Survey

  6. HP GBS – our strategy journey COSTS VALUE Decentralized Business Value Add as End-to-endProcess Owner Regional SharedServices Global ConsolidationandAdoption Technology Enablement & Process Optimization 2010 1990 TIME 6

  7. www.OB10.com A/P Workflow ERP Invoice To Pay Process The A/P Process Settlement & Financing Invoice Receipt

  8. www.OB10.com Out- Sourced 9% Hosted 20% On Premise 71% Account Payable Workflow A/P Workflow Implementation No Intention 5% Planning 15% Implemented 45% Actively Planning 20% Currently Implementing 15% Source: 2009 Paystream Advisors Survey

  9. Benefits of A/P Workflow • Automates routing and approval of invoices • Standardizes the process • Ensures greater visibility / compliance • Enables off-shoring of non value added activities • Compresses invoice approval cycle time

  10. www.OB10.com A/P Workflow ERP Invoice To Pay Process The A/P Process Settlement & Financing Invoice Receipt

  11. Why paper invoices persist • Customers: • ERP Input formats are proprietary • Cost and complexity of working with hundreds of suppliers • Suppliers: • Billing Systems output invoices proprietary formats • Cost and complexity of customizing for clients

  12. www.OB10.com Invoice submission methods • Imaging • Optical character recognition • Outsourcing • E-Invoicing supplier network

  13. Service components Supplier Customer Network Services

  14. Many of your suppliers will be on the network We enroll those who are not The Supplier Network

  15. The global supplier enrolment team OB10 Office Locations

  16. www.OB10.com Campaign Reporting Campaign Reporting

  17. Touchless, Straight Through Processing • No Touch • Automated Matching • Immediate Receipt • VAT Compliant • Full Line-Item Level Detail Recycling is good at home… but not in AP operations

  18. Supplier Supplier Supplier Supplier Supplier Supplier Supplier Customer / Buyer Firewall Connector Archive SAP Add-on

  19. Procure to Pay Framework Self-Service – Collaborative Network Standard Supplier Information Supplier Buyer Sales Order Purchasing Electronic Purchase Order Delivery Billing Electronic Invoice Management Supplier Financing Treasury Treasury Payment Management A/R A/P

  20. Procure to Pay Framework Self-Service – Collaborative Network Standard Supplier Information Supplier Buyer Sales Order Purchasing Electronic Purchase Order Delivery Billing Electronic Invoice Management Supplier Financing Treasury Treasury Payment Management A/R A/P

  21. 5% 10% 6% 0% ’10 ’05 ’10 ’02 Discounting Is More Attractive Than Ever 25 days 53 days Due date Invoice date Approval Cash as % of assets Interest rates Sources: REL/Hackett Group; own analysis; Cash: Goldman analysis of S&P 500; Interest on 4 week T-Bills by Federal Reserve;

  22. www.OB10.com Supplier views approved invoices… Click to View Details for Accelerated Payment

  23. www.OB10.com …Evaluates accelerated payment offer… Invoice Details & Current Terms Displayed Click Here to Select a Date for Accelerated Payment

  24. www.OB10.com …Selects payment date… Click on the Date Desired for Accelerated Payment

  25. www.OB10.com …Requests early payment Proposed Terms for Accelerated Payment Click “Submit” to Accept Terms for Accelerated Payment or “Cancel” to Leave Payment Date as is

  26. Example of $5 billion spend company Invoiced spend $5bn $800M Accelerated spend: 12% Offer rate (APR) $4bn Non-discount spend: 80% 30 days Average acceleration $8M Additional discount p.a.: Accelerated spend: 20% $800M

  27. Business case example Example company • Payment terms: 45 days Net • Approval cycle: 25 days • Spend: $5 billion • Invoices: 300,000 • Cost per invoice: $10 Business Case AP automation • Save $5 per invoice • Annual savings $1.5M • Reduce approval cycle to 10 days Business Case including Dynamic Discounting • Acceleration 30 days • Combined annual savings $1.5M + $8M = $9.5M

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