SAP and Ariba together are offering solutions under one roof that cover the procurement process end-to-end and support all categories of spend. Our solutions portfolio allows SAP customers to quickly and easily benefit from the Ariba Network, and deploy Ariba’s cloud-based sourcing and procurement solutions, connected to their existing SAP infrastructure. Join this session to hear how our customers have rapidly implemented the Ariba Procure-to-Pay solution, including integration with SAP ERP and the Ariba Network, in order to gain maximum compliance and efficiency, and accelerate their journey to procurement excellence.
Driving End-to-End Procurement Excellence by Integrating SAP and Ariba (Customer Session 1)
1. Building the Foundation for Growth
Driving End-to-End Procurement Excellence
by Integrating SAP and Ariba
INVISTA’s Journey
Val Blanks
BPT Procurement Lead
INVISTA
2. 2
In this session we will…
Introduce you to INVISTA, Koch Industries and our
MBM® guiding principles
Describe the operational situation that led us to launch
our BPT program to transform our technology platform
Outline the strategic deployment plan with related
implications for our Ariba deployment
Discuss the nuances of simultaneously deploying Ariba
and traditional SAP capabilities from a program
management perspective
Discuss our design for the optimal technical solution for
INVISTA’s Ariba and SAP Platform
3. Introduce you to INVISTA, Koch Industries
and our MBM® guiding principles
4. 4
INVISTA Overview
INVISTA: one of the world’s largest integrated producers of polymers
and fibers
• Primarily nylon, spandex and polyester applications
Acquired INVISTA from DuPont in 2004 and combined it with KoSa
• History of innovation and market leadership
• Enriching daily life: clothing, swimwear, carpet,
luggage, automobile parts, airbags and more
Owns or licenses more than 1,000 patent families
Approximately 10,000 employees in more than
20 countries
www.INVISTA.com and www.INVISTACareers.com
8. 8
Guiding principles and five dimensions of MBM®
(Market Based Management)
Vision: Determining where and how the organization
can create the greatest long-term value.
Virtue and Talents: Helping ensure that people with
the right values, skills and capabilities are hired,
retained and developed.
Knowledge Processes: Creating, acquiring, sharing
and applying relevant knowledge, and measuring and
tracking profitability.
Decision Rights: Ensuring the right people are in the
right roles with the right authority to make decisions
and holding them accountable.
Incentives: Rewarding people according to the value
they create for the organization.
Five Dimensions
9. Describe the operational situation that led us
to launch our BPT program to transform our
technology platform
10. 10
INVISTA’s legacy technical platform was the byproduct
of the formation of INVISTA through acquisition
2004
Acquisition of DuPont’s
polymer and fibers division
1998
Acquisition of Hoechst’s
polyester division
The result was a global company but just putting things together
doesn’t make them one.
• 4 Different SAP instances
• Business processes that differed by:
• Previous company
• Region/country/plant
• SAP instance
• Each of the SAP instances were highly customized
11. 11
Path to what is now known as BPT began in early 2012
Phase I: Supply Chain / OTC
Assessment
Phase II: Non-OTC
Assessment / Business Case
Phase III: Vendor Evaluation /
DMF Approval Process
Finance Operations
Procurement IT
An 8-week assessment of
the supply chain (OTC)
processes
Aimed at understanding key
gaps in current capabilities,
strategies / action required
to improve
Focused on expanding
scope of initial phase to
non-supply chain business
functions
Detailed vetting of benefit
and cost opportunities
associated with suggested
solutions
Developed and vetted
detailed DMF; received
approval for Phase I from
INVISTA board
Completed detailed vendor
assessment
Logistics
Customer Service
Supply Chain
12. 12
We found significant process, organizational and
technology gaps during our assessment
Order Management
Master Data
1 4
BU Self Assessment Results (All Regions, All BUs)
Lagging Leading
Transportation
Management
Inventory
Management
Customer / Channel
Management
Current State Maturity
Assessment
Desired Future State
Maturity
Current OTC processes lag our competitors and
leading practice
Significant value is at stake in improving the global
OTC process
The existing SAP architecture can not be built upon
to enable the desired process improvements
New SAP environment will fully deliver value
capture bets targeted by other functions/capability
groups
Key organizational elements necessary to drive and
sustain change are not in place within INVISTA
Without a significant change in approach, individual
BU focused improvement initiatives will not deliver
the promised benefits
Key Findings
Systems analyzed T Box Y Box Client
“A”
Client
“B”
Total number of custom
objects found
23,837 24,603 4,880 6,330 5x
Total number of must fix*
defects
1,036 778 122 50 7x
Number of must fix defects
considered high complexity
196 711 17 20 10x
SAP Environment Analysis
13. 13
Not unexpectedly, INVISTA had procurement challenges
• Data challenges across multiple SAP environments limiting strategic sourcing
decisions
• Inconsistent processes resulting in limited automation of procurement processes
• Contract management process is labor intensive and demands multiple iterations
without visibility of full contracting lifecycle
• Contract templates vary and are not centralized and repositories and practices vary
across sites and functional areas
• Current contract tool is stand-alone and requires manual process to create Outline
Agreement
• Lack of self-service tool for supplier on-boarding
• Current on-boarding/sourcing tool lacks integration to back-end systems for
supplier master data
14. 14
In 2012, global procurement was executing a parallel
assessment of value captured from the 2008 project
Business
Process
Transformation
(BPT)
2008
Enabling Technology
SAP SRM
SRM-MDM
Supplier Self-
Service
SAP Sourcing
2008
Project Objectives
When the OTC work pointed to a project that would include
Procurement, our strategy was rolled into the larger project.
1. Improve data integrity
2. Improve governance
3. Automate catalog functionality
4. Drive deeper contract compliance
5. Improve strategic sourcing
6. Extend supply base
7. Enable forward, reverse auctions,
and RFX functionality
8. Enable supplier self service
9. Extend supplier collaboration
10.Increase automated processing of
procurement documents
15. 15
Our procurement benefits have to be realized as part of
the larger program objectives
Productivity
Improvements
10%
Cost
Reductions
25%
Margin
Enhancements
47%
Finance
Capability
7%
Procurement
Capability
9%
Info Tech
Capability
2%
Margin
Enhancement
Reduce order cancelations
Limit reduced quantity
orders
Increase sales through
customer segmentation
Reduce pricing errors
Finance
Simplify and automate
processes
Automate report
generation
Leverage service delivery
Procurement
Implement contract
management
Reduce manual
processes (e.g.
electronic creation /
release of POs, etc.)
Streamline procure-to-
pay process
Information
Technology
Reduce application
portfolio
Reduce application
support
Reduce IT support
Reduce process complexity
Eliminate manual data
gathering and verification
Reduce errors and rework
Productivity
Improvement
Cost Reductions
Reduce regular freight
Reduce premium freight
Reduce fines
Reduce penalties
Reduce demurrage
BPT Business Case
16. Outline the strategic deployment plan with
related implications for our Ariba deployment
17. 17
The BPT project release strategy considered 5 strategic
factors when assessing the numerous options for deployment
Limit the business impact and risk with the initial
deployment
1 Business Risk
Maximize the process scope of the early deployments to
validate integrated solution
2
Process
Coverage
Realize more of the business case early in deployment
while minimizing the number of deployments
3 Business Case
Minimize the level of “interim state” complexity (includes
temporary interfaces, processes, and users impacted)
4 Complexity
Leverage organizational readiness/stakeholder
engagement in early deployments
5
Stakeholder
Engagement
Ariba
Opportunity
18. 18
Realize more of the business case early in deployment
while minimizing the number of deployments
Our procurement team was challenged to unlock value
from the Ariba Network early to show momentum
Early Reduction in Operating Costs
Early Benefits Realization
Optimize Cost
Five principles were defined to help guide the Ariba deployment recommendation
Lowest Risk and Impact to BPT Program
Early Improvement in Information for Decision Making
Ariba Sourcing Professional
Ariba Contract Management
Ariba SIPM
Ariba Modules in INVISTA Scope:
Ariba PO/Invoice Automation
Ariba Procurement Content
3 Business Case
19. 19
1
Ariba Sourcing and
Contract Management
tools early
The top 5 deployment alternatives
were evaluated against our
guiding principles
We considered 5 alternate strategies to address the
challenge of unlocking value early
2 Ariba as part of current
BPT scope and timeline
3 Ariba Contract
Management early
4 Ariba Sourcing
Professional early
5
Ariba Sourcing, Contract
Management and SIPM
early
1
Ariba Sourcing and
Contract Management
tools early
20. 20
Resulting timeline and implications to the program for
the early implementation of the Ariba Network
DRAFT Plan for Ariba Early Deployment
Legend:
Alternative 1: J A S O N D J F M A M J J A S O N D Build and Test
Ariba Sourcing Deployment - Global
Ariba Contract Deployment - North America GoLive / Hypercare
Ariba Contract Deployment - Europe
Ariba Contract Deployment - Latin America
Ariba Contract Deployment - Asia Pacific
Note that the early deployment of Ariba Sourcing and Ariba Contracts would not be integrated to SAP until BPT Deployment #1
2013
Q3 Q4 Q1 Q2 Q3 Q4
2014
Ariba Additional
Resources
BPT Procurement
Resources
Cutover / Deployment /
Change Management
Resulting timeline
Implications to the BPT program
21. 21
Based on the strategic factors discussed, parts of the Ariba
suite were selected as the first release to unlock value early
BPT Program
Project
Preparation
Business
Blueprint Realization Release Release ReleaseRelease ReleaseRelease
Sourcing and Contract Management
Deployed as a cloud solution independent of SAP
ECC (no integration)
Early capability impacting only Procurement
processes
Timeline/Plan matched basically to traditional
Ariba deployment
Implications for Ariba Deployment
Unlocked value for the organizations
Proved the program could deliver on promise
Enabled early learnings for future releases
22. Discuss the nuances of simultaneously deploying
Ariba and traditional SAP capabilities from a
program management perspective
23. 23
Ariba Sourcing Professional
Ariba Contract Management
Ariba SIPM
Ariba PO/Invoice Automation
Ariba Procurement Content
Overall Project
Timeline:
Considerations:
Suite Integration of Ariba Upsteam/Downstream modules
Integration between Ariba modules and SAP ECC
Timeline of overall project
After the first release, this left the balance of the larger
project and the remaining Ariba functionality to be deployed
Full Ariba Suite:
36 months
24. 24
Unlike traditional Ariba programs, our pace had
to align with the balance of the BPT program
Ariba Deployment:
Independent Module deployment Procurement
Typical deployment schedule of 12 -16 weeks
Single process organizational impact
Focused dataset
Low to no customization
One-time final production cutover execution
Business Process Transformation Deployment:
Fully integrated deployment across:
Customer Service, Supply Chain, Logistics, Procurement, Finance, and
Operations
Multiple phase deployment phased across sites and regions
Business wide change implications
Enterprise wide transactional and master data impact
High configuration and development requirement
Multiple iterations of mock cutover cycles
25. 25
Release 2 tested the breath of capabilities in a
controlled environment to contain risk
BPT Program
Project
Preparation
Business
Blueprint Realization Release Release ReleaseReleaseRelease
Limited Site Deployment
Broadly deploy processes to a limited asset base
Enables testing of the process with low risk
Validates the broad nature of the business case
Introduces legacy integration
Allows for process adjustments & fine-tuning
Implications for Ariba Deployment
Added balance of Ariba functionality for sites
deployed
Enabled integrations to SAP ECC
Release
26. 26
Release 3 expands the capabilities to the global
business unit to unlock the business case
BPT Program
Project
Preparation
Business
Blueprint Realization Release Release ReleaseRelease Release
Global Business Deployment
Expands the program to a complete business
Enables end-to-end global visibility
Introduces global complexity
Enables the full business case for a business
Implications for Ariba Deployment
Introduces additional localization
requirements
Enables full benefits for a business
Release
27. 27
Careful project planning and execution strategy required for hybrid on-premise / cloud model
Traditional Ariba release cycles not aligned with waterfall methodology typically leveraged for
on-premise SAP deployments
Careful synchronization of Ariba non-production realm with various SAP ECC sandbox,
development, test, and training environments
Strategic execution of Single Sign On (SSO) capability across SAP and Ariba
Maintained awareness of SAP/Ariba roadmap and planned functional releases (Leverage the
Ariba Early Access program)
Careful planning and execution of Suite Integration for Ariba Upstream & Downstream modules
Identification of the right technical resource(s) to support custom integrations
Aligned plan for support model for Ariba and on-premise project team members
Synchronized resourcing of Supplier and Catalog Enablement teams
Identification of the right Designated Support Contacts to ensure timely responses
Lessons Learned / Key Considerations
29. 29
Early decisions on the enabling technologies guided the alignment of functional
capabilities to applications and in doing so introduced integration complexities
Sourcing Strategy
(Ariba Sourcing)
Sourcing Execution
(Ariba Sourcing)
Negotiate/Execute
Contracts
(Ariba Contracts)
Administer Contracts
(SAP Outline
Agreements)
Payment
(SAP ECC)
Invoice Reconciliation
(SAP ECC)
Invoice Receipt
/Network (Ariba
Network/SAP)
Supplier Registration
(Ariba SIPM)
Supplier Approval
(Ariba SIPM)
Catalog Management
(Ariba Procurement
Content)
Create Purchase
Requisition (SAP ECC)
Approval process
(SAP ECC)
Send PO to supplier
(Ariba Network/SAP)
Create Purchase Order
(SAP ECC)
Receiving
(SAP ECC)
Supplier
Onboarding &
Certification
Strategic
Sourcing
Contract
Management
Operational
Procurement
Supplier
Collaboration
Ariba Discovery
(Ariba Network)
Supplier Governance/
Replication (SAP MDG)
Sanctioned Party
Screenings (SAP GTS)
Cloud On-PremiseBoth
30. 30
Our design needed to take advantage of the relevant
strengths of both platforms to deliver maximum value
Ariba SAP
Vast network of suppliers already
established within the platform
Strategic source identification with
the use of Ariba Discovery
Streamlined supplier onboarding
via SIPM
Enhanced supplier self-service
capabilities
Streamlined auction capabilities
Robust document versioning
capability to support contract
negotiations
Seamless electronic signature
capability for contract execution
Strong master data governance
and process management
Native integration to the balance
of the SAP suite of applications
Ease of purchase order
automation
Full integration with direct
material procurement and
production planning
Robust and flexible transactional
reporting capability
31. 31
In order to maximize the on premise and cloud solutions
we developed a series of integrations
Ariba SiPM
Ariba Sourcing
Professional
Ariba Contract
Management
Ariba Procurement
Content
(APC)
Ariba PO/INV
Automation
Global Trade
Services
(GTS)
Outline
Agreement
(ECC)
Purchase
Requisition
Work Order
Network
(ECC)
Vendor Invoice
Management
(OpenText)
Master Data
Governance
(MDG)
Cloud On-Premise
Custom Integration Standard Integration
32. 32
Ability to operationalize strategic decisions in an
automated fashion
Better control over supplier self-service through
seamless integration with existing on-premise
governance tools that you own and control
Assured supplier master data harmonization across
ERP/cloud landscape
Increased visibility to supplier information throughout
the on-boarding lifecycle
Reduced effort required for integration of supplier(s)
with Ariba Network and catalog purchasing
A key design consideration was the ability to enable a two
tiered qualification process to enable strategic sourcing
Ariba SIPM
Global Trade
Services
(GTS)
Master Data
Governance
(MDG)
Benefits
Custom Integration Standard Integration
Supplier
Onboarding &
Certification
Strategic
Sourcing
33. 33
Basic supplier information
Initial Restricted Party Screening
Due diligence decision point
Which removed the labor intensive maintenance barrier
to executing more frequent sourcing events
Embeds strategic sourcing & contracting decisions in the supplier on-boarding process
Increases labor efficiencies with commodity managers focusing on strategic objectives
Reduces data management & governance activities for suppliers
Prevents maverick spend with imposed control around vendor replication
Sourcing
RFX/Auction
and Award
Tier 1
Supplier Pre-
Qualification
Supplier
Registration
Tier 2
Supplier
Qualification
Supplier
Replication
Contracting
Negotiation
and Execution
Pre-Qualification Qualification
Additional supplier information
Full due diligence performed, where
applicable
Benefits
34. 34
Eliminated the need to duplicate data entry
Allowed users to work within the environment they
were most comfortable with to increase productivity
Ability to marry strategic and transactional data for
reporting purposes
Greater visibility of contract throughout the life cycle
Close to real time automation of contract replication
across SAP ECC
Reduction of administrative demand and contract
inconsistency between applications
Single source of truth for updates and renewals
Tying the SAP outline agreements to the Ariba contracts
dramatically reduced the risk of errors as a result of
manual efforts
Benefits
Custom Integration Standard Integration
Contract
Management
Ariba Contract
Management
Outline
Agreement
(SAP ECC)
35. 35
The operationalizing of supplier agreements in SAP
ECC by creating catalogs
Automation of supplier catalog updates through
technology capability and Ariba resourcing
Reduction in AP reconciliation issues with PO-Flip
capability on the Ariba Network
Option to configure country-specific rules for Invoicing
Ease of document exchange with suppliers given
various modes of communication (EDI, cXML, Email
etc.)
Standard integration was leveraged for the balance of
the process scope
Ariba
Procurement
Content (APC)
Ariba PO/INV
Automation
Purchase
Requisition
(SAP ECC)
Vendor Invoice
Management
(VIM)
Benefits
Custom Integration Standard Integration
Operational
Procurement
Supplier
Collaboration
36. 36
Fully understand your business requirements prior to determining your
application scope and integration approach
Allow the business case to guide where you invest in custom interfaces and
where standard integration are sufficient
Build custom interfaces with replication failure mechanisms that enforce
corrective action
Develop broad reconciliation reporting to ensure data harmonization across SAP
and Ariba
Fully understand the differences between the two platforms from a data format,
standards, and defaults perspective
Work with SAP and Ariba to secure a long-term maintenance path where
appropriate
Lessons Learned / Key Considerations
37. 37
Unlocked value for the organization with the early release
of sourcing and contract management in a stand alone
environment
Developed an integrated solution for the end to end
procurement process in alignment with the BPT program
Delivered measureable progress on the business case as
validated by post go-live benchmarks
As a result we have achieved our goals
38. 38
In this session we have…
Introduced you to INVISTA, Koch Industries and our
MBM® guiding principles
Described the operational situation that led us to launch
our BPT program to transform our technology platform
Outlined the strategic deployment plan with related
implications for our Ariba deployment
Discussed the nuances of simultaneously deploying Ariba
and traditional SAP capabilities from a program
management perspective
Discussed our design for the optimal technical solution
for INVISTA’s Ariba and SAP Platform
Talking points:
One of the benefits of partnering with Deloitte: they have done this before.
Deloitte brings experience we don’t have to mitigate the project risk we face:
Proven method to break the activities down into logical groupings
Templates to assist in executing those activities
Resources to help us think critically about our processes and requirements.
Deployment Talking Points
Talking points:
One of the benefits of partnering with Deloitte: they have done this before.
Deloitte brings experience we don’t have to mitigate the project risk we face:
Proven method to break the activities down into logical groupings
Templates to assist in executing those activities
Resources to help us think critically about our processes and requirements.
Deployment Talking Points
Talking points:
One of the benefits of partnering with Deloitte: they have done this before.
Deloitte brings experience we don’t have to mitigate the project risk we face:
Proven method to break the activities down into logical groupings
Templates to assist in executing those activities
Resources to help us think critically about our processes and requirements.
Deployment Talking Points