UCB implemented SAP Ariba solutions to automate their procure-to-pay processes. They onboarded suppliers to the Ariba Network to enable electronic invoicing and payments. While they achieved high levels of automated invoice posting, they fell short of onboarding targets for number of suppliers and invoice volume. Key learnings included the need for strong communication, realistic onboarding plans, and managing supplier data quality. Success requires aligning procurement, AP and treasury, clear communication, and a realistic business case.
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Buy Right-Pay Right — How Procurement, AP, and Treasury Can Work Together for P2P Transformation and Working Capital Excellence
1. Richard Dorado Lopez, Cristian Stefanescu, Ian Ronayne / June 14, 2016
Buy Right, Pay Right
How Procurement, Accounts Payable, and Treasury Can Work Together for
Procure-to-Pay Transformation and Working Capital Excellence
Public
4. Agenda
4
• Introduction to UCB
• Project context and history
• Implementation
• Key learnings
• Key success factors
5. UCB: making lives better every day
5
Bringing solutions to people living with neurological or
immunological diseases
Key facts and figures:
■ FY 2015 revenue: €3.88 billion
■ FY 2015 rEBITDA: €821 million
■ More than 7 500 employees globally
■ Operations in ~40 countries
■ R&D Spend: 27% of revenue
■ Listed on Euronext
7. UCB: reinventing itself, leveraging a solid heritage
7
1928: Emmanuel
Janssen establishes
UCB in Brussels
1972: A new state-
of-the-art R&D
center in Braine-
l’Alleud, Belgium
1980s: UCB
registers its novel
antihistamine
Zyrtec®
1990s: approval of
Keppra®,
a novel
anti-epileptic
2004: UCB
acquires British
biotech company
Celltech
2006: UCB
acquires German
pharma company
Schwarz Pharma
Today
Combine leadership
in antibody research
& chemistry expertise
to better treat severe
diseases
1928 1952 1972 1980s 1990s 2004 2006 2008-2010 Today
Chemical Group Primary Care Pharma Specialty Bio-pharma
1952: UCB
discovers Atarax®
U.S. license
awarded to Pfizer
1936: UCB enters
the United States
1936
Launch of Cimzia®,
Vimpat® & Neupro®
(CVN)
8. 3 core medicines for patients with severe diseases
■ Rheumatoid arthritis
■ Psoriatic arthritis (PSA)
■ Ankylosing spondylitis (AS)
■ Axial spondyloarthritis (AxSpA)
■ Crohn’s disease
■ Epilepsy adjunctive therapy
■ Parkinson’s disease
■ Restless legs syndrome
8
9. Agenda
9
• Introduction to UCB
• Project context and history
• Implementation
• Key learnings
• Key success factors
10. SAP4UCB – ERP around the world
High:
4 major countries
Medium:
4 production countries
Low :
30 additional affiliates
Standard Global unique SAP ERP
almost all modules
10
11. Buy Smart for Patients Program
11
Simple,
user friendly
More added value
from Purchasing
Compliant
Optimized cash
flow
Best in class cost
Effective, efficient
& user friendly
buying process,
aiming for best-
in-class in a
compliant manner
New drivers in UCB
End-to-end, fully integrated process
Web-based tool for non-
stock purchases using
shopping carts
SRM
Invoice management
system utilizing Optical
Character Recognition
(OCR)
VIM
Strategic
Sourcing
Requisition to
Order
Confirmation Invoice Handling Payment
SRM + VIM
In
13 countries
(4 others planned)
12. Project context
12
Revision &
enhancement
of Source-to-Pay
related policies
PR-PO
cycle time
shortened to
2-3 days
PO utilization up around 90%
Optional use of expense
reporting tool for non-
catalog spend <€1K
Source-to-Pay Process
Strategic
Sourcing
Requisition to
Order
Confirmation Invoice Handling
Payment
Employee Expense Report
Version upgrade
and GTP
requirements
integration
Introduction of a
simplified vendor
creation process
VIM
For 12
countries
Increase in
invoice first pass yield
SRM Shopping Carts
Available for indirect
spend in 12 countries
Ariba
Sourcing
Standardized
Purchasing
Sourcing tool
ARIBA Network
e-PO & e-Invoice
automation
e-Payment
Request
For manual
payments,
replacing paper forms in 26
countries
13. Actors GBS /
FMD
Purch Business Business
GBS /
Proc
GBS /
Proc or
Purch
GBS /
Proc
Business GBS / AP GBS / AP Business GBS / AP GBS / AP
Project context & objectives
13
Current UCB status & how the project is fitting to it
S2P
process
Vendor
Creation
Vendor
Selection
PR/SC
creation
PR/SC
Approval
PO
creation
PO
approval
PO send
Confirm
reception
of goods
Invoice
Receipt
Invoice
coding
Invoice
Approval
Payment Archiving
System SAP
ECC
E-
sourcing
Ariba
SRM SAP ECC SRM* VIM
SAP ECC
/ Portal Paper
Ariba
Network
E-PO E
-Ack E-invoicing
E-
archive
Recently implemented
SAP
EMAIL
Paper
Operational
Archiving
E-Invoice
Legal
Archiving
14. Overview
14
Scope is more than just invoices
ERP MM
Purchase Order
Inbound Delivery
PO’s, PO Changes & PO Cancel
Legacy PO’s
Order Confirmation
Advanced Ship Notice
Invoice /
Accounting Doc.
Payment Run
Goods Receipt
Service Entry
Sheet
Goods Receipt
Service Sheet
Service Sheet Status Update
Invoice / CC Invoice
Invoice Status Update
Remittance Advice
UCB Business rules on Ariba
Network to ensure quality of
incoming documents
11 messages in scope
2 main messages:
PO + Invoices
Payment Schedule
Geographical: Main BE, UK, US, DE
UCB IT prereq.: VIM countries (12)
*StAN: Supplier through Ariba Network
*
15. Business case: objectives
15
• Aligned with S2P strategy
• Increase Efficiency, Simplicity & user-friendliness
• Increase compliance
• Decrease administrative costs
• E-invoicing is now a mature technology
• Negative impact on Cash Flow acceptable
Efficient, effective
and user-friendly
S2P process,
aiming for best-in-
class, in a
compliant manner
Efficiency,
Simplicity &
User-
Friendliness
Optimizing
Cash Flow &
Working Capital
Best-in-Class
"Administrative
Buyer Cost"
Added value by
Sourcing Team
Compliance
16. Project planning
16
Principles
The PO & Invoice automation project consists of 2 tracks
Track 1: Solution implementation
■ Set-up of SAP Ariba solution environment and connectivity
■ Blueprint
■ Implementation
■ Test, training, Go-live
Track 2: Supplier enablement
■ Recurrent onboarding activities according to flight plan
18. Technical Process
18
SAP Ariba solution integration
SAP ERP (MM-FI-…)
Ariba Network portal
Ariba Sourcing,
Ariba Contract
Management,
Ariba Supplier
Information and
Performance
Management
Ariba
Network
VIM
AribaVIM
add-on
Ariba
ERP
add-
on
FI Inv
PO Inv
Payment
Integrated
suppliers
Invoice
Approval
Document flow
GR
/SES
Supplier
Supplier
POR
PO
Supplier
(LIGHT)
19. Business Case: UCB invoice volume
19
Total count of invoices in 4 main countries (Be, Germany, UK, US): 135K
■ PO-related: 100K
■ Non PO-related: 35K
Raw data without taking into account any PO supplier exception
PO
invoices
Total
Belgium 51K 60K
USA 19K 23K
UK 19K 26K
Germany 12K 26K
Total 100K 135K
Cum %
Nr of
suppliers
Cum.
Spent %spent
10% 5 € 78M 5,7%
20% 16 € 104M 7,6%
30% 41 € 180M 13,5%
40% 85 € 269M 19,5%
50% 160 € 345M 25,1%
60% 289 € 468M 34,1%
70% 521 € 625M 45,4%
80% 963 € 836M 60,8%
90% 1930 € 1077M 78,3%
100% 6770 € 1376M 100%
Total count of invoices in SAP PE1: 250K
PO-Related: 190K
Non PO-related: 60k
20. Business case: Ambition 20
E-invoicing at UCB
Year # E-
invoices
#vendors % of invoices
1 60k 289 44%
2 70k 521 52%
3 80k 1000 59%
4 90k 1000+ 66%
5 100k 1000+ 74%
Most E-invoicing suppliers claim they
can achieve 70% penetration in 2 years
Invoice Processing cost: Penetration
18€ 9€
Conservative average
current AP cost
To-Be AP cost
E-invoice Cost
Processing cost 7,2
Cost to 3rd Party* 1,8
*Invoice processing cost+Archiving
We can reach 289 suppliers in 1 year.
Furthermore, we can process 80% PO-invoices
in 3 years, afterwards, we start processing non-
PO invoices
21. Business Case: Where are we?
21
In order to achieve the necessary savings, the business case expected target
volume of invoices, according to roll-out waves
* Wave 4: additional 300 suppliers
Target
Waves 1-2-3*
Actual %
# Suppliers Onboarded 289 225 75%
# Suppliers Transacting Invoices 289 170 60%
22. Detailed status
22
Highlights:
• On average the auto posting is 55% (inflow
from SAP Ariba solutions only)
• Continuous improvement in straight auto
post.
• On average the FY posting is 81% (inflow
from SAP Ariba solutions only) (around 60%
without SAP Ariba solutions)
23. High auto-posting rate
■ Implementation of the business rules on the Ariba Network
■ Good quality of the invoice content
Integrated suppliers bring progressively very high volume
Supplier selection
■ Create a realistic flight plan
■ Suppliers needed to be excluded from scope, technical, purchasing or business point of view
Process compliance of the suppliers who have joined the Ariba Network
Integrated suppliers
■ Integrated suppliers: min 8 weeks, 12-15 weeks more realistic
■ Dedicated team, with his own planning/methodology
■ High effort in testing
Onboarding performance
■ Accuracy of Vendor database, avoid generic contact details like info@supplier.com
Business Case: Achievements
23
25. Key Learnings
25
Onboarding Process
Communication and customer involvement
■ SAP is Supporting the Onboarding but part of the Communication remains at UCB side (initiation, escalations, …)
■ Lot of communication non expected to convince suppliers
■ Internal communication a lot more important than anticipated
Onboarding process
■ Online Suppliers Summits bring a positive image and clarity to the suppliers
• New Complexity due to the new offer related to Light Onboarding
■ Onboarding requires data quality and accurate follow-up
• Flight plan data quality is key
• Reporting on onboarding results can be complex
• Monitoring the « escalated » suppliers
• Ariba Network ID is key but always not very known from contacts
26. Key Learnings
26
Project realization
Functionalities of SAP Ariba solutions
■ Historically, SAP Ariba solutions were strong in Indirect Goods, other Scope still evolving
■ Some of the less important messages are key for the suppliers benefits
■ User usability improved with new UI but not always fully intuitive for complex processes
■ Business rules for SAP Ariba solutions need to be well understood as driving the compliance
Process
■ Process streamlining is important but despite having streamlined process, process adaptations are needed
Implementation partners
■ Partner needs very good knowledge of end-to-end components: SAP and SAP Ariba solutions, SAP Invoice Management by
OpenText (VIM), add-on, technical and P2P process
28. Key success factors
28
Drive eInvoice as part of P2P
■ Align Purchasing and Finance (and IT) on goals, resource, priorities: buy-in from both head of Dept
■ Joint project team from Purchasing and Finance (and IT)
■ Who is managing the contact with the suppliers?
Communication: make it part of company agenda
■ Internal: Finance & Purchasing teams need to be aligned but also business stakeholders
awareness
■ External: As Strong message to the suppliers as possible depending of Company culture
Realistic business case
■ Do not assume the full vendor list will be onboarded – deep dive into the flight plan
■ Vendors can have a lot of reasons to not buy-in in the process despite the benefits
■ Supplier onboarding is a quite intensive collaboration task involving SAP, customer, and supplier
29. Conclusion
29
Confident SAP Ariba solutions are the right choice for UCB
Lessons learned will help to further improve next waves
Remain fully confident it is a success
SAP management is highly committed
Support from an Ariba partner speeds up implementation
30. Aligning Procurement AP Treasury to Profit
from a Payables-Based WCM Platform
Ian Ronayne, Network Value Executive, SAP Ariba (SAP)