Solution Workshop – Measuring Network Success
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This session is focused on establishing attainable and measurable goals, documenting and tracking against these goals, and translating it into the benefits for your organization. A group activity will be conducted where participants are asked to develop a scorecard, track results, and present to leadership.
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Solution Workshop – Measuring Network Success
- 1. The Ariba Network: Scorecard Workshop Christine O'Shea, Sr Manager, Network Enablement and Przemek Skinder, Manager, Buyer Enablement © 2013 Ariba, Inc. All rights reserved.
- 2. Objectives • In today’s session, you will: Learn about KPIs to measure your e-commerce program Understand the best in class benchmarks surrounding e-commerce Craft components of an executive level scorecard © 2013 Ariba, Inc. All rights reserved.2
- 3. Inquiries & Exceptions Discounts & Payments Matching & Approvals Common Challenges That Lead to an E-Commerce Program 3 Inquiries & Exceptions Discounts & Payments Matching & Approvals Receipt & Capture Receipt & Capture High cost of Paper Invoices Lack of Compliance Too many Exceptions Lack of Control “Nearly 77% of all incoming invoices are still paper based.” - Aberdeen, 2012 “15% of invoices have exceptions adding 6.6 days to the cycle.” - TAPN, 2010 “50% of prenegotiated discounts are never captured.” - Aberdeen, 2012 “$4.6 million in contract leakage per billion in spend on average.” - The Hackett Group, 2012
- 4. Objectives and Metrics for Best-in-Class E-Commerce Programs © 2013 Ariba, Inc. All rights reserved.4 Objective Metric Best in Class Process Efficiency % of Addressable spend that is automated 80% % of Electronic Invoices 67% Invoices per FTE 33,000 % of Invoice Exceptions 12% Days to approve Invoices 4.1 Touchless Invoice Processing 85% Compliance Contract leakage savings 0.46% % of spend under management 55% Cash Management Discount capture 0.20% Working Capital 0.27% Source:The Hackett Group, Aberdeen, Ariba
- 5. Proven Approach to Leveraging Your Scorecards © 2013 Ariba, Inc. All rights reserved.5 Report results Implement incentives Define Baseline Select Metrics Align on Objectives Confirm Executive Sponsors
- 6. Example Executive Dashboard © 2013 Ariba, Inc. All rights reserved.6
- 7. Group Assignments • Group 1 % of Addressable Spend that is Automated % of Electronic Invoices • Group 2 Invoices per FTE % of Invoice Exceptions • Group 3 Days to approve Invoices Touchless invoice processing © 2013 Ariba, Inc. All rights reserved.7 • Group 4 Contract leakage savings % of Spend Under Management • Group 5 Discount capture Working capital
- 8. Group Activity • Discuss the impact of the metric and document the following: Which sponsors care? Where and how can the data be obtained? What trends should you see over what time frame? How frequently should this be tracked? How can you incent teams/individuals? © 2013 Ariba, Inc. All rights reserved.8
- 9. Please Complete Session Survey © 2013 Ariba, Inc. All rights reserved.9 Find Session in Schedule Click Choose one Rate Session Thank you for joining us Click Survey and Select Breakout Session Survey
Hinweis der Redaktion
- The challenges that most of your prospects will share across the invoice-to-pay process can be boiled down into four major categories:Too much paper – paper invoices are the most expensive to process when compared to e-Invoicing. Companies across the globe still have about 80% of their invoices coming in as paper. Too many exceptions – Paper handling is inefficient, and it also introduces additional cost and effort for AP for handling invoice exceptions. According to a recent TAPN survey, about 15% of invoices have errors and exceptions on average. And it costs anywhere between $20 and $200 to address each error. So for 100K invoices that is about $300K in incremental cost. At a conference last year, I heard someone say that at HP they have errors and exceptions on 39% of their invoices. 39%!Lack of ComplianceComplying with preferred vendors and pricing can also lead to significantly higher costs. A recent Hackett Group study shows that companies lose over $4 million per billion in spend under contract by paying for invoices that don’t comply with negotiated prices. For poor performing organizations, that leakage figure is many times larger.Too many missed discounts and late payments Early payment discount and dynamic discounting is an emerging best practice that can deliver over $2 million per billion in discountable spend. But most companies simply can not approve and pay their invoices on time, and miss over 50% of their discount savings.So as your listening to your prospects share their problems, dig into the pain, ask them to expand on a day-in-the-life of the invoice receipt process. Get your prospects to think about these inefficiencies, the cost, the waste, the missed opportunities.===================================================
- Discount capture - ($2M for every $1B)Working Capital - ($2.7M for every $1B per day of improvement of DPO, DSO, DIO)