Accelerating E-Invoice adoption

and roll-out with SAP

UK & Ireland SAP User Group
Conference 2011
20th – 22nd November 2011
Frank Ruland, Line of Business
Solutions, SAP AG
 Agenda
How SAP E-Invoicing for Compliance Simplifies
Financial Operations
• Introduction and SAP Solution Overview
• Customers are Realizing Substantial Value with
SAP Solutions for E-Invoicing
• Questions and Answers
Businesses Are More Reliant on Their Network of Partners
than Ever Before

Trend #1: Increasing Complexity of Network Interfaces

25,000
 New markets, mergers and acquisitions, global
supply chain
20,000
 Increasing number of business partners and
subsidiaries 15,000

Trend #2: Accelerated Speed of Business

10,000
 New product and services introductions; new
suppliers and partners 5,000 250 500 750
1,000
+
 Rapid partner on-/off-boarding due to changing
market conditions 0

Partners
Forrester Consulting, Joint Industry EDI/B2B Survey, March 2010

“”
…thanks to an ever-more-globalized business environment, more large companies now see attractive market
opportunities beyond their borders, further highlighting the need to establish an efficient B2B infrastructure with local
subsidiaries and suppliers.
Gartner, 12 October 2010, Market Trends: Application Infrastructure and Middleware Software, Worldwide, 2009-2014
 Industry Data Confirms Paper-based Processes
Are Inefficient and Expensive

PayStream Advisors, IWA Summit Billentis – based on 1.5 page invoice and €60/hour staff cost
 Error-Prone Paper-based Processes Are Inefficient and
Can Damage Relationships with Customers and Suppliers

1. Customers 3. Purchasing
 Electronic billing  Resolving problem
mandates invoices
 Format and country-  Missed cash discounts
specific requirements
Accounting/
Purchasing
Finance

2. Accounting & Finance 4. Suppliers

 No universal view of CFO  Lost paper invoices
departmental invoices  Late payments slow
 High cost per invoice cash flow

5. CIO/CFO
 Increase compliance risks
 Higher cost of capital, lower productivity
 E-Invoicing Increases Transparency, Productivity,
Compliance and Business Partner Satisfaction

Customers
1. Customers 3. Purchasing
 Comply with electronic  Increased productivity
billing goals  Greater percentage of
 Automate processes cash discounts
to improve supplier captured
e-Invoicing Accounting/  Lower cost of goods
Purchasing purchased
Finance

2. Accounting & Finance 4. Suppliers

 Consistent payments CFO  Improved vendor
across countries and relationships
organizations  Reduced DSO
 Lower cost of capital  Improved cash flow

5. CIO/CFO Suppliers
 Global visibility
 Stronger controls, audits and improved compliance
 Integrated systems and processes
 Going Paperless Can Improve Speed, Accuracy, and
Compliance While Reducing Costs
Outbound E-Invoicing
CFO
(E-Billing)
How do I improve our financial How do I provide my customers
operations processes? with paperless bills?
Improve productivity Reduce cost per outgoing invoice
Compliant record keeping Eliminate paper and postage
Complete audit trails Speed compliance with customer
format mandates
Shorten customer-to-cash cycle
times
Inbound E-Invoicing
How can I standardize and
accelerate invoice receipt and
retention?
Eliminate manual data entry
errors: reduce disputes, rejections
and re-submissions
Eliminate manual reconciliation
effort
Increase on-time payment
percentage
 Outbound E-Invoicing
SAP E-Invoicing for Compliance

SAP Solution
Outbound
E-Invoicing Provide invoices to your customers in the format they
demand
Provide compliant digital signatures
Digitally Sign Invoice
Improve productivity of A/R department accounting
shared-service

Send PDF via Email

SAP Differentiators
Integration: Integrates with SAP back-end systems for
Send EDI accounts receivables
Support: Solution is covered with enterprise support from
SAP and Crossgate
Check Legal Compliance Scalability: Ability to dispatch large volumes of invoices
from shared-service centers
 Inbound E-Invoicing
SAP E-Invoicing for Compliance

SAP Solution
Inbound Receive electronic invoices via standardized interfaces (PDF invoice,
EDIFACT D96A, signature/verification file)
E-Invoicing
Automatically verify/perform all required format, content and signatures
Seamlessly transfer invoice data to ERP for further processing,
approvals, and archiving
Receive Electronic Files
Improve productivity of accounting department /accounting shared-
service

Verify Compliance SAP Differentiators

Internal Control: Verify documents and signatures for all incoming
invoices according to compliance requirements in over 38 countries
Direct Access to Global Partner Network: Leverage SAP’s world class
Transmit Data to ERP network of business partners to accelerate adoption by your suppliers
and increase percentage of electronically received invoices
Straight-through invoice management: Transmit invoices to ERP and
invoice processing systems and archiving, improving quality by
eliminating manual intervention
 Exchange Electronic Invoices with
Any Business Partner in Any Format

Signed
PDF +
XML Your Company EDI

Supplier 1 Customer A

Supplier 3 Customer C
SAP E-Invoicing Signed
Supplier 4 EDI EDI Customer D
for Compliance
Supplier 5 Customer E
VAN B2B Hub

Email signed
EDIFACT Archive Electronic PDF
Signature
Supplier 2 Verification Customer B

Archive Trust Center

 SAP E-Invoicing for Compliance in the
Accounts Payable Process

HUB
HUB
HUB
SAP
E-Invoicing Digital
Hubs and Portals EDI for Signature
PDF/email Compliance Validation

Supplier

iDOC + supporting SAP

docs (e. g. signature,
verification protocol)

Invoice
Mgmt in Payment SAP
ERP

ERP (FI/AP)
Optional

SAP SAP SRM

Archiving
by
OpenText

Document Archiving
& Viewing
 SAP E-Invoicing for Compliance in the
Accounts Payable Process

HUB
HUB
HUB
SAP
E-Invoicing Digital
Hubs and Portals EDI for Signature
PDF/email Compliance Validation

Supplier

iDOC + supporting SAP

docs (e. g. signature,
verification protocol)

Optional
SAP
Invoice
Payment SAP
Mgmt by
OpenText

ERP (FI/AP)
Automation,
process support
SAP SAP SRM
Archiving
by
OpenText

Document Archiving
& Viewing
 SAP E-Invoicing for Compliance in the
Accounts Payable Process

HUB
HUB
HUB
SAP
E-Invoicing Digital
Hubs and Portals EDI for Signature
PDF/email Compliance Validation

Supplier

iDOC + supporting SAP

docs (e. g. signature,
verification protocol)
Fax
Optional
SAP
OCR
Document Invoice
Option by Payment SAP
Scan Mgmt by
OpenText
OpenText

Paper Invoice ERP (FI/AP)

recognition

SAP SAP SRM

Archiving
by
OpenText
Email
Document Archiving & Viewing
 SAP E-Invoicing for Compliance in the
Accounts Receivable Process

SAP
SAP
E-Invoicing
Billing Data For 1. Digital
Compliance Signature
3. by Validation
SAP ERP Crossgate

Archiving
(optional) 2.

Archiving
Compliance
(optional)
Checks

3.
multiple outbound
options

Email + PDF EDI EDI

Customer Customer
Hub
A B
 Customers are Realizing
Substantial Value with
SAP Solutions for E-Invoicing
 ÖAG is an affiliated company of Wolseley plc.
 Austria’s biggest wholesaler and distributor of
plumbing and heating supplies
 Approx. 800 employees
 Total turnover EUR 300m per year (2010/2011)
 83 branches located all over Austria
 SAP since 2007
 Cooperation with Crossgate since 2009
 Internal arrangement was not
satisfactory Crossgate
Eurolog
PGS

 Two-tier selection process

FSE OB10
 Main selection reasons:
◦ Offering and pricing (the only provider
with all EDI processes plus E-Billing)
◦ Cooperation with SAP
◦ Best customer liaison and support
◦ Most transparent charging method
 Outbound
◦ Initial situation
 ~ 80.000 invoices per month via post
 ~ 1 million invoices per year via post
 ~ 17.000 invoice recipients
◦ SAP® E-Invoicing for Compliance by Crossgate
◦ PDF document with qualified electronic signature
◦ 3rd party verification protocol
◦ eRollout Portal / first contact to
customers
 Inbound
◦ Initial situation
 ~ 16,000 incoming invoices/month
 ~ 1,700 suppliers
◦ SAP® Information Interchange by Crossgate
◦ EDIFACT format from suppliers
◦ Communication from Crossgate via IDOC
◦ EDI (+ PDF document) + monthly
statement
◦ Plausibility check –
automatic clearing
 Outbound
◦ 2,500 customers now use E-Billing
 (invoice quota ~ 20 %)
◦ Packed in ZIP-file – later one document per e-mail
◦ Fiscal aspects problematic (uncertainty)
◦ Intense initial customer support
◦ Internal processes and communication very
important
 Inbound
◦ 14 suppliers live (invoice quota ~ 20 %)
◦ 31 in pipeline
◦ Order references need to be correct
 (order number, position number, article codes...)
◦ Test-phase crucial for success
 Cost reduction
◦ Printing/paper/postage costs
 ~EUR 25.000/year*
 ~EUR 360.000/year^
 Faster delivery via e-mail / earlier payments
 Storage of invoices
 Competitive advantage with automatic E-Invoicing for
our customers
 Reduction of paper usage (approx. 4 trees+)
* Resource: Business case ÖAG AG
^ Savings potential 3 EUR/invoice with handling costs (resource: Accenture)
+ 1 tree = 80.500 sheets of paper (http://science.howstuffworks.com)
 Reduction of errors from OCI (automatic EDI)
 Reduction of handling time (could be up to 100 %)
 Cost reduction
◦ Employee costs (~EUR 50.000/year)
 Master data quality
Customers are Realizing Substantial Value with SAP
Solutions for E-Invoicing

100% secure and compliant e-Invoicing

Considerable cost savings and optimization of processes
Transparency along the whole process

1,100 Dealers within 7 Weeks

Easy and rapid entrance to e-Invoicing

Achieved and maintained a 100% Customer retention rate

Experienced a corollary 5% productivity improvement in credit and
receivables

Achieved 20% to 50% reduction in bad debt risk, and 20% to 40%
faster access to information
10% to 20% reduction in time needed to collect credit information
and enter data prior to a sale
 What Does This Mean for Your Business?

Top Executive Issues

Financial Operations

Ensure compliance in all relevant countries

Meet sustainability goals by driving paperless business networks
Increase productivity so staff are focused on activities that add the most value

Payables Receivables

Achieve invoice processing cost reduction,
maintain accuracy and capture more
discounts
Pay vendors on time and accurately,
improving vendor relations
Reduce Days Sales Outstanding (DSO)
with automated e-billing processes
Reduce cost of receivables processing
while ensuring timely invoice delivery to
customers
Manage Costs and Complexity NOW, without Compromising
the FUTURE

Manage
Manage
Costs
+ Manage
Complexity
+ Change
Simplify landscape by eliminating point to point Consistent foundation that
integrations; rich content repository of partners enables you to connect ,
transact, collaborate with
Extend the value of your existing investments without
a collaborative business
rip/replace; Minimize exposure to risk of/process
network at the speed of
breakpoints; ensure compliance and regulations
business
Fast start with predictable costs

Technology Line of Business CXO

Now Future

SAP Value Engineering and Team Analysis

Easy to Connect: Instant Access to an Open, Industry-optimized Global
Business Network with 60,000 Global Partners

LSP
Bank Others…

YOU
Production LSP

Mfg. SAP Business Warehouse

Network
60,000+ Partners
Connect
Financial Transact
Distributor
Services Collaborate

Retailer Government

Supplier

Eliminate expensive point to point connections with Crossgate Content repository

 Easy to Extend: Deep B2B Pre-integration within SAP
Business Suite for Mission Critical Processes

SAP and Non-SAP Solutions SAP and Non-SAP Solutions

End customer
Suppliers
Crossgate Crossgate

Financial SAP Netweaver

Services, Warehouse
Government
Orders In-/Outbound Process Integration Delivery JIT In-/Outbound

Orders Ack. In-/Outbound Inventory Report In-/Outbound

SAP ERP Financial
Production Services,
sites Invoice In-/Outbound Self Billing Invoice In-/Outbound Government
SAP Supply Chain
ASN In-/Outbound Management Shipment In-/Outbound
Logistics Logistics
Service Service
Providers
and Carriers Delivery Forecast In-/Outbound SAP Procurement Enterprise Service
Providers
and Carriers

Remittance Advice In-/Outbound Other Processes, Docs, etc.

Other SAP Solutions
Outsourced Retailer
Manufacturers

3rd Party Solutions

… …

Leverage Ready-to-run B2B content maintained over lifecycle

 Thank You!
Contact information:

Frank Ruland
CROSSGATE Director, Line of Business Solution,
Stand S-41 Business Networks and B2B
King’s Suite SAP AG
frank.ruland@sap.com