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With all the power and configurability of Ariba Invoice Automation you may ask what is the best way to roll this out so you can also experience 98% touch-less, NO Touch, Auto Posting of invoices into your ERP.  The good news is that Ariba has learned extensively from our leading customers and has a practice dedicated to just this domain area in order to provide the highest levels of guidance and best practices to our customers.  Leaders across all industries have worked closely with Ariba to continue to mature what works and what does not work from a roll out and Smart Invoice rule configuration perspective.  It is important to note this is a fluid practice but we believe that our experience and focus on this detailed area sets us apart and further gives us confidence in getting new customers to follow in the wake of the leaders that came before.

 

A good example in this regard is with a large Fortune 50 organization that prior to Ariba managed most of their invoices in a traditional paper based model.  As a result, the percentage of invoices that were able to be entered and posted into their ERP on the first try was less than 40% (i.e. auto post rate).  As a result, they embarked on an Ariba project to capture and validate invoices through the Invoice Automation Solution to increase this percentage and maximize AP Cost Savings.  Once live with Invoice Automation, they immediately jumped to an Auto Post Rate of 80%. Within 6-7 months thereafter they leveraged Ariba’s Smart Invoice Validation configuration wizard  (and Ariba’s Best Practice Service) to refine and tighten these rules, for certain populations of suppliers, and saw Auto Post Rates jump to 98%.  This level of program maturity and refinement is a key principal and practice with the Smart Validation capabilities.

 

Best Practice Tip #1 –Supplier Groups
Grouping suppliers into segments is one of the most important activities in an eInvoice and Enablement effort.  Not only is this important from a business case realization perspective (i.e. prioritize based on invoice volume, discounting, high exception currently being handled by AP, etc) but also from a rollout, success and supplier adoption perspective.  Understanding the supplier drivers for adoption and value in doing eInvoicing with you is enormously important for you in meeting your business case goals. Elements that Ariba focuses on with customers in this regard in the beginning weeks of the project include:

 

  • Criteria for inclusion into the project: What are the priorities from a savings perspective and how does that align with the relationship and activities with each supplier.  Grouping suppliers into ‘value’ buckets is an important first step so ROI is met in months not years. 
  • Key Metrics and Timing:  Gathering the key metrics to support the ‘criteria for inclusion’ is of paramount importance in order to assure the proper ‘value based’ phases and segmentation.  Weighting Invoice Count with Exception Issues is of specific importance in prioritizing and grouping suppliers into enablement waves.
  • Supplier Communications: Another grouping characteristic is taking under consideration the current relationship and thus communication strategy that will work best with the supplier groups in question. Certain suppliers that cater to particular business units or supply a specific good/service may need to be handled a bit different than others.  Leveraging Ariba’s vast communication library and segmentations we have seen in this regard in the past is important in order to group and target the proper communications (and schedule) that will drive the easiest and greatest acceptance levels for these supplier population. 
  • Supplier Support:  Similar to ‘supplier communications’ suppliers in certain categories (SIC codes – which Ariba will enrich on your supplier database), or serve certain business units, etc will require a different support infrastructure.  Again, building upon Ariba’s experience in this regard will drive the proper planning and grouping of supplier to assure success. 
  • System to System Connected Suppliers: Suppliers of certain categories (i.e SIC codes), revenue size and Network/eInvoice experiences will require ‘system to system’ connections with your eInvoice solution before even considering participating (i.e. connecting electronically and directly between the Network and their Order Mgmt/AR systems).  Grouping suppliers into these considerations early is important as they typically take a bit longer to enable due to internal requests for IT involvement.  Identifying them early is important and getting into the IT queue early is even more important – power of Ariba is we have worked with many of these suppliers already and due to our comprehensive value proposition to these suppliers we routinely skip to the top of the queue.  
  • PO Considerations:  At this highest level, grouping suppliers between PO and Non PO Invoices is important as the effort and value proposition is a bit different (as well as the Smart Validations you would want to drive with that supplier).  Another consideration in this regard is grouping suppliers based on more advanced PO Management activities such as: PO Delivery, Order Confirmation, Ship Notices, Blanket PO Management, PCard Orders etc – that is if these considerations are in scope in your effort
  • Invoice Types / Templates: Understanding you receive a variety of different types of invoices spanning PO Based Invoices (Goods and Services), Non PO Invoices (Goods and Services), Invoices against Contracts or Blanket Po Invoices it is important to group and target the enablement based on the value proposition differences accordingly.  The Smart Invoice Validation Rules also vary due to the varying Type/Templates in question.   

 

Best Practice Tip #2 will be posted in the next installment of Tip of the Week.  We would love for you to comment or share your feedback if you are enjoying and find best practice tips like these useful!

 

 

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