Volcanic ash from the recent Eyjafjallajökull volcano in Iceland stranded many global passengers, including some of our Ariba colleagues visiting the U.S. from EMEA, but the “VOG” didn’t slow business commerce at Caterpillar. As part of its world-class, e-Invoicing initiative, Caterpillar is implementing a global strategy that has achieved 90% electronic invoicing, including the processing of 98% of U.S. invoices electronically.
We were fortunate to be joined for this month’s EMEA best-practice webinar series by Teong Lim, Caterpillar’s Global e-Invoicing Program Manager, who was stranded in China and unable to get back to his home in the U.K. Teong shared with our audience of Accounts Payable and Shared Service executives how he is leveraging Ariba’s global capabilities to move toward a 100% paperless operation. With Ariba’s smart invoicing capabilities, Caterpillar has become so efficient that they’ve been able to reduce global AP staff by 75 percent.
“This has made managing our way through the global recession much easier,” said Teong. “Worldwide, we have 90% of our invoices flowing through the Ariba Network, and the volume is growing rapidly,” continued Teong. “With Ariba’s scalability, we can manage our expansion without having to increase headcount, and that’s very important to us.” The next phase of Caterpillar’s global e-invoice expansion will involve India, Mexico and China. In China, Teong will leverage the flexibility of Ariba to match an electronic invoice with a VAT paper invoice required by the Chinese government for back up. You could call this a “paper match”.
Teong cited some critical factors for a successful global rollout, including management support from each business unit and a firm policy for supplier participation. “We mandate that suppliers comply with our electronic process,” he said. “If they send us paper, we will send it back.” A common global process and support structure is another important aspect of the deployment. “That keeps it simple, and helps us with change management,” said Teong. All in all, good advice for any organization looking to duplicate Caterpillar’s outstanding results with global e-invoicing.
To hear the recorded presentation, click here.
Thanks Teong! And congratulations to Teong and the entire Caterpillar team for sharing these best-practices.