Transcript Document
© 2012 Financial Operations Networks LLC Shared Service Strategy: Increase Efficiency and Reduce Costs of Accounts Payable About Your Presenter Judi Thallas, APM Finance Change Management Leader, ConAgra Foods Business Services Center Judi has been with ConAgra Foods for 14 years, originally hired as the Accounts Payable Supervisor for the Frozen Foods Group. In 2003, Judi helped establish a financial shared services center and served as the Accounts Payable Manager of the new center. Judi was also a key leader of the Concur automated online employee expense reporting tool and revision of the company’s credit card programs. In addition, Judi was a key player in the phased implementation of the company’s ERP Purchase to Pay module focusing on Accounts Payable. Concurrently, Judi was also managing an AP staff utilizing multiple legacy payable systems. Since 2009, Judi has focused on change management and training of the ERP P2P processes for both the AP staff and the end users ranging from plant maintenance associates to senior vice presidents. Judi is also involved in company M&A activities, focusing on AP process assessment including: training, vendor onboarding, change management, and post go live support. In This Session … • ConAgra Foods Accounts Payable evolution • Decentralized to centralized process Deployed an ERP System with Bolt-On Applications Consolidated multiple AP systems into a single ERP system Reduced cost-per-invoice Increased on-time payments Reduced AP help desk inquiries What We’ll Cover … • About ConAgra Foods • Where We Were • Our Goal • Our Evolution • What’s Next • Wrap-up ConAgra Foods Overview ConAgra Foods started in 1919 as Nebraska Consolidated Mills. ConAgra Foods is a Fortune 500 company with more than 23,000 employees, with the company’s world headquarters located in Omaha, Neb. ConAgra Foods had $12.3 billion net sales for FY 2011. ConAgra Foods is one of North America’s leading food companies, with brands in 97 percent of America’s households. ConAgra Foods Portfolio $12.3 billion in sales Our business • ConAgra Foods reports operations in two segments Consumer Foods Commercial Foods Grocery, Convenience, Mass Merchandise and Club Stores Restaurant, Foodservice Operations and Commercial Customers ConAgra Foods - Business Services Center Cash Disbursements Team Central Accounts Payable Activities Freight Payables Document Imaging Invoice Entry Payment Processing Discrepancy Resolution Business Analysis Travel & P-Card Sales & Use Tax 1099 Processing Financial Reporting Training Where We Were – All Over the Board Multiple AP systems Multiple AP processing locations Multiple reporting processes Manual Wire Transfer Process Duplicative Administrative functions Location specific processes Multiple post process document storage Methods 55% invoices entered already past due Multiple AP remittance addresses 100% paper Inconsistent volume & efficiency information High % Locally Printed/Mailed checks Manual Accrual calculations Multiple sets of controls and audit processes Poor Supplier Relations Limited ability to report accurate “enterprise” metrics Our Goal • Centralize, Standardize & Optimize Technology & Business Processes • Benefits Improved visibility & financial controls Enhance efficiency & effectiveness Reduce invoice processing & audit costs Increase Procurement effectiveness Multi Year, Multi-Faceted, Enterprise-Wide Approach • Implement a single ERP system – ERP • Order-to-Cash Project (2004) General Ledger (2007) Supply Chain (P2P) (2008 to 2010) Fixed Assets (2010) Establish a Shared Service Center Enhance ERP capabilities with complimentary applications Automated Imaging & Work Flow Integrated Sales & Use Tax Application Automated P-Card Functionality The Hackett Value Grid™ Identifies Top Performers Within the Purchase-to-Pay Process Purchase-to-Pay Top Performer Hackett Value Grid™ Example of Effectiveness Drivers Example of Efficiency Drivers • Cost per Invoice • First Pass Match Rate • FTEs per $ Billion • Annual training hours • Invoice per FTE • Number of Inquiries • PO Utilization • Invoices Rejected • Span of Control • Centralization of Resources • Processing Cycle Times • Standardization of Pay Terms • On-Time Payment Rates • E-Catalog Utilization • Self-Service Inquiries • Percent of Active Suppliers • Electronic Invoicing • Percent of Suppliers Representing 80% of Spend • Electronic Payments Reprinted with permission of The Hackett Group, Inc. Stages of Organizational Maturity Top Performer Advanced Learning Traditional • De-centralized invoice processing • De-centralized purchasing • Manual matching & approval • Minimal automation • Imaging solution for document retention • Limited metrics • No formal SLA’s • Centralized invoice processing • Business unit purchasing • Document imaging & workflow • Systematic matching • Rules based approval • Moderate automation • Some purchase card usage • Efficiency metrics • Limited SLA’s • Centralized invoice processing • Some centralized purchasing • Imaging with OCR & rules based workflow • Some assumed receipt, evaluated receipt and automated recurring payments • EDI for large volume suppliers • Basic Portal technology for supplier self-help • Expanded purchase card program • High level end to end efficiency & effectiveness metrics • Formal SLA’s Reprinted with permission of The Hackett Group, Inc. • End to end accountability for P2P processes & reporting • Formalized supplier payment strategy • Aggressive use of assumed receipt & evaluated receipt • Fully developed purchase card program • Fully developed, detailed end to end efficiency & effectiveness metrics • Closed loop EDI for strategic suppliers • Complete supplier selfservice portal • Formal SLA’s Our Evolution • The Plan Foundation to Automation ERP & Bolt-on Applications Phases 1 & 2 • Executing the Plan Invoices Processed AP Cycle Times Improved Visibility Supplier Self Service Foundation to Automation Reprinted with permission of The Hackett Group, Inc. ERP & Bolt On Applications Master Data Create/Change ERP AP Invoice Entry & Payment Processing Data Image & Workflow P-Card Processing Sales & Use Tax Phases 1 & 2 – Centralize, Standardize & Optimize Phase 1 Centralize & Standardize Phase 2 Optimize FY09 ERP Rollout Centralize Accounts Payable FY10 Optical Character Recognition Supplier SelfService Portal for AP FY11 Buyer Initiated Payments Expanded PCard Program FY12 Closed Loop EDI E-Catalog Procure to Pay Taxonomy Standardize Payment Methods & Cycles Electronic Invoice Submission Supplier PO Collaboration Invoices Processed Work Flow OCR File Capture & EDI Productivity Improvement & Cost Reduction > 20% year over year AP Cycle Times Opportunity = Auto-escalation Improved Visibility Supplier Self-Service – AP Inquiries Inquiries Reduced 25% 98% Adoption Rate Recipe to 98% Self-Service Adoption Ingredients 1 Simple, Hosted Self-service Solution 1 Team Dedicated, Enthusiastic AP Specialists 1 Large Group of Active Suppliers Directions Make it Easy for the Supplier to use your Portal Designate a Team Member as the Portal Administrator Partner with Purchasing to identify potential Suppliers Invite largest call volume Suppliers first Create & Publish FAQ’s document on site What’s Next - Phase 3 – Monitor & Maintain Supplier Scorecard Formalized SLA’s Sustainable End to end Training Results = Top Quartile Efficiency and Effectiveness The ConAgra Journey Traditional • Decentralized Processing • Information Segmented Learning/ Advanced • Centralized Processing • Information Consolidated Top Performer • Optimized Processing • Information Analytics Reflections/Lessons Learned Very Ambitious Project Communicate Communicate Communicate Manage Change Course Correct Don’t Underestimate Training 7 Key Points to Take Home 1. Centralized , Automate & Optimize 2. Leverage your relationships – partner with your suppliers 3. “Plan your work…then work your plan” Norman Vincent Peale 4. “You can’t manage what you don’t measure” Edward W. Deming 5. Communicate, Communicate, Communicate 6. Keep It Simple 7. Don’t underestimate the need for training Questions? © 2012 Financial Operations Networks LLC Thank You! For further information on this topic, contact The Accounts Payable Network 2100 RiverEdge Parkway, Suite 1010 Atlanta, GA 30328 Contact: [email protected] 866-827-6389 770-984-1184 www.TheAPNetwork.com