Touching your invoices? You don’t need to. 14 'how to’s' to touchless processing

James Copeland VP FSSC BMC Software Inc.

Touching your invoices? You don’t need to. 14 ‘how to’s’ to touchless processing

© Copyright 11/7/2012 BMC Software, Inc 2

Agenda

BMC

SSC at BMC

Change of process

The problem

Invoices on hold

First pass yield

Results to date

Questions?


Founded in 1980, 8th largest independent software company with over $2.0 billion in total bookings and revenue (Fiscal Year March 2012)

Corporate headquarters in Houston, with more than 6,000 employees around the world

IT needs to be structured, managed, staffed and deployed as a service – a service that business leaders can leverage to achieve their goals and objectives - That’s exactly what we do.

We serve - 15,000 customers in 132 countries - Fortune 100: 94% - Fortune 500: 81% - Forbes Global 100: 96% - Forbes Global 500: 86%

BMC by the numbers


Shared services profile

IT - Classic IT role - Customer-facing role - R&D-facing role

Key business processes - Order management (OM) - Global procurement (GP) - Financial shared services (FSS)

Corporate initiatives (CI) - Process improvement - Cross departmental initiatives

People - 789 employees - 36 offices - 23 countries

Americas

India

Israel

Asia Pacific

Europe

IT

GP

OM

CI FSS

People by function

People by region


FSSC - Pune - Global accounts payable

Invoices (TTM) 116k – Manual inv (TTM) 58k (50%)

iExpense (TTM) 72k 39 countries Staff 19

- Global fixed assets 32 countries Staff 3

- General ledger EMEA region

– 25 countries – Staff 10

- Cash application EMEA & APAC Staff 2

- India statutory accounting Staff 5

FSSC – Houston

Revenue accounting - Staff 4

Professional services accounting - Staff 4 (Houston)

1 (Amsterdam) 1 (Pune)

Capitalized software accounting - Staff 7

Key financial applications - Oracle11i single WW instance

Single chart of accounts - Hyperion HFM and planning - BlackLine account reconciliation - IT2 treasury system

Financial Shared Services profile


Get control of your processes – roles & responsibilities

Moved FPA to the BU’s. Moved Back Office Accounting to Business Ops.

CFO Legal HR BU 1 BU 2 BU 3 Operations

Tax

Risk

Treasury

Sales

R&D

Mktg

FPA

FPA

CAO

Order Mgmt

IS&T

GP

Back Office Accounting

Mgmt Acctg


Objective

Reduce Touch - Best case – don’t touch the invoice

Current scenario – 30,000 invoices per quarter

» 15,000 are manual

Increase P2P first pass invoice yield (target > 90%) - If we have to touch it – we only want to do it once


Symptoms of the problem Historical trend of invoices on hold

0

100

200

300

400

500

600

Apr09

May09

Jun09

Jul09

Aug09

Sep09

Oct09

Nov09

Dec09

Jan10

Feb10

Mar10

Apr10

May10

Jun10

Jul10

Aug10

Sep10

Oct10

Nov10

Dec10

Jan11

Feb11

Mar11

Apr11

May11

Jun11

Jul11

© Copyright 11/7/2012 BMC Software, Inc 9 © Copyright 11/7/2012 BMC Software, Inc 9

Increase FPY

• 1 - Train procurement, facilities and other key users

• 2 - Restrict WebReq access to “Superusers”

• 3 - Notify suppliers that “No PO - No Payment” is our policy

• 4 - Implement the Oracle iSupplier Portal

• 5 - Adopt/Require “Tiered Routing” globally for all categories

• 6 - Auto close for aged PO’s

• 7 - Issue Weekly Report that shows violators of “No/Late” PO policy

• 8 - Ensure procurement professionals are NOT entering their own name on ANY Oracle WebReqs – that is, ALWAYS enter the name of the actual requisitioner

• 9 - Revise process/procedure on 2-3 way match PO’s and communicate/train users

© Copyright 11/7/2012 BMC Software, Inc 10 © Copyright 11/7/2012 BMC Software, Inc 10

Decrease touch

• 10 - Develop & implement a systemic solution to the “Fieldglass Receipt” issue

• 11 - Evaluate alternative front end AP process

• 12 - Implement Kofax scanning improvements

• 13 - Formal plan/approach to accelerate the rate of catalogue integration outside of the USA

• 14 - Need formal plan and execute a “Supplemental P-Card (MC or VISA) in large International Countries

Results to Date

© Copyright 11/7/2012 BMC Software, Inc 12 INTERNAL USE ONLY © Copyright 11/7/2012 BMC Software, Inc.

12

Historical trend – all regions and total

Region Mar-11 Jun-11 Sep-11 Dec-11 Mar-12

APAC 7 2 0 6 4

ISREAL 7 9 2 9 8

INDIA 31 12 8 4 6

EMEA 29 39 29 60 7

LAM 0 4 0 7 1

NA 80 85 97 126 11

Total 154 151 136 212 37

Year over year decrease – 76% From December High – down 83%

The holds problem was primarily India, EMEA and North America. Significant improvement in North America.


13

North America Region

For North America (US + Canada) total 11 invoices amounting to $65K are on Hold. No invoices for US/ CA are above 30 days hold. Specifics for North America (7 invoices) 2 No PO 4 Insufficient funds on PO 1 No receipt There are no expense claims on hold

81% drop in holds for the quarter. No expense reports on hold. This was during Q4, a high volume invoice and expense report period.


14

North America – Process Control Chart

Green Line is the average

Red Lines are the UCL and LCL - Set 3 standard deviations from the mean

Data points outside the red lines indicate something outside the norm has happened - Only 5% chance that this was a random event

1st Time Pass Rate for this Week is 89.08 %, Average for END of FY12Q4 84.34 %.


15

North America – Invoices on hold greater than 30 days

•Objective was to eliminate any holds greater than 30 days

•No excuses weekly video conference with the P2P team

•Deep dive in all older invoices

•Pick up the phone

0

5

10

15

20

25

30

24/10/2011 24/11/2011 24/12/2011 24/01/2012 24/02/2012 24/03/2012

What Changed?


16

Top 3 Reasons Invoices went on Hold this week:

Receipting not

done

PO’s short of

funds

No PO / Invalid

PO on invoices

Grand Total 11 4 33

Hold % age 22 % 8 % 65 %

Top 7 Vendors Contributing 57 % of the Issues:

Identification of offenders - suppliers

VENDOR_NAME Invalid PO on

invoices

Receipting not

done

PO’s short of

funds Total holds

1st time pass

invoice Grand Total

% Age against

total holds

% age against

total invoices

of same vendor

Vendor 1 15 15 3 18 29% 83%

Vendor 2 3 3 10 13 6% 23%

Vendor 3 3 3 3 6% 100%

Vendor 4 1 1 2 1 3 4% 67%

Vendor 5 2 2 2 4% 100%

Vendor 6 2 2 2 4% 100%

Vendor 7 2 2 2 4% 100%

Total 23 6 0 29 14 43


17

Top 10 People: who are contributing 27 % of the holds

Identification of offenders - employees

MIN_REQUESTER Department Invalid PO on

invoices

Receipting

not done

PO’s short of

funds Total holds

1st time

pass

invoice

Grand

Total

% Age

against

total holds

% age

against

total

invoices of

same

vendor

Employee Name 5011-10010-PUBLIC

RELATIONS 3 3 3 6 6% 50%

Employee Name 5011-60009-AMERICAS CS -

GEO 2 2 3 5 4% 40%

Employee Name

5011-40649-IS AND T -

ENTERPRISE PLATFORM

SVCS AG

2 2 2 4% 100%

Employee Name 5011-60009-AMERICAS CS -

GEO 1 1 15 16 2% 6%

Employee Name 5011-40012-GLOBAL

CORPORATE SERVICES CC 1 1 9 10 2% 10%

Employee Name 5011-40089-IS AND T - PMO 1 1 1 2% 100%

Employee Name 5011-40012-GLOBAL

CORPORATE SERVICES CC 1 1 2 3 2% 33%

Employee Name

5011-40649-IS AND T -

ENTERPRISE PLATFORM

SVCS AG

1 1 1 2% 100%

Employee Name 5011-40650-IS AND T -

CUSTOMER OPERATIONS 1 1 4 5 2% 20%

Employee Name 5011-40254-WW OEM

ROYALTIES 1 1 1 2 2% 50%

Total 4 9 1 14 37 51


18

Measurement details

Week

29

Jan

Week

05

Feb

Week

12

Feb

Week

19

Feb

Week

26

Feb

Week

04

Mar

Week

11

Mar

Week

18

Mar

Week

25

Mar

Week

01

Apr

Invoice Volumes 262 435 422 567 341 538 329 471 288 467

1st Time Pass Rate

82.06

%

79.08

%

83.41

%

82.19

%

83.28

%

87.83

%

84.50

%

85.99

%

84.72

%

89.08

%

Cycle Time (Avg./ St Dev) Days

– Invoice went on Hold to Hold

resolved date

8 &

11

10 &

14

13 &

26

17 &

32

21 &

36

7 &

10

15 &

16

9 &

11

12 &

10

15 &

21

Total Hold Invoices Received in

Week 47 91 70 101 57 87 51 66 44 51

Total Holds Resolved 56 63 105 65 97 56 80 92 69 61

PO Vs Non PO (%)

58 &

42

72 &

28

73 &

27

84 &

16

57 &

43

86 &

14

65 &

35

79 &

21

84 &

16

66 &

34

Assess your metrics weekly


First Pass Yield

83% 82%

81%

86% 85% 85%

86% 87%

90%

76%

78%

80%

82%

84%

86%

88%

90%

92%

Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13

Actual Plan

Objective is 90% FPY for FY13

Assuming 5,000 manual invoices Per month, we will need to eliminate: From our low of 81% - need to eliminate 450 exceptions per month From our year end metric of 86% - we need to eliminate 200 exceptions per month


Closing thoughts

Single largest contributing factor to success

No PO No Pay

Employee contact

Questions?


Learn more at www.bmc.com

Touching your invoices? You don’t need to. 14 'how to’s' to touchless processing

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