case study: conagra foods - highradius study: conagra foods ... before fscm •substantial ......
TRANSCRIPT
Case Study: ConAgra Foods Enhanced Transaction Management: Lessons for
Optimal Workflow
Lori Kleinschmit Lisa Walter
What We’ll Cover …
• Company Overview
• Case for Change
• High Radius Accelerators
• Dispute Management
• Collections Management
• Lessons Learned
• 7 Key Takeaways
What We’ll Cover …
• Company Overview
• Case for Change
• High Radius Accelerators
• Dispute Management
• Collections Management
• Lessons Learned
• 7 Key Takeaways
ConAgra Foods Overview (CAG)
ConAgra Foods started in 1919 as Nebraska Consolidated Mills.
In 1971, it was renamed ConAgra, Inc. and the company
became ConAgra Foods in 2000.
Fortune 500 company with more than 26,000 employees
World headquarters in Omaha, Nebraska
3 campus locations – Omaha, Kennewick, Naperville
13.2 billion in net sales for fiscal year 2012
Most recent press: Bid and Deal Closure to purchase Ralcorp (RAH)
Our Brands
ConAgra Foods Portfolio
$13.2 billion in sales
ConAgra Foods reports operations in two segments
63%
37%
Consumer Foods - 63% Commercial Foods - 37%
Consumer Foods Commercial Foods
Grocery, Convenience, Mass Merchandise and Club Stores
Restaurant, Foodservice Operations and Commercial Customers
Our Business
Consumer Foods
ConAgra Foods is one of North America’s leading food companies,
with brands in 97 percent of America’s households.
28 of these brands are No. 1 or No. 2 in their category.
20 of these brands generate more than $100MM in retail sales each year.
ConAgra Foods offers 160 meals for $3 or less.
Commercial Foods
Our Commercial Foods segment manufactures and sells a variety of
specialty products to foodservice, food manufacturing and industrial
customers worldwide.
A top provider of premium multi-use flours with the broadest
portfolio of whole grains in the industry.
National leader in food ingredient sourcing and distribution with
coverage in the 48 contiguous states and Hawaii.
Leading producer of frozen potatoes and sweet potato products
and other vegetables and appetizers.
Creates value by selling a portfolio of flavors, seasoning blends
and spices.
AR Department Org Chart
What We’ll Cover …
• Company Overview
• Case for Change
• High Radius Accelerators
• Dispute Management
• Collections Management
• Lessons Learned
• 7 Key Takeaways
Case for Change
Average Annual Accounts Receivable
Consumer - $ 8B
Mills - $ 2B
Average daily balance of past-due receivables from customers
Consumer - $3.7MM
Mills - $ 2.0MM
Average volume of deductions processed annually
Consumer – 160,000
Mills – 10,000
Value Assessment
People
Can productivity be improved?
Can manual work be automated?
Process
What is the root cause of issues?
For example, what is your effectiveness creating, resolving, and preventing deductions?
Technology
Are current systems performing optimally? Could changes in current functionality add significant value?
Before and After
Before FSCM
• Substantial manual processes to process collections and disputes (deductions) with multiple screens / clicks
• Management reporting using excel spreadsheets
• No workflow to process and clear deductions
• No collection strategy or prioritization of customers for Collections. All accounts are treated the same
• Identification and attachment of back-up
documentation for deductions is manual and non-standardized
• Manual generation of customer correspondence • No reporting for management to level workload Custom reports and queries
TOMORROW (After FSCM)
• Simplified User Interface (UI) to process collections and deductions
• Additional reporting capabilities • Sophisticated workflow to process and clear
deductions • Ability to prioritize and define collection
strategies using collection rules
• Utilize High Radius technology to collect back up for top customers ~ 60% of deductions
• Automated generation of customer correspondence
• Standard delivered BI content
Implementation Partner
Founded by a team of individuals with extensive background in SAP
financials process automation
Specialize in Cash Application, Collections, Deductions, and Credit
Management
Consumer Packaged Goods Industry has been their main focus
Provide Implementation Methodology and Tools
Provide Accelerators to SAP FSCM modules
Return on Investment focused
Knowledge transfer to internal IT department
Project Timeline
Milestone Timing
Requirements gathering Sept-Oct 2011
Design Mid Oct-Dec
Build/ Configuration / Development Mid Dec- Feb
Scenario Testing Mid Feb- Mar
Cycle 1 cutover/testing March
Cycle 2 cutover/testing April
Cycle 3 UAT May
Data Prep / Trng. / Production cutover Mid May-June
Go Live June 25, 2012
Stabilization June- Feb 2013
What We’ll Cover …
• Company Overview
• Case for Change
• High Radius Accelerators
• Dispute Management
• Collections Management
• Lessons Learned
• 7 Key Takeaways
High Radius Accelerators
Dispute Resolution Accelerator (DRA)
• Enhances standard SAP Dispute Management functionality with:
•Collaborative workflow solution
•Cross-department collaboration via automatic dispute case routing and processing
•Out-of-the-box templates for common reason codes
•Complete audit trail of the lifecycle of a dispute is captured
•Benchmarking performance of the users and processes
Correspondence Automation
• Simplifies outbound customer communications by:
•Automatic document generation and delivery directly from SAP via fax, email or print
•Documents such as invoices, customer letters, deduction denial letters, proof-of-delivery/bill-of lading can be dynamically generated automatically
•Create for one transaction at a time or in mass
Receivables Radius
Claims Automation
•Automating the process of retrieving documents such as Proof-of-Delivery (POD), Bill of Lading (BOL), customer Debit Memos/Claims from various websites
•Automate linking of documentation to the dispute case in FSCM
Correspondence Automation
Correspondence Templates
1st & 2nd Dispute Back Up Request Package
Credit Backup Request
Final Deduction Backup Request Package
GL Clearing Package
Internal OSD Email
Internal Pricing Email
Internal Trade Email
14 & 60 Days Internal Escalation Package
Invalid Single Denial Package
Invalid Summary Denial Package
AR Statement Letter
Receivables Radius
What We’ll Cover …
• Company Overview
• Case for Change
• High Radius Accelerators
• Dispute Management
• Collections Management
• Lessons Learned
• 7 Key Takeaways
Dispute Management
Supports the processing of deductions – known as disputes.
Process disputes using a different reason code for each type of business transaction
Status along with reason code controls subsequent actions on the dispute
All information related to a dispute is summarized in one central business object: the dispute case utilizing Records Management Storage (RMS)
Single view, you can see the reason code, processor, disputed amount, amount paid, customer correspondence and all notes / actions taken to resolve
Drill-down capabilities allow users to view information from other FSCM applications – such as Collections as well as from SAP ERP
Dispute Resolution Accelerator(DRA)
Single View Screen w/simplified SAP navigation
• One-click access to Document Flow
• One-click access to Attachments
Tasks – Shortcuts to Logical Work Flows
DRA Task List
Clear using ZFITS-(Create a credit memo to offset a trade related dispute or request a payment to the customer)
Clear using F-30
Go to ZREBATE (View open customer agreements)
Update Dispute Case
Send Email
Forward to user
Update notes
Upload Supporting Documentation
Generate Correspondence Packet
Obtain Trade Validation Proposal (TVP)
Clear to ZFITS using TVP
Update Back Up Detail
Claim Automation (RR)
For Pre-defined Customers:
• Automatic Retrieval of backup from Customer
Websites
• Optical Character Recognition (OCR) of backup
• Automatic Reason code assignment
• Provide SKU material information from backup
For all Customers
• Continual batch job to auto link IBM P8 saved
images to FSCM case
• Any backup manually linked directly to case will
auto index into IBM P8
RR
Link to FSCM Case
IBM P8 indexing
Continual IBM P8 to FSCM auto
linking
Debit Memo & TVP
Trade Validation Proposal
Digitalized Backup
TPM
SAP Agreement
Dispute Management Wins
• Package open disputes info
• Disputes requiring action
FSCM Step 1
•Flexible display of user work lists
Collab Tool
• Validation and Settlement
FSCM Step 2
Ability to collaborate with Sales partners through systematic work flow
What We’ll Cover …
• Company Overview
• Case for Change
• High Radius Accelerators
• Dispute Management
• Collections Management
• Lessons Learned
• 7 Key Takeaways
Collections Management
Implemented core FSCM:
One stop shop for organizing and prioritizing work
Daily prioritized work list based on average DIA
Navigation directly to customer accounts
Visibility to all open invoices, open promises to pay and
dispute cases
History log of activity on both invoices and disputes
Ability to document the results of customer contacts
Collection Rules and Prioritization
• Setup to trigger when a customer should be put onto a collection work list
Collection Rules
• Assigned to collection rules to rank order the prioritization of customers on a work list
Prioritization Percentages
The percentages assigned to all rules total to 100%. When customers have broken a collection rule, the customer (payer) will be prioritized on the work list by the total percentage assigned.
Collection Rules
1. Days in Arrears (DIA) average 2. Percentage of Past Due/Open Invoices 3. No Successful Customer Contact 4. Resubmission Due 5. Broken Promises 6. Total Amount, Days until due (for website customers) 7. Percentage of Credit Limit Used 8. Risk Rating 9. Credit 10. Transfer to Collections
1. Collection strategies begin with DIA
Days in Arrears (DIA) average will drive
segmentation of a Good, Average, or Slow
payer
2. Percentage of Past Due/Open Invoice
Once the DIA category of Good, Average, or Slow payer has been identified, the next
rule is applied
Percentage Past Due/Open Invoices = Total Past Due
Invoice Dollar Amount divided by Total Open Invoice Dollar
Amount
3. No Successful Customer Contact
If there was no success in reaching the customer, a collection
note stating, “no successful contact” will be recorded on the
invoice(s). After a specified grace period, the payer for those
invoices will re-appear on the work list for follow-up.
Based on the DIA category of Good, Average, or Slow, the payer will re-appear on the work list
Good Payer = X days Average payer = X days Slow payer = X days
4. Resubmission Due
Resubmission Reasons:
Contact person absent
Contact person request callback
Customer needs time to clarify and
approve
Customer still waiting for delivery
Resubmission due date
(follow-up date),
prioritization percentages
will be assigned to the type
of resubmission reason
that was recorded on the
invoice(s). Percentages
determine in what order the
customer appears on the
work list.
5. Broken Promises with Grace Period
When a Promise to Pay has been broken, the
payer will appear on the collector’s work list
based on …
Grace period of X days depending if EFT or Check paying
customer
6. Total Amount, Days Until Due
7. Percentage of Credit Limit Used
Payers will appear on the collector’s work list
based on Credit Limit Usage
8. Risk Rating
Risk Rating will also have assigned prioritization percentages
When a customer has broken any collection rule, the payer will be
prioritized further based off of the customer’s risk rating
9. Credit
Any business partner with a risk category of
collection or bankruptcy will be removed from
prioritization on the work list
10. Transfer to Collections
If a business partner does not have any open
invoices only disputes in a ‘to be collected’
status, it will appear on the collection work list.
What We’ll Cover …
• Company Overview
• Case for Change
• High Radius Accelerators
• Dispute Management
• Collections Management
• Lessons Learned
• 7 Key Takeaways
Lessons Learned
What We’ll Cover …
• Company Overview
• Case for Change
• High Radius Accelerators
• Dispute Management
• Collections Management
• Lessons Learned
• 7 Key Takeaways
7 Key Points to Take Home
1. Ensure project member skills match project needs (for example training, reporting,
trade, risk, general ledger, AR, and IT system analysts).
2. Must have an open and imaginative culture when establishing requirements. There
should be healthy dialogue to constructively challenge new ideas, versus being
locked into requirement documentation. As system capability was discovered
needed more flexibility to update requirements without jeopardizing scope
3. Do research and leverage an implementation partner
4. Identify project phases and resources needed for each
5. Engage credit, risk, sales, finance, and unconsolidated business groups in strategy
development. Proactive gap analysis for future state of business operations
6. Plan for Change Management and Communicate with impacted users
7. Celebrate wins and continue to list these as project milestones
