Invoice Data Capture Project

How The Walt Disney Company Transformed Accounts Payable Shared Services with Intelligent Data Capture Presented by: Jeffrey P. Valentino

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About the Presenter… Jeff Valentino

• Sr. Manager, Accounts Payable; Disney Worldwide Shared Services (North America and EMEA Regions)

• 20 years of Financial and Operational management experience with Fortune 100 companies

• Held a variety of leadership positions with a focus on strategic growth, reversing financial declines and capturing cost reductions via process redesign and performance enhancement programs

• ~ 5 years with The Walt Disney Company in a Shared Services environment

• Earned an MBA at University of Florida and Six Sigma Green Belt Certified

Whether keeping a smile on at our parks, presenting the news at ABC, creating films and television shows, building attractions or stores, or covering sporting events, The Walt

Disney Company is a multimedia conglomerate with focuses in 4 key areas…….

Who is ?

North America Canada Puerto Rico USA

Asia-Pacific Australia China Korea Hong Kong Japan Malaysia New Zealand Philippines Singapore Taiwan Thailand

Latin America Argentina Brazil Chile Colombia Mexico Peru Venezuela

EMEA Austria Belgium Czech Republic Denmark Finland France Germany Greece* Hungary* Israel* Italy Netherlands Norway Poland* Portugal South Africa* Spain Sweden Switzerland Turkey* UK

42 Countries and 10 languages

* Have limited scope

149,000 employees worldwide

Organization – Disney Worldwide Shared Services (DWSS)

DWSS Mark Kingman

Optimization Services

Travel Services

Financial Services

General Accounting,

Cash & Banking, and Fixed Assets

Accounts Payable

Quality, Controls, & Finance

Project Team/ Information Technology

Payroll

Employee Administrative

Services

Travel & Expense

Management, Card Admin

Global Travel

Employee/ Cast Services

HC: 43 53 15 90 39 40 12 5 1

Key Services:

• Global Travel • Event Booking • Production

Travel Support

• Travel Spend Analysis

• Credit Card Admin

• Domestic and EMEA T&E

• Payroll • Payroll

Taxes

• Employee Inquiries • Employee Doc Mgmt • Employee Transaction

Processing • Compliance Training

Administration • I9 stewardship

• Project Management

• IT (local apps)

• Quality • Metrics • Controllership • Financials

• Fixed Assets • Escheatments/

Unclaimed Property

• Cash and Banking

• General Acct (account reconciliations)

• Domestic and EMEA AP

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HR Support

Human Resources

DWSS Annual Impact/Scope

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TRANSACTIONS • Manage 29k Active Credit Card Accounts • Pay 5-6M invoices • Process 350k Expense Submissions, 31K

Items Audited • Process 3-400K Fixed Asset Transactions

and 4k Projects Capitalized • Submit over 4,000 Tax Filings • Reconcile 366 Cash Accounts and over

200k Active Ledger Accounts

EMPLOYEE/CAST IMPACT • Over 150k Inquiries • Over 120k Employees/Cast Paid; 220k W2s

produced • Manage Annual Compliance Training • Process over 200k Employee/Cast Status

Changes, Fitness Reimbursements, Educational Reimbursements, Leaves, etc.

• Manage Employee/Cast Documents

FINANCIAL • $18B disbursed in AP • $5B disbursed in Payroll • $3-4M in Travel Card spend • Account for $25B in Assets • Remit over $ 1B in Payroll taxes • 42k Wires for $19B to date

~ 5M+ invoices annually ~ $18B in disbursements annually

Global scope encompasses North America and EMEA countries

Cost per invoice $1.61

May ’04 May ’07 May ’10 May ’11 FYE ’11 (Sept) FY’12 (Dec) Headcount 105 88 64 61 53 53 Defect Rates 11.3% 10.1% 10.1% 10.7% 9.4% 8.6% Invoices Per FTE 38K 59K 64K 69K 72K 83K (EST)

(annualized) Electronic Payments 15% 32% 48% 49% 53% 53% Electronic Invoicing 86% 89% 92% 92% 92% 92% Invoices POT(HOT) 67% 82% 91% 92% 95% 95%

A/P Statistics and Trends

Goal

ENHANCE

Strategy

• Customer partnering • Improve skills and focus • Information management

ELIMINATE • Process-wide improvements • Edit at source • Measure and improve

Work Breakdown

Tier 1 • Value-added consulting/service/analysis • Complex issue resolution • Process management/controls

Tier 2 • Data fixing • Routine problem resolution • Exception routines

Tier 3 • Data entry and manipulation • Repetitive transactional tasks

AUTOMATE OR OUTSOURCE

• Self service via internet • ERS, EDI, IDC….. • Vendors

Technology is a true enabler for driving world-class service, efficiency, and value

Continuous Improvement Strategy

4

20

29

FTE’s FY06 FY11

17

39

28

FTE’s FY06 FY11

FTE’s FY06 FY11

Accounts Payable Roadmap

Imaging Enabled

Paper Free

Paper Based

Zero - Touch

Manual Workflow E-Invoicing P-to-P

Invoice Processing Project Background

Problem Statement

• Disney manually processes ~500,000 invoices annually (92% electronic) • Posting of paper purchase order related invoices is labor intensive • Paper invoices detract from our Green Standard and Carbon Footprint Reduction

Initiatives

Goals/Objectives:

• Reduce DWSS AP manual effort applied to scanned invoices by 80% o Auto-post invoices with no manual intervention o Identify defective invoices - without manual intervention

• Reduce DWSS AP indexing costs by 80% • Provide path to migrate to 100% Green Standard for invoicing

o Allow for vendor/BU-direct submission of invoice images (e.g. email a PDF image)

• Use new data to drive analysis efforts in PTP (e.g. improved discount capture) • Define translation opportunities across PTP and DWSS processes

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Invoice Processing Project Background

Project Scope:

• Implement technology to provide image-based invoice data capture o Provide for auto posting of invoices into SAP

• Integrate technology solution into existing EIT imaging environment Infrastructure

• SAP ERP: “TWDC has the largest single instance of SAP in the world” • SAP Workflow • EDOCS image archive • Microsoft SQL Server Enterprise

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Technology Selection Approach

Multi-Phased RFP Approach

• Phase 1: Selected top RFP candidates out of 7 industry leaders to move to Phase 2 • Phase 2: On-site assimilation of TWDC vendor invoice sample (“Bake-off”)

o Statistical sample of 3,028 invoices representing a variety of invoice challenges

All languages, currencies, purchase order types, ranges of defects, types of inbound documents USA, UK, France, Spain, Italy, Portugal, Germany, Austria, Switzerland, Belgium, Netherlands, and Luxemburg

o 2 vendors showed; 4 bowed out, 1 vendor could not comply with terms

Technology Selection Approach

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Brainware: • 3,028 Images processed through OCR – “Distiller” • 1,005 Images made ready to Post – “Verifier” • Throughput

76% Extraction Rate 600 invoices/ person/ day 35% Straight Thru Processed (STP) – zero touch

• Impact = 8 FTE Reduction • 5 Customizations identified during event

Industry Competitor: • 3,028 Images processed through OCR • 95 Images made ready to Post (on 2nd attempt) • Throughput

130 invoices/ person/ day 0% Straight Thru Processed (STP) – required human intervention

• Impact = 0 FTE Reduction

The clear choice!

Other Considerations …

• Brainware is the only true provider of intelligent data capture and enterprise search solutions, and is widely regarded as the market leader in this space

• Brainware is the only true intelligent data capture platform that we were able to validate for extraction and processing data from both structured and unstructured documents

• Brainware first launched it’s intelligent data capture solution, Brainware Distiller, in 2000

• Brainware has successfully delivered more than 350 implementations of its software solutions worldwide; throughout the Americas, Europe, the Middle East, and Asia

Brainware Customer Base

Recommendation & Business Case

Recommendation • Implement Brainware

Complements EIPP for a complete invoice payment strategy Business Case • DWSS AP Savings

Labor reduction: 8 FTE Eliminate the need to index imaging: $ Savings Payback period: ~ 2 years with positive NPV + 20%

• Intangible Benefits Reduced cycle-time Increased paid-on-time Comprehensive invoice process

BW Development and Implementation – “less than 100 days”

Progress Since Go-Live ...

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30.7%

53.3%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%IDC: Brainware Auto-Posting Invoice Activity Auto Post

Linear (Auto Post)

Questions?