seminar:"purchasing intelligence - ricardo passchier

©2015 Software AG. All rights reserved.1 |

Ricardo PasschierBusiness Solutions Leader, Software AG

Purchasing IntelligenceMastering P2P Process Performance

14th April, 2015

@rpasschier

©2015 Software AG. All rights reserved.2 |2 |

Typical business conversations

Failed or delayed business activities• Why did this happen?

• I wasn’t told until it was too late!

Budget cuts• Where do I begin to reduce costs?

• Which systems or teams are involved?

Regulatory compliance & risk• Was the correct process followed?

• Who or what processed that order / service request / shipment?

Need to identify root-cause of issues - quickly


See what’s going on when others cannot

See within and across systems of record

Measure the output• What is the outcome of a process?• How many orders were delivered?• How much revenue was generated?• How much money was spent?

Classic BI

Measure the processes• How did we achieve the

outcomes?• Which business patterns lead

to success/failure? Any waste/defects?

• How to improve?

Process Intelligence


Are you truly in control?

Managing processes based merely on outcomes is not enough…

Businesseffectiveness & efficiency

Controlrisk, quality & compliance

Process intelligence,powered by PPM, provides

visual reference-to-evidence

Wronglyexecuted?

Wronglydesigned?

Wronglydocumented?


Understand the past

Anticipate the future

See what’s happening now

Intelligent businesses require insightin past, present and future (beyond reporting)

©2015 Software AG. All rights reserved.6 |6

Validate process execution against design

Scenario 1: Model first,then instrument the process at key action

pointsnot O.K. O.K.

checkingcalculations of

interest

checkingcalculation of

costs

calculationschecked but not

verified

informing theclaimant

asking claimantto adjust theapplication

within 4 weeks

claimantinformed and

asked

deciding whoinforms the

claimant

decided for theregistrar

decided not forthe registrar

registrar giveswriting office

order tocompose a letter

letter composed

transmitting theletter and order

to the courtsoffice

transmitted tothe courts office

adding the orderto the file

transmitting theletter to the post

office

order added letter transmitted

sending letter toclaimant

letter sent toclaimant

issueingpayment order

informing thedefendand about

his options

payment orderisssued

defendandinformed

giving order tothe courts officeto serve payment

order

order given

comissioning toserve the

payment order

served by thepost

served by thepolice

checking ifserving wassuccessful

successfulincorrect/incompl

ete document

transmitting theserving

document to thecourt

servingdocument

transmitted

examining theserving

document

registrar

servingdocumentexamined

giving order todemand a

repeated servingto the post

informing theparties (module1)

serving has notbeen possible

informingclaimant&ask him toadjust the direction

of the defendandwithin 3weeks

order not given

sendingobjection to the

post officedefendand

objectionreceived by the

post office


courts officepost office

objection sent

adding objectionto the file

transmittingobjection to

registrar

objection addedtransmitted to

registrar

informing claimantabout objection andhis options to react

(Module1)

claimantinformed

checking if claimantwants to engage the

ordinary legalprocedure

yes no

applying for thedivesture to the

judge

paying the costsfor an ordinary

procedure

applied costs payed

giving an order toinform the central

costs office to sendhim the file

order given

sending file toclaimant cost office

sent to claimant

executing the file

file was executed

sending back thefile to courts

office

file received incourts office

claimant

registrar

writing office

courts office

Module 1

registrar

claimantinformed

using Module 1!

order given parties informed

registrar

courts office

Module 2

registrar

registrar

claimant

transfering theprocedure to thecompetent court

transfered

informing theparties about the

transfer(Module1)

parties informed

check if procedureshould be

transferred to othercourt upon request

of claimant

no request ofclaimant

request ofclaimant

asking ifdefendand

agrees (Module2)

defendandagrees totransfer to

another court

defendandagrees not

informingdefendand about

the request(Module 1)

registrar

defendandinformed

issueing theenforcement orderupon application of

the claimant(Module2)

declaration about all payments

enforcementissued

checking ifapplication is

conform to thetime limit

O.K.not O.K.

arranging theserving

procedureregistrar

servingprocedurearranged

issueing aexecuted copy

executed copyissued

registrar

arranging thearchiving of the

file

procedure hasfinished

arranged

registrar

archiving the file courts office

checking if file isarchived three

years

file archived

no yes

destructing allcostituent parts ofthe file except forthe enforcement

order

destructed

signalizing on thefile if executeddoc has been

issued

signalized

destroying thewhole file after

30years

file destroyedafter 30 years

executing theprocedure

Order5128

Requisition

Finance

SRM

©2015 Software AG. All rights reserved.7 |7

Find out what’s going on ‘in the middle’ (without having to model first)

Scenario 2: Measure first (discover first),then identify burning issues, focus on

improvementnot O.K. O.K.

checkingcalculations of

interest

checkingcalculation of

costs

calculationschecked but not

verified

informing theclaimant

asking claimantto adjust theapplication

within 4 weeks

claimantinformed and

asked

deciding whoinforms the

claimant

decided for theregistrar

decided not forthe registrar

registrar giveswriting office

order tocompose a letter

letter composed

transmitting theletter and order

to the courtsoffice

transmitted tothe courts office

adding the orderto the file

transmitting theletter to the post

office

order added letter transmitted

sending letter toclaimant

letter sent toclaimant

issueingpayment order

informing thedefendand about

his options

payment orderisssued

defendandinformed

giving order tothe courts officeto serve payment

order

order given

comissioning toserve the

payment order

served by thepost

served by thepolice

checking ifserving wassuccessful

successfulincorrect/incompl

ete document

transmitting theserving

document to thecourt

servingdocument

transmitted

examining theserving

document

registrar

servingdocumentexamined

giving order todemand a

repeated servingto the post

informing theparties (module1)

serving has notbeen possible

informingclaimant&ask him toadjust the direction

of the defendandwithin 3weeks

order not given


post officedefendand

objectionreceived by the

post office


courts officepost office

objection sent

adding objectionto the file

transmittingobjection to

registrar

objection addedtransmitted to

registrar

informing claimantabout objection andhis options to react

(Module1)

claimantinformed

checking if claimantwants to engage the

ordinary legalprocedure

yes no

applying for thedivesture to the

judge

paying the costsfor an ordinary

procedure

applied costs payed

giving an order toinform the central

costs office to sendhim the file

order given

sending file toclaimant cost office

sent to claimant

executing the file

file was executed

sending back thefile to courts

office

file received incourts office

claimant

registrar

writing office

courts office

Module 1

registrar

claimantinformed

using Module 1!

order given parties informed

registrar

courts office

Module 2

registrar

registrar

claimant

transfering theprocedure to thecompetent court

transfered

informing theparties about the

transfer(Module1)

parties informed

check if procedureshould be

transferred to othercourt upon request

of claimant

no request ofclaimant

request ofclaimant

asking ifdefendand

agrees (Module2)

defendandagrees totransfer to

another court

defendandagrees not

informingdefendand about

the request(Module 1)

registrar

defendandinformed

issueing theenforcement orderupon application of

the claimant(Module2)

declaration about all payments

enforcementissued

checking ifapplication is

conform to thetime limit

O.K.not O.K.

arranging theserving

procedureregistrar

servingprocedurearranged

issueing aexecuted copy

executed copyissued

registrar

arranging thearchiving of the

file

procedure hasfinished

arranged

registrar

archiving the file courts office

checking if file isarchived three

years

file archived

no yes

destructing allcostituent parts ofthe file except forthe enforcement

order

destructed

signalizing on thefile if executeddoc has been

issued

signalized

destroying thewhole file after

30years

file destroyedafter 30 years

executing theprocedure

Order5128

Requisition

Finance

SRM

©2015 Software AG. All rights reserved.

How does it work?


Buyer Purchaser Supplier A/P

9

CustomerNeed

Time

Create PR

CreatePO

ReceiveGoods

PostInvoice

PurchaseOrder

GoodsReceipt

SupplierInvoice

PurchaseRequisition

Extractor

e.g. Purchase-to-Pay

System(s)of record

Step-by-step reconstruction of process steps based on transactions / interactions

Automatic sequencing according to timestamps

Extract process data from systems of record. For example, activity, timestamp, person,

product, customer, supplier, geography, etc

Straightforward and quick implementation: pilot as quick as 20 days

Uncover processes to reveal actual behavior


Connect outcomes to process flows

Distribution

Trend

Reconstruction of an aggregated process flow in order to visualize and explain step-by-step how the results

shown in the left-pane were achieved

Through automated process discovery and process mining

Visual mining


Benchmark best and worst practices

Best PracticeDepartment A

Benchmarkingat activity level

Worst PerformerDepartment B

Drive standardization and targeted fact-based process improvement

BEST PERFORMANCE(due to lean process

flow)

WORST PERFORMANCE(bottlenecks highlighted)

PERFORMANCE GAP(detected during benchmarking)

©2015 Software AG. All rights reserved.

PPM use cases& customer examples


• Lean & Six-Sigma require identification of waste and defects – and hence visibility of suboptimal processes

• Straight-Through-Processing requires measurement of ‘touch-less’ orders to determine areas where manual intervention occurs

• Benchmarking requires delta comparisons between opco’s, departments, regions, factories etc.

• Outsourcing requires monitoring of supplier SLAs

• Service management requires monitoring of service levels, efficiency, productivity e.g. support desks, call-centers etc.

• Consolidation of processes and supporting systems will occur during and after M&A

• Shared services require finding a common denominator

Customer excellence,Cost reduction, Standardization

Outsourcing, M&A, Shared services

Typical use cases

When to consider PPM?


• Segregation of duties requires an understanding of participants, process and outcomes

• Conformance to internal policies/procedures and external rules/legislation, requires evidence for internal and external auditors

• Success requires evidence that execution meets design and expectations

• User acceptance may require additional evidence that new processes are being followed (and not being worked-around)

• Education plans should take actual usage data from users to determine training need

• Visibility before automation

Governance, risk & compliance

Global rollout & Go-live support

Typical use cases

When to consider PPM?


Case study examples

Swisscom have used this approach to drastically reduce the time required to process DSL contracts, from 12 to 2 days. Not only has this helped to place less of a burden on working capital as payments are received sooner, more importantly it has improved customer satisfaction, reducing churn.

Heineken have used this approach to benchmark their operating companies, with the aim to drive standardization and identify continuous improvement actions in such areas as source-to-pay and order-to-cash. One of the results has been the introduction of a global shared services center for procurement, creating economies of scale.

Relevant for all industries: production and services companies alike

Telco

Consumer Goods


Case study examples

CosmosDirekt have used this approach to boost productivity by 28 percent, increasing the number of policies issued without the need for clarification or additional info. Consequently, this has helped them to slash complaints by 60 percent and allowed them to achieve overall cost savings of up to 20 percent.

Süwag have used this approach in their market comms, supply management and accounts payable departments to monitor over 23 million EDIFACT (B2B) messages per annum and implement a zero-touch approach to delivery of key business documents. Customer enrollment and supplier performance is now more easily understood allowing board members to maintain oversight and control.


Finance

Energy/Utilities


Case study examples

Yodobashi Camera have used this approach to improve delivery reliability and customer satisfaction of their e-commerce business. The time between order confirmation and dispatch has been reduced to a minimum of 6 hours and a maximum of 12 hours, from 24 and 48 hours respectively, in part by negotiating better service level agreements with their business partners.

SAP have used this approach to become a “better run business”. It is deployed by their Global Procurement Organisation (GPO) to simplify procurement processes and implement best-in-class automation where ever possible. SAP also monitor their compliance against SOX regulations.


Retail

Information Technology

[email protected]

www.linkedin.com/in/ricardopasschierwww.twitter.com/rpasschier