Implementing SAP Invoice Management at Tullow Oil

Implementing SAP Invoice Management at Tullow Oil
Vish Somaia – Pathway SAP Project Manager
Monday 24 November 2014
Implementing SAP Invoice Management
Vish Somaia – Pathway SAP Project Manager – Monday 24 November 2014
Implementing SAP Invoice Management
Contents
• Business Context
• Requisition To Pay Process
• Solution Overview
• Key Benefits
3
Tullow has experienced exceptional growth over the past 5
years, resulting in more complex business operations
• Increase in complexity of
business operations
• Continue to progress with
operations in Ghana and
Uganda and continued focus
on growth in Africa and the
Atlantic Margin
Increase in global operations:
• 4 new basins in 5 years
• 74% exploration and appraisal rate
• Cost recovery exposure increasing year on year
• Sales revenue has
grown by 80% over the
past 5 years
• Operating profit has
increased by 198%
over the past 5 years
4
Global Operations across remote developing geographies,
spanning 3 continents.
Business Regions
UK
Europe, South America, Asia
NORWAY
London
North and West Africa
South and East Africa
Corporate Hubs
Dublin
NETHERLANDS
SENEGAL
MAURITANIA
SIERRA
LEONE
UGANDA
EQ.
GUINEA
GUYANA
ETHIOPIA
KENYA
LIBERIA
SURINAME
FRENCH GUIANA
CONGO
IVORY
COAST
TANZANIA
GABON
GHANA
Cape Town
NAMIBIA
MADAGASCAR
5
The Pathway Transformation Programme brings People,
Process and Technology Change across Tullow
Reduce rework by minimising errors from infrequent Requistioners,
Automated bank reconciliation clearing
Budget visibility
Manage quality of requisition data input
Invoice
scanning
in SAP
Delegation of Authority (DOA) authority applied for budget holder approvals to spend
Increases early recognition,
visibility & control of spend
Reduced manual processing and shift of AP from one of
processor to monitoring and managing of exceptions
Efficient approval process with full visibility Introduction of material & service master in requisition
Simplified low value purchasing process Introduction of p-card & blanket order buying options
Automated partner billing
Nominated Requisitioner Model
Introduction of the
warning
Real time reporting of commitments compared to budgets
messages
Commitments should only be raised when budgets
are consumed
against approved budgets
(e.g. when AFE
Greater budget holder control
No DoA approval required for three way matches
is 100%
consumed)
Introduction of service receipting commitments against their budgets
interface to RBS, Citibank
Increases early recognition, visibility and control of services spend Automated
and Standard Chartered
3 way match
Reduced misstatements in Joint Venture books
reducing cost recovery exposure
Ability to produce Venture specific audit support documentation
SAP Implementation
JV module fully
integrated with
the Finance
system
Reduced manual
processing and
increased process time
efficiency and accuracy
6
Rising to the challenge – The Pathway Programme helped
position us for future growth
For our business
For Finance & Supply Chain
Fit for purpose, timely and auditable
end to end processes and ways of
working
Accurate and timely information,
allowing effective performance
monitoring and decision making
Process
Data
Scalable Finance and Supply Chain
system solutions to automate critical
processes and allow value adding
activities
Applying the right level of process to
drive efficiency and assurance
Providing the right information to help
us manage the business and make the
right decisions
One standardised and integrated
system to support business growth
Systems
Strong unified global team with
capability to flexibly support the
Business Units
Clearer roles and responsibilities to
empower our people and help them
work more effectively
People
7
Requisition to Pay Process
Identification of
Need
Raise
Requisition
Budget Holder
Approval
Purchase Order
Raised by C&P
Receipt (either
service or goods)
Invoice Arrives
Finance
Payment Run
Review if
Required
Check Against the PO
Scan Invoice
If there is a mismatch then
check with Supply Chain/Requisitioner
8
Vendor Invoice Management – Benefits
Vendor Invoice Management (VIM) is a software solution used to manage invoice
processing.
VIM aims to tackle inefficiencies in the business by reducing the manual keying of invoices
into the Finance system and automating the process as much as possible.
VIM offers controlled and automated exceptions handling, ageing, escalation, and
reporting, resulting in reduced cost of processing invoices.
Depending on classification, invoice exceptions are routed according to established
business rules and policies. Workflow policies determine where invoices are routed and
what approvals or next steps are required.
VIM integrates seamlessly with SAP and the majority of its functions are run through SAP
itself.
9
Vendor Invoice Management – Process Overview
YES
NO
10
Vendor Invoice Management – Solution Overview
VIM – Vendor Invoice Management is
where the invoice is first sent after
scanning, and once validated in Invoice
Capture Centre (ICC) , it comes back
into VIM for further processing
including exception checks and
workflows.
Archive Server is the content repository
where the Invoice scanned image is
stored.
Archive
Server
ICC
VIM
ICC – Invoice Capture Centre enables
the use of Optical Character
Recognition (OCR) technology to record
details from the scanned invoice and
then allows the user to validate/update
these details.
11
VIM Invoice Processing Flow
12
VIM Invoice Scanning and Ingestion
The first step in the VIM Invoice Processing flow is Scanning the
invoice into VIM:
Incoming Invoice
received
• Received via email
• Received in the post
Invoice scanned to
Generic Accounts
Payable mailbox
• Paper invoices received scanned and emailed
to generic AP mailbox per location
Invoice transferred to
SAP
• Invoice received into SAP
• Automated process
Invoice ingested into
VIM
• DP document created
• Invoice saved to the Archive Server
• Invoice sent to ICC for Character recognition
and Validation
13
VIM Invoice Processing Flow
14
Invoice Recognition and Validation
Invoice Capture Centre (ICC) works in conjunction with VIM to completely automate the
capture of data from paper invoices.
ICC uses optical character recognition (OCR) to extract invoice data and eliminate
intervention in the invoice capture stage of AP processing.
• Extracts the essential invoice data (date, amount, PO number etc) from the scanned invoices.
• Uses a knowledge base that has been trained on samples of thousands of invoices from multiple
countries around the world.
• Maps the read data – such as names, addresses, vendor numbers, purchase order numbers etc. – to
SAP vendor master data and SAP purchase order data during analysis.
• ICC can be ‘trained’ to increase recognition on future invoices.
Field
Recognition Logic
Vendor
Vendor determination uses an extract of SAP vendor master data downloaded from the
SAP system of the invoice receiving party.
Company
Code
Company code determination uses the SAP extract of Company code names and
Addresses
PO
number
PO Number is recognised only if they are in the valid range of SAP PO numbers
Examples:
15
VIM Invoice Processing Flow
16
Invoice Processing
Purchase Order Invoice Scenarios
Invoice for Goods
Purchase Order
Matched against Goods
Receipt
Posted as 3 way match
without any additional
approval
Invoice for Service
Purchase Order – SES
relevant
Matched against Service
Entry Sheet
Posted as 3 way match
without any additional
approval
Invoice for Service
Purchase Order – Non
SES
Sent for Verification to
Requisitioner/Nominate
d Invoice verifier
Posted as 2 way match
with invoice verification
Sent for Approval to
Budget Holder as per
DoA
Posted with approval
Finance Invoices
Finance Invoice
17
Invoice Reporting
VIM provides a standard suite of reports to help monitor and review invoices:
VIM Reports
Description
Role
VIM Analytics
Report
Provides you with clear data reports on your documents with
exceptions as well as the Invoice Exception workflows
AP Processor &
AP Supervisor
Key Process
Analytics
Reports about a variety of key figures regarding the VIM process: It
shows the accumulated amounts of all documents in the DP
workflow, in parked state and in posted state.
AP Supervisor
Productivity
Report
Reports about the productivity of users/roles and the activities of
users/roles.
AP Supervisor
Summary
report
Provides a summary of all documents processed through VIM
AP Processor &
AP Supervisor
Aging Report
Reports about the aging of documents and work items in the current
system
AP Processor &
AP Supervisor
Current
Liability Report
This report is part of VIM Analytics, It offers you a clear data report on
documents that are parked in the system
AP Processor &
AP Supervisor
Exception
Report
Reports all work items with exceptions, grouped by exception,
company code or vendor
AP Processor &
AP Supervisor
18
Invoice Processing in VIM vs. SAP
The general rule is that all invoices are processed through VIM. However, exceptions exist:
Vendor invoice Management
VIM
Direct entry in SAP
The following invoices are processed through VIM:
• Non-PO invoice
• PO invoices
• Only exceptions should be processed directly in SAP
Exceptions that need to be processed manually in
SAP:
• Non-PO Invoices which are loaded from
spreadsheet (Winshuttle) e.g. Employee expenses
• Emergency scenario invoices that can’t be
processed through VIM (PO and non-PO)
• Down Payment Requests
19
Why is Invoice Management important for Tullow?
 Drive a uniform approach to invoice processing across all
Tullow Oil locations.
 Support an up front, “scan once” process.
 Streamline invoice entry to SAP with the use of Optical
Character Recognition (OCR) technology.
 Deliver transparency of invoice processing through
enhanced reporting and analytics.
 Provide integrated SAP workflow to support Invoice
Management and Resolution.
 Efficient early approval process with full visibility of
commitments, resulting in reduced manual processing
time, increasing efficiency and accuracy.
 Introduction of service receipting – Increases recognition,
visibility and control of services spend.
20
Questions?
21