How to improve your invoice-to-pay process using plug and gain by SAP Signavio

[Sarah_Roessler]

• Would you like to understand the main improvement opportunities along your invoice-to-pay process but do not have capacity nor budget to invest in a process mining project?
• Have you started using the plug and gain approach and would like to dive deeper in the invoice-to-pay process? Would you like to understand patterns of manual changes, analyze longer time periods and learn more about root causes for process issues?
• Are you looking for invoice-to-pay process analyses which have SAP ERP process knowledge built in but do not require the consumer to be a SAP ERP expert in order to understand them?

If any of the above applies to you, the value accelerator for invoice-to-pay (plug and gain approach) is the answer. It provides the necessary data and dashboards out of the box and thus uncovers improvement potential and root cause analyses in an easily understandable way. In this blog, @nklimenko and I will explain the scope of this value accelerator along exemplary use cases.

What's included?

Several dashboards for continuous improvement (such as Improve your on-time payment performance) and transformation (such as master data quality and process harmonization).

The data is coming – as usual for the plug and gain approach – from SAP Signavio Process Insights. This allows to quickly provide data without building or leveraging dedicated extractors in SAP Signavio Process Intelligence. It is a combination of different process flows, change performance indicators and master data. Based on this, a holistic view of the invoice-to-pay process can be provided.

The dashboards are built in a way that they guide the user along the analyses, explaining the context and motivation as well as possible conclusions for each analysis. This allows business users to follow the analysis without having deep technical SAP ERP knowledge or process mining expertise.

Example: Improve your on-time payment performance

Let’s take a look at how the dashboards can support you in improving your on-time payment performance. On the General overview, you see whether on-time payment performance is even an issue in your invoice-to-pay process and which financial impact it has.

As the late payment rate is quite high, especially when it comes to your biggest suppliers, you see a risk of losing your main suppliers and having to pay penalty interest.

That’s why you decide to navigate to the “Avoid late payments” deep-dive analysis where your impression is verified looking at the financial impact which is calculated based on an assumption of penalty interest to be paid. You can of course adjust the formula, for example the penalty interest rate, to fit your company’s context.

As a next step, you would like to understand why late payments occur and how to change the situation moving forward. To do so, you can check to what extent the payment run has been used for late payments assuming that late payments should not occur if the payment run is used consistently.

Additionally, you see those late payments which have spend such a long time in invoice verification that they were posted or unblocked after their net due date. Alternatively, there might be so much manual effort in invoice creation or changing values throughout the invoice-to-pay process that these might lead to late payments.

Based on these root causes, you get recommendations on how to analyze these further and on defining actions how to avoid this.

If the analysis points you to issues and delays throughout your invoice verification process, you might wonder how to incorporate data into this process which might run outside of SAP ERP or within SAP ERP add-ons. Whereas plug and gain by SAP Signavio focuses on SAP ERP data, we are well aware that processes cross system borders. That’s why worked with customers to combine data from non-SAP ERP systems and or tables which are not part of SAP standard in order to extend the process analysis scope covered.

Example: Harmonize your processes

In addition to process improvement, you can use the plug and gain dashboard for transformation projects which aim at improving for example process harmonization. Why is process harmonization desirable? It helps you to streamline operations, to lower onboarding, TCO and testing effort. When looking at the invoice-to-pay process, you can either process invoices without reference to a purchase order or without reference to your purchase order. Analyzing the share of which alternative is used to what extent (based on your business context and internal procurement guidelines) can help you assess your process harmonization potential.

As a next step, you might want to reduce the number of alternative options used to perform the same process step, for example invoice creation or invoice clearing. The following analysis allows you to assess to what extent each process step is performed in a streamlined way and thus provides guidance on which process step to focus on when it comes to process harmonization along the invoice-to-pay process.

You can also compare the different process variants including changes. Specifically, you can evaluate the number of cases going through each process variant and their lead times.

In order to choose a process variant or variants, the Best-Run Score (see link to previous blog) can be used to assess internal best and worst practices and understand which process variant(s) might be desirable. This supports you in selecting the recommended process variant(s) for your harmonization efforts and to understand which users might need to be convinced and retrained.

How to get it?

In case you think the above mentioned analyses would provide value to you and your organization, you might ask yourself how you can get those. They are part of the plug and gain by SAP Signavio approach which has been launched at Sapphire. It leverages the capabilities of the SAP Signavio Suite and provides unique out of the box analyses for both continuous improvement and transformation projects sparing you long implementation projects. Reach out to your SAP counterpart to learn more about how you could benefit from plug and gain by SAP Signavio!

Where to find further information

• The following note explains the prerequisites and scope of plug and gain by SAP Signavio: https://me.sap.com/notes/3340986/E
• Previous blogs on Best-Run scores, process house, transaction scores and process flow variants
• Plug and gain approach: https://www.signavio.com/plug-and-gain-approach/