Implementing SAP Vendor Invoice Management

by OpenText in the Public Sector

Maria Hourani & Trent Ryan

Employment and Social Development Canada

SESSION CODE: PS533

AGENDA

• Who We Are

• Business Blueprint and Realization

• Business/Solution Architecture Operating Model

• VIM Architecture, Components and Processes

• Our Procure to Pay Process

• VIM in the SAP Landscape

• VIM in your Archiving Strategy

WHO WE ARE

• Public Sector – Canadian Government

• Canadian citizen facing services department
• Our Line of Business
• Employment Insurance
• Old Age Security
• Canada Pension Plan
• Student Loans
LEARNING POINTS

 Architecture Approach to Procure to Pay

 Procurement Justification

 The VIM Components and how they work

BEST PRACTICES

 Alignment with SAP Roadmap

 Vendor supported Best of Breed Solution

 Horizontal alignment of the VIM Components

Enterprise Management Solution – myEMS

• Implementation - April 1, 2014

• Major Components
• ECC
• Portal (ESS/MSS)
• BW, BOBJ
• IDM, GRC
• Solution Manager
• Vendor Invoice Management by Open Text
 Business/Solution Architecture Operating Model
Business Approach
If the business functions, processes, steps or activities are
unique to a Department’s mandate, and they can’t be
standardized due to legal or regulatory requirements….
Organization Value Potential
Drivers: Compliancy
If the business functions, processes, steps or activities are
subject to common GC requirements for a custom
government-wide approach and solution….
Drivers: Compliancy, Reporting
If the business functions, processes, steps or activities
should operate effectively at the lowest possible cost while
still meeting all compliance requirements….
Drivers: Standardization, cost cutting and effectiveness
* Over time, there may be opportunities to move to ERP Best Practice from Own Practice & GC Practice as the environment changes.
Solution Approach*
Develop “Own Practice” to ensure wished
results/benefits
• Program Systems
Organization Cost Potential
• Program Receivables
Adopt/Adapt “GC Practice” to ensure wished
results/benefits
• Receiver General Interfaces, CFMRS Trial Balance
• IFMS Bolt-On for Salary Management (SFT)
• SAP/PeopleSoft Interoperability
• Government of Canada Pay Interface
Follow “ERP Best Practice“ (“Out of the Box”) to ensure
wished results/benefits
• Standard configuration options
• Development allowed using approved exit points and
ERP supported tools
• ERP endorsed 3rd Party Tools
Examples: Vendor Account Groups, Budget Management
Workflow, Enterprise Portal for Click, Call Consult, Person
Profile Management, Job Opening
 Business/Solution Architecture Operating Model
Business Approach
If the business functions, processes, steps or activities are
unique to a Department’s mandate, and they can’t be
standardized due to legal or regulatory requirements….
Organization Value Potential
Drivers: Compliancy
If the business functions, processes, steps or activities are
subject to common GC requirements for a custom
government-wide approach and solution….
Drivers: Compliancy, Reporting
If the business functions, processes, steps or activities
should operate effectively at the lowest possible cost while
still meeting all compliance requirements….
Drivers: Standardization, cost cutting and effectiveness
* Over time, there may be opportunities to move to ERP Best Practice from Own Practice & GC Practice as the environment changes.
Solution Approach*
Develop “Own Practice” to ensure wished
results/benefits
• Program Systems
Organization Cost Potential
• Program Receivables
Adopt/Adapt “GC Practice” to ensure wished
results/benefits
• Receiver General Interfaces, CFMRS Trial Balance
• IFMS Bolt-On for Salary Management (SFT)
• SAP/PeopleSoft Interoperability
• Government of Canada Pay Interface
Follow “ERP Best Practice“ (“Out of the Box”) to ensure
wished results/benefits
• Standard configuration options
• Development allowed using approved exit points and
ERP supported tools
• ERP endorsed 3rd Party Tools
Examples: Vendor Account Groups, Budget Management
Workflow, Enterprise Portal for Click, Call Consult, Person
Profile Management, Job Opening
Business Blueprint Phase
 During the Blueprint Phase of the project, the ESDC
myEMS (SAP) team in consultation with the business
process owners identified the need to streamline its
accounts payable (AP) operations.

 The existing accounts payable processing method was

characterized by manual paper based data capture and
approval procedures that resulted in inefficient payment
processes.

 With the implementation of SAP, the opportunity for

process optimization was realized.
Business Process Optimization - Realization Phase

 Vendor Invoice Management by

OpenText (VIM) is an SAP supported
best practice solution.
 VIM aligns with our “organization cost
potential” principle for standardization
and provides significant process
optimization.
Procurement Justification

• VIM is an SAP Best Practice

• VIM an integrated SAP solution supported by Active Global Support

• SAP and OpenText (formerly IXOS) - 20 years of partnership

• VIM Solution aligns with the SAP Roadmap

• Fully supported by SAP in an upgrade

• Solution Extension Partnership (Reselling)

VIM Architecture
SAP Components
OpenText Components
OpenText Add-on
Scanning and Archiving
Scanning and Archiving

Enterprise Scan

• Scanning desktop component

• Mass scanning and indexing of documents

• Communicates with VIM through

ArchiveLink to initiate the processing of
invoices and storing them in the Archive
Server

Archive Server
Scanning and Archiving

ArchiveLink

• ArchiveLink links archived documents to SAP

documents

• ArchiveLink was co-developed by SAP and

OpenText

Archive Server
Scanning and Archiving
Document Pipeline

• Component of the Archive Server

• Batch mode import of electronic

documents

• Processes the documents in the

background, archives them, and links to
SAP

• Highly scalable

• It can be centralized or remote

configuration

Archive Server • ESDC uses centralized

Scanning and Archiving

OpenText Archive Server

• Enables storage, management and

retrieval of archived documents

• Scalable, integrated service for archiving

all enterprise content

• Secure document repository to

guarantee safe storage of documents
for retention period

Archive Server
Scanning and Archiving

Archive Server
Invoice Capture Center (ICC) - OCR Option

Procurement Note:
• SAP sells the ICC - OCR Option separately
Invoice Capture Center (ICC) - OCR Option

• The Invoice Capture Center (ICC) automates the capture of the data
from scanned paper invoices.
• ICC uses OCR to extract invoice data and reduce human intervention in
the invoice capture stage of AP processing.
• It uses rule-based classification, extraction, and verification.
• ICC has a high success rate on of accuracy and can learn invoice formats to
improve accuracy.
Invoice Capture Center (ICC) - OCR Option
SAP VIM Automated Invoice Reconciliation
Business Transformation

Consolidated Accounts Payable processing

functions to 5 processing centres
 Montreal and Winnipeg handling Accounts
Payable and Travel Claims
 Toronto and Moncton handling DARS
(Departmental Accounts Receivable System)
– overpayments of repayments from clients
(CPP, OAS, EI)

 National Headquarters performing all functions

Procure-to-Pay Process Flow at ESDC

The following is a walk-thorough of

the P2P Flow at ESDC, which
incorporates:

• Procurement processes

• Workflow

• Electronic Approvals

• Vendor Invoice Management

• Payment
 Procure-to-Pay Process Flow at ESDC

1 2
Procurement Planning
& Requirement
Definition (e.g. SOW)
3 4
- Tender Contract
Enter Purchase Approve Purchase - Evaluate Bids
Requisition in SAP Requisition in SAP - Award Contract
Portal Portal - Issue / Create Purchase Order
in SAP

5 6 7 8
- Provide Goods /
- Confirm Goods / - Invoice scanned
Services - Review & Approve
Service Receipt in - Process invoice
- Invoice sent directly Invoice in SAP
SAP using VIM
to AP Centre

Receive Payment
Archiving Strategy

• Enterprise Class Archiving Solution

• Legal Retention periods can be
applied to all objects
• Electronic Invoices
• FSA Signature Cards
• Travel Documents
• SAP Data Archiving Objects
Archive Server • Baseline component for OpenText
Document Management Solution
Archiving Strategy

Archive Server
SAP ERP
SAP Document in the SAP Electronic Invoice in the Archive
ERP System Server
Archiving Strategy

Archive Server
SAP ERP
After 2 Years Archive the SAP Document in the
Archive Server
Archiving Strategy

Archive Server Delete

After 5 Years, Delete both the SAP Document and
the to Electronic Document
Data growth in Archive Server

Based on 150,000 scanned documents alone:

• 20GB per Month

• 240GB per Year

= 1.7TB in 7 years
Outcomes
• Over 150,000 invoices processed in our first year
• 75-85% accuracy with ICC
• Significant reduction in time for processing of
invoices

• Return on Investment being realized

• Minimal cost for scanners - As vendors convert to
sending pdf; more efficient
• An outsourced scanning service could be used
with VIM, but limited to image scanning only
RETURN ON INVESTMENT

• Centralization of Invoice Payment services

• Reduced time and effort for management of

Procure to Pay

• Support for Data Archiving for managing

database growth.
KEY LEARNINGS

• Engage and Transform Early

• Centralization began 12 to 15 months in advance
• Well defined and communicated business process
• Public Sector integration with Funds Management
• Required Function Module
• Bring in experienced people
• Knowledgeable consultants.
• Seek Advice
• Third Party Implementation Assessment
• Perseverance – Work together
• Continuous Improvement
• Feedback from the Processing Centres
Questions
STAY INFORMED

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Tom Wailgum: @twailgum
Chris Kanaracus: @chriskanaracus
Craig Powers: @Powers_ASUG
THANK YOU FOR PARTICIPATING

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SESSION CODE: PS533
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