Automatic Data Processing, Inc. · NASDAQ:ADP
Automatic Data Processing — Perfect Payables webinar (Aberdeen Group and ADP) (December 2011)
30 slides from Automatic Data Processing's conference presentation, Dec 15, 2011
Slide 1: Perfect Payables
Perfect Payables Best Practices for Performance Improvement and Supplier Participation December 15th, 2011 Scott Pezza Research Analyst Aberdeen Group Sush Koka Senior Director, Product Marketing ADP Procure-to-Pay Solutions © AberdeenGroup 2011
Slide 2: Perfect Payables
Perfect Payables Review of the Latest A/P Research Performance Benchmarks: Beyond the Best-in-Class Recommendations for Performance Improvement Understanding the Supplier’s Perspective Strategies for Supplier Enablement © AberdeenGroup 2011 2
Slide 3: Latest Research
Latest Research Aberdeen’s PACE Methodology Pressures Actions Capabilities Enablers Defining Best-in-Class Performance A Focus on Defining Capabilities Technology Adoption by the Best-in-Class © AberdeenGroup 2011 3
Slide 4: Pressures Driving a Focus on A/P Improvement
Pressures Pressures Driving a Focus on A/P Improvement Corporate directives to lower costs 60% 43% Lack of visibility into invoices and A/P 55% documents 57% Difficulty finding or managing paper-based 29% documents 23% Inability to effectively manage cash according to 16% current business needs 29%
Slide 5: Context: The Maturity Class Framework
Context: The Maturity Class Framework Defining Best-in-Class Performance Definition of Maturity Class Mean Class Performance Best-in-Class: 3.8 days to process a single invoice Top 20% of aggregate performance scorers $3.09 average cost to process a single invoice 4.1% year-over-year increase
Slide 6: Actions: Top Strategies to Combat Business Pressures
Actions Top Strategies to Combat Business Pressures 64% Invest in automation of invoice receipt and 34% workflow processes 36% 39% Conduct assessment of current A/P capabilities 52% 49% 29% Integrate Payables with back-end systems 41% 36% 18% Devote resources to supplier enablement for 16% eInvoice
Slide 7: Capabilities: Competitive Framework – Part One
Capabilities Competitive Framework – Part One Best-in-Class Industry Average Laggards Process Centralized IR&W processes in a single location 67% 46% 28% Standardized IR&W processes across locations/units 59% 38% 28% Organization Executive sponsor or champion for A/P improvement initiatives 63% 41%
Slide 8: Capabilities: Competitive Framework – Part Two
Capabilities Competitive Framework – Part Two Best-in-Class Industry Average Laggards Technology Automated matching of invoices to purchase orders 57% 37% 29% Ability to compare invoices to contracts for: 57% - Payment terms 34% - Payment terms 17% - Payment terms 56% - Prices 34% - Prices
Slide 9: Enabling Technologies
Enabling Technologies Technology Choices of the Best-in-Class Document imaging 52% 43% Cash Management 46% 25% Electronic approval workflow 44% 34% 43% Supplier portals 11% Comprehensive A/P automation (single solution) 35% 17% Spend analytics / Business Intelligence 33% 16% Comprehensive A/P automa
Slide 10: Additional Performance Benchmarks
Additional Performance Benchmarks Beyond the Best-in-Class Definition Metric Best-in-Class Industry Average Laggard Electronic Invoices (% of total) 35.8% 23.8% 10.9% Early payment discount capture rate 31% 24% 15% Error Rate (incoming invoices with inaccuracies) 6% 11% 12% Exception Rate (invoices
Slide 11: Prioritization of Competing Choices
Prioritization of Competing Choices Benefits and Ease of Improvement Attribute Potential Benefit Ease of Improvement (5 – Most Beneficial) (5 – Easiest to Improve) Collaboration between A/P and Procurement 4.35 3.02 Integration of A/P with ERP/financial systems 4.35 3.08 Automation of invoice matchi
Slide 12: Recommendations: Performance
Recommendations: Performance Standardize your invoice receipt and approval processes © AberdeenGroup 2011 12
Slide 13: Recommendations: Performance
Recommendations: Performance Standardize your invoice receipt and approval processes Centralize important IR&W processes © AberdeenGroup 2011 13
Slide 14: Recommendations: Performance
Recommendations: Performance Standardize your invoice receipt and approval processes Centralize important IR&W processes Enable the automated matching of invoices to purchase orders © AberdeenGroup 2011 14
Slide 15: Recommendations: Performance
Recommendations: Performance Standardize your invoice receipt and approval processes Centralize important IR&W processes Enable the automated matching of invoices to purchase orders Integrate A/P with contract management © AberdeenGroup 2011 15
Slide 16: Recommendations: Performance
Recommendations: Performance Standardize your invoice receipt and approval processes Centralize important IR&W processes Enable the automated matching of invoices to purchase orders Integrate A/P with contract management Integrate A/P with your back-end ERP or Financial systems © AberdeenG
Slide 17: Understanding the Supplier's Perspective
Understanding the Supplier’s Perspective Top Pressures Demand volatility’s impact on available cash Risk of trading partner default Strategic Responses Alter payment terms with trading partners Seek out additional sources of financing Respondents from the sell-side were less than half as
Slide 18: Understanding the Supplier's Perspective: Technology Profiles
Understanding the Supplier’s Perspective Technology Profiles Buy-Side 60% Sell-Side Percentage of Respondents, n = 138 52% 50% 42% 41% 40% 37% 29% 30% 20% 10% 0% Electronic PO Electronic Electronic Electronic Supplier Network creation and invoice receipt invoice creation payment receipt submission a
Slide 19: Strategies for Supplier Enablement
Strategies for Supplier Enablement Common Approaches for Your Peers Mandated supplier adoption of electronic invoices © AberdeenGroup 2011 19
Slide 20: Strategies for Supplier Enablement
Strategies for Supplier Enablement Common Approaches for Your Peers Mandated supplier adoption of electronic invoices Inclusion of suppliers in project design and scoping © AberdeenGroup 2011 20
Slide 21: Strategies for Supplier Enablement
Strategies for Supplier Enablement Common Approaches for Your Peers Mandated supplier adoption of electronic invoices Inclusion of suppliers in project design and scoping Exchange of beneficial terms for cooperation © AberdeenGroup 2011 21
Slide 22: Strategies for Supplier Enablement
Strategies for Supplier Enablement Common Approaches for Your Peers Mandated supplier adoption of electronic invoices Inclusion of suppliers in project design and scoping Exchange of beneficial terms for cooperation Outsourcing of enablement efforts © AberdeenGroup 2011 22
Slide 23: Strategies for Supplier Enablement
Strategies for Supplier Enablement Common Approaches for Your Peers Mandated supplier adoption of electronic invoices Inclusion of suppliers in project design and scoping Exchange of beneficial terms for cooperation Outsourcing of enablement efforts Shouldering of the burden by A/P © Aberd
Slide 24: Wrap-Up
Wrap-Up ePayables is focused on improving the efficiency of, and visibility into, the accounts payable function Electronic invoices can be processed more quickly and for far less cost – but supplier cooperation can dictate success A wide variety of technologies is available, depending on your
Slide 25: About ADP
About ADP ADP P2P End-to-end integrated solution for purchasing and payables Modular solution allowing clients to pick and choose functionality Outsourced scan/capture allows clients to start small and scale up Price compliance and electronic receipt capabilities increase control Continuou
Slide 26: Optimizing Payables with ADP Procure-to-Pay
Optimizing Payables with ADP Procure-to-Pay End-to-end solution covering automation from POs and invoices to receipts and payments 26 © Copyright 2011 ADP, Inc. Proprietary and Confidential Information.
Slide 27: ADP Supplier Enablement
ADP Supplier Enablement • Diverse supplier network including large multi-national suppliers to regional “mom and pop” establishments • Over 40,000 suppliers transacting every day and growing exponentially • More than 100,000 suppliers where ADP manages master data for paper invoice processing • Netw
Slide 28: Case Study: Challenges with Manual Processes
Case Study Client Background • Client company and its subsidiaries explore, acquire, develop, produce and market natural gas Overview and crude oil • Multi-billion dollar company, with operations in in North America and selected international • locations, with field offices throughout operated areas
Slide 29: Case Study: Successful Migration from Paper to Electronic
Case Study Successful Migration from Paper to Electronic No More Paper • 99% of client invoices are processed in ADP P2P • 60 percent of invoices are electronically submitted by 480+ vendors • 20% of suppliers, accounting for 60% of invoices volume have been on boarded • Lost invoices have been elim
Slide 30: Questions?
Questions? Scott Pezza Research Analyst, Aberdeen Group Phone: 617.854.5380 Scott.Pezza@Aberdeen.com Sush Koka Senior Director, Product Management Phone: 832.308.3581 Sushmitha_Koka@adp.com © AberdeenGroup 2011
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