Posts tagged M-Files
Digital Finance - Integrating SAP with an ECM Solution
 
Greg Kowalik  President, RDS

Greg Kowalik
President, RDS

In my previous post, I talked about digital business transformation in general, and how the best way to achieve it is by using incremental smaller project "chunks", instead of big bang, enterprise wide programs. Based on our experience with many customers, smaller projects with long term goals in mind produce the best results.

Now, let's take one of these smaller chunks of work, and look at reasons to make your Finance Department fully paperless, and the benefits of it.

Nothing happens in business without some effect on finance and accounting.  Every activity, every change in business process anywhere inside or outside of your company will have some impact on the accounting and Finance Group.  Making sure the Finance Group operates efficiently is extremely important. 

For one, your relationship with your suppliers is impacted by your Finance Group's ability to pay them on time.  The sustainability of your business is directly connected to your ability to manage cash, bank accounts, credit, to receive payments and handle collections, as well as your ability to provide accurate and timely reports to top management, and support internal and external audits. Your employees and contract labor need to be served efficiently and without issues. A Finance Department that operates smoothly and efficiently is crucial, and, in today's fast paced economy, being digital is the only way to achieve this.

If you are running SAP, or any other ERP system for that matter, digitizing Finance should be one of your top priorities. Why? Let's look deeper inside the Finance Organization and its challenges. I will discuss Accounts Payable, Accounts Receivable, General Accounting and Master Data maintenance challenges just to illustrate the need for digital Finance, but there are many other examples.

Accounts Payable.  Digital AP is often one of the first Finance Groups that go digital due to the uniqueness of their problems, the volume of vendor invoices, and other issues surrounding their processing. We have been implementing digital AP processes since the late 90s. Our customers come to us experiencing some or all of the following problems:

  • Loss of vendor early payment discounts, often amounting to hundreds of thousands of dollars per year.
  • Losing invoices which circulate around the company in paper format or email, resulting in vendors sending invoices and credit memos multiple times because AP was too bogged down handling exceptions, chasing approvals, and in the end often missing due dates.
  • High volume of calls from unhappy vendors not getting paid on time, or asking "what is the status of my invoice ?"
  • Threatening calls from utility or phone companies to disconnect service due to non payment.
  • Inability to accrue liabilities accurately at the end of the month, or an extremely painful and long monthly accrual process.
  • Unreliable or broken approval process for Non-PO invoices.
  • Inefficient PO exception processing with AP chasing issues originating in procurement, or other departments (pricing or quantity issues).
  • Invoices exceeding contractually agreed spend (PO over limit).
  • Issues around sales and use tax.
  • Decentralized process with vendors sending invoices directly to the requester of goods/services, with Finance having no visibility to those documents.
  • Failed, or slow and painful sales and use tax audits, internal audits, and/or IRS audits resulting in high penalties.
  • Increased exposure to litigation due to records being kept indefinitely.

We solved ALL these issues by implementing digital Accounts Payable processes, with easy to measure benefits, some of which are:

  • Capture of early payment discounts, saving the company hundreds of thousand of dollars each year.
  • Ability to electronically approve invoices for payment, anytime, anywhere and on any device!
  • No lost paper, no emails circulating throughout the entire organization. Excellent ability to track where the invoices are.
  • Systematic handling of invoice exceptions.
  • Routing of exceptions to the people that need to handle them throughout the organization, which freed the AP team's time, allowing AP to focus on more strategic tasks like analyzing bottlenecks inside the organization, addressing re-occurring invoicing issues from vendors, etc.
  • Increased number of no-touch invoices going straight to post.
  • Auto-coding of invoices based on history or per vendor.
  • Invoice type specific approval logic.
  • Elimination of boring data entry, by introduction of data capture engine which recognizes data in most languages.
  • Precise, fast, and easy accruals of liability, recognizing documents from the time the invoice is received via email, or immediately after scanning.
  • Support of EDI, XML formats for high volume vendors.
  • More visibility to invoices and greatly improved reporting capabilities.
  • Quick ROI

I would be happy to share many great stories, and provide multiple references to illustrate the above.  Don't just believe me, talk to our clients.

Digital Accounts Receivable is another great area for digitization.
I was recently talking with a couple of our customers about improving their order to cash process inside SAP, the final steps of which are handled by the Finance Accounts Receivable group. They both had similar problems, in that they both struggled with providing proper documentation related to customer invoices. One kept failing audits, because the documentation supporting sales orders and delivery/shipping was not readily available, and was disconnected from customer invoices and the SAP system. The documents were just kept in paper file cabinets or in shared drives. The Accounts Receivable and Collection groups suffer when they cannot accurately handle payment discrepancies, and do not have an efficient way of handling dispute cases. In addition, the Customer Service group cannot answer questions easily when they don't see all the supporting documentation together with the SAP data.
We solved their problems by fully digitizing the sales process. At the same time, we provided Finance with great tools for billing and collections support.

Again, we see that the Finance Department is the hub of it all, and a great candidate for digitization.

If you happen to use a lock box for checks, getting the check images in-house, and associating them with the SAP payment document is something our customers ask for as well.

Accounting Entries Supporting Documentation.
I am often impressed with the complex spreadsheets which Accounting maintains in order to support month-end processes, and how these spreadsheets are used to support GL entries.  The value of these spreadsheets goes largely unappreciated, until an auditor asks: "How did you come up with these numbers?" It is very important to be able to answer those questions quickly, and it would be ideal to have the supporting documents:

  1. Be associated with the FI document.
  2. Be made visible inside SAP, and searchable outside SAP.
  3. Be stored in a central ECM repository. 

Get in touch, and let us show you just how easy it can be to accomplish all this.

Vendor and Customer Master Data Supporting Documents.
Finance relies on accurate master data.  Vendors, Customers, Material Master; all need to be properly maintained, otherwise every aspect of your business suffers.  This sounds easier said that done.  When we help many of our customers to automate Accounts Payable, we find out early on that their vendor master data is a problem. For example, they ask us how we will know which vendor to associate with which invoice automatically, since there are many vendor master records which look exactly the same.  We have an answer and a way to work around this, but the root cause of their initial issue is a bad master data maintenance process.

Two years ago, a large Florida customer of ours in West Palm Beach who is running multiple SAP systems, had an issue managing vendor master.  We had already implemented the basic Accounts Payable imaging solution, and as they continued their journey into the digital world, tackling master data was the logical next step; their duplicate vendors and inaccurate master data in SAP was causing them a lot of problems.  Their external, web based, outdated document management system was not working well; it was disconnected from SAP, outgrown, and not suitable for a fast growing business such as theirs. Expiring vendor certificates of insurance were not managed, and audits were hard to support. It was a challenge affecting the entire supply chain process and Finance.

We solved all their vendor master management issues by digitizing the master data group. The new ECM system which we implemented was directly linked and synchronized with SAP vendor master data, which provided digital vendor workspaces to capture, store, and manage vendor related documentation, W-9s, certificates of insurance, and more. We connected 65,000 vendors and all their documents to the context of the SAP master records, and made it all available to users who had proper security access.  Master records were cleaned up and de-duped, while the governance process around vendor master was implemented in SAP MDG.

Subsequently, every change to the vendor master data (new or existing) would be done by following a consistent process, with data and documents coalescing via workflow and linked to two SAP systems at the end. The ECM system would provide the foundation for any document searches using master data related attributes (synced in real time from SAP), as well as full text search of the documents. Each document was neatly rendered to PDF, regardless of original format. Expiring certificates of insurance were properly managed, and the reporting of expiring documents was made readily available. W-9s were made accessible for easy auditing, and all documents were linked to vendor master.  As we like to say: "The content in the context of SAP!"

The final solution was showcased at the 2017 SAPPhire conference in Orlando. It was the first of its kind in the world, due to the uniqueness of connectivity between multiple SAP ECC instances, SAP MDG, and one common ECM system. The business benefits were enormous; no more duplicates in master data, and a consistent process for data and documents related to it benefited the whole supply chain process and Finance Group.

We have too many examples and detailed use cases to cover in this post, but I hope I shared a few with you that will help you both understand the importance and benefits of a digital Finance, and how it is achievable. I would be happy to discuss with you what your particular painful spots are, and how to solve them.

Contact us here, and let us know your thoughts and comments! 

Digital Transformation, Why and How
 
Greg Kowalik  President, RDS

Greg Kowalik
President, RDS

Digital transformation, digital enterprise, digital workplace, digital everything, the digital buzz words are everywhere. Each ECM, and ERP software vendor talks about it at their conferences, their blogs, sales pitches, Twitter, everybody is going digital!

Our clients talk about it too; they want the digital, paperless and well managed business. Unstructured data/documents are not going away, but the problem is growing exponentially.  It is on the agenda of every CIO with a push from their legal department screaming: “Enforce the retention policy!”. Exposure, risk avoidance, growing cost of storage and infrastructure, inefficient processes, slow responsiveness to changing business needs; the problems of not going digital are well understood by all. If so, why are only 18% of US companies considered “digital”?  (According to the McKinsey Global Institute’s Industry Digitization Index)

Two of our clients approached me recently, and asked what to do about the request from their legal department to enforce the records retention policy. I could tell they were feeling overwhelmed at the nightmare prospect of having to go through file cabinets, networks shares, emails, SharePoint sites, ERP archive data files, paper boxes, legacy systems and more, in a huge effort to inventory their records and identify ways to eliminate paper, to consolidate methods of electronic storage mechanism, and associate those records with ERP data. It is a massive task, which is only the beginning, because once all the records have been identified, located, and organized, a systematic and ideally automated way to apply retention rules would need to be established, which would allow for various types of legal or audit holds, and would destroy the records at the end of their life-cycle.

It is very difficult to envision the enormous effort necessary to arrive at the end point of the digital journey with that approach, which is in my opinion the single most important reason why so very few companies even try.  Unless your company is in a regulated industry, with a risk of shutdown due to non-compliance, the likelihood of doing nothing, or very little, is high. But the risk of doing nothing, and being outpaced by competition is also high, if not higher (Blockbuster vs Netflix story comes to mind). Doing nothing is the worst possible option.

The solution is surprisingly simple. Just do it is smaller chunks. Our brains and our own nature struggle with massive, complex, and long running tasks and projects.  On the other hand, smaller “sprints” are processed and executed surprisingly well and efficiently.  This is why an agile approach to projects works often much better than the waterfall, traditional approach.

In conclusion, the long term goal of achieving a digital workplace and a digital enterprise is important. Working in that direction by executing smaller, incremental projects is the way to succeed.  We see a lot of success achieved by our clients who embrace this approach, and who start by selecting processes or departments that ask:

 

·        to be more efficient and digital

·        to have the freedom of working from anywhere

·        to have happier employees, with the information needed readily available and in the right context

·        to be able to respond to customers faster, and with more efficiency

 

Our most successful customers do not wait, do not simply do nothing. They are committed; they execute and advance process by process, business unit by business unit. Otherwise, big, enterprise-wide programs are difficult to manage, they are hard to keep on track, and often fall apart. In our experience, the "smaller chunks" approach instead has proven to be the most manageable and successful one of all.  And we would be happy to share with you our success stories, our tools, and our methodology to achieve this.

Contact us here, we would be happy to hear your thoughts and comments!