BUILDING A BUSINESS

CASE FOR P2P

AUTOMATION IN AN SAP
®

ENVIRONMENT
HOW TO GET THE C-SUITE ON BOARD WITH
YOUR AUTOMATION INITIATIVE
 TABLE OF CONTENTS

Introduction......................................................................................................3

Current State of Procure-to-Pay...................................................................4

Building Your Business Case.........................................................................5

Convincing the C-Suite ..................................................................................6

Gaining the Approval of P2P Team Members...........................................8

P2P Automation Success Story................................................................. 11

Conclusion..................................................................................................... 12

About Esker................................................................................................... 13
INTRODUCTION
Procurement and accounts payable (AP) managers are acutely aware of the advantages that P2P automation
has to offer. But it’s never as easy as simply selecting a vendor and implementing a solution. Before a P2P
automation project can hit the ground running, one critical hurdle must be cleared — getting the buy-in from
upper management and other key stakeholders.

WHY BUILDING A BUSINESS CASE MATTERS

Today’s fast-paced and ever-evolving business landscape demands that upper management (i.e., the
c-suite) focus on streamlining business functions as much as possible. This places greater emphasis on
things like cash forecasting and analytics, growth management, risk mitigation and regulatory compliance.
As a result, members of the c-suite have a greater role to play in the procurement of solutions related
to financial and administrative functions. It is therefore the responsibility of P2P and finance managers
to demonstrate how P2P automation will not only modernize the procurement and AP departments, but
translate into benefits for the entire organization.
By building a well-thought-out and strategic business case for automation, P2P and finance managers will
dramatically increase their probability of convincing the c-suite that:
ƒ The benefits of P2P automation are too encompassing to take a back seat to other projects.

ƒ The IT department will not be burdened with new infrastructure requirements or changes.

ƒ Any new solution will not require transformative changes on the part of P2P staff or vendors.

ƒ Automating the P2P process is not only a company cost-saver, it makes the jobs of all key
stakeholders easier.

ƒ Integration with existing SAP systems and the SAP S/4HANA® Cloud will be seamless and non intrusive.

UNDERSTANDING THE C-SUITE MINDSET

P2P automation is mutually beneficial to both the c-suite and P2P and finance managers (as this white paper
will explore in detail), but differing priorities can make selling it difficult. While P2P and finance managers are
more inclined to care about P2P-specific factors such as process efficiency and error reduction, the c-suite
has a broader vantage point that puts a premium on strategy and oversight on an organization-wide level.
Another common obstacle in building a case for P2P automation is getting the c-suite to reshape their
perspective on P2P functions. Many members of upper management still think of procurement and AP
departments as being back office cost centers that add little value to a business. Failure to break them of
this mindset all but ensures any new P2P automation project will be dead on arrival.

PURPOSE OF THIS WHITE PAPER

The good news is, despite upper management consistently being cited as the biggest obstacle to P2P
automation, they understand the general benefits. In fact, according to a 2018 Deloitte survey, the rate of
digital technology adoption amongst organizations is the highest in transactional procure-to-pay processes.1
It is the goal of this white paper to enable P2P and finance managers to embrace their responsibility and
equip themselves with the knowledge and strategies needed to make P2P automation a reality. By better
understanding how an automated P2P solution works, P2P and finance managers can cite key performance
indicators (KPIs) and analytics to more effectively persuade their organization’s top decision makers.

1. Leadership: Driving innovation and delivering impact | Deloitte Glabal Chief Procurement Officer Survey, 2018. Deloitte LLP..

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 3

CURRENT STATE OF PROCURE-TO-PAY
Traditionally, procurement and AP have played secondary support roles within organizations. Tasks
assigned to P2P staff members were typically backend office functions that only represented “soft”
benefits to the c-suite. Today, P2P teams have far more influence on the overall financial health of an
organization. Procurement and AP departments are less about data processing and more about strategy
and analytics — both critical functions for helping P2P teams and the c-suite meet their goals.

OVERCOMING THE CULTURE OF PAPER

Because of how rapidly P2P has shifted into a more strategic and value-added business function, the culture
of traditional, paper-based invoice processing and management is still alive and well in many procurement
and AP departments. In fact, according to a research by Ardent Partners, the average enterprise still recieves
56% of its invoices in a manual format including paper, PDF, email, or fax.2
On the managerial side, performance monitoring remains a largely manual practice as well, and with 54%
of AP and finance executives reporting that deeper, more agile analytics and reporting are essential for AP’s
future success2, the need for modernization of performance management systems is apparent.
Traditional methods of P2P processing are associated with higher costs, lower visibility, longer processing
times and a host of other negative effects that are felt throughout the organization. Left unchecked, they
can ultimately impede business progress and the ability to gain a competitive advantage.

WHERE P2P AUTOMATION FITS IN

Today, most organizations have some kind of electronic tool for automating aspects of P2P and other
business processes, such as an ERP system or other business applications. But while these are great tools
for streamlining the process of cutting checks, there are numerous pain points which they do not address.
Organizations with ERP/business applications in place certainly cut down on paper and inefficiencies within
their process, but many ERP providers — particularly the bigger, license-based systems — do not invest in
the features that truly optimize P2P (e.g., AI-based data extraction, mobile app, catalog management, etc.).
P2P automation helps to fill the gaps not addressed by ERP/business applications by providing the capability
to solve virtually all of the biggest challenges facing P2P today, including:

ƒ Staff dedicating much of their time to manually ƒ Limited analytics, reporting and audit trail
sorting and handling paper capabilities

ƒ Excess paper, transportation and physical ƒ Difficulty taking advantage of early-payment

archiving expenses discounts

ƒ Trouble accurately capturing data regardless of ƒ Poor oversight of spending with both PO- and
invoice format non-PO-based suppliers

ƒ Low visibility of invoice processing and

requisition approval status

ADDING CONTEXT TO THE DISCUSSION

Understanding the current state of P2P is important when building a business case because it allows P2P
and finance managers to provide more context into why automated invoicing and procurement is more
than just a want — it’s a need. Whatever shortcomings P2P has, whether as an industry or within your own
organization, must be identified so that the c-suite understands what valuable opportunities are on the table,
and how P2P automation can capitalize on them.

2. State of ePayables 2017: The Convergence of Cash, Suppliers, and Intelligence, June 2017. Ardent Partners.

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 4

BUILDING YOUR BUSINESS CASE
How your business case for P2P automation is crafted, packaged and presented is entirely subjective. But
before the actual phase of creating a business case begins, some important preliminary steps are required.
Below are three action items recommended for maximum effectiveness and preparation.

DEFINE YOUR OVERALL OBJECTIVES

It can be difficult to stick to a strategy if you fail to first identify what the project plans to
accomplish. This can include defining what phase(s) of P2P you wish to automate and what type
of solution you want to pursue.
For example, do you plan on automating all phases of the P2P process, or just particular aspects
like data capture of vendor invoices or electronic archival of documents? These details are
essential to iron out before creating the business case.

BACK UP YOUR BUSINESS CASE WITH RESEARCH

If there is one universal truth about the c-suite, it’s that they love their metrics. P2P and finance
managers can explain why an automated solution is good for business all day, but when it comes
down to decision time, upper management is going to need measurable data to justify their
decision.
An effective way to calculate projected ROI is by measuring current processing costs and then
measuring them against projected improvement costs from prospective automation providers.
Doing this research not only helps validate the solution you’re propositioning, it shows the c-suite
that you’re thoroughly invested in the project.

CONSULT WITH OTHER STAKEHOLDERS

This is a big one. Without stakeholder approval and cooperation, your proposal has little chance
at coming to fruition. Obviously, support from the executive decision makers is the end goal, but
P2P and finance managers must also make time to consult with the other departments that will
be affected by P2P automation. This can include everything from business divisions and IT to
procurement and outside suppliers.

How to speak their language

For P2P and finance managers, the primary goal of automation is to make P2P operate more effectively
from end to end. However, the c-suite and other key stakeholders need to be convinced that it’s a good
investment for not only P2P departments, but the entire organization. Getting the green light to launch your
project may be challenging, but it’s not impossible — the key is learning how to push all the right buttons.
In the coming pages, this white paper explores in detail how to communicate your plan with two of the most
influential stakeholders for any P2P automation project: the c-suite/executive management and P2P team
members. Effectively speaking the same language as these groups will be instrumental in gaining their
support, and ultimately, approval for your project.

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 5

CONVINCING THE C-SUITE & OTHER
MEMBERS OF EXECUTIVE MANAGEMENT
Executive decision makers have many different factors to consider on proposed projects, including their
own self interests. Simply put, if your business case for P2P automation includes a compelling answer to
the ever-important executive question, “how does this help me solve my problems?” the likelihood of project
acceptance will be much greater.
Members of upper management may have different priorities company to company, but they all share
common concerns. Below are two of the biggest things every executive and c-suite member places on a
pedestal. Your task is to demonstrate how automating P2P processes positively influences these factors.

PROFITABILITY & THE BOTTOM LINE

Improving company profitability is the end-all be-all for upper management. Considering how many
organizations still have inadequate or even non-existent levels of automation within their P2P departments,
it’s easy to understand why. According to an Ardent Partners study, “reduce invoice-processing costs” is
currently the top priority and functional driver of AP leaders.2
With this in mind, the c-suite is likely to respond positively to any new solution that can help the company:

ƒ Eliminate wasteful spending ƒ Generate greater productivity from employees

ƒ Improve operational efficiency ƒ Maintain current customers/suppliers and

attract new ones
P2P automation as a revenue generator
Automating P2P processes has proven to be an effective solution at lowering operational costs. In fact,
Ardent Partners estimate that AP automation alone can contribute as much as 60–80% to processing cost
reductions.2
To help build your business case, it would be wise to expound on the cost savings benefit — below are three
of the biggest ways how an organization can reduce expenses via P2P automation:

Makes it easier to take Reduces the risk of late- Improves employee

advantage of early- payment fees caused by productivity and
payment discounts. manual invoicing errors. supplier satisfaction.
P2P and finance managers Automation eliminates The more productive P2P
will love that automation manual data entry. For P2P teams are, the better they
eliminates paper handling. managers, that means a can serve the suppliers.
Conversely, the c-suite will more accurate, efficient And satisfied suppliers
be happy knowing that operation; for the c-suite, ultimately translate into
faster processing speeds it translates to fewer the c-suite saving money
mean more early-payment penalties for error-laden through negotiating lower
discounts. invoices. prices.

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 6

VISIBILITY & CASH FLOW MANAGEMENT
As much as the c-suite is focused on saving money and increasing company profitability, it appears there
is one thing they value even more — control and visibility over finance and administration (F&A) functions.
There’s a good reason the c-suite is preoccupied with visibility — its impact is significant. According to
the previously mentioned Ardent Partners study, Treasury’s largest
opportunities to impact cash and the financial performance of an
enterprise lies within the AP department, which is why “best-in-
class” organizations use automation to process invoices straight-
through and are more than twice as likely to have the capability to
measure both productivity and financial metrics.2

Packaged KPIs & dashboards

The overall goal of building a business case is to showcase how the
benefits of automation can transcend P2P and strategically impact
other critical aspects of the organization. And nowhere is that more
clear than the real-time visibility and other analytical tools offered by
top-tier solution providers.
Much like statistics can now be used in professional sports to
analyze virtually any type of metric for a competitive edge, many
P2P automation solutions feature packaged KPIs and dashboards
that go beyond what was paid to provide instant access into what
invoices are in the pipeline. This type of enhanced control and
monitoring allows everyone involved to perform daily tasks, monitor
performances, better forecast the use of cash, and determine the
best approach for capturing early-payment discounts.
Dashboards are also customizable so that users can choose what
they want to display and to which user or profile. Plus, users are free
to remove, edit or add other indicators to their dashboards.

CFO Procurement & AP Managers Cost Center Owner /

ƒ Organization spend ƒ Visibility over spend LOB Manager
overview ƒ S
 pend by category, volume ƒ Requests pending
ƒ P2P cash flow and supplier approval

ƒ P2P process metrics ƒ Accrual reporting ƒ Budget control and

forecasts
ƒ DPO ƒ Payment KPIs
ƒ Spend analysis and trend
ƒ Process efficiency

Complete audit trail

Most best-in-class P2P automation solutions also house a complete audit trail of every touch point within
P2P invoice processing, providing insight into “who did what, when and where,” with the ability to monitor
whether or not the proper checks and validations took place. A record of all users’ invoice data changes is
kept so no modifications can be made without leaving a trace. For the c-suite, this provides some much-
needed peace of mind regarding regulatory compliance for things like the Sarbanes-Oxley Act and more.

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 7

GAINING THE APPROVAL OF P2P TEAM MEMBERS
While the c-suite needs to be sold on the benefits of automation, P2P staff could also use some reassurance.
How invoices are processed and managed says a lot about a company’s financial health, and a happier,
more productive P2P staff bolsters both the bottom line and the reputation of the organization.

WHY MANUAL WORKFLOW NEEDS TO BE ADDRESSED

To help squash the belief that current processes are working, it will be beneficial to call out exactly why
manual workflow is detrimental to both the P2P staff and the c-suite when building your business case.
Below are three of biggest difficulties faced by procurement and AP staff, and how they affect P2P
performance and the c-suite:

DATA MUST BE MANUALLY ENTERED INTO ACCOUNTING SYSTEMS.

CONSEQUENCES FOR P2P TEAMS: CONSEQUENCES FOR THE C-SUITE:
ƒ Time wasted doing manual tasks such ƒ Investing resources in P2P staff to
as keying in invoice data, review, coding perform low-value and error-prone tasks
approval, etc.
ƒ Slowdowns in the payment cycle caused
ƒ Increased risk of error and slowdowns in by errors can impact working capital
the P2P cycle due to human intervention
ƒ P2P staff is dissatisfied, less invested in
ƒ Unfulfilling job due to tedious daily tasks their job

APPROVAL PROCESSES ARE LONG & COMPLEX.

CONSEQUENCES FOR P2P TEAMS: CONSEQUENCES FOR THE C-SUITE:
ƒ T
 ime wasted doing manual routing, ƒ Slowdowns in the P2P cycle make it difficult
processing and sign-off procedures for early-payment discounts to be captured

ƒ Managing PO or non-PO verification and ƒ Slowdowns can also lead to late-payment

payment approval can be complex penalties and damage supplier relationships

ƒ Limited control and visibility into the process ƒ Limited control and visibility into the process

ORGANIZING & STORING INVOICES IS DONE MANUALLY.

CONSEQUENCES FOR P2P TEAMS: CONSEQUENCES FOR THE C-SUITE:
ƒ T
 ime wasted filing invoices in file cabinets ƒ Inability to find documents can lead to
or document storage facilities scrutiny by external audits for regulatory
compliance
ƒ Difficult to locate invoices and requests
quickly ƒ P
 aper documents may find their way into
the hands of unauthorized personnel
ƒ Risk of losing or damaging important
archived documents ƒ In-office or off-site storage can be costly

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 8

THE END-TO-END VALUE OF AUTOMATED WORKFLOW
An automated P2P solution can optimize spend requests and goods or services ordering by eliminating
paper and manual processing steps. Because every phase of processing is made electronic, the need for
any human data entry, time-consuming approval, and manual storage and filing is eliminated. Businesses
save time and money with online purchase requisition and order forms, as well as benefit from company
complaint and standardized approval workflow.
Wherever there is a benefit for P2P staff, it’s usually the case that a benefit for the c-suite exists as well.
Translating these benefits in your business case will increase the likelihood of project acceptance.

BENEFITS OF AUTOMATED WORKFLOW

BENEFITS FOR P2P TEAMS: BENEFITS FOR THE C-SUITE:

ƒ Receive and enter invoices and requisitions ƒ Faster P2P cycle; more early payment
faster discounts

ƒ Less time spent on manual tasks and more ƒ Lower processing costs; happier P2P staff
job fulfillment
ƒ Avoid adding headcount to manage growth
ƒ Able to handle volume fluctuations with ease
ƒ Fewer late penalties and dissatisfied suppliers
ƒ Improved accuracy and process control
ƒ Greater support for regulatory compliance
ƒ Retrieve invoices instantly and electronically
ƒ Ability to repurpose staff to higher value tasks
ƒ Improved relationships with customers and
suppliers

PROMOTING REASSURANCE WITHIN P2P

Understandably, those who are part of the P2P staff will not always have a positive reaction to the news
that there will be changes associated with their jobs. It’s human nature to fear change, and even though the
majority of P2P team members comprehend the benefits of P2P automation, that doesn’t mean they’re sold
on the solution.

Job security
One of the biggest fears for the P2P staff is the thought that an automated solution will put them out of a
job. However, that is rarely the case. Most businesses that utilize a P2P automation solution repurpose their
existing staff to perform tasks of higher responsibility and greater business value. For example, instead
of manually entering invoice data, an P2P staff member can instead spend his/her time fostering supplier
relationships, analyzing information, etc. This is a crucial point to convey when building your business case
to the P2P staff.

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 9

Learning curve & user acceptance
Another common concern among the P2P staff is the learning curve for a new solution. Even though the
current process may be inefficient, experienced staff members understand their roles and have a system in
place that they’re comfortable with.
It will put the minds of P2P and finance managers at ease to know that, at least for many of the leading
solution providers, P2P automation solutions are implemented using the Agile methodology and Change
Management practices, which allows users of the new solution to get hands-on experience early on in
incremental stages and be more receptive to procedure changes.

Benefits of Agile & Change Management approaches include:

ƒ Gaining the benefits of the solution more rapidly with faster ROI

ƒ Ability to make decisions and modifications with context and experience

ƒ Quickly receiving new features to test

ƒ Being directly involved in the project; greater process insight

ƒ Investing resources in the most valuable features

ƒ Reducing risks and lowering overall startup costs

P2P AUTOMATION SUCCESS STORY:
Luxasia is a luxury specialist in retail and distribution with headquarters in Singapore
and 10 locations across Asia. Curated over 30 years of experience in the luxury beauty
industry, the company’s impressive portfolio provides customers with the best global
luxury brands on the market.

THE BACK STORY

As a radpidly growing company, Luxasia began searching for a solution to help improve its predominantly
manual accounting process. At the time, employees seeking invoice approvals had to create purchase
requisitions by hand and print them out. POs were then manually created in the company’s SAP® system.
Luxasia was also processing its internal expense claims by hand. Employees would use Excel spreadsheets,
scan paper receipts, then print and pass them onto an AP specialist to process and manually enter into SAP.

THE SOLUTION
Luxasia selected Esker’s P2P solution to automate its purchase requisitions and supplier invoices. The
solution integrated seamlessly with Luxasia’s SAP system and created a unified, end-to-end P2P cycle.
Beyond invoice automation, the expense claim automation functionality contributed to a drastic reduction of
paper use. Esker’s P2P automation solution has helped Luxasia streamline its workflow processes, resulting
in a myriad of impressive benefits, including:

INCREASED EARLY PAYMENT DISCOUNTS ENHANCED VISIBILITY, with critical metrics

with more vendors using using the self- available at the touch of a button thanks to Esker’s
service supplier portal customizable dashboards

50% FASTER INVOICE PROCESSING by ON-THE-GO INVOICE & PURCHASE REQUISITIONS

eliminating manual data entry CAPABILITIES, allowing users to access, review
and approve documents 24/7 using the Esker
Anywhere™ mobile app

UP TO 4X FASTER APPROVALS thanks to

automatic notifications and the ability to
assign approvals to another person if an
approver is away or on leave

INCREASED EMPLOYEE PRODUCTIVITY,

with AP specialists processing over 1,000
invoices in the same amount of time it
previously took to process 400 invoices

FACILITATED E-INVOICE SUBMISSION,

with 15% of invoices being submitted via
portal, reducing physical archiving costs and
providing easy document retrieval on one
platform

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 11

CONCLUSION
Your project is not the only one vying for approval and budget dollars within the organization. Upper
management tends to understand the benefits of P2P automation in a general sense, but may lack insight on
how those benefits can translate beyond P2P to the business as a whole. Creating a clear and comprehensive
business case is the key to convincing key stakeholders and propelling your P2P automation project to the
top of their to-do list.
Now that you are better equipped to speak convincingly to the key stakeholders, it’s time to move forward
on actually building your business case. Be sure to include the following essential elements as you begin
the process:
ƒ Description of your current procurement and AP processes and proposed solution

ƒ Projected timeline and project costs

ƒ Calculated project benefits and potential risks

ƒ Any other assumptions based on your project knowledge

This white paper can be used as a fallback to measure the quality of your business case as it’s assembled
as assurance that no important details were overlooked. Good luck!

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 12

ABOUT ESKER
Esker is a worldwide leader in AI-driven process automation software, helping financial and customer service
departments digitally transform their procure-to-pay (P2P) and order-to-cash (O2C) cycles. Used by more
than 6,000 companies worldwide, Esker’s solutions incorporate artificial intelligence (AI) technology to drive
increased productivity, enhanced visibility, reduced fraud risk, and improved collaboration with customers,
suppliers and internally.

SAP S/4HANA® CLOUD CERTIFIED SOLUTIONS

Esker’s Accounts Payable solution is certified for integration with SAP S/4HANA Cloud. Delivered by the SAP®
Integration and Certification Center, this certification provides users the assurance that Esker’s intelligent
automation solutions are enabled to work with their SAP S/4HANA Cloud software and be compatible with
future upgrades — allowing SAP users to further leverage the value they have invested in their ERP system.

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HONG-KONG

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SPAIN
MALAYSIA

SINGAPORE

ARGENTINA AUSTRALIA

GLOBAL EXPERTISE
Founded in 1985, Esker operates in North America, Latin America, Europe and Asia Pacific with global
headquarters in Lyon, France, and U.S. headquarters in Madison, Wisconsin. In 2019, Esker generated 104
million euros in sales revenue.

BUILDING A BUSINESS CASE FOR P2P AUTOMATION IN AN SAP ENVIRONMENT | 13

©2020 Esker S.A. All rights reserved. Esker and the Esker logo are trademarks or registered trademarks of Esker S.A. in the U.S. and other countries.All other trademarks are the property of their respective owners.
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