Telkom SA

Natie Venter
Data Quality Symposium
June 2008
Sun City, South Africa

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Procurement Services -
Vision
To operate procurement services with appropriate technology to provide an
electronic end-to-end acquisition process which delivers sound
demonstrable business value to Telkom.
Vision-Driven Capabilities
Procurement Customer Automate Procurement Electronic Commerce with
Web Interface Processes Suppliers
Enable customer self- Streamline and automate Open systems that enable EC
service business processes relationships with any supplier

Electronic product Minimize data recapturing Internet Based Electronic

catalogues
Feature rich interface into
procurement
Shift data-capturing
responsibility to the
customer
Standardization of product
catalogue
Free people up from routine
transaction processing
communication
Catalogue maintenance
Supplier self service
Deep integration with
strategic suppliers

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Objectives
Web-based customer self-service via electronic
product catalogs
Automate and simplify the requisitioning and
approval processes
Maximize ROI of SAP
Optimal structuring of user access & SAP
licensing for users/partners
Support Telkom e-business strategy
Extend e-business relationships with suppliers via
Telkom Market Place

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Step 1: End User
Goal:
Enable End user Requisitioning
Action:
Deploy e-procurement solution
Benefit:
Reduce non-value adding activity of
professional buyers
Increased efficiency / reduced cost

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Step 2: Master Data
Goal:
Reduce maverick buying and free text orders
Benefit:
Reduce off-contract spend
Volume discount
Enable company procurement policies (BBEE)
Action:
Create Master Data
Catalogue stock/ contract items

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Step 3: Automate Approval
Goal:
Automate Approval Process
Benefit:
Reduce cycle times
Internal visibility / Reporting capability
Increase efficiency & cost saving
Action:
Activate approval workflow

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Step 4: Automated Release
Goal:
Automate Procurement Process
Benefit:
Automated release / Reduce Cycle Times
Delegation of authority
Enforce company procurement policy
Action:
Activate automated Purchase Order release

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Step 5: Vendor
Goal:
Vendor Communication
Activities:
Fax / E-mail
Electronic Communication:
Market Place

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Market Place Overview

Neutral Market Place

Electronic Operating Environment (EOE)
Platform supporting collaborative commerce
Connecting Buyers and Suppliers
Hosting components for ASP services
Technology Partners: SAP, Faritec ICP, Starnode
Designed to support total Procure-to-Pay process

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Vision
High Cost Reduction Sourcing
Cycle Time Reduction
Risk Reduction
Vision
Procurement
Info Asset Leverage AP - AR
Business

Simplification
Value

Integration
Inefficiency ce Traceability
Time delays pla Leverage of
e t existing systems
Lack of insight
Complexity a rk
Non Value Activities M
Unnecessary Cost

Sourcing Duplication
Reformatting
Procurement Re-entry
AP - AR Data Silos
Low Business Rule Inconsistencies

Manual Business Automation

Process

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Master Data Challenges
Buyers Suppliers

Material Catalogues incomplete Multiple creation of content per buyer /

and outdated / No services and / Content Creation Costly to support multiple Standards
or projects catalogues
Standard or structured product Misinterpretation of request result in
descriptions - duplications Standardization costly returns

Duplications, Quality of Master Reduce administrative challenges

Data Quality Control

Free text & off contract spend / Different product descriptions by buyer
Compliance with required BEE Approval and supplier
spend / Maverick buying
Human intervention - errors in Costly returns, no opportunity to display
product selection / costly returns Product Selection Additional product range
Access to internal catalogue only
Effort to maintain all supplier Outdated product and price information
Catalogue / Price
catalogues & price changes Management
revenue implication.

Transparency of data Transparency of data management

management reporting / Business Reporting reporting
intelligence

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Procurement Challenges
Buyers
Cost of processing paper, work flow;
contract compliance, policy
compliance.
Delayed notification of
acceptance or request
Revise Order online,
accommodate change requests
Centralize procurement,
decentralized distribution
Delayed confirmation of acceptance
of delivery. Settlement discounts
Paper/ delivery / time cost of
source documents. Human cost in
sorting, capturing and storage
Transparency of data
management reporting
Government and Industry Data Quality Symposium,
Suppliers
Correct description and price of product
Order Generation Processing time reduce, cost reduction
Guaranteed delivery of response and
Order Response confirmation of commitment
Paper based order history. Paper
Change Order confirmation of orders
Confirm delivery details per line item,
Advance Shipping Notice address and date
Delay in confirmation of goods / service
Goods Receipting acceptance cash flow impact
Submission of original paper invoice,
Invoice/ Credit Creation delay in invoice processing, no
transparency during invoice processing
Transparency of data management
Reporting reporting
June 11-12, 2008, Sun City, South Africa
 Procurement Solution
Buyer Market Place Supplier

Requisition
Requisition

PO / Change Order Order Receipt

PO / Change Order PO / CO Purchase Order PO / CO Order Receipt

Receipt Order Ac Order Ack

Receipt Order Ac OA Order Acknowledgement OA Order Ack

ASN receipt ASN

ASN receipt ASN ASN ASN
Advance Shipping Notice

Goods Receipt POD

Goods Receipt Physical Delivery Physical Delivery Physical Delivery POD

Invoice ERP Receipt

Invoice ERP Receipt Invoice / CR Invoice Invoice / CR Invoice / CR
Invoice / CR

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Actual Procurement Benefits
Structured material and services descriptions on
contract & master data to ensure adherence to the
distribution of order spend according to preset
vendor quotas
Spend tracking per product category more
accurate reporting
Reverse Auctioning opportunity
Avoid costly productivity losses for internal
customer to search for product

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Actual Procurement Benefits
Better Asset Management and warranty tracking
Connection to market place to provide alternative
source of supply
Improved Vendor evaluation - compare apples
with apples
Product life cycle management stock depletion
versus purchases, direct vs. stock
Off SAP paper contracts could be taken on to
SAP via standardized descriptions spin-offs bulk
buy and supplier relations improvement

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Actual Procurement Benefits
History on material planning Usage and demand
curves data can be invaluable for future possible
stock items or simply to evaluate demand in the
network geographically
Procurement of Services
Procurement of leased assets standardization
and categorisations - will improve asset register and
tax benefit claims

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Maverick Spend
Free text order lines constituted 40% of average
monthly spend
Data structuring process reduced the spend free
text to only 18% currently
Phase 2 opportunity to reduce this number to less
than 10%

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Finance Challenges
Buyers
Volumes, sorting, verification
Time, volumes, mistakes
Manual, time consuming short
raises, RFC, error prone
Volumes of disputes; decisions on
timing & method of comms, admin
overhead
Insufficient settlement discounts
taken
Differences in AP-AR positions,
admin time and effort
AP Queries volumes, costs
Government and Industry Data Quality Symposium,
Suppliers
Invoice Generation Conversion from digital to paper
Invoice Distribution Paper based, delivery time and guarantee
Invoice Presentment
No understanding of process or document
Invoice Entry
status
Invoice Matching
Invoice Disputing Lack of notification, volumes, requirements
for resolution, causes not always clear
Payment Adjudication
No understanding of when payment will
Payment Processing occur, if settlement discount will be taken,
what transactions may have been raised,
Payment incorrect payment
Payment Remittance Paper based, volumes, administratively
intense, discrepancies in positions,
Reconciliation
incorrect payment allocations
Outstanding Collections Admin intensive, costs
June 11-12, 2008, Sun City, South Africa
 Business Benefits Sought
Reduction in the amount of human intervention
Improved utilization of accounting officers time
and skills (Reviewing, exception management)
Reduction in the number of errors and duplication
of work
More timely processing of invoices and liability
recognition
Reduction in filling space and associated costs

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Business Benefits Sought
Leveraging existing systems functionality
Provide suppliers with as much self functionality
as possible
Automate dispute and query management
processes
Interest paid reductions
Uptake of settlement discounts

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Solution Constructs
Utilize CTX as central business process
automation and data transfer mechanism
Tightly integrate into the existing procurement
automation processes (PO is king)
Minimize the amount of SAP modifications
Minimize the time to solution rollout
Deal with small to medium size suppliers first
Supplier access and ease of use
Single solution that could scale to meet all of
Telkom Finance and suppliers needs

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Finance Solution
Supplier Market Place Payer

Invoicing Invoice
Invoicing Invoice + Credit Note Invoice + Credit Note Invoice
ERP Receipt
Invoices ERP Receipt

Invoice Statuses Invoice Status

Invoice Match
Invoice Match

Dispute Admin Dispute Statuses

Dispute Admin Dispute Management Raise + Manage Dispute Payment
Payment
Processing
Processing
Payments
Cash Receipting
Cash Receipting Remittance Advice Remittances PMT Remittance Invoice AP load
Invoice AP load

PMT Instruct
Reconciliation
Reports

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 End Game: Procure to Pay
Requisition
Requisition
Process
Market Place
PO / Change Order Order Receipt
PO / Change Order PO / CO PO / CO Order Receipt
Xchange
Receipt Order Ac Order Ack
Receipt Order Ac OA OA Order Ack

ASN receipt ASN

ASN receipt ASN ASN ASN

Goods Receipt
Goods Receipt Physical Delivery Physical Delivery POD
POD

Invoice ERP Receipt Invoice / CR

Invoice ERP Receipt Invoice / CR Invoices Invoice / CR Invoice / CR

3 way match Dispute Statuses Dispute Admin

3 way match Dispute / Status Dispute Dispute Admin

Invoice AP load Invoice Statuses View Status

Invoice AP load Status Status View Status

Payment Processing Payments Proof of Payment

Payment Processing Remittance Advice Remittance Advice Proof of Payment

Reporting Remittances Reporting

Reporting Reports Reports Reporting

Reconciliation
Reports

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
 Benefits Achieved
Increased uptake in settlement discounts
Substantial improvement in department
productivity
Quantum improvements in processing times
Significant reduction in errors and improved data
quality
Significant increase in 3 way matching success
rate

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
Reduction in supplier query management time
and overhead (Esp. through previous channels)
Decrease in paper and faxing costs
Improved liability recognition
Improved insight into related business processes
Reduction in interest and penalties

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa
Thank You

Government and Industry Data Quality Symposium,

June 11-12, 2008, Sun City, South Africa