SAP and Crossgate extend B2B 360 Services to Support SAP® Supply Network Collaboration (SAP SNC)

Today SAP and Crossgate (an EDI/B2B exchange co-owned by SAP) announced a number of new service extensions that support the EDI and B2B requirements of the Supplier Network Collaboration (SNC) solution from SAP. These new solutions and services are the result of the joint-development work between SAP and Crossgate to support a new paradigm of EDI and B2B, and to make the implementations of supply chains and trading partner communities faster, easier and less expensive for SAP customers. This new paradigm takes advantage of several maturing standards, eSOA, ESR (enterprise service oriented architectures) and SAP Netweaver.

SAP and Crossgate streamline the integration and responsiveness of global supply chains by providing pre-configured B2B collaboration for customers using SAP SNC

Crossgate has released a set of core service extensions in support of the SAP® Supply Network Collaboration (SAP SNC) application, eliminating time and material B2B integration projects which have often presented challenges to supply chain managers.

Globalization of industries, the increasing speed of business and growing customer demand have created numerous opportunities for business growth and expansion. To take full advantage of these opportunities, organizations need to overcome the challenges involved in expanding supply chains to accommodate customer demand while maintaining visibility and control.

Crossgate is helping companies succeed in meeting the challenges of managing ever-expanding supply chains by offering them business process outsourcing (BPO) services that have qualified as “Powered by SAP”. These services from Crossgate, called B2B360˚ Services, offer a set of predefined service extensions designed for use with SAP applications. Crossgate’s Business-Ready Network already provides access to more than 40,000 network partners around the world that SAP customers can connect to and collaborate with. With Crossgate, companies can integrate any supplier of any size, anywhere in the world, for a predictable and fixed cost without having to impose new standards or change management procedures.

B2B360˚ Services “Powered by SAP” provide a turnkey integration solution that offers clear benefits in terms of time to value and total cost of ownership for customers. B2B integration with SAP SNC can be realized in a simple and very efficient manner.

“With Crossgate’s service extensions in support of SAP SNC, companies have the ability to electronically integrate suppliers and customers, without having to push mapping standards toward them,” said Lori Mitchell-Keller, senior vice president, Suite Solution Management, SAP. “The result is an increased level of end-to-end integration with global suppliers.”

Developing collaborative relationships is not always easy, since each partner has different technical capabilities and communication standards. Being able to integrate an entire network of suppliers with a single connection to the Crossgate Business-Ready Network gives companies a measurable increase in process excellence and operational efficiency. The Crossgate service extensions allow companies to quickly respond to upcoming business demands to integrate a new supplier or replace an existing trading partner for scenarios such as multi location visibility, forecast collaboration, supplier managed inventory or production progress reporting, without costly and labor-intensive change management or time and material integration projects.

From a technical perspective, the Crossgate service extension designed for use with SAP Supply Network Collaboration features out-of-the-box integration to EDIFACT, X12, industry-specific XML standards and a turnkey integration of trading partner-specific data formats for industries including high tech, consumer products and automotive.

Please email me with any questions or to discuss these service extensions.

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Reducing Costs and Increasing Profits Through e-Invoicing Both Inbound and Outbound

Implementing electronic invoicing is a major trend today. The economic uncertainties have motivated companies to review internal processes for any and all possible cost savings. Converting outbound paper processes that are slow and involve expensive postal fees is an obvious one. Inbound paper invoices sent by suppliers are also very expensive and slow to manually process. Again this is an obvious area to reduce costs and improve efficiencies which improve the bottom line. The remainder of this article discusses these processes in more detail.

Inbound Electronic Invoices

There is a lot of interest these days in AP (accounts payable) optimization initiatives. Many companies that I have spoken with over the past few weeks and months are very interested in reducing the costs of paper processing and data entry that are associated with traditional manual processing of inbound invoices. In addition to cost reduction, CFOs are also seeking ways to speed up the processing of invoices so they can take advantage of early payment discounts with their key vendors. It is worth noting that many companies cannot take advantage of early payment discounts because the manual processing of paper invoices takes too long.

Paper does not easily give up it's information. Somehow the information on the paper invoice must be read, understood, extracted and entered into the AP software application, approved or rejected and payments made. Sometimes this takes 45 days just to complete this process.

I have spoken to a number of CIOs and CFOs recently that were seeking to out-source the entire process of handling inbound paper vendor invoices. They wanted the following:

• Reduce the costs of processing the paper (labor, IT, facilities, etc.)
• Scan/OCR the data on the inbound paper invoices to quickly digitize it, or convert more to EDI and B2B electronic invoices
• Have a human review the scanned data and fill-in any missing or unreadable data from the original paper copy
• Submit and route the digitized invoice for approval
• Convert as many paper invoices to electronic EDI or B2B file transfers as possible to achieve the speed and efficiency of real-time integration
• Electronically archive the scanned documents to reduce storage space

What were these executives wanting to fix?

• Slow paper processing may prevent receiving early payment discounts
• High postage costs
• Mail room and document handling costs
• Document copying costs
• Document storage costs
• High data entry costs to transfer the data on the document into a computer system
• Human data entry introduces additional errors that cause invoice disputes
• Invoice disputes cause supply chain friction
• Lack of visibility because of slow paper processing prevent real time visibility into accounts payable liabilities
• Prevent various business units from manipulating financial reports by slowing down invoice processing

In addition to fixing and improving these processes, the automation and digitizing of the invoice process enables the CFO to have more tools for cash management. When invoices can be processed quickly the CFO has the ability to negotiate different and better payment terms and discounts. Slow processing removes these options.

The CFO's office wants the benefit of all-of-the-above, but not necessarily the headcount and associated IT costs that may come along with an in-house solution. As a result, a number of service companies have developed a BPO (business process outsource) service model that offers these services and solutions on a subscription model. Email me if you would like more information on this.

Once the AP process is optimized, the CFO will have lower costs, faster processing, better visibility, and flexibility to take advantage of various early payment programs.

Outbound Electronic Invoicing

We have all seen it with our own personal invoices and bills. Companies are encouraging their customers to accept electronic invoices/bills and to pay online. There are huge savings that can be realized by companies that can convert their customer base to accepting electronic invoices via email, EDI or other B2B invoice files. Here are a few:

• Reduced or eliminated postal fees
• Eliminate the latency caused by using the postal service
• Customers receive their invoices faster and pay faster
• Reduces Days Sales Outstanding (DSOs)
• Reduce Cash Conversion Cycles
• More accurate electronic data reduces the number of disputes
• Invoice disputes are discovered and resolved quicker
• Reduce Print & Postage costs by as much as 60% –from $5 to $2 (Gartner)
• Lower Call Center Volumes–Up to 60% of calls relate to invoice disputes
• Reduced errors that were previously caused by poor hand writing
• Increase in electronic payment when online invoices and bills are presented with this option
• Reduce call center calls by archiving invoices online and making them available to your customers

The list above details some of the obvious business efficiencies that can be realized, but electronic invoicing can be difficult. Companies that engage in electronic invoicing globally must be compliant with all the laws and regulations that governments and tax authorities require (see Mexico e-Invoicing). This can be a resource intensive task. Often it is easier for a company to engage an expert global service provider that can provide tight ERP integration for electronic invoicing, and let them implement the service and monitor it for compliance with all the governments and tax authorities. Email me if you would like more details on various government requirements.

What does the process look like for implementing electronic invoicing with your business partners?

1. You should first contact your customers and ask them to accept electronic invoices
2. In most countries your customers must sign an agreement stating they will accept electronic invoices. This is typically done via a letter and/or email sent to the accounts payable department that directs them to an online portal where they can agree to accept e-Invoices.
3. Once the online form is completed and the customer agrees to accept invoices electronically, a copy of the agreement should be automatically emailed to the customer for reference.
4. The online form should also include a survey of the customer's electronic data exchange (B2B)capabilities. The online survey form can ask if your customer is able to exchange EDI or other B2B data formats, or do they want to exchange invoice information only via email or a web portal?
5. Once your customer is ready - an email should be sent to them with a link to a secure website where they can login and view current and past archived invoices. This reduces the customer support and accounts payable workload. This portal should also enable the company to see when their customer's read and/or download the invoices. Unread invoices should be flagged and the company alerted that more customer training may be necessary.
6. Electronic invoices must be archived most often for 5-10 years. The length of time that electronic invoices must be archived differs widely depending on local regulations.
7. The portal should also enable both you and your customers to verify the integrity of the digital signature included on the electronic invoice. The portal should have integrated functionality to send a verification request to the digital signature authority and receive a response. This ensures that the invoice on record and in the archive is valid.
8. If your customer is a high volume customer and can support EDI or other B2B data exchanges, then the portal may be useful to check on the status of invoices, but a fully automated B2B process may be more efficient. Electronic invoices may be sent to your customer via email as a PDF attachment, or as a link in the email. The link would take them to the invoice stored on the online archive where it could be viewed and printed.
9. Automating the process of implementing electronic invoicing with your trading partner community is very important for companies with large numbers of customers. Self-service portals where customers can self-register can save enormous time and costs.

Some e-Invoicing service providers focus on either inbound or outbound e-Invoicing only, but a number offer support for both. In addition, some provide complete EDI and B2B managed services as well. Some will try to remain agnostic to any ERPs, but a few such as Crossgate (a company co-owned by SAP) provides a very SAP-centric approach which can offer a tighter integration and additional advantages to SAP customers.

The ROI for e-Invoicing

With many solutions and services finding and documenting the ROI can be complex, difficult, subjective and abstract. That is not the case with implementing electronic invoices. There are well documented costs and savings available and the savings are easy to calculate. Here are some examples from Aberdeen (in 2007) from best-in-class companies that focused on AP optimization and invoice processes:

• Invoice processing costs were 88% lower
• Invoice processing cycle times 52% faster than their peers
• 66% higher rates of on/time payments
• The cost to process a single invoice for the best-in-class companies was 2$, average companies $8.36, and for industry laggards it was $ 29.38 per invoice (OUCH!)
• Time to process a single invoice: best in class 8.6 days; industry average 17.4 days; laggards 20.3 days
• Exception rate: best in class 7.4%; all others 11.6%
• On-time payments: best in class 82%; all others 59%
• On-time payments that earn discounts: best in class 79%; all the rest 48%

In the area of DPO (Days Payment Outstanding):

• Best in class:46 days
• Average: 42 days
• Laggards: 32 days

As these numbers demonstrate, there are a lot of different areas around invoice processing that can be improved to provide cost reductions, process improvements and better cash manage options for CFOs.

If you would like to discuss electronic invoicing in more detail please email me.

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SAP's Business ByDesign and Crossgate for EDI and B2B Services

SAP Business ByDesign is a new addition to the SAP solutions for small businesses and midsize companies. It is a complete and adaptable hosted business solution designed to unify and streamline core business operations for growing companies that traditionally have not purchased an integrated business application due to issues of cost and complexity. SAP Business ByDesign is offered on a subscription basis, priced per user per month for the specific functionalities being used.

SAP and Crossgate have now added on-demand EDI and B2B support for SAP Business ByDesign. Users can now communicate directly from their hosted ERP (Business ByDesign) using the efficiencies of various EDI and B2B standards by activating the services provided by Crossgate (Crossgate is co-owned by SAP).

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Supporting Global e-Invoicing

I am currently working on a large number of electronic invoicing projects around the world and am learning a lot. Some countries require that the digital signature on an electronic invoice be provided by a signing organization in the specific country where the invoices are issued. Does that mean that a global electronic invoicing service provider must open a location in each of these countries? No, but the global provider of electronic invoicing services must be integrated with authorized signers in each of these countries.

In effect, global providers of electronic invoicing integrate with a worldwide network of digital signers so they can provide a one-stop shop for multi-national companies needing efficient worldwide support and services.

If you would like to discuss your electronic invoicing needs please email me.

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More on Mexico e-Invoicing

One of the main reasons companies want to use electronic invoices is to eliminate paper, processing and postal expenses. However, some customers don't have reliable internet connections so the receipt of electronic invoices is difficult and unreliable.

How does the sending company eliminate their paper processes if some of their customers can not accept electronic invoices? The electronic invoice service provider (Crossgate) can take all invoices as a data file from the source company and then divide those that can be sent electronically, from those that need to be printed and mailed. This service enables the sending company to eliminate the in-house processing of paper and focus exclusively on sending all invoices electronically.

If you would like to discuss the details of Mexico e-Invoicing please email me.

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Major Online Retailer Integrates Business Partners Using SAP and SAP's EDI and B2B Strategies and Partners

The mail-order company neckermann.de will use SAP and an EDI and B2B managed services company that SAP co-owns to handle all business partner communication in the future. The solution will be integrated seamlessly into the company’s SAP environment.

neckermann.de is investing in the restructuring of its IT environment and will be handling all material management activities with the help of SAP software solutions in future. The company wishes to concentrate on its core competences and is therefore outsourcing EDI and B2B processes to the SAP-centric EDI specialist, Crossgate.

The central partner profile repository forms one of the core elements of the Crossgate network (Crossgate is co-owned by SAP). This is similar to a telephone directory, but instead of isolating phone numbers and addresses, the Crossgate repository contains partner specific integration mappings that have been collected during 3,000 customer projects. Currently, more than 40,000 business partner profiles exist on the network simplifying the onboarding and electronic connectivity of business processes.

More than 400 business partners of neckermann.de will be connected to their internal SAP infrastructure via Crossgate’s platform for the purpose of:

1. processing orders
2. delivery notes
3. invoices
4. performing master data comparisons

During the project, Crossgate will assist neckermann.de in contacting its partners in addition to carrying out all EDI enablement activities. In other words, it will integrate the business partners into the B2B network. The exchange of documents will then take place centrally via Crossgate’s Business-Ready Network. Around five million transactions will be exchanged annually.

Among the key benefits that neckermann.de is expecting from the SAP connection to Crossgate’s Business-Ready Network are a consolidation and acceleration of processes. As the solution is fully-hosted by Crossgate, Neckermann will not have to perform any kind of maintenance or updates and expansions to the solution which will be integrated into the new system architecture of neckermann.de. The result --it will be possible to integrate all processes seamlessly, lower the total cost of operating an EDI infrastructure, and maximize the investment in SAP.

Stefan Beyler, Chief Information Officer (CIO) at neckermann.de, explained the situation: “Our goal is to achieve flexible, fast business processes. This will not be possible without the seamless integration of the respective business partners in all areas, including our SAP systems.”

About neckermann.de GmbH
neckermann.de GmbH, with a turnover of 1.4 billion euros, is one of the leading mail-order companies in Europe. The neckermann.de Group, including its subsidiaries in ten European countries, employs around 5,000 people – 3,500 of these in Germany. Sun Capital Inc., a leading investment company based in Boca Raton, Florida/USA, is the majority shareholder of neckermann.de. As a multi-channel mail-order company, it offers customers numerous possibilities for ordering items from its range of over 250,000 products, including a catalogue, the Internet, the phone and a mobile application. neckermann.de generates around 50 percent of turnover via the online shop and receives regular awards for its innovation, such as best online shop and the concept award for dialog-oriented shopping.

About Crossgate, Inc.
Crossgate (a company that is co-owned by SAP) offers the world's first Business-Ready Network, guaranteeing 100% integration of business partners, clients and suppliers. A single connection to the Network means electronic data exchange with any business partner regardless of their technical capability. In addition, Crossgate's B2B-360 Services powered by SAP provide clients direct access to all integrated business partners in the B2B transaction network via their SAP systems. With its legally compliant e-Invoicing Services, Crossgate also provides an innovative and 100% secure solution to cover the entire process of incoming and outgoing invoices, including signatures, global compliance monitoring, and secure automated long-term archiving. More than 40,000 business partners, representing over 10 industries, currently exchange documents and data via the Business-Ready Network.

Crossgate is represented at four sites in Germany, with operations in Atlanta, London, Milan, Paris, and AsiaPac. For more information, visit http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.crossgate.com&esheet=5979936&lan=en_US&anchor=http%3A%2F%2Fwww.crossgate.com&index=1

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Electronic Invoicing for SAP

Electronic invoicing sounds simple. You set up your ERP to attach a PDF version of any generated invoice to an email and forward it to the email address of your customer. Easy right? Like most things in life, it is not as easy as it sounds.

Many governments and tax authorities around the world have established unique rules and regulations on how electronic invoices must be used. How do you learn, and follow the requirements of 30-50 different regional tax authorities? How many staff or consultants will it take to ensure you are compliant? Let's talk about some of the issues:

1. Customers want to know if the invoice sent from their vendor is authentic and unaltered. Therefore, digital signatures are most often required to verify that the invoice is authentic and uncompromised.
2. Some tax authorities require that all invoices include a government issued unique number (called folio number in Mexico). Who manages this process?
3. Governments and their tax authorities want customers and vendors to archive the electronic invoices for often 5-10 years. How do you automate this archive process and make it compliant with each regional authority?
4. Many countries have specific file formats required for electronic invoices. Who manages these file formats and ensures your in-house formats are correct?
5. Some tax authorities require monthly reports on electronic invoicing. What reports? How do you submit these?

Most businesses select a global managed service provider that can manage global e-Invoicing for them. There are huge efficiency savings from using electronic invoicing, even with the cost of a managed service provider.

SAP users now have the option of using a global e-Invoicing service provider that is co-owned by SAP called Crossgate. If you would like to discuss in more detail just email me.

This article contains more information on the value of using e-Invoicing with your SAP system.

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Electronic Invoicing in Mexico

Last month (May 2009), Mexico's tax authorities (SAT) began requiring a new complex set of rules and requirements for electronic invoicing. The purpose of these rules are to provide SAT with better visibility, for tax purposes, into the sales and revenue streams of businesses in Mexico.

Crossgate (an EDI managed services company that is co-owned by SAP) provides global e-Invoicing, EDI and B2B managed services for many fortune 1000 companies already, but the Mexico requirements are different and unique. They were a challenge to support, but we have now completed these requirements and are in production with a managed services solution.

Here are some of the high level requirements for you to understand:

1. You must be registered with SAT (Mexico Tax Authorities) to exchange electronic invoices
2. You must register and download a list of folio numbers (similar to invoice numbers but provided by SAT)
3. A folio number must be assigned to every invoice. You will likely have your own invoice number with an associated SAT issued folio number
4. On a monthly basis, companies must provide SAT with a list of folios that were used during the month.
5. Companies must archive a special XML file for each folio used during the month and it must be stored on premise

Email me if you would like the rest of the detailed requirements and information on Crossgate's automated e-Invoicing solution for Mexico.

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