This document discusses invoice automation through SAP Ariba as a key component of digital transformation for purchase order and contract compliance. It highlights how SAP Ariba provides an invoice network that allows suppliers to submit invoices through a global portal. This enables 98% touchless invoice processing and reduces supplier inquiries. Implementing invoice automation improves compliance, provides visibility into spending, and standardizes processes.

1. PUBLIC
Chris Rauen, Financial Supply Chain Marketing, SAP Ariba (SAP)
Kristin Starner, Operations Manager, UnitedHealth Group
Tonia Saunders, System Process Owner – Finance & Accounting, Avery Dennison
March 22, 2017
Invoice Automation: Key Component of Digital
Transformation for PO and Contract Compliance

2. 2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Invoice network
SAP Ariba Payables provides an invoice network
Buyer ERP
source system
Approved
invoices Status, visibility,
and remittance
Supplier
Global invoice portal powered by
Ariba Network
Capture any invoice, from any source
system (SAP, Oracle, PeopleSoft,
JDEdwards, …)
Minimum change management and
increased AP capacity
Deliver an invoice/payment status portal Greatly reduced supplier inquiries
Provide full visibility and rich remittance
Increased efficiency and standardized
processes

3. 3PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Validating electronic invoices on the network
Invoice
ERP
GST/VAT
compliance
PO & PO line
match
Buyer match
(non-PO)
UOM & SKU
change
Currency match
Subtotal
& total
amount
PO line change
Line & total
consumption
thresholds
Shipping & tax
thresholds
Invoice
number
Bill to/
ship to
PO
number
Requestor
(non-PO)
Invoice
date
VAT/GST
IDs
Account
coding
Workflow
Compliance
Suppliers
Buyer
 98% touchless
processing

4. 4PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Invoice automation is critical
# annual invoices per FTE
Low-touch invoice processingHigh-touch invoice processing
Manual
• Paper
• Fax
• Data entry
“Electronically manual”
• E-mail
• PDF
• Scanning/OCR
Electronic invoice
• Integrated invoice: EDI, B2B, XML
• Web invoice: PO-Flip feature, e-invoice
• ERS (evaluated receipt settlement)
Keys to success:
• Multiple methods for suppliers
to submit electronic invoices
• Intelligent error recognition/
front-end validation
• Preapproval on PO to reduce
invoice workflow
Invoice
Working
capitalPayment

5. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
eProcurement Transformation
Enterprise Sourcing & Procurement (ES&P)

6. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
Overview
• UnitedHealth Group’s eProcurement evolution
• The hidden value of SAP Ariba invoicing
• How it works
• Where that leaves us
6 6

7. About UHG
Enterprise Sourcing & Procurement (ES&P) was established in 2010 to
centralize procurement functions around the organization. ES&P sits within
the Corporate Services function of UnitedHealth Group, and ultimately reports
up to the CFO. ES&P has over 230 employees onshore and offshore.

8. 8
4,955
Contracts
Executed/year
6,143
Suppliers in
ES&P scope
$6.8B
ES&P Managed
Spend
$2,857,199,632
Spend Invoiced through Ariba Network

9. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
The disconnect
9
ES&P:
Contracting
Business Partners:
Buying/Paying
Maximize
Value
• Competitively bid goods/services
• Obtain competitive pricing
• Leverage UHG size and scale
• Draft and author contracts
Mitigate
Risk
• Risk review every engagement
• Include contract language for
supplier management of data
• Prevent data breeches
• Submits purchase orders
• Orders direct with supplier
• Visibility to only their spend
• Processes and approves invoices
• Different teams and tools managing invoices/contracts
• No visibility to compliance
• Limited view to company-wide spend/activities
• Invoices can technically be paid without a contract/risk review
• May not be in compliance with UHG
risk programs
• Suppliers may not be properly
handling protected data

10. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.10 10
• Payment approval received on PO
• Automated invoice processing (no more manual
invoice entry)
• Orders auto-populated with address, GL, approvals
• Automated Approval Flow tied to DOA
Reduced
Transaction
Costs
• Ability to report spend to line item detail from a single
source
• Easily identify reoccurring non-catalog orders to push
more to catalogs
Spend
Visibility
• Ensures payment terms discounts are captured
• Ensures negotiated savings are captured
Price
Compliance
SAP Ariba P2P value proposition

11. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
SAP Ariba contract compliance
11
Business Partners:
Buying/Paying
Maximize
Value
• Competitively bid goods/services
• Obtain competitive pricing
• Leverage UHG size and scale
• Draft and author contracts
Mitigate
Risk
• Risk review every engagement
• Include contract language for
supplier management of data
• Prevent data breeches
• Submits purchase orders
• Orders direct with supplier
• Visibility to only their spend
• Processes and approves invoices
• Price compliance against contract
• Visibility and leverage of company-wide spend
• Controls on Contract spend
• May not be in compliance with UHG
risk programs
• Suppliers may not be properly
handling protected data
Contract
Compliance
Alternative invoicing channels are shut off, which then ensures:
• ES&P has a contract for every invoice
• ES&P is engaged to assess risk for all supplier contracts
• No spend leakage

12. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
Invoicing transformation
12 12
-
20.000
40.000
60.000
80.000
100.000
120.000
2011 2012 2013 2014 2015 2016
SAP Ariba Invoice Count
0
100
200
300
400
2014 2015 2016
Non-PO Invoice Count
0
10
20
30
40
50
60
70
80
90
100
Oct'
15
Nov
'15
Dec
'15
Jan
'16
Feb
'16
Mar
'16
Apr
'16
May
'16
Jun
'16
Jul
'16
Aug
'16
Sep
'16
Contract Terms Created
Net New
Ongoing
Critical Components
• Value Proposition
• Executive Support
• Spend Enablement Goals
• Resource Support
• SAP Ariba references
and support
$-
$500
$1.000
$1.500
$2.000
$2.500
2011 2012 2013 2014 2015 2016
Millions
SAP Ariba Invoice Amount

13. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
How it works
13
Contract:
Loaded in Ariba
Contracts
Setup:
Contract Terms
setup for
invoicing
Invoice:
Supplier submits
invoice against
contracts
Reconcile:
System
reconciles
invoice against
contract terms
Approve:
Invoice routed
for approval
Payment:
Invoice routed
to ERP for
payment
SAP Ariba
Contract Compliance

14. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
How it works
14
Ariba Terms for Invoicing:
Contract:
Loaded in SAP
Ariba Contracts
Setup:
Contract Terms
setup for invoicing
Contract:

15. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
How it works
15
Reconcile:
Invoice:
Supplier submits
invoice against
contracts
Reconcile:
System reconciles
invoice against
contract terms
Invoice

16. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
How it works
16
Payment:
Approve:
Invoice routed for
approval
Payment:
Invoice routed to
ERP for payment
Approve:

17. 17
This is great functionality, but
where does it leave us?

18. 18
UHG realizes the value of our contracts
Tool automates match of invoice pricing against the
contract pricing
Compliance to corporate policies
Ensures ES&P is engaged for all supplier contracts
and risk is assessed and managed
126,000
Invoices
automatically
processed
256
Suppliers
enabled for
transacting in
Ariba Network
18,275
Invoices tied to
Contracts

19. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 19
Reporting benefits
Supplier 1
UNSPSC
Code 1
Invoice 1
Invoice 2
UNSPSC
Code 2
Invoice 3
Invoice 4
Supplier 2
Supplier 1
SOW 1
Invoice 1
Invoice 2
SOW 2
Invoice 3
Invoice 4
Reporting by
good/services
Spend breakdown
Supplier optimization
Price/Volume
comparisons
Reporting by SOW
Visibility to spend by
contract
Future negotiations
Manage contract spend

20. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
How we support P2P
SAP Ariba
Ordering
2 - Offshore
- Catalog
Maintenance
-Buyer Support
Supplier
Enablement
2 - Onshore
4 - Offshore
-Network
Enablement
- Contract Terms
Creation
SAP Ariba
Invoicing
2 - Offshore
- Invoice
Exceptions
-Non PO Invoice
P2P Operations
Manager
P2P Operations sits within our
ES&P Operations team,
supporting 200 Commodity
employees

21. © 2016 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited.
What’s next for UHG
 Operationalize Enablement – New Supplier, New Contract? Invoice in
Ariba Network
 Electronic Invoicing – Increase efficiencies with EDI, cXML and CSV
invoicing to increase contract compliance for highly complex invoices
 Light Enablement
 Invoice Exception Optimization – Continue evaluating tolerances,
process improvements for managing invoice exceptions
21

22. Thank You!

23. Who we are and what we do
$6.1 billion sales from continuing operations in 2016
Founded in 1935
2014 Fortune 500® ranking: 385 (NYSE:AVY)
A global leader in labeling and packaging
material and solutions
Headquarters: Glendale, CA operating in
50+ countries
25,000 employees worldwide

24. Our business is a powerful part of everyday life
$4,18B
$1,45B
$0.45B
2016 Sales
Vancive Medical
Technologies
Pressure-sensitive
Materials
Retail Branding and
Information Solutions

25. SCOPE
 Sourcing through payment
 PO and invoice automation
 Align sourcing, procurement, and
payables
 Integrate e-invoicing, on one
platform, with:
 Spend analysis
 Sourcing
 Contract management
 Procure-to-pay
Transforming business operations at Avery Dennison
OBJECTIVES
 Streamline and accelerate invoice
processing
 Automate management of POs-invoices
to improve compliance
 Reduce the risk of human error and
fraud
 Reduce costs
 Improve control over spending
– Capture line-item invoice detail
– Share with sourcing and
procurement teams

26. Steps taken to accomplish a successful roll-out
Identified and engage key project team members
 Accounts payable, finance, and procurement
Workshops with SAP Ariba implementation team
 Developed configurations and tolerances
 Aligned business processes across boundaries
Change Management strategy
 Continuous communication – Over communicate
Identified a pilot to go-live
 Suppliers and buyer
 2 months period prior to next go-live wave
Training
 Successfully trained end-users and suppliers
 Flexible training schedules

27. Results
 Reduced invoice processing cycles
– 23 days to 5 days
 Invoice exceptions – indirect POs
dropped by 70%
 Saved significant number of hours
per week for buyers in procurement,
AP staff
– Fewer match exceptions
– Fewer supplier inquiries
Standardized payment terms to
improve DPO
Improved on-time payment
performance
Cleaned up master vendor data and
consolidated suppliers
Introduced a mobile app
Enabled employees to work
on-the-go
Improved compliance
Increase use of catalogs
No PO - no pay policy
PO-Flip for straight-through
processing
Substantial reduction – lost POs
Eliminated risk of human error
Automated workflows
Significantly lowering risk from
fraud

28. 28PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Results
Reduced invoice processing cycles
23 days to 5 days
Invoice exceptions – indirect POs
dropped by 70%
Saved significant number of hours per
week for buyers in procurement, AP
staff
Fewer match exceptions
Fewer supplier inquiries
 Standardized payment terms to
improve DPO
 Improved on-time payment
performance
 Cleaned up master vendor data and
consolidated suppliers
 Introduced a mobile app
– Enabled employees to work
on-the-go
 Improved compliance
– Increase use of catalogs
– No PO - no pay policy
– PO-Flip for straight-through
processing
 Substantial reduction – lost POs
 Eliminated risk of human error
 Automated workflows
– Significantly lowering risk from
fraud

29. Lessons learned and best practices
 Centralized purchasing platform
 Identify AP roles early on
 Engage end-users
 Weekly post project status calls
 Post-go live calls with end user
 Collaboration with other SAP Ariba clients
in your area

30. Recognition: P2P department of the year Institute of Finance & Management (IOFM)
 Recognized for implementing P2P automation
through a single platform, resulting in reduced
costs and improved control over spending.
 Team reduced the invoice processing cycle
from 23 days to 5 days and have saved
significant number of hours per week.
 Changes have also resulted in better overall
compliance.
 “AP & P2P functions are crucial to every
business, yet often go under-recognized.
These departments exemplify what every
business dreams to have: teamwork, growth,
and cost savings.”
-Brian Cuthbert, Executive Director of IOFM

31. Next steps
 100% electronic invoicing for indirect spend
through Ariba Network
– North America and Europe
 Procure-to-pay across Asia and Latin America
 Expand business with preferred suppliers and
eliminate need to manage one-time vendors
 SAP Ariba Spot Buy Catalog to better manage
off-contract spend
– Further reduce number of suppliers

32. Thank you.
Contact information:
Kristin Starner, UnitedHealth Group
kristin_starner@uhg.com
Tonia Saunders, Avery Dennison
tonia.saunders@averydennison.com
Chris Rauen, SAP Ariba
christopher.rauen@sap.com

33. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company.
The information contained herein may be changed without prior notice. Some software products marketed by SAP SE and its distributors contain proprietary software components
of other software vendors. National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP or its affiliated
companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP or SAP affiliate company products and services are those that are
set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.
In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release
any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future developments, products,
and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The
information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various
risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements,
and they should not be relied upon in making purchasing decisions.
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company)
in Germany and other countries. All other product and service names mentioned are the trademarks of their respective companies.
See http://global.sap.com/corporate-en/legal/copyright/index.epx for additional trademark information and notices.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.