How do you practically link traditional functional silos such as supply chain and payables together? And what results can you expect from this? In this session, Cynthia Haug shares her experience and results from achieving this at GE Healthcare, Johnson Controls and now at Newmont Mining Corporation. Attend this session to discover how to: - Conduct P2P process analysis to identify where there are breaking/risk points in your P2P process and what is causing high costs - Gain buy-in from your key internal P2P stakeholders so they take appropriate action for change - Move from functional silos to being in control of a global end-to-end P2P process – what results can you expect?

1. The Power of Linking
Procurement with Payables
•The “How To” Enable One P2P

2. Agenda
 Introduction to Newmont
 Overview of P2P Experience
 Journey: Infancy to Maturity of Global P2P
 How to Lower P2P Costs

3. Background on Newmont
 World’s second largest gold producer
 Market cap ~$30 billion
 2011 gold production ~5.2 million ounces of gold
 2011 copper production ~206 million pounds
 2011 reserves: a record 99 million ounces of gold
and 10 billion pounds of copper
 ~ 43,000 employees on five continents
 Operations in seven countries on five continents,
organized around four regions – North America,
South America, Asia Pacific, and Africa

4. Different Fortune 300 Companies:
Same Goals
 General Electric Healthcare
Responsible for Global Rollout
Outsourced invoice input to Hyderabad,India
Mismatch resolution kept in house
Tools: Oracle, ERS (Electronic Receipt Settlement)
Auto Pay/Repeat Pay, “No PO No Pay” Policy
 Johnson Controls
In house and centralized Procure to Pay regionally
Tools: Bottom Line, SAP, Oracle, Excel Upload, EDI
 Newmont Mining
In house and centralized North America Procure to Pay
Tools: SAP, Open Text

5. Problems of Decentralized: Siloed P2P
Stage 1: Separate Decentralized Procurement and
Payables Departments
Genetics:
 Two individual teams with separate processes
 Two sets of employee goals
 Separate reporting structures:
One AP Manager & One Procurement Manager
Genetic Deficiencies:
 Separate processes encourages department “Finger Pointing”
 Unaligned P2P departmental goals increases time/cost
 Encourages “Push-Pull” relationship instead of collaboration

6. Stage 1:Vertical Departments:
Separate Department Roles within P2P
Accounts Payable Supply Chain
Payment Process Purchase Orders
Payment • Pay Vendors>Right amount Purchase
• Requisition to PO
Process
Orders • Additions/Changes/
• Pay Vendors>Within agreed terms Close Processes
Invoice Matching Process Requisitions
Invoice • Match to Purchase Order Requisitions • Create Req
Matching • End User/Cost
• Input NOI and begin approval work flow
GL Account #
Review Process Vendor
Desktop Vendor Administration
• Valid PO/NOI Administration
Review • Add/Change
• Valid Vendor
Vendors

7. Effect of P2P Misalignment:
Tip: If you don’t centralize > Missed Opportunities
Payment
Process Purchase
Orders
• AP matched to
Payment delayed/vendor relationship damaged wrong line
• AP matched to
wrong vendor
Price/Qty Mismatch • Invoice was
Invoice
Insufficient PO Funds Requisitions rejected in
Matching
Not enough lines on PO workflow
• GR but no IR
No requisitioner approval
No Purchase Order
Desktop Vendor
Review No Vendor Administration

8. Align P2P Goals
Stage 2: One “Service Level Agreement”
Separate/Decentralized Procurement and
Payables Departments
Required DNA:
 Upper Management Buy-In to one SLA
 If Global: Regional Management support
 Reporting Tools: Mismatches, GR/IR
Genetics:
 Two individual teams with separate processes
 Goals Tied to one P2P Service Level Agreement
 Separate Reporting Structures:
 One AP Manager & One Procurement Manager

9. Stage 2: Strengths and Deficiencies
Genetic Strengths:
 One Service Level Agreement in annual goals:
Transactional employee accountability for P2P process
requirements
Genetic Deficiencies:
 Separate Reporting Structures:
Two End To End Managers
 Service Level Agreement needs enforcement by both
Finance and Supply Chain Department

10. Stage 3: Regional P2P
Required DNA:
 Upper Management Support to Regionalize P2P
 If P2P moved under SC: Leverage IA/SOX for Finance Alignment
 Separate SRM from SC Transactions
Genetics:
 Regional P2P Departments
 Goals Tied to one P2P SLA
 End to End P2P Processes
Genetic Strengths:
 One SLA in annual goals: Employee accountability
in one P2P structure
 One Reporting Structure: P2P Collaboration
Genetic Deficiencies:
 Lowest P2P cost not maximized

11. Stage 3 Example: Pre/Post Savings
Procure to Pay Stage Stage Savings Earnings
2 3
AP 15 8 $350K
Processors/Scanners (53% Reduction
for North America in FTE’s)
North America Discount 2.2M
Earned
(August-December 2011)
Discount Corporate 75% 96%
Capture Increase %
Successful Citi One 375K
Card Roll-Out (Rebate)
Sub-Total 350K 2.6M
Total 2.95M
 Since the transition, NA P2P has realized benefits totaling 2.95M
 Maximized efficiency by moving into a paperless environment to
leverage future automation with SAP

12. Stage 4: Global P2P /SSO
Required DNA:
 Upper Management Support to globalize P2P
 One ERP Platform
 One scanning/workflow platform/multiple languages
 Knowledge of regional tax/ law implication
 Change Management
Genetics: Shared Service Organization
 Goals Tied to one P2P Service Level Agreement
 End to End P2P Processes
Genetic Strengths:
 One SLA in annual goals: Transactional employee accountability
 One Reporting Structure: P2P Collaboration
 Lowest Cost Per Invoice due to Global platform

13. Impact of P2P Shared Service:
Functions
Definition and Roles Key levers
Trusted advisor to business Planning and analysis
• Business entity specific support focused on
Business • Business partnering
partners • Strategic planning, forecasting and analysis focused
• Close proximity to decision makers • Decision support
Knowledge driven activities Centralization of expertise
• Expertise functions not specific to a particular • At global level
business entity
Expertise • Higher expert capacity
• Highly specialized, requiring interpretation and utilization
judgment
• Strong proximity with
• Low FTE level: limited benefit from SSO approach global function
Volume driven processes Shared services model
• Not critical to drive business decisions • Standardize high volume,
Transactional transactional processes
• Not specific to any business entity
• Leverage Major ERP
• Strong scale effect
• Service provider culture
• Value in streamlined and reliable processes

14. Tips to Lower P2P Costs
Map end to end Procure to Pay process
 Identify in flow risk/control areas
 Identify in flow time constraining transactional activity
Identify current throughput of your Accounts Payable
Department
 Determine Base Data
 Determine Cost Measures, Productivity& Process Measures
 Determine Quality Measures
Identify Key Performance Indicators and drive
annual improvements with monthly report outs

15. Example: Monthly
Base Data/ Productivity Measures
Measurement Definition Stage 1 Value Stage 4 Value
Total # Invoices 143,326 143,326
Processed Total invoice transaction count
Total Electronically (% of Electronic Invoices 0 96,053 ( 67% )
Total)
143,326 47,273 ( 33% )
Total Manually (%of Total) Manual invoice = invoice entered
by AP into Oracle
Labor cost / total # electronic
Labor Cost per Electronic invoices N/A $0.81
Invoice processed Labor cost = total salaries +
fringe (+ temp labor if applicable)
Labor cost /total # manual
Labor Cost per Manual invoices $36.79 2.47
Invoice processed Labor cost = total salaries +
fringe (+ temp labor if applicable)
Manual Invoices Manual invoices count/FTE
Processed per FTE count 1540 3251

16. Join up P2P : Automate for Success
After identifying efficiency of current throughput-
determine types of transactions with ability to move
from manual invoices to automated
 Purchase Order
 Non-Purchase Order
 Repeat Pay/ Auto Pay Payments
 Immediate Short Term Expenditures
Research/Network same lines of businesses and
successful use of automation

17. Questions
?