HoffmannLa Roche Inc' Panel Discussion

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Hoffmann-La Roche Inc.Panel Discussion

• Ariba Invoicing
• Joanne Marchesani
• Accounts Payable Supervisor
• February, 2006

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Hoffmann-La Roche Inc.

• Global Pharmaceutical company
• US Headquarters in Nutley, NJ
• Ariba implementation is a component of Global
  Supplier Relationship Management

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Hoffmann-La Roche Inc.
Project History

• Ariba project started 1/2003
• Pilot group live 11/2003 in US, full
  implementation in Canada
• Full implementation in US 4/2004
• Global implementation complete by 11/2005
• Moderate customization

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Hoffmann-La Roche Inc.
Global Statistics 2005
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Hoffmann-La Roche Inc.
Invoicing Statistics

• January-December 2005
• Total number of invoices 162,150
• Electronic/automated invoices 111,322
• Total Ariba electronic invoices 25,213
• Total Ariba payment requests 4,069
• Total batch invoices (automated, non-Ariba)
  60,458
• P-card transactions 21,582
• Manual invoices (Ariba SAP) 50,828

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Hoffmann-La Roche Inc.
Ariba statistics

• 2005 (US only)
• Total number of Ariba Purchase Orders 31,480
• Total number of Ariba invoices 56,362
• Electronic Ariba invoices 25,213
• Manual Ariba invoices 31,149
• Ariba payment requests 4,069
• Preferred vendor status in 2006 will require
  registration on the Ariba Supplier Network and
  electronic invoicing

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Hoffmann-La Roche Inc.
Invoicing goals

• Eliminate paper invoice processing
• Electronic workflow
• Visibility to status of invoice
• Require electronic invoicing for all preferred
  suppliers
• EDI
• CXML
• PO Flip
• ERS (not yet implemented)
• Excel upload tool (not yet implemented)
• Reduce reconciliation to less than 5

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Hoffmann-La Roche Inc.
Benefits of E-invoicing for Accounts Payable

• Automated workflow for approval/reconciliation
  reduces payment cycle
• Automated workflow adds visibility to status
• Increased control
• Increase in A/P productivity
• Reduction in manual input

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Hoffmann-La Roche Inc.
Benefits of E-invoicing for Accounts Payable

• Reduction in manual data entry/follow-ups
• Staff redeployed to analytical work
• Value add to company
• Compliance to purchase order pricing

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Hoffmann-La Roche Inc.
Invoicing challenges

• Financial integration with SAP
• Change orders
• Accepting/allowing receipt exceptions
• Frequent data problems with ASN electronic
  invoices
• Invoice exception tolerance behavior
• Need to revisit original design/customization

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Hoffmann-La Roche Inc.
Invoicing challenges

• Synchronization of data between Ariba and SAP
• Reconciliation resolution
• Training of users
• Change Management
• Reporting

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Hoffmann-La Roche Inc.
Where are we today??

• Resolved the majority of the financial
  integration issues
• Invoices all post immediately to SAP (assets are
  exception)
• Accruals not required
• Revising procurement strategy to maximize use of
  Ariba ASN

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Hoffmann-La Roche Inc.
Where are we today??

• Increased compliance to PO requirement less
  POATF
• Invoice reconciliations under control
• Project underway to onboard all preferred
  suppliers
• Project in 2006 to handle the non-PO spend in
  Ariba

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