CASE STUDY: SAP Business Workflow

A software services firm, with its subsidiaries across the globe, faced with a challenge of making the payments on-time and accurately while adhering to the corporate policy on approval procedures...

Background...accounts payable department processes about 200 - 300 incoming invoices while about 1/3rd of them require an additional approval from the manager, the director, or the vice-president etc., before the payment is processed. And this is a most complex process and requires the system to adhere to the corporate policy and procedures on payment process...

ConceptSoftware Services firm having implemented Sales

and Distribution, Finance, Materials Management… modules, has decided to implement SAP Business Workflow component for the invoice processing. A 200 – 300 invoices a day, and verifying them up for payment processing has become a huge task and consuming lots of resources and time, yet resulting in mistakes.

With an idea to streamline the existing business process of invoice processing and automate the process to eliminate the errors and ensure smooth and efficient invoice verification and payment process.

01. With centralized payment center in North America, 200 – 300 invoices to be processed a day and subsequently process the payments too.

02. A mandatory requirement of invoice verification process to

with subsequent payment release function to process the payments. This exercise helped the organization to establish the business process for the invoice verification process and payment release process and spell out the necessary organizational “with Business Workflow, SAP

has presented a comprehensive object-oriented vision for a pro-duction-class workflow system”

Gartner Group

Process Challenge Invoice verification process is a very complex and iterative process in the company. It involved the following

release the invoice from the block and this involved verification and cross verification from the business units concerned and forward the invoices up for final approval to make the payment.

03. Dynamic role resolution is required to determine the next approving manager automatically based on the organization, business user, function, purchasing organization, and hierarchy.

Process SolutionA prototype of SAP Business Workflow was built using the business objects for the invoice verification process

hierarchical requirements, relevant business users, and business functions involved. relevant business users, and business functions involved.

Process DefinitionBased on the prototype a full-fledged requirement was defined and the necessary process needs....

01. All invoices are subject to invoice verification process and subsequent payment release function

02. The payments for all the invoices will be carried

03. The payment for a particular invoice will be processed only when the invoice is verified and approved by the responsible business unit function.

04. With no integration to HR module, setting up of Organizational Hierarchy was a challenge. This was overcome by a creative design of the business objects and application programming to embed the logic of Organizational Plan to carry out the role resolution function for invoice verification process and payment release function.

05. Role resolution function was based on complex algorithm that not only checked for the legitimate approval but also the next approving authority in the following cases, if a. an approving business user is on vacation b. a replacement for the business user is not started c. a business user has not attended the workflow item due various contingent reasons

Process BenefitsComplete re-engineering of the existing business pro-cess of invoice verification and subsequent payment release function. The time spent on reviewing, for-warding and approving invoices for payment release is expected to cut short by 80%. More efficient and automatic process means more efficient staff hours to pool in the resources on value added activities.