With sixteen billion B2B invoices processed in Europe annually, an estimated €260 billion could be saved across the region by adopting e-invoicing alone. But multinational companies are hugely complex businesses, spanning numerous locations across the globe. It isn’t uncommon for large corporations to have different processes in finance teams, particularly when it comes to processing invoices. So how can large enterprises manage such a daunting process?
Mondelēz, the $26 billion global net revenue snack giant, has a particularly valuable story on how they brought about the transformation of their finance function. Tungsten Network and sharedserviceslink hosted Raj Sachidananda, EU Accounts Payable Operations Lead at Mondelēz, on an interactive webinar to find out how the company did it.
In this article, we’ll review the findings Sachidananda shared with us, exploring the ways that Mondelēz successfully transformed its finance function to drive efficiencies that have benefited the company since 2011.
The Waterfall Methodology: How to improve shared services
Sachidananda began by sharing the ‘Waterfall Methodology’, a process of three critical steps which you must follow in order to move to a shared services model successfully:
- Migrate: Move select processes to a new platform
- Stabilise: Acclimatise staff and procedures over a period of time to ensure they become habit
- Transform: Advance capabilities by investing in increasing functionalities.
For Mondelēz, improving their shared services function meant moving some capacity s to an outsourced company in India, with the finance function beginning to transition their systems gradually. In the early stages, Mondelēz opted to move over just 20% of their functions, including RTR (Record to Reporting), STP (Straight-Through Processing) and O2C (Order to Cash).
According to Sachidananda: “Five years ago when we were doing this, we didn’t progress with any further migrations until we had stabilised the services we already outsourced.”
However, during the stabilisation phase of the project, Sachidananda was busy preparing for the next steps of the migration. By keeping a laser focus on documentation standards, Mondelēz was able to accelerate its journey in mid-2017, pushing ahead with the widespread rollout of e-invoicing once they had outsourced 91% of target processes.
How Modelez leveraged e-invoicing
The campaign to roll out e-invoicing across Mondelēz began in earnest. To ensure that each business function remained as efficient as possible during the transition to e-invoicing, Sachidananda set up small CoEs (Centres of Excellence). Each CoE was responsible for ensuring that new processes were thorough without being cumbersome, driving up efficiency by design.
The company initiated the CoE model in February 2017. Within two years, the company had standardised all e-invoicing processes, a result that was almost unthinkable for a corporation of Mondelēz’s size at the beginning of the project. Sachidananda credits the creation of CoEs with a 50% reduction in SOPs (Standard Operating Procedures).
But how did Mondelēz utilise their e-invoicing solution provider to take advantage of their dramatic increase in operational efficiency?
Immediate results with e-invoicing solution providers
After Sachidananda’s team launched a huge internal awareness campaign in Europe, usage of e-invoicing started at an impressive 35% across finance teams. Similar successes were repeated in other regions, with American penetration for e-invoice use starting at 50%.
E-invoicing solution providers like Tungsten Network also help drive efficiencies by proactively flagging invoices with incorrect information before they’re submitted – resulting in significant manual error reductions.. In 2019 Mondelēz recognised the benefit of investing in further e-invoicing functionality. By 2020, Sachidananda’s team was able to focus their efforts on analysing the top reasons for e-invoice failures, helping them continuously increase first-time approvals.
Assessing the results of e-invoicing solution providers
Reflecting on the success of the rollout, Sachidananda pointed out that the work is far from over. Going into 2020, Mondelēz was aiming to have 75% global penetration for e-invoicing, which would be an ambitious increase of 20% compared to the figures given at the close of 2019.
However, Mondelēz has come a long way since 2017. In 2020, the company reported that 92% of invoices were being paid on time, above the target Sachidananda had set in 2019. The shared services team covered four regions across sixty-five countries, with fifteen languages supported.
E-invoice and shared services transforms finance functions
Leveraging modern technology can help large multinationals achieve their financial goals in new and exciting ways. By applying a vigorous, methodical approach to finance transformation, Mondelēz rapidly made their invoicing more efficient despite the complexity of the business.
Companies of all sizes can achieve substantial savings through e-invoicing and shared services, provided they partner with effective companies with a history of success.
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