archer daniels midland: the journey from 100% paper to 100% digital

March 25th, 2015

Purchase to Pay Advisory Webcast

Archer Daniels MidlandThe Journey from 100% Paper to 100% Digital

Presented by:

2© 2015 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Agenda

Introductions and Housekeeping


Questions and Discussion

Webcast Feedback and CPE Request

Archer Daniels Midland

The Journey from 100% Paper to 100% Digital

March 25, 2015

Nick Shields

Operations Supervisor

Archer Daniels Midland Company

Vishal Patel

Senior Marketing Manager

Tradeshift

Transforming how businesses work together.

Tradeshift helps buyers and suppliers connect, transact and collaborate with

e-invoicing and procure-to-pay software.

Easy to use. Free for suppliers.

Tradeshift brings you intuitive, agile,

scalable software.

We strengthen buyer-supplier

relationships through the power of

our network, our proven supplier

onboarding methods, and our

scalable platform

& app ecosystem.

Connected Buyers & SuppliersGlobal business network collaborating in

real time on a scalable, secure cloud-based platform

Electronic invoicing, PO’s, ASNs, credit notes, etc

Data capture (paper, PDF, fax, email), onboarding tool

Matching, validation, approval, routing,

coding, direct communication

Supplier registration, onboarding, information

validation & management

Extension of capabilities with customer or third-party apps

Early payment solutions. Dynamic discounting & supply chain finance

Key Facts

CY13 net sales $90 B

Employees 31,000

Facilities 740+

Country sales 140+

Market cap ~$28 B*

NYSE: ADM

Premier Player in Global Agribusiness

Serving Vital Needs Throughout the World

54%

30%

14%

2%Ag Services

Oilseeds Processing

Corn Processing

Other

CY13 Segment Operating Profit$2.71 Billion

*As of Mar. 17, 2014

Drivers for Automating the AP Process

The North American Shared Services Center:

• Receives 2,600 PO invoices a day

• 8 people dedicated to error invoices & send out 66,000 invoice

exception notifications a year

• 32 Temporary Staff in AP process

• Manually key 950,000 invoices a year

• Manually scan 950,000 invoices a year

• Receive 37,000 duplicate invoices a year

• Receive 24,000 calls & 58,000 e-mails annually requesting payment

status

Objectives

Strategic / High-level

• Reduce Costs Per Transaction

• Improve Collaboration and Visibility for Suppliers

• Standardize Global Invoice Processing

Other

• Reduce Reliance on Temporary Staff

• Increase On Time Payment Rate and Discount Capture

• Improve Error Resolution Process

• Reduce Resources that Handle Paper (Scanning, Mail, etc.)

Procure-to-Pay Journey

1. September 2012 – Procurement Issued North American Procure to Pay Policy

2. January to June 2013 – Centralized Invoice Processing to North American

Shared Services Center from Processing Facilities (350 + locations)

3. July 2013 – Instructed suppliers to invoice directly to Shared Services

4. October 2013 – Sent out RFP to 7 eInvoicing Providers

5. May 2014 – Project Kickoff with Tradeshift

Why Tradeshift?

• Global presence & global compliance

• Modern and innovative technology

• Intuitive and very easy to use

• Ability to extend capabilities at any time in the future

• Many different invoicing options

• Free for suppliers

• Value creation for suppliers

“The Tradeshift platform will allow us to innovate and improve collaboration

and transaction efficiency across our global supplier network without

disrupting our existing infrastructure.”

Suzanne Leopoldi-Nichols

Director, ADM Shared Services Group

ADM Resources Needed

• IT and Business Unit Sponsor

• Project Manager

• 3 Subject Matter Experts in AP

• Business Analyst from IT

• 1-2 Programming Resources

• 2 Part Time Resources for Vendor Onboarding

• Procurement Resource

Project Timeline

Feb. 6

#5a

New Supplier

Registration

#1

PDF

Streaming

(2 Wks)

#5

Supplier Management#4 Collaborative Workflow

#3

CloudScan AP

(on hold)#2a

PO

(7 Wks)

#2c

Status

(5 Wks)

#2b

Inv/CN

(6 Wks)

We are here

May 23 Jul. 18 Aug. 29 Oct. 3 TBD TBDMay 12

#2 E-Document Exchange

#5b

Enhancements

TBD TBD

20152014

#4a

Users

(11 Wks)

#4b

Receipt

WF

(5 Wks)

#4c

PO WF

(TBD)

Dec. 19

#4d

NPO WF

(TBD)

TBD

• Complete Automation of Workflow

• Continue Onboarding Suppliers

• AP Cloudscan

• Global Roll Out

Future Steps

Supplier Onboarding

• Targeting 25,000 supplier base

o 250 ‘White Glove’ Suppliers (highest volume)

o E-mail and Direct Mail Campaign for Remainder

• Host Regular Supplier Webinars

• Mixed Reaction from Suppliers Depending on “Tech Abilities”

• Good Experience Working with the Network Growth Team

Lessons Learned

• Quality Purchase Orders

• Buyers Following Policies and Procedures

• Communication of Changes

• Taxes

• Vendor Onboarding

Benefits of Tradeshift (< 1 Year)

Metrics

• Improvement in Discount Capture Rate – 24%

• Improvement in On-Time Payment Rate – 30%

• Reduction in invoice processing time – 21.8 days

• Reduction of Keying and Scanning of invoices – 7.7%

• Reduction of Temporary Headcount – 6

Other

• Improve Visibility and Communication for Suppliers

• Eliminate Lost Invoices

• Reduce likelihood of rejected or returned invoices due to missing data

What’s Next?

• Continue Onboarding Suppliers

• Global Roll Out

• Supply Chain Financing

Questions?

Please use the chat box to submit your questions.

Agenda

Introductions and Housekeeping


Questions and Discussion

Webcast Feedback and CPE Request


Statement of Confidentiality and Usage Restrictions

This document contains trade secrets and information that is sensitive, proprietary, and confidential to The Hackett Group the disclosure of

which would provide a competitive advantage to others. As a result, the information contained herein, including, information relating to

The Hackett Group’s data, equipment, apparatus, programs, software, security keys, specifications, drawings, business informa tion, pricing,

tools, taxonomy, questionnaires, deliverables, including without limitation any benchmark reports, and the data and calculations contained

therein, may not be duplicated or otherwise distributed without The Hackett Group Inc.’s express written approval.

www.thehackettgroup.com

archer daniels midland: the journey from 100% paper to 100% digital

Business

po invoices

error invoices

duplicate invoices

scalable software

onboarding toolmatching

etcdata capture paper

prior written consent

hackett group