Nayara Energy Increases AP process efficiency by automating invoice processing through SAP Open Text Vendor Invoice Management
Nayara Energy is a new-age downstream company of international scale with a strong presence across the hydrocarbon value chain from refining to retail. In August 2017, the company was acquired by international investors, Rosneft and an investment consortium comprising of global commodity trading firm, Trafigura and UCP Investment Group. The company owns and operates India’s second-largest single-site refinery at Vadinar, Gujarat with a current capacity of 20MMTPA. The refinery is one of the world’s most modern and complex refineries with a complexity of 11.8, which is amongst the highest globally. The company has one of the fastest-growing pan-India fuel retail-network with over 5,900 fuel stations.
Nayara Energy’s key business objectives for Vendor Invoice automation project:
Post-acquisition, as a part of transition into the new organization, detailed exercise on the existing processes were carried out and opportunities around automation to improve the control and process efficiency were identified. A dedicated cross-functional team comprising of members from both IT and finance functions was formed.
As part of the transformation journey, Accounts Payable (AP) was identified as one of the key areas for digital transformation as it involved many manual touch points. The benefits of this process improvement are leveraged across the value chain (P2P – Procure to Pay) and extend the same to Nayara Energy’s ecosystem by way of enabling early payments and self-service
- To get the most out of working capital by maximizing Days Payable Outstanding (DPO) – without adding liquidity risk to the Company’s supply chain.
- To leverage benefits across the value chain P2P (Procure to Pay)
- Leveraging the physical and human assets to generate value out of the investment for shareholders.
Nayara envisioned to automate their Accounts Payable process to handle the significant volume of invoices processed, coupled with addressing some of their key process challenges including:
- Non availability of established uniform process for invoice capturing & processing: There was lack of uniformity in the process of invoice receipt, capturing, and processing, thereby making it difficult to track the status and lifecycle of invoices in a time bound manner. With no easy access to invoice information, connected processes such as forecasting of working capital planning were challenging.
- Manual efforts and efficiency loss – While there was no single point for the receipt of invoices from vendors, a majority of the time of the AP team was spent on tracking invoices through excel spreadsheets and processing them. This being a manual process, the team also had to follow up with respective stakeholders for their approvals in case of any penalty or LD (Liquidated Damages) being applicable on the vendors, thereby making it a cumbersome and time-consuming process.
- Manual Compliance Check – The existing SAP system was configured only for invoice booking post manual validation of invoice. The AP team had to carry out a three-way comparison for GST validation, PAN number validation etc. manually before processing the invoice. All these compliance related checks involved time and hence the impacting the overall TAT for invoice processing. Moreover, the chances of manual errors could lead to compliance risks.
- Maintaining vendor relations – The manual process had a huge impact on vendor relations considering keeping track of payments and redressal of vendor queries was a time consuming process.
- Challenges in generating accurate & timely MIS / reports – Tracking the effectiveness and performance of the AP team working on various manual processes for invoices and generating reports on the same was also a key challenge. With all data being tracked manually, the accuracy of reports was also being questioned many times.
Partnering with Avaali to implement a solution for automating the Accounts Payable process
Avaali was chosen as the implementation partner for Open Text VIM at Nayara Energy. Post-award of the contract the transformation team shared a Business Requirement Document (BRD) with Avaali to give high-level details of the process. Avaali team initiated the implementation of Open Text VIM by creating a detailed business blueprint covering all the invoice and payment approval scenarios under the implementation scope. Detailed user training helped in easy transition and bringing about successful change management at Nayara.
- Process Uniformity for Invoice Capturing – The implementation of SAP VIM brought a major transformation for Nayara Energy. The same was followed up with a change management initiative to not only improve existing processes but also to exclude redundant activities. Establishing the Central Mail Room (CMR) was one such major change, which became a focal point for the receipt of all vendor invoices to ensure effective invoice tracking from the very first day of the receipt. Post receipt, these invoices were scanned, digitized, and stored at a centralized storage (SAP xECM – Extended Content Management). This helped us do away with the physical movement of the Vendor invoices across the organization for acknowledgment/approval from the users.
- Improved Process Efficiency – The OCR option through SAP VIM helped in the elimination of manual data entry for various data inputs during vendor invoice creation. It also helped in identifying the data related errors and eliminating of duplicate invoices through applied business rules. With established and robust workflow processes, there was a reduction in the invoice processing TAT. Moreover, system-driven business rules, compliance checks were automated and exception handling was better managed, thereby improving the overall process and control efficiency.
- Reduction in Turnaround time (TAT) – Implementation of SAP VIM helped achieve higher process efficiency leading to faster invoice processing with reduced errors and effective tracking. Rule-based processing and handling of escalations through workflows helped in the accurate and correct processing of invoices. The team processing the invoices were focused on managing the exceptions arising out of the business rule validations, rather than keying in the details for creating invoices in the system.
- Superior vendor/user experience – System-based auto checks and rule-based processing helped in prompt and accurate processing of vendor invoices. It also helped in prioritizing vendor payments on time. Any issues with invoices were identified at the early stages to avoid any loss of time. Real-time information on received invoices helped improve transparency with the vendors. This robust mechanism helped enhance vendor and user experience and also established a trust for brand Nayara Energy.
- Real-time access to reports – Implementation of SAP VIM helped track invoices on a real-time basis. Since invoices are captured in the system right from day one, it is very easy to extract data from the system on a real-time basis.
Anup Vikal, Chief Financial Officer, Nayara Energy Limited
“At Nayara Energy, we are accelerating towards strategic growth. To enable the same, we have been unlocking several finance transformation initiatives that are truly changing the way work is done and is bringing about value across the enterprise. One such initiative is the implementation of SAP VIM and through this implementation, we are ensuring process excellence along with improved productivity. True value of the implementation was realized during the COVID-19 lockdown period as the tool allowed greater flexibility and remote accessibility. The platform by ensuring our vendor ecosystem continues to trust Nayara Energy as we facilitated processes without compromising on timelines, with firm view on compliance and controls.”
Parthasarathy S, Chief Accounting & Transformation Officer, Nayara Energy Limited
“At Nayara Energy, we made a definitive move from fragmented, laborious and time consuming accounts payable process to implement SAP VIM system. The platform has not only helped us improve efficiencies, enhanced productivity, simplified operations and most importantly, helped in eliminating bottlenecks. The multi-level approval approach that SAP VIM’s platform brings ensures a more control on systems and significantly improves the cycle time. The smooth and successful implementation of the platform has resulted in achieving timely closure of books and appropriate governance and records management.”
Oil, Gas & Coal
Nayara Energy Limited
Avaali Solutions Pvt. Ltd.
- OpenText™ Vendor Invoice Management for SAP® Solutions
- OpenText™ Invoice Capture Centre
- OpenText™ Archiving for SAP® Solutions
- OpenText™ Document Access for SAP® Solutions
- OpenText Approval Portal
Avaali Solutions is a company that enables large enterprises to bring down the cost of executing business processes via Digital. Avaali has delivered success for numerous large enterprises globally in the form of process agility, timely visibility and governance to processes by leveraging emerging technologies. Avaali’s advisory, consulting and implementation services has enabled enterprises to transform their business processes and engage better with their stakeholders including customers, employees, partners, vendors and shareholders.
Nayara Energy is a new-age downstream company of international scale with a strong presence across the hydrocarbon value chain from refining to retail. In August 2017, the company was acquired by international investors, Rosneft and an investment consortium comprising of global commodity trading firm, Trafigura and UCP Investment Group. The company owns and operates India’s second-largest single-site refinery at Vadinar, Gujarat with a current capacity of 20MMTPA. The refinery is one of the world’s most modern and complex refineries with a complexity of 11.8, which is amongst the highest globally. The company has one of the fastest growing pan-India fuel retail-network with over 5,900 outlets.
To learn more about Nayara Energy visit: https://www.nayaraenergy.com/