Re-design of the incoming invoice approval

A company like METRO receives thousands of invoices from suppliers every day - invoices that must first be checked before the company can allocate them to an account and post them. Are the name and address of the supplier correct? Is the stated delivery quantity correct, as well as the listed tax rate or invoice number? Companies usually verify this and other information using software that can automatically verify invoices.

METRO uses an application for incoming invoice verification that it has developed itself and that runs on a separate instance: the MMS-IC (Metro Merchandise System - Invoice Control). With this application, the company carries out invoice verification at national and international level. METRO does not use SAP for store merchandise management. Therefore, standard SAP invoice verification cannot be processed with reference to the purchase order.

MMS-IC is an application in the SAP R/3 environment. Purchase orders, goods receipts and invoices from a wide variety of merchandise management systems are prepared, checked, assigned and approved for invoice verification via several interfaces.

In the case of MMS-IC, however, very few elements from the standard SAP system are used - for example, user maintenance, authorization checks, SAP Workbench and vendor master record. Only the final posting of invoices is prepared and distributed for posting in SAP. In the MMS-IC, all relevant data is transferred via the interfaces to the corresponding FI/CO systems of the national subsidiaries, both SAP and non-SAP systems, for further posting.

Hardly any manual reworking required

METRO's proprietary development has grown historically and is complex, but offers several advantages for the company: Thanks to the metro-specific logic in the MMS-IC, for example, it is hardly necessary to manually post-process invoices. In Germany, for example, well over 90 percent of all invoices are already automatically reconciled. In addition, invoice verification using MMS-IC results in a high monetary benefit for the company.

But the system also has disadvantages: Due to the complexity of the application, METRO can only integrate new countries into MMS-IC with difficulty, and the error rate is high. Many adaptations also require considerable expert knowledge, unlike in a standard system, for example. The complexity of the system - mainly due to old and no longer needed codes or unnecessary content - slows down and also makes many processes more difficult.

METRO Digital takes care of the IT services and solutions at METRO. METRO Digital is the Tech-Unit of METRO and supports all METRO countries worldwide.

Around 900 employees in Germany and Romania offer a wide range of services. This includes consulting on business processes, development, implementation and support of business solutions, operation of computer centres and networks as well as support for IT equipment.

At the beginning of the project with GAMBIT Consulting, the question was therefore whether it makes sense to stick to the in-house development at all - or whether the change to the SAP standard might not be the better solution. METRO Digital had the overall objective to accelerate the rollout capability of core processes when integrating new countries. In addition, it wanted to further improve invoice verification processes and reduce dependence on expert knowledge.

In several workshops METRO Digital therefore first presented the current processes in the MMS-IC to the experts of GAMBIT, including all relevant interfaces. Together the teams analyzed the actual situation. In the following, the role of GAMBIT consisted in evaluating the metro-specific process in the MMS-IC, showing alternatives and elaborating a recommendation.

During the analysis, GAMBIT also considered the implementation variant for the processing of invoice control in the SAP standard SAP VIM (SAP Vendor Invoice Management) with all process-related, time-related and cost-related consequences. The strategic goal of the project was to create a stable, transparent and secure system at the end of the project, which also meets the requirements of a SAP S/4HANA conversion.

The result of the GAMBIT analysis was that the SAP standard would not bring about any improvement in the case of METRO and some processes would even be made more difficult. Moreover, SAP MM (Purchasing & Inventory Management) would have to be introduced for 17 national companies - an enormous cost factor.

Advantages are maintained

The only reasonable alternative was therefore to keep the in-house development and the far more cost-effective re-design and optimization of the application - a solution which was then also implemented by GAMBIT after the decision of METRO Digital.

The implementation included the system conversion from SAP R/3 to SAP S/4HANA, the introduction of a one-client concept with an adaptation of the data model (all countries in one client instead of 1 client per country) and the redesign of the coding of MMS-IC. The advantages of the in-house development could be maintained in this way.

In the actual implementation, the analysis was followed - in several waves - by the concept phase, then the SAP S/4HANA conversion, then the implementation of the one-client concept and finally the redesign of the Supplier Invoice Suite (SIS). Among other things, old and no longer needed coding was removed and the "hard" coding of the program logic was replaced by variable customizing tables.

The goals of the project were achieved "in time" and "in budget": In close cooperation with the METRO Digital team, the re-design and the SAP S/4HANA conversion created the basis for achieving an improvement in the integration of new countries into the MMS-IC. In addition, the automatic allocation of invoices as well as the monetary benefit of invoice control could be maintained with the chosen solution.

The application now meets the requirements of a modern IT system: For example, the system is now much more transparent, less complex and runs more consistently than before. The work has also made it possible to ensure that the application is also future-proof in the long term and easier to maintain.

In October 2019, the application went live as a pilot project in Russia and other countries are now following at three-month intervals. "The fact that the project went so well on the whole is especially due to our client - the competent team at METRO Digital. Because such a project can only be mastered together and in close and trusting cooperation with the customer", said Toni Muñoz, Project Manager and Senior Executive Consultant at GAMBIT after the go-live.