Success story
Pioneer Foods
Industry• Consumer Goods: Food and Beverages

Solution• OpenText™ Business Centerfor SAP® Solutions

Partner Support• JHN Solutions

Pioneer Foods tackles supplierreconciliation challenges with OpenText

OpenText Business Center for SAP® Solutions helps
streamline processes, reduces errors and lowers costs
TMResults
Increased ability to take early
settlement discounts and staff
costs lowered
At least 50 percent reduction inreconciliation time
Instant access to GR/IR reports,saving many hours
Able to handle increased
volumes with a smaller team“Without OpenText Business Center for SAP Solutions, wewould not have been able to reach the levels of automationthat we have achieved with our reconciliation process to date.
We are now saving at least 50 percent of the time it used totake for manual reconciliations, thanks to the solution.”David Nel

Accounts Payable Manager
Pioneer Foods

Pioneer Foods tackles supplier reconciliation challenges with OpenText

Pioneer Foods, established in 1997, is one of the largest South African
producers and distributors of a range of branded food and beverage
products. Operating mainly across South Africa, it provides wholesale,retail and informal trade customers with products of a consistently
high standard. Pioneer Foods also exports to more than 60 countries
across the globe. It operates a number of production facilities
producing a range of products that includes some of the mostrecognizable and best-loved brand names in South Africa, including:Weet-Bix, Liqui-Fruit, Ceres, Sasko, Safari, Spekko and White Star.
Having grown substantially, Pioneer’s finance functions, including
accounts payable, had become highly decentralized. Pioneer took thedecision to centralize certain financial operations into a Shared ServiceCenter (SSC) in Cape Town, South Africa. Among the objectives of thismove was to drive process consistency, improve efficiency and reduce
costs. Each year, Pioneer receives around 400,000 invoices, from 6,000
domestic suppliers. A team of around 60 personnel was responsible forreconciling supplier statements in order to pass invoices for payment.
However, the manual nature of the reconciliation, involving spreadsheets and checklists, meant the staff were unable to keep pace withthe workload.
David Nel, Accounts Payable manager at Pioneer Foods explained theimpact on the business. “When we set up the SSC, staff came fromvarious locations and divisions, each with their own way of doingthings. The reconciliation sheets consisted of various Microsoft ®
Excel ® formats across the different divisions. The manual processes
meant it was impossible to reconcile the thousands of statements wereceive each month in a timely manner. We needed to automate andeliminate human error to take advantage of settlement discounts with
our suppliers. We were potentially missing out on these discounts as
manual reconciliations took longer to complete and review.”

Automation the key to success

Pioneer uses SAP® as its core financial system, and so began to look fora solution that could automate as much of the supplier statement reconciliation process as possible. With many of Pioneer’s suppliers only
able to provide statements in PDF format or on paper, Pioneer chose
OpenText™ Business Center for SAP® Solutions to handle the automatic
extraction and capture of the statement content using optical character
recognition (OCR). Further processing is then carried out in SAP after
the extracted data has been uploaded, thanks to the tight integration
between OpenText and SAP.
“For the supplier statement reconciliation process, we looked at anumber of options and selected OpenText partner JHN Solutions’Supplier Statement Reconciliation (SSR),” says Nel, explaining that thefunctionality of Business Center for SAP Solutions and JHN SSR clearly
meets Pioneer’s needs, but that the company also wanted a service
provider with a local presence in Cape Town. “JHN, which is based here,
has numerous reference customers in the area.” JHN’s implementation timeframe was also much shorter than other providers, just threemonths, with the nearest competitor planning forat least six months.
Once OpenText has captured and extracted the statement data, SSR
from JHN, a SAP-certified ABAP add-on application, automates the reconciliation between the statements and vendor accounts.
“Without Business Center for SAP Solutions, we would not have beenable to reach the levels of automation that we have achieved with
our reconciliation process to date. OpenText reads the contents ofstatements, whether they were received by email in PDF format orwere scanned, again using OpenText.

“I can now produce a GR/
IR report at the touch ofa button, as many times aday as needed, saving me
many hours every time.”
David Nel

Accounts Payable Manager
Pioneer Foods

Pioneer Foods tackles supplier reconciliation challenges with OpenText“We are now saving at least 50 percent of the time it took for manual
reconciliations, thanks to the solution,” said Nel.

Greater transparency, improved reporting
and audit compliance

In order to match supplier statements to transactions in the vendor
accounts, OpenText extracts a unique supplier identifier and other key
metadata from the statement header. The solution extracts the line
items of the statement, which it then matches to transactions in the SAP
vendor account. Exception handling takes care of any remaining items
not matched automatically.

With fewer errors and greater accuracy, reporting is now more reliable.
In the past, it would take three to four hours to produce a Goods
Receipt/Invoice Receipt (GR/IR) report, and it would lack detail.

The Pioneer SSC has a service level agreement (SLA) with the business.
The SSC works to pay suppliers on time, and should it choose to do so,pay them early. By ensuring statements are reconciled within the termsof the SLA, the business can now take greater advantage of early
settlement discounts.

The OpenText and JHN solutions combine to provide a range of newcapabilities that were just not possible in the past. A supplier reconciliation report can be exported to help resolve queries, and can easily beemailed to a supplier. The solution is flexible, allowing modifications tothe reconciliation sheet, such as adding supplier bank account details
and payment terms. This helps with checking if master data is accurate
and up to date.

Ability to claim discounts and reduce costs“The ability to settle with suppliers early, if we choose, allows us toclaim discounts we would previously have missed out on. Not only
does this present a cost saving to the business, it can be replicatedso is not just a one-off saving,” said Nel.
With the accounts payable team spending less time on reconciliations,they are able to handle higher value tasks and more queries. As transaction volumes increase, the team has also been able to take on extra work.
“As well as taking on extra workload, through natural attrition, wehave reduced headcount by seven full-time positions. Adding thisrecurring cost saving to the discounts the business can now claim,
the solution is clearly providing a return on investment. We will
perform a formal measurement at some point, but we’re confident
that we’re saving money, year on year,” said Nel.

Nel says that since the data is live, the report is completely up to dateand contains greater detail than the old manual reports. “I can now
produce a GR/IR report at the touch of a button, as many times a
day as needed, saving me many hours every time.”“We are now able to provide auditors with a system-generated audit
trail on who carried out a reconciliation and who approved it. Our
auditors have welcomed this greater transparency and see it as animprovement on the previous manual processes,” said Nel.
Pioneer has already identified other opportunities that could benefit
from Business Center for SAP Solutions. Any new accounts payabledepartment coming into the SSC will immediately go onto the newsolution, too.

“The ability to settlewith suppliers early, if
we choose, allows us toclaim discounts we would
previously have missedout on. Not only does thispresent a cost saving tothe business, it can be
replicated so is not justa one-off saving.”
David Nel

Accounts Payable Manager
Pioneer Foods

Pioneer Foods tackles supplier reconciliation challenges with OpenText“Together, the OpenText and JHN solutions have become an importantpart of accounts payable processing,” said Nel. “Having a local implementation partner in JHN has been a huge and important part of thatsuccess and we look forward to continuing to work together.”

About JHN SolutionsJHN Solutions is a SAP software solution and technology partner and
an OpenText technology partner. It specializes in SAP Financials andassists customers to optimize their business processes by automating
critical, often time-consuming tasks.
jhnsolutions.co.za

About OpenText

OpenText, The Information Company,
enables organizations to gain insight
through market leading information
management solutions, on-premises orin the cloud. For more information aboutOpenText (NASDAQ: OTEX, TSX: OTEX)
visit opentext.com.
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