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El Paso CorporationEl Paso, which owns North America’s largest natural gas pipeline system and is a top 10 domestic exploration and production company, was processing more than 200,000 invoices per year – every one received on paper. Each required handling and sorting by mailroom staff, manual distribution to the appropriate coders and approvers and manual data entry into the company’s PeopleSoft accounts payable system. This was far too expensive and time consuming.

SummaryManual Was No Longer an OptionGrowth is good. But on its way to becoming one of the top 10 domestic independent natural gas producers, El Paso Corporation also outgrew its manual invoicing processes – and it was paying a heavy price. This case study outlines how the company came to terms with its invoicing challenges, its search for a partner to quickly implement an efficient eInvoicing solution and the benefits it is now enjoying because of its successful transition to eInvoicing.

Issues/challengesToo much time, too many resources consumed

The average time to process an invoice exceeded typical •payment terms (i.e. 30 days).

Since the vast majority of El Paso’s spend is services based, •there were no POs for these invoices – approvers didn’t have time to check pricing for accuracy.

To investigate and implement improvements, El Paso’s •operations and procurement staff needed to analyze spend. But that wasn’t possible with paper invoices because none of the line item detail was being captured in a system where analysis could be performed.

Too often, paper invoices were being lost, which created •re-work and, worse, opportunity for duplicate payments.

Invoice questions from suppliers and internal users were •difficult to answer, since there was no way to track the invoices until they were entered into PeopleSoft – and on average, this took more than 40 days after invoice receipt in the mailroom.

Case Study:Successfully Deploying an eInvoice Solution

Time for a change – the sooner the betterWith El Paso’s past and projected growth, the company knew it could no longer afford its manual invoicing processes. It had to automate. The first step was to determine what it wanted to accomplish. Then came the search for a partner that could guide it through the electronic invoicing (eInvoicing) process.

Business objectives of eInvoicing project: faster, easier, less expensive

El Paso’s business needs weren’t difficult to identify, as it had been feeling the pain of manual invoicing for too long. It wanted to:

Make it easier for approvers (mostly engineers – highly paid •and scarce resources) to handle invoice processing, so they can devote more time to their primary jobs.

Pay suppliers on time, per agreement terms. •

Eliminate supplier carrying costs for late payments. •

Capture spend information to enable strategic sourcing •initiatives and better contract negotiations.

Find and capture the early payment discounts that were being •lost due to long processing times.

Gain visibility into the entire invoicing process to enable •better management and improvements.

Provide better service (self-service) to suppliers and internal •staff regarding invoice status.

The ADP logo is a registered trademark of ADP, Inc. ADP® Invoice is a trademark of ADP, Inc. and/or ADP P2P Canada, Inc. All other trademarks and service marks are the property of their respective owners. All rights reserved. ©2010 ADP, Inc.

Selection ProcessSearching for expertise and ability to executeEl Paso conducted a thorough investigation of a number of eInvoicing providers, which led to the selection of the ADP Procure-toPay™ platform. Web-based and proven in thousands of buyer and supplier deployments, handling millions of invoices annually, the ADP Procure-to-Pay platform is SaaS (Software-as-a-Service) based. Buyers and suppliers utilize ADP® Invoice (ADP’s eInvoicing solution) to electronically transact with one another. This collaborative platform provides an online environment for sending, receiving, coding, and adjudicating purchase orders, receipts and invoices. In addition, the system provides automated price reconciliation against contracts, early payment discount management, 3- and 4-way matching, and robust spend capture and analysis.

Project Scope and TimelineHastened thanks to SaaSImmediately following the selection process, the El Paso and ADP project teams met to determine the project plan and timeline, taking into account El Paso’s business, project management and resource requirements. The teams worked closely to configure the ADP Invoice solution to meet El Paso’s specific requirements for:

Invoice coding validation. •

Approval workflow. •

Contract pricing reconciliation. •

Data transfer of approved invoices to PeopleSoft. •

Because ADP’s platform is SaaS, it only requires a web-browser and an Internet connection for El Paso and supplier users to access. Therefore, no hardware or software installations were necessary behind El Paso’s firewall.

Better Than Expected ResultsFaster, less expensive, more value uncoveredThe project was delivered on time and under budget, and El Paso now is benefiting from:

The ability to track invoice status from submission •through payment.

Elimination of the need for paper management, scanning •and shipping of invoices to various office locations (It has many dispersed field offices where approvers reside).

The ability to capture detailed line item data for •spend analysis.

Invoice processing time that’s been cut in half. •

A newfound ability to pay suppliers on time. •

Increased cash flow and improved bottom line savings, •thanks to the ability to capture early payment discounts that were previously being missed.

Improvements in process efficiencies that come from •being able to capture and analyze metrics to drive further continuous improvement.

Keys to Project SuccessInternal best practices & finding the right eInvoicing partnerEl Paso’s project manager, Sherry Lozier, identified the following key success factors for the project:

End users were involved through the selection and •implementation process, which ensured buy-in when implementation was rolled out.

The El Paso project team communicated frequently •with all stakeholders.

The executive team gave the project its full sponsorship •and support.

The project team had a clear vision, objective and statement •of requirements.

The teams spent sufficient time and effort in the planning •phases, which helped to set realistic expectation for scope and delivery.

About El Paso CorporationEl Paso Corporation provides natural gas and related energy products in a safe, efficient, dependable manner. The company owns North America’s largest natural gas pipeline system and is one of North America’s largest independent natural gas producers. For more information, visit www.elpaso.com.