SAP Capture Solutions: The First Step in Digital Transformation

Today, economic conditions are motivating corporations to embrace digital transformation to increase the speed, accuracy, and immediate visibility of their business processes. The digital journey strategy is based on advanced technology and process optimization. The first step in the digital journey is essential for transforming manual data capture to digital capture and ingestion in an SAP system. Capturing data from nonelectronic channels for use in SAP system business processing presents significant challenges. These challenges include, but are not limited to excessive processing cost, lost documentation, bad decisions based on inaccurate and irrelevant data, lack of compliance, and limited visibility of process and supporting documentation.

Read this live Q&A transcript to get answers from SAP and OpenText experts to get answers to your questions on how to craft a digital strategy for acquisition of data delivered through nonelectronic channels. They will share tips and best practices for how your capture strategy will promote efficiency, lower cost, and improve your return on investment in SAP S/4HANA. Here is a sample of some questions these experts are prepared to answer:

• Why is capture so important to an SAP-centric digital strategy
• How does a capture solution work with email attachments?
• What level of document recognition can be expected from a capture solution?
• How does capture differ from OCR
• Since capture is still a mission-critical business enabler, what are the significant trends going forward?
• How can machine learning technologies be used for capture solutions?

Matthew Shea: I am joined by experts from SAP and OpenText who will answer your questions on how to craft a digital strategy for acquisition of data delivered through nonelectronic channels.

I’d like to start off by welcoming Sheila McCarthy, Director of Solution Management, Enterprise Information Management, and Middleware at SAP, and  Tom Walker, OpenText Senior Program Manager in the SAP Finance Center of Excellence with primary responsibility for SAP Invoice Management and Digital Content Processing.

Sheila McCarthy: Hello, this is Sheila McCarthy. I am a director in SAP’s Go-To-Market organization for our Enterprise Information Management suite of solutions. Included in that portfolio are our content management solutions by our strategic partner, OpenText.

Tom Walker (OpenText): Tom Walker here. Thanks for joining us. We look forward to the session.

Matthew Shea: Sheila, could you tell us a little bit about why capture is so important to an SAP-centric digital strategy?

Sheila McCarthy: OpenText is SAP’s number-one Solution Extension (Solex partner), providing SAP with over a dozen solutions for content management to enable digital transformation. SAP has only about 30 Solex partners, making it a very exclusive partnership. A Solex partnership is a very strategic partnership that includes co-development and co-support of our joint solutions.

Capture is a critical component for companies to be successful in their digital transformations. Manual handling of unstructured inputs, including paper, is very labor intensive and expensive. Tight integration of documents with the SAP system is critical as it provides context to SAP transactions.

Tom Walker (OpenText): Today, joining Sheila and me, we have Matthias Niessen, Gisela Hammann, and Vladimir Shakhov from our Product and Program Management teams located in Europe, the Middle East, and Africa (EMEA) to assist with more in-depth technical questions.

We will now answer your questions. We are looking forward to many questions, so please join in.

Comment From Jahil: How does a capture solution work with email attachments?

Tom Walker (OpenText): Attachments are automatically extracted from the email. As with scanned images, the image from the email is stored and passed to an optical character recognition (OCR) component to extract the required information.

Comment From Joel: What level of document recognition can be expected from a capture solution?

Tom Walker (OpenText): Great question! Very often I’m asked this more generic question: What level of recognition can be expected? When you are working in a business process, the ability to capture all required information at the document level determines success in the process. As you would expect, the document capture recognition is subject to many variables, but for a “quality” document, the typical recognition would be between 70% and 90%. For documents not fully recognized with the first pass, machine learning is used to increase recognition as the documents are received the next time.

Comment From Ben: How does capture differ from OCR?

Tom Walker (OpenText): This is a question a lot of companies we talk with are asking. To help with answering this question, we will be releasing a white paper written by Harvey Spencer, President of Harvey Spencer Associates Inc., titled “Effective Capture is the First Step in Digital Transformation.” Harvey is an analyst who follows the capture space. He states that “depending on the application and country, 80% or more of external communications is still paper based. With an average manual data entry cost of 63 cents, the cost is enormous.”

SAP S/4HANA provides corporations with tremendous potential to digitize their business processing, but if the first step in the business process is manual evaluation of information to be entered followed by manual data entry into the SAP system, then speed and accuracy of the process are diminished.

Comment From Anthony: Since capture is still a mission-critical business enabler, what are the significant trends going forward?

Vladimir Shakhov: Thank you for this question. There are actually several trends: capturing and recognition of voice and capturing and recognition of images.

Comment From Oleksandr: How can machine learning technologies be used for capture solutions?

Gisela Hammann: Machine learning learns from user feedback. The user does his or her daily work and captures information (for example, invoice data or order data) in the SAP user interface (for example, the SAP Fiori Manage Supplier Invoice app). From what the user captured, the capture system learns to capture the data touchless at the next pass of a document of the same type (for example, an invoice from the same vendor or from the same customer). The capture system adapts perfectly to the business scenario and increases the automation rate within a short time.

Comment From Theo: In an SAP system how can goods receipt entry be improved to help eliminate quantity variances in three-way match invoicing?

Tom Walker (OpenText): I have actually seen some companies that only do purchases without purchase orders (POs), but the trend is using POs, so I’ll offer comments on the PO process.

Goods receipt is a significant event in many companies. In many companies the person doing the goods receipt entry into an SAP system has the primary job of doing the physical receipt of goods, so the data entry is a task put off until the last minute. Delivery notes are lost and often entered in error.

These errors can impact payment of invoices, vendor relationships, inventory levels, cost of goods sold, financial statements, production schedules, or order points. Using a capture solution to automate the goods receipt process ensures accuracy and speed. A capture solution such as the one provided by OpenText and SAP will allow receiving to focus on receiving and less on paper work.

Comment From Sean: How can capture recognition be improved?

Gisela Hammann: Capture recognition can be improved by improving printing and scanning quality. Beyond that machine learning can improve recognition results by learning from data the users are entering.

Tom Walker (OpenText): The addition of common sense is an improvement. Ask those who send you documents to send them in a format that improves machine recognition, such as one size of paper. Do not fold paper. Do not staple. Use only white paper with black ink. Do not use paper with a date stamp on top of critical information. Finally, do not send a document with rings on the paper where someone set a cup on top of the document.

Comment From Allen: In an SAP system how is sales order entry improved with capture solutions?

Vladimir Shakhov: Usually, capturing a sales order is a process that requires automatic data entry and is prone to errors. If you are slow or type in the wrong data, you will lose the customer. With capturing and processing solutions, you can automate this process.

Comment From Rainer: Do SAP customers have a choice for choosing a capture vendor if they prefer a best-of-breed solution?

Sheila McCarthy: Thanks for your question, Rainer. While customers always have a choice, SAP strongly recommends OpenText solutions given our long, successful partnership and tight integration with SAP solutions. We have many joint customers who have seen significant value from implementing capture from OpenText with their SAP systems.

Comment From Michael: Which business process will benefit significantly after an organization moves to digital capture solutions?

Gisela Hammann: Digital capture solutions are providing benefits for all document-based business processes, such as sales order entry, invoice processing, delivery notes processing, and remittance advice processing. It’s crucial to enhance speed and correctness of data entry for speeding up the process.

Comment From Mark: How is SAP Fiori used with digital capture solutions?

Vladimir Shakhov: It is used at the front end, which is fully supported by OpenText capturing solutions.

Comment From Sam: Why is a capture solution required if we are moving toward electronic acquisition of information?

Gisela Hammann: There is no question that the digital evolution is promoting the growing use of electronic information exchange. However, much external communication is still paper based. (Refer back to the quotes from Harvey Spencer’s white paper in Tom’s post earlier in this session.)

Comment From Juraj Fetko: You estimate that over five billion sheets of paper are sent out every year in the US from companies with over five million dollars in revenue and that there will still be over four billion by 2023. When do you estimate three billion, two billion, one billion, five hundred million, or zero?

Tom Walker (OpenText): Since these numbers are from the white paper written by Harvey Spencer, we would need to inquire with Harvey and respond offline. I think the focus of the estimate is to show that even with all the efforts to remove paper from the business process, it is still very much there and will be for a while.

Comment From Oleksandr: Can a customer use paper invoices parallel with electronic data interchange (EDI)?

Vladimir Shakhov: Yes, sure. The solution streamlines the capturing and processing of the paper documents and EDI. Then it takes them through a unified business process.

Comment From Rosa: It appears that this solution is similar to OCR technology. Correct?

Tom Walker (OpenText): The capture solutions provided by SAP and OpenText include OCR, but this is only one component of an end-to-end, holistic capture solution. So, yes, it is similar since it does include OCR, but how you verify and use the information extracted with OCR creates significant additional value.

Comment From Guest: Can you elaborate a little on the different capture offerings and their expected use cases or strategic alignment (for example, where does the Captiva/Documentum product set align with EnterpriseScan/ArchiveServer offerings?). One barrier to accurate capture and recognition seems to be the legibility of invoices. I have seen a trend toward branded invoices containing colors to highlight the amount that is owed. This is OK for the human eye, but we’ve found this doesn’t help the scanning and OCR.

Gisela Hammann: The OpenText capture solution portfolio is just being aligned and integrates Captiva/Documentum with the OpenText portfolio. With regard to the second part of the question, yes, we see sometimes invoices with graphical elements that are not very good for OCR. Over the years, image enhancement algorithms have been adapted for coping with most of these effects.

Comment From Oleksandr: Is it possible for users to verify extracted data?

Matthias Niessen: Sure. The recognition is, however, very precise and learns from any corrections made by users. Keep in mind also that the most important verification is done against the business context (master data, for example).

Tom Walker (OpenText): These are great questions. We ran a poll and found a very interesting statistic:

What is the impact of transferring data into an SAP system from paper or email attachments? Sixty-seven percent of respondents said it is major. Another 27% of the respondents said it is minor. Only 6% of the respondents said none (i.e., it is no impact).

Comment From Andrew: What types of documents can capture solutions process?

Vladimir Shakhov: Most of the time people talk about capturing invoices when thinking about capture solutions. But capture is not only about capturing invoices.

With modern capture solutions, you can capture any type of information from documents, such as sales orders, delivery notes, HR documents, or remittance advices.

Comment From Andre: Do you see any trend of moving from paper to EDI?

Tom Walker (OpenText): EDI has been around for a while. We see large clients continue to embrace EDI for significant trading partners. We see EDI remaining as a capture channel, but the trend seems to be movement to networks and capture solutions more than to in-house EDI.

Comment From Oleksandr: Is this combination (SAP plus OpenText) used by enterprise organizations only? Or can it be for small and medium-size businesses (SMBs) too? How can SMBs easily and cheaply integrate such a solution?

Sheila McCarthy: Yes, capture is available in the cloud as well as on premise, so it for both enterprise organizations and SMBs as well. SAP S/4HANA Cloud is targeted at SMBs, and capture is already integrated into the SAP S/4HANA Cloud, making it easy and cost-effective.

Comment From Markelle: What do you we need to know for a capture implementation?

Gisela Hammann: You need to analyze the documents. For example, what are the document types to be captured? What data should be captured to create SAP business objects such as posting an invoice or creating a sales order? What are the volumes? What are the time-critical documents?

Comment From Doug: Is capture available in SAP S/4HANA?

Tom Walker (OpenText): SAP and OpenText most certainly provide capture solutions for SAP S/4HANA both on premise and in the cloud. In fact, all SAP and OpenText capture solutions undergo rigorous internal testing by SAP before being released.

Comment From Oleksandr: Do you plan to use blockchain technology with document processing? For example, to create immutable and independent verifiable records of transactions and proof of authenticity of documents, emails, and other information objects.

Gisela Hammann: Yes, we are just working on this. I cannot share details at this point, however.

Comment From Jonathan: How important is document archiving to a capture solution?

Tom Walker (OpenText): Based on my background in accounting, you hit on a question I completely relate to. Any financial transaction requires a creditable source document. During the process — and often long after the process is completed — someone such as an auditor, for example, wants to see all the source documents. You want to be sure you have easy access to not just the one source document, but all other documentation related to the process, such as emails and spreadsheets. Therefore, a critical component of a best-in-class capture solution is a tool to manage the document and retention as well as to provide an easy-to-use interface.

Comment From Dario: Our current capture runs outside of the SAP system. Is that still a best practice?

Tom Walker (OpenText): No, the best practice for SAP customers is to validate directly inside of the SAP system.

Comment From Nick: We have operations around the world. How does the capture system address different languages?

Gisela Hammann: We are capturing documents from all over the world — in all business languages, such as English, and also all European languages, such as Italian, Spanish, French, German, Finnish, and Russian.  We also are capturing documents in Asian languages with double-byte character sets, such as Chinese, Japanese, and Thai.

Tom Walker (OpenText): On behalf of SAP and OpenText, we appreciate your questions and look forward to the opportunity to help you with your digital transformation journey.

Matthew Shea: Thank you, everyone, for joining today’s discussion.