Groceries Inc. is a leading retail grocery chain in Canada that offers its customers a wide range of best quality products and services at a competitive price. There are 1200 company-owned stores Canada-wide, 500 franchise stores, and 40 distribution centers in all provinces of Canada. Groceries Inc. employs 80,000 full-time and 10,000 part-time employees in Canada. On average, it lists 75,000 items in the store and 4500 vendors who supply them. Groceries Inc. also has its brand manufactured and provided to Groceries Inc. by 3^rd party food processing vendors.

Groceries inc. is a publicly listed company on the Toronto stock exchange. Its current share price is 85 CAD. Financial details are as follows:

Revenue	30,000 Mil	Gross Profit	9,000 Mil
Cost of Revenue	18,000 Mil	Net Income	1,200 Mil
Sales Growth	10 %	Net Income Growth	2.5 %

 

Groceries Inc. is the market leader holding a 25% market share. Its nearest competitor has a 23% market share. Groceries inc. faces tough competition from brick & mortar stores and online retailers. Groceries Inc. is known for its best customer service and 80% customer satisfaction rating.

Groceries Inc. has commenced its Digital Transformation journey. Its vision, policies, and strategies incorporate Digital Transformation.

Groceries Inc.'s IT team has 750 employees. The IT team is responsible for ALL aspects of IT, including application, infrastructure, integration, security maintenance and monitoring. IT team is also responsible for application development and enhancements. The IT team has six months of work backlog and cannot retain talent due to a high workload, mundane tasks, and lack of career growth.

Groceries Inc. uses 35 different applications hosted in 2 data centers in Canada. Both data centers are 90% occupied and have no space to add additional infrastructure.

Groceries Inc. IT Technologies are coming to the end of support, and there is no plan to upgrade or replace. Current technologies are unable to meet business and market needs. As a result, many business units in the organization have started their work around solutions by having many offline excel spreadsheets. In short, the IT Team and Technologies are becoming the bottleneck for business growth.

Executive management expects Digital Transformation to solve Business and IT issues.

 

RPA Application:

Recently, Groceries Inc. surveyed all its vendors. The survey went to 5000 vendors ranging from small family-owned businesses to large corporations like Pepsi. 95% of vendors participated in the study, and the results were alarming. 90% of vendors were happy to do business with Groceries Inc., but 87% of vendors rated Groceries Inc. Invoice Payment capability as three out of ten, where rating 1 is 'Not Happy,' and rating 10 is 'Very Happy.'

The Business Analyst team investigated the reasons for the low vendor rating. Fundamental analysis revealed the following facts:

Number of vendors - 5000	Number of invoices - 10,000 per week
Average invoice processing time - 10 minutes per invoice	Invoice processing staff - 25 full-time employees (20 CAD per hour - 8 hrs. shift)
Invoice processing backlog - 40,000 invoices	Outstanding accounts payable - 15.5 million
Payment term - 30 days	Actual payment - 65 days
Payment accuracy - 65%	Payment dispute - 10%
Payment delay - 85%	Delay reason 1 - data entry errors 60%
Delay reason 2 - backlog 30%	Delay reason 3 - vendor errors 10%

Groceries Inc. leadership has taken this issue seriously and committed to fixing it within six months.

IT team is proposing an RPA application for the Invoice Processing process. Vendors will submit their invoices on Groceries inc.'s vendor portal (as they do today - no change). RPA tool pick-up invoices from the document repository server. RPA tool will perform an Optical Characters Recognition (OCR). OCR will convert data into a structured format. Invoice data will be entered in the SAP S4HANA (ERP application). RPA tool will perform the 3-way match, i.e., receipt qty & amount, purchase order qty & amount, and invoice qty & amount are matching. In case of a 100% match, it will issue payment advice and process an electronic funds transfer. In case of any exceptions during the entire process, the RPA application will be sent the exceptions to an Account Payable team for further investigation and resolution. The anticipated exception rate could be up to 5%.

IT team is confident it can develop and deploy this application in 4 months. The estimated cost is 450,000 CAD.

The finance team would like to hire five more people in the accounts payable team; per hour per person costs 20 CAD.

IT, legal, and Purchasing prefers RPA application. The finance team is convinced that hiring more people will solve the issue.

Working as a Lead Business Analyst, Digital Transformation Steering Committee has asked you to perform the following analysis and report back to the steering committee in two weeks.

Steering Committee comprises senior leadership (VP and above) from IT and business.

Steering Committee asks:

• Define the problem statement
• Identify stakeholders for the RPA project
• Pros and Cons of RPA vs. manual Invoice processing
• List the critical decisions points
• Potential IT and Business Benefits
• ROI calculation approach

Answer rating: 100% (QA)

Answer Analysis Report for Groceries Incs RPA Project Problem Statement Groceries Inc faces challenges in its invoice processing system leading to delayed payments data entry errors and customer dissa... View the full answer