Hormel Foods
After Trying a Competitor, Came Back to DataServ Workflow
A DataServ client since 2018
Key Results:
- 99.9% data capture accuracy
- Average time of 3-4 days for invoices indexed to complete
- Average turnaround time for Invoice Processing Machine = 15 hours
- Reduced AP FTEs by 50% after initializing AutoVouch™
Key Stats:
- Invoice Volume: 350,000 annually
- ERPs: Oracle Cloud
- Team Size: 22,000 employees, 20 AP FTEs reduced to 10 as of 2024
- Industry: Fortune 500 global branded food company
Executive Summary
Hormel Foods Corporation is a Fortune 500 American food processing company founded in 1891 in Austin, Minnesota. The company originally focused on the packaging and selling of ham, sausage and other pork, chicken, beef and lamb products to consumers, but now offers a wide range of packaged and refrigerated foods with brands including Spam, Planters, Columbus Craft Meats, Dinty Moore, Jennie-O, and Skippy. The company’s products are available in over 80 countries worldwide.
Hormel was already “highly automated” before DataServ but they were not getting the results they wanted or needed. They had been using Metaviewer, a traditional software program, to help with workflow and imaging, and they were doing scanning and validating manually. They were on a path to convert from R12 to Oracle Cloud but saw the value in DataServ and decided to implement DataServ for their PO invoices before beginning that conversion. The Controller recognized that a prior tendency to customization of processes and paperwork led to many inefficiencies, higher costs, and more IT support, and that Hormel needed standardization. They asked DataServ to bring best practices and hold them accountable to 80% standardized processes.
After Initializing the DataServ Solution for PO and NPO invoices in Q1 2019, Hormel converted from Oracle 12 on-premise to Oracle Cloud at which time their consultants advised that they leverage some of the features of Oracle Cloud. Hormel evaluated OCR, Workflow, and 3-way matching automation available within the Oracle Cloud platform. The Hormel consultants were asked to implement workflow for non-PO invoices using the native Oracle Cloud tools and transition away from DataServ for the workflow portion of this subset of invoices. They spent several months attempting to roll this out in conjunction with the cutover to Oracle Cloud.
A few months later, Hormel found the use of the Oracle Cloud workflow to be lacking. The routing and escalations were not as robust, proactive, or automated as Dataserv’s, and required much more manual work. In addition, re-training users who were familiar with DataServ to use the Oracle Cloud interface proved to be difficult. Many users who had to process PO and NPO invoices were having to work in two separate interfaces – the inefficiency was frustrating.
Outcomes
After months of detailed analysis of the OCR, Workflow, and 3-way matching automation within the Oracle Cloud platform, Hormel decided that they would stay with DataServ. It was determined that DataServ would continue to provide Hormel with the Invoice Processing Machine (IPM) and invoice data capture services and the automated 3-way match through the AutoVouch™ capability because those services fit Hormel’s business better than Oracle. Hormel decided to re-initialize the DataServ workflow for all of its non-PO volume, thus putting 100% of their AP invoices through the DataServ solution.
Currently Hormel is about 90% PO-based. With roughly 30,000 invoices per month, they are averaging approximately 76% AutoVouch™ straight-through success rate. That means that out of 83,000 PO invoices over 3 months, 63,000 successfully went through AutoVouch™ without a single human touch point.
Business Impact
Prior to the IPM and AutoVouch™, Hormel’s AP Processors would have 100 invoices each in the queue to start their day. Now there are often zero invoices in the queue for manual processing. Because over 75% of invoices never require human intervention, the number of staff tasked with AP processing has been cut in half, saving Hormel well over $1 million per year. Hormel’s Controller also praised the analytics provided by DataServ, noting that they now have greater visibility into their financial liabilities with AP solutions and the power to make better and faster decisions.
Thoughts from Hormel
"One of the things that I find better with the DataServ solution over other solutions I've used, number one, is the people. I definitely would say the service that we get from DataServ as a company is second to none.”
“I'm really excited to see the projects that are coming up and just thinking about, you know, we've come so far, but just fine tuning those last few pieces. And some of the upcoming projects I think are really going to help drive some of some of where we're going.”
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