From SAPinsider Las Vegas 2025: How Hilcorp Transformed AP Automation and Became Best in Class
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Key Takeaways
⇨ Hilcorp Energy successfully transformed its Accounts Payable operations through SAP and Serrala implementation, achieving best-in-class automation with invoice processing times reduced to three days and a supplier portal adoption rate exceeding 70%.
⇨ The journey included overcoming initial challenges with OCR technology, which led to a pivot towards AI-driven invoice capture, improving accuracy and enabling more efficient vendor interactions through targeted training and support.
⇨ Critical lessons for companies considering SAP digital transformation include the importance of process mapping, structured training for both internal teams and vendors, and the advantages of AI over traditional OCR for continuous improvement in data extraction.
When oil and gas giant Hilcorp Energy embarked on an ambitious SAP digital transformation journey, they knew it wouldn’t be easy. Operating across Alaska, Wyoming, Colorado, Pennsylvania, Texas, Louisiana, and New Mexico, Hilcorp’s expansive footprint presented significant challenges in streamlining financial operations—particularly Accounts Payable (AP) automation.
But success is often built on the lessons of failure. As Melissa Guillory and James Gilpin from Hilcorp detailed in their Serrala and SAP implementation journey, the road to efficiency was paved with challenges, course corrections, and technological breakthroughs.
Today, Hilcorp’s AP automation system is best in class, with invoice processing times down to just three days and a supplier portal adoption rate exceeding 70%. But getting there required a major pivot, a shift in strategy, and a strong technology partnership.
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Before its AP transformation, Hilcorp’s AP department faced significant inefficiencies:
- Processing 35,000+ invoices annually, with 46% handled manually
- Vendors delivering invoices via mail, email, and even in-person drop-offs at field offices
- A third-party vendor portal that was both costly and inefficient, slowing down approvals and lacking transparency
- A scattered workforce, with employees handling invoices across multiple regions
Hilcorp’s vision was clear: cut costs, automate workflows, and improve visibility across AP operations. The strategy? A full-scale SAP and Serrala implementation and AI-powered automation.
Hilcorp went live with SAP S/4HANA in January 2021, at the height of the COVID-19 pandemic. The implementation process was made even more challenging by the remote nature of the workforce.
A critical piece of the automation strategy was Optical Character Recognition (OCR) for invoice processing. The team expected OCR to streamline invoice capture, but reality quickly proved otherwise.
The system struggled to accurately recognize invoice formats, with many errors in data extraction. Vendors using pre-printed “Credit Memo” notices inadvertently triggered incorrect invoice classifications. At its worst, Hilcorp had 60,000 invoices stuck in the system, with 50% past due—a nightmare for any AP team.
This put Melissa’s team under immense pressure. With a public mandate from Hilcorp’s VP to be “best in class” by year-end, they had no choice but to pivot fast.
Recognizing that OCR wasn’t delivering as expected, Hilcorp shifted gears to AI-driven invoice capture. Instead of relying on static OCR rules, Hilcorp implemented AI-based data capture, which learned from past errors and adapted over time. Melissa’s team trained top vendors one-on-one to use the supplier portal correctly. They launched a vendor outreach campaign, offering personalized guidance. And they increased supplier portal adoption to 70%, ensuring invoices were entered correctly.
Hilcorp also introduced an automated B2B invoice submission process using XML documents, reducing manual intervention. The company created a dedicated help desk, reducing vendor inquiries by 72%. And they used used SAP Analytics Cloud (SAC) dashboards to monitor invoice bottlenecks.
Today, Hilcorp’s AP system is nearly unrecognizable compared to its pre-SAP days. The dashboard looks like this:
- Invoice processing time cut from weeks to just 3 days
- Reduced past-due invoices to just 1%
- Supplier portal adoption above 70%, with minimal manual intervention
- Help desk inquiries down 72%
But beyond the numbers, the most significant achievement is the cultural shift within Hilcorp. AP automation is no longer an IT initiative—it’s a business transformation.
For organizations embarking on their own SAP digital transformation journey, Hilcorp’s experience offers critical takeaways:
- Process Mapping is Essential: Understand every regional workflow before implementing automation.
- Training is a Must: Both internal teams and external vendors need structured training to ensure smooth adoption.
- AI Outperforms OCR: Static OCR can cause data extraction errors, while AI-driven capture continuously improves.
- Hypercare Matters: A dedicated post-go-live support team ensures a smoother transition.
- Set Clear Metrics for Success: Define KPIs and track adoption to measure real business impact.
What started as a challenging SAP transition turned into an automation success story. Through strategic pivots, AI-powered automation, and strong partnerships with companies like Serrala, Hilcorp has built a world-class AP system that enhances efficiency, transparency, and vendor relationships.
What this means for SAPinsiders
AP invoice management is ripe for AI automation. AI-enabled AP invoice automation transforms financial operations by reducing costs, increasing efficiency, and improving accuracy. Businesses benefit from lower processing costs, fewer late payment fees, and the ability to maximize early payment discounts, delivering rapid ROI (typically within 6-12 months). AI accelerates invoice approvals, eliminates manual data entry errors, and detects duplicates and fraud, reducing disputes and streamlining compliance. Real-time tracking and automated PO matching improve cash flow visibility and forecasting while strengthening supplier relationships through faster payments and self-service portals. Scalability is another advantage—AI allows businesses to handle higher invoice volumes without adding AP staff, making it ideal for growth and acquisitions. Predictive analytics further enhance spend optimization and financial insights, ensuring a smarter, more agile finance operation.
A stable of SAP partners are tackling AI-enabled AP invoice automation. SAP’s own AI-Powered Complex Invoice Automation automates all stages of invoice processing—from receipt and data extraction to mapping—leveraging AI to streamline operations.
What should be behind AP on the CFO’s AI punch list? Granted, CFOs stand to gain the most from using AI to drive efficiencies in AP management. Following AP, they should look at financial planning and analysis (FP&A). AI-driven forecasting, scenario planning, and predictive analytics improve financial decision-making. Potential benefits include 25-50% faster financial reporting cycles, 30-40% improvement in forecast accuracy, up to 20% better cash flow management, reducing financial risk. Next should be fraud detection and compliance automation. AI can detect anomalies, flag suspicious transactions, and ensure compliance with financial regulations. Potential benefits include up to 80% faster fraud detection and risk mitigation, 30-50% reduction in compliance costs, and significant reduction in financial losses due to fraud.
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