Breaking Barriers:B                                         Driving Continuous                                          Im...
Session Abstract        Your company may have achieved some early returns in        sourcing savings or procurement compli...
Speaker - Albemarle Corporation    Eric Stratmann    •     Director – Global MRO Purchasing    •     Responsible for $375 ...
Speaker - BBVA Compass    Billy Lester    Billy Lester is the Ariba Operations Manager at BBVA Compass. He has over 8 year...
Speaker - SunTrust Bank    Seth Brewster      Seth Brewster, Business Systems Analyst, SunTrust Bank      Seth Brewster is...
Breaking Barriers:                                          Driving Continuous                             B            Im...
About Albemarle    With sales in excess of $2.9 billion per year and plans for significant    future growth, Albemarle Cor...
Material Masters Historical Challenges•   Albemarle currently includes 11 plants,    ~72,000 Material Masters in three lan...
Project Objectives/Solution Overview                                                                 Multi-language     En...
Project Details            SAP                                       Ariba Material Master                                ...
Selecting the Right Provider•    Provider needs to have proven expertise and experience in Master     Data Consolidation• ...
Project Results •   Implemented a Global Classification (UNSPSC) and Nomenclature     (ECCMA eOTD) •   Created Standardize...
ROI•    >80% of materials mapped to UNSPSC – providing proper     spend visibility•    >20% of materials identified withou...
Breaking Barriers:B                                         Driving Continuous                                          Im...
Agenda     •   About BBVA Compass     •   Ariba and BBVA Compass     •   Initial Strategies and Business Requirements     ...
About BBVA Compass     •   BBVA Compass is a subsidiary of Compass         Bancshares Inc, a wholly owned subsidiary of BB...
Ariba and BBVA Compass     •   Ariba Procure-to-Pay Professional (P2P)     •   Ariba Supplier Information and Performance ...
Initial Strategies and Business     Requirements     •   Centralization of Procurement and Invoice processes     •   Captu...
The Challenges of Change     •   Bad data collection     •   No true processes defined prior to implementation         (Pr...
Reevaluating Ourselves     •   Ownership and philosophy change     •   Redefining the processes     •   Structured communi...
Initial Metrics Versus Current Metrics     •   2010 Metrics                   64 suppliers enabled (22 electronically)    ...
Lessons Learned     •   Structure lines of communication     •   Early involvement from executive management     •   Bette...
Breaking Barriers:B                                         Driving Continuous                                          Im...
Agenda     •   SunTrust at a Glance     •   Ariba Solutions Deployed     •   SunTrust Spend Overview     •   Metrics     •...
SunTrust at a Glance                                                 • The most direct corporate ancestor, the Trust Compa...
Ariba Solutions Deployed     •       Supplier Management                                                  •   Procurement ...
SunTrust 2011 Spend Overview     •       Total procurable spend: $2.1B     •       Total addressable spend in scope: $1.7B...
Spend Profile for a Financial     Services Organization• $2.1 Billion     of procurable spend     with over 13,000 supplie...
Challenges to Optimizing Spend                                                Impacts to                             Strat...
Challenges to Optimizing Spend                                                Impacts to                           Strateg...
Challenges to Optimizing Spend                                                Impacts to                           Strateg...
Q&A     Contact info:     John Lark jlark@ariba.com32   © 2012 Ariba, Inc. All rights reserved.
Share This Session…NOW…from     your mobile!     •   All presentations are posted:                   Guidebook mobile app ...
Upcoming SlideShare
Loading in...5
×

Breaking Barriers: Driving Continuous Improvement and Value in Your Spend Management Initiatives

635

Published on

Published in: Business, Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
635
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • BBVA financial services group; $740 B total assets; 7,400 branches; 107,000 employees; (footprint 30 countries)Major Business Units: Corporate Banking, Retail Banking, Wealth Management3 largest areas of operation: Alabama (3), Texas (4), and Arizona (5)
  • Procure-to-Pay Professional implementation mid-late 2010 (August)Spend Visibility and SiPM implementation mid-late 2009 (August)Contract Management Basic implementation (replace ECMS) late 2010 (December)
  • All processes were owned by the LOBs and invoices paid through AP60% of all AP spend was identified as sourceable based on categorization of suppliers (not products)Training and communication involved earlyDetermined all information would be provided by external systems4. Top suppliers identified based on spend and transaction count
  • Bad data collectionLOBs submitted invoices to AP, LOBs signed additional contracts, AP created new suppliers based on invoicesExternal data sources stored incorrect informationProcurement splintered (Functional and IT)Sourcing ineffective based on limited criteriaPurchases made based on LOB’s recommendationsTraining and communication fell short based on initial reach but no follow-upsNot enough resources to handle basic requirements (lack of motivation and cooperation)Majority of supplier relationships existed directly with the LOBs rather than Procurement (name dropping)Cannot control 60% of spend when relationships are owned by the LOBNo guidance regarding approval hierarchies; information provided was outdated and incorrectSuppliers may choose not to use the system due to fees, additional steps, or fear of traceable spendTraining and communication fell short based on initial reach but no follow-upsPackage was limited to a small portion of Ariba’s abilitiesCommunications were disregarded based in the manner in which they were deliveredNo true champion for product; historically shown to be a money pit with limited potential from a system perspective
  • Ownership of the system changed hands along with a new philosophyIdentified the actual processes (all of the truths and issues) developed several iterations to a future stateAdding structure to a chaotic environmentTraining handled solely by the Ariba Operations GroupCommunication plans developed and sent on a schedule as well as remindersPolicies were never considered prior to the system’s implementation; new policies were developed and aimed at wrangling the outlyersDeveloped internal operating guide with job descriptions and rolesEstablished basic SLAs for standardizing supplier enablement (basis for productive employees)More practical outlookWhat can we do with what we have?Ensure the IT group understands the role of support; creating interface functions; white lists for external access; additional user restrictions or external mapping requirementsMoving the boulder – if you follow a process and make minor exceptions; fully document the process; the system will build itself and at some point people will take notice
  • Focus on contracts next initiative
  • Better communication:formula of communication lines # of lines for n people = n(n-1)/2Ex. 4 people equal 6 lines of communication 10 people equal 45 lines of communication You can see how this type of implementation can get out of control quickly
  • Transcript of "Breaking Barriers: Driving Continuous Improvement and Value in Your Spend Management Initiatives"

    1. 1. Breaking Barriers:B Driving Continuous Improvement and Value in Your Spend Management Initiative Albemarle Corporation BBVA Compass SunTrust Bank© 2012 Ariba, Inc. All rights reserved.
    2. 2. Session Abstract Your company may have achieved some early returns in sourcing savings or procurement compliance. But how do you keep up the momentum going? In this session we explore some of the hidden areas of improvement and savings that exist within most organizations, and help create a roadmap to help you expand the scope of spend under management and return of your source-to-settle initiative.2 © 2012 Ariba, Inc. All rights reserved.
    3. 3. Speaker - Albemarle Corporation Eric Stratmann • Director – Global MRO Purchasing • Responsible for $375 Million Annual Spend – 50 Global Employees • Four Years in Purchasing and Previously Director – IT and other applications and systems roles • Special Project Work in SAP Integration (Five acquisitions in the last seven years) • Lived and Worked in Multiple U.S. and European Locations3 © 2012 Ariba, Inc. All rights reserved.
    4. 4. Speaker - BBVA Compass Billy Lester Billy Lester is the Ariba Operations Manager at BBVA Compass. He has over 8 years banking and financial experience, with the last 4 years focused primarily in Procurement and Corporate Services. Additionally, he has extensive experience with both the implementation and daily operations of Ariba’s on-demand and enterprise products. This experience was in part due to his employment with Regions Financial Corporation, where he initially served as the project lead, then the systems administrator. Upon being hired at BBVA Compass, one of Billy’s first initiatives was to define and flow the current Procurement process cradle-to-grave. After 6 months, he was able to reengineer the procurement process and assist in authoring the policies surrounding the new methodology. In 2011, BBVA Compass was able to capture and process approximately $180MM in spend, approximately $154MM more than the prior system employed. Based on BBVA Compass’ current run rate, the company expects to meet or exceed $225MM in spend for 2012.4 © 2012 Ariba, Inc. All rights reserved.
    5. 5. Speaker - SunTrust Bank Seth Brewster Seth Brewster, Business Systems Analyst, SunTrust Bank Seth Brewster is a Business Systems Analyst in the Financial Services Unit of SunTrust Bank, and serves as the Ariba administrator overseeing Ariba reporting, process design implementation, and Ariba Subject Matter Expert in various other administrative functions within the Ariba tool.5 © 2012 Ariba, Inc. All rights reserved.
    6. 6. Breaking Barriers: Driving Continuous B Improvement and Value in Your Spend Management Initiative Eric Stratmann Director, Global MRO Purchasing Albemarle Corporation© 2012 Ariba, Inc. All rights reserved.
    7. 7. About Albemarle With sales in excess of $2.9 billion per year and plans for significant future growth, Albemarle Corporation produces specialty chemicals and employs over 4,000 people in 38 locations around the world. Their three main areas of business are: Polymer Additives, Catalysts and Fine Chemicals. In these businesses, Albemarle serves more than 3,400 customers in over 100 countries. The customers are split between various end markets; consumer electronics, refining, pharmaceuticals, agriculture, petrochemicals, construction, automotive and packaging.7 © 2012 Ariba, Inc. All rights reserved.
    8. 8. Material Masters Historical Challenges• Albemarle currently includes 11 plants, ~72,000 Material Masters in three languages Initial Material Master Count 123,000 SKUs• Bloated storeroom inventory levels• None of the plant storerooms operating on a standard discipline• Each site acting as an independent agent for local MRO material master data• Many MRO Material Master duplication issues• No standardized process for SKU creation / extend8 © 2012 Ariba, Inc. All rights reserved.
    9. 9. Project Objectives/Solution Overview Multi-language Enrich, Standardize and database in SAP for create a Consistent requesting the creation / SAP 40 character short extension of a MRO description, and PO SAP R/3 SKUs Text Implement a Global Standardize SAP Classification and Classification views Nomenclature for all across all SKUs Material Masters (including UNSPSC) De-duplicate SKU Material Masters9 © 2012 Ariba, Inc. All rights reserved.
    10. 10. Project Details SAP Ariba Material Master Albemarle Data Cleansing Search / CreateEnglish Sites – 50,130AV01 = Avonmouth, UK • Supplier / Manufacturer and Part Shopping Cart Number Extraction UKB494 = Bayport, TX • Normalize Manufacturer Name across SAP organization SRM MAG1 = Magnolia, AR MA01 = Magnolia, AR Phase 1 • Use the Manufacturer information in the Material Master as designed for SAP Ariba OnlineOR01 = Orangeburg, SC Catalog PA01 = Pasadena, TX • Rationalization PD01 = Baton Rouge, • Identified 6.88% potential duplicate SKUs across sites LA SH10 = South Haven, Phase 2 • Approximate savings of 4.5% of total inventory value MI TY01 = Tyrone, PA • Value Extraction • This involves formatting the data so the German Sites – 9,811 attributes applicable to fit, form and BG = Bergheim, Phase 3 function are standardized throughout the data set SAP R/3 Germany • Standardization Dutch Sites – 11,448 • Standardized Terminology and Technical Properties  Multi-language database AS57 – Amsterdam, Holland Phase 4 • SAP 40 Character Description build • PO Text Description Build MRO material master10 © 2012 Ariba, Inc. All rights reserved.
    11. 11. Selecting the Right Provider• Provider needs to have proven expertise and experience in Master Data Consolidation• Knowledge of ERP’s, SAP for Albemarle Albemarle• Global companies need a Global Provider – Ariba Selected Multi Language• Subject Matter Expertise – Human Touch, not only Technology• Adopt and utilize leading best practices, best-in-class processes• Develop a solution that is interwoven with longer-term strategic vision and best practice procurement11 © 2012 Ariba, Inc. All rights reserved.
    12. 12. Project Results • Implemented a Global Classification (UNSPSC) and Nomenclature (ECCMA eOTD) • Created Standardized and Consistent SAP 40 character short description, and PO Text • Visibility and duplicate identification across 11 sites and three languages through Ariba Catalogs • Multi-language database for MRO material master creation and updates • Processes established for on-going SKU creation and Maintenance12 © 2012 Ariba, Inc. All rights reserved.
    13. 13. ROI• >80% of materials mapped to UNSPSC – providing proper spend visibility• >20% of materials identified without stock movement• Each Item of Supply has a proper description associated with: A unique classification – to improve spend visibility A unique identification – to improve procurement and materials management• Increased searching, finding, and comparing of items across the organization13 © 2012 Ariba, Inc. All rights reserved.
    14. 14. Breaking Barriers:B Driving Continuous Improvement and Value in Your Spend Management Initiative Billy Lester Ariba Operations Manager BBVA Compass© 2012 Ariba, Inc. All rights reserved.
    15. 15. Agenda • About BBVA Compass • Ariba and BBVA Compass • Initial Strategies and Business Requirements • The Challenges of Change • Reevaluating Ourselves • Initial Metrics versus Current Metrics • Lessons Learned15 © 2012 Ariba, Inc. All rights reserved.
    16. 16. About BBVA Compass • BBVA Compass is a subsidiary of Compass Bancshares Inc, a wholly owned subsidiary of BBVA • Ranks among top 20 commercial banks based on deposit market share • Operates 716 branches in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas • Ariba client since August 200916 © 2012 Ariba, Inc. All rights reserved.
    17. 17. Ariba and BBVA Compass • Ariba Procure-to-Pay Professional (P2P) • Ariba Supplier Information and Performance Management (SiPM) • Ariba Spend Visibility Professional • Ariba Contract Management Basic17 © 2012 Ariba, Inc. All rights reserved.
    18. 18. Initial Strategies and Business Requirements • Centralization of Procurement and Invoice processes • Capture 60% of all sourceable payables through Ariba • Initial training effort Approximately 12,000 employees generalized use 30 employees group-specific use • Mass supplier notifications18 © 2012 Ariba, Inc. All rights reserved.
    19. 19. The Challenges of Change • Bad data collection • No true processes defined prior to implementation (Procurement) • Political agendas Resource Ownership Supplier Ownership • Unrealistic expectations • Poor communication and training • Lack of IT backend support • Lack of executive support19 © 2012 Ariba, Inc. All rights reserved.
    20. 20. Reevaluating Ourselves • Ownership and philosophy change • Redefining the processes • Structured communication and training • Developed policies and guidelines • Develop realistic expectations within smaller and more specific timeframes • IT backend support • Gaining executive support20 © 2012 Ariba, Inc. All rights reserved.
    21. 21. Initial Metrics Versus Current Metrics • 2010 Metrics 64 suppliers enabled (22 electronically) Total system spend $8.6MM (PO-Invoice Only) No ACC setup, No Contract Workspaces Authored 2,000 – 3,000 users initially login • 2011 Metrics 849 suppliers enabled (325 electronically) Total system spend $186MM (PO and Non-PO Invoices) 5 suppliers utilize ACC, 83 Workspaces Authored 4,500 users login each month (rotating)21 © 2012 Ariba, Inc. All rights reserved.
    22. 22. Lessons Learned • Structure lines of communication • Early involvement from executive management • Better understanding of the current environment What is being asked and what will be allowed? Who are the stakeholders and what is their impact? Who are the proponents and opponents? • More scope definition and limiting scope creep • Develop realistic and measurable goals22 © 2012 Ariba, Inc. All rights reserved.
    23. 23. Breaking Barriers:B Driving Continuous Improvement and Value in Your Spend Management Initiative Seth Brewster Business Systems Analyst SunTrust Bank© 2012 Ariba, Inc. All rights reserved.
    24. 24. Agenda • SunTrust at a Glance • Ariba Solutions Deployed • SunTrust Spend Overview • Metrics • Challenges to Optimizing Spend24 © 2012 Ariba, Inc. All rights reserved.
    25. 25. SunTrust at a Glance • The most direct corporate ancestor, the Trust Company of Georgia, was founded in 1891, and merged with SunBanks, Inc of Florida in 1985 to form SunTrust Banks, Inc. • Having total assets of $172.6 billion, it is one of the nations largest and strongest financial holding companies. • Employs approximately 30,000 teammates Diversified Business and Corporate & Wealth & Product Mix Retail & Household Investment Investment Commercial Lending Banking Management • SunTrust • National • National • National Footprint • Full line of • Residential • Full array of private • 1,658 Branches investment mortgages, com wealth management banking mercial lending and institutional • 2,889 ATMs products and solutions including • Mortgage • 800+ services personal and institutional servicing Relationship investment management portfolio of Managers $163B25 © 2012 Ariba, Inc. All rights reserved.
    26. 26. Ariba Solutions Deployed • Supplier Management • Procurement  Performance Surveys  Catalog & Non-Catalog Purchase Orders: Punch-out,  Scorecards supplier hosted, custom workflow, etc (approx. 200,000/yr.  Repository for all macro data on SRM managed suppliers and 5,000 users/mo. Functionality Not Used: For supplier “collaboration” with •  Sourcing specific modules for service categories (i.e. Temp Labor, Project Management: Reporting, timeline, Save Tracking, Print, etc) Project Artifact, etc. Standardization in Process and Templates: Sourcing • Accounts Payable Library Invoice Processing: Invoices matched to PO and/or Contract Performance of RFI, RFP, and Auctions Invoice Workflow: Exception handling, approvals, receipt Document Archival verification Functionality Not Used: Tasks, Workflow Payment Terms: Prompt payment and Dynamic • Contract Management Discounts Contract Administration: Storage, Archival, and Retrieval • Ariba Network Establishes linkage between Master and eBilling: 94% volume of invoices are eBilled and about Sub-Agreements (approx. 11,000 agreements) 50% of spend is eBilled Contract Compliance: Invoice to Contract Match Electronic issuance of POs, Contracts, etc. Reporting: Expiring Contracts, Contracts by Supplier, Electronic Supplier Connectivity: EDI, cxml, csv uploads LOB, etc. Catalog Maintenance: Supplier managed Functionality Not Used: Contract Templates, Clause Library, Contract Authoring and Workflow through Process, eSignature26 © 2012 Ariba, Inc. All rights reserved.
    27. 27. SunTrust 2011 Spend Overview • Total procurable spend: $2.1B • Total addressable spend in scope: $1.7B • Total % of spend under management: 84.5% % Enabled Spend Invoiced via Ariba vs. Directly in AP System: Monthly Ariba invoice amount processed as a percentage of total Directly in AP System invoice amount processed27 © 2012 Ariba, Inc. All rights reserved.
    28. 28. Spend Profile for a Financial Services Organization• $2.1 Billion of procurable spend with over 13,000 suppliers• 80% of spend concentrated with 400 suppliers• Critical suppliers account for approximately 40% of total spend Traditional “Purchase Order” transactions accommodates only 10% to 20% of our spend28 © 2012 Ariba, Inc. All rights reserved.
    29. 29. Challenges to Optimizing Spend Impacts to Strategies and Obstacles Optimization Tactics Sends an “it’s optional” message Have leadership involved early in to internal stakeholders that optimization discussions with manage local processes and/or internal stakeholder leads Unclear Leadership Messages categories To ensure success, you must get Ariba is just a tool and you will not top down support CFO down and achieve maximum value without make sure it spreads through leadership support the organization Needed to bridge the gap between Consider full-time Process lead / Limited / No In-House Ariba the Ariba System & its capabilities small team to take “ownership” of “expert(s)” and implementing that into our system and processes environment.29 © 2012 Ariba, Inc. All rights reserved.
    30. 30. Challenges to Optimizing Spend Impacts to Strategies and Obstacles Optimization Tactics Make sure you do a thorough Benefit to you is that once you scrub of data have it cleaned up you have a Eliminate duplicate suppliers, Supplier Data Clean Up Is clear picture of complete holistic consolidate like suppliers Not Easy spend of a supplier instead of having it piecemeal Create strict and formalized supplier enablement process If this is a larger effort, you can bring in contractors for a brief time One centralized location for all to do the initial load Loading Legacy Contracts and contract documents allows for Every New Contract has a Need to make sure all contracts easy location of contracts for your Workspace are collected, filed and uploaded company into system regardless of expiration date30 © 2012 Ariba, Inc. All rights reserved.
    31. 31. Challenges to Optimizing Spend Impacts to Strategies and Obstacles Optimization Tactics Companies have no direction and Set achievable spend optimization randomly enable spend target No Commodity Onboarding Plan This inhibits focus on getting the Create commodity onboarding plan highest impact for stakeholders with milestones that is results and doesn’t work toward oriented measurable goal Review and evaluate plan often Cross-functional team dedicated to Need clear processes for Contract streamlining processes involving Business Process Creation and Compliance, Sourcing Projects, Ariba on an ongoing process for Optimization Contract Workspaces, the first few years after Requisitions, Exceptions, etc implementation.31 © 2012 Ariba, Inc. All rights reserved.
    32. 32. Q&A Contact info: John Lark jlark@ariba.com32 © 2012 Ariba, Inc. All rights reserved.
    33. 33. Share This Session…NOW…from your mobile! • All presentations are posted: Guidebook mobile app – Search Apple or Android app store for Guidebook – Enter code “collabor8” Or at Slideshare.net/Ariba • Share via email or social media **Come back soon – we are syncing #AribaLIVE audio and video interviews to the presentations**33 © 2012 Ariba, Inc. All rights reserved.

    ×