Maximizing the Value of Your ERP<br />Jason Wolf<br />John Lark<br />© 2011 Ariba, Inc. All rights reserved. <br />
© 2011 Ariba, Inc. All rights reserved. <br />2<br /><Speaker Name><br />I will update tmo….<br />
© 2011 Ariba, Inc. All rights reserved. <br />3<br />Agenda<br /> Market Directions – Extending ERP Capabilities<br />Lear...
The Segmented Procurement Landscape<br />Complexity / Need for Procurement Effectiveness<br />Each spend segment has uniqu...
5<br />The CPO Situation<br />Drive more savings<br />Normal channels have less to give<br />You are here<br />What are yo...
Many CIOs Are Recognizing ERP Shortfalls<br />© 2011 Ariba, Inc. All rights reserved.    			<br />6<br />“Our research hig...
North America
EMEA</li></ul>Source:  IDG Research, The Cloud and the CIO Report, 2011-April<br />
ERP Reality – The reality of B2B collaboration is that while most companies have successfully deployed ERP systems to opti...
Higher Costs
Increased Risk</li></ul>Supplier challenges:<br /><ul><li>Missed sales opportunities
Inefficient processes
Increased costs and time</li></li></ul><li>Individual Groups Are Already Addressing the Need to Enhance the ERP<br />8<br ...
Total Number of Documents<br />© 2011 Quadrem International, Ltd.<br />9<br />
Global Adoption Trends<br />P2P ratio: For every1 Order Document, how many other related documents are sent between the Bu...
Network Portal<br />Network Portal<br />Sales / <br />Sales / <br />Sourcing<br />Sourcing<br />Sourcing<br />Marketing<br...
Capture 3x more discount savings
Facilitate paperless  procurement and invoice compliance
Ensure Contract Rate Compliance & eliminate Maverick Buying
Optimize working capital
Strategic platform for growth</li></ul>Supplier Benefits<br /><ul><li>Manage customers via self-service Portal
Reduce receivables costs 75%
Get paid up to 70% faster
Increase Wallet Share – eliminate price issues
Improve visibility and control
Automate Order-to-Cash process
Access new business opportunities with largest buying community
Strategic platform for growth</li></ul>11<br />© 2011 Ariba, Inc. All rights reserved.  <br />
Lessons from Other Leaders<br />Supplier Value<br />Buyer Value<br />Albemarle<br />Walt Disney Corporation<br />Pfizer<br...
13<br />© 2011 Ariba, Inc. All rights reserved. <br />
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Maximizing the value of your ERP - London

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You've invested heavily in an ERP's eProcurement capabilities, yet managed spend remains unacceptably low. Join this session to explore how today’s thought leaders have enhanced their current ERP systems to improve adoption, visibility, and compliance across traditional spend areas and complex services.

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  • Key StatsKey Question: What happens if we grow. How can we manage more with the same?
  • Key Stats
  • Key Stats30 plus fax servers connected to 12 ERPs
  • What it means for you as buyer is supplier will collaborate with initiative.Deliver more value as it simplifies experience for themCommitment is greater bc suppliers have more visibility and clarity of the overall relationship
  • Key StatsManual = PO (fax) INV (paper) | goes to shared service center as legal invoice – Scanned – CheckedPO (elec) – Inv (elec) CHECKED before becomes legal invoice and company does their internal checking
  • Hacket says 1% - 5MM (125 – 500 - billions…)650 – adding costs of hardwares and phone calls, 2- 3% reduction of lost purchase orders (ie blank fax)115 – phone calls – people not answering phone calls related to have you received my PO. Has it been sent….. “they will see it on screen”300 – time saved from not having to receive low-value orders because the ASN will act as the proof of delivery. SO YOUR SECRETARY DOES NOT need to do this…900k – no need to open paper – scnaannd insert the inv500k – don’t need to chase people for accou - single reason – so tired of recieveing invoices -- German in Czek….300k phone callsHigh level on numbers….
  • Maximizing the value of your ERP - London

    1. 1. Maximizing the Value of Your ERP<br />Jason Wolf<br />John Lark<br />© 2011 Ariba, Inc. All rights reserved. <br />
    2. 2. © 2011 Ariba, Inc. All rights reserved. <br />2<br /><Speaker Name><br />I will update tmo….<br />
    3. 3. © 2011 Ariba, Inc. All rights reserved. <br />3<br />Agenda<br /> Market Directions – Extending ERP Capabilities<br />Learningsfrom other Leaders<br /> Case Study<br /> Questions / Open Forum<br />
    4. 4. The Segmented Procurement Landscape<br />Complexity / Need for Procurement Effectiveness<br />Each spend segment has unique business process needs <br />Spend Categories<br />Spend<br />Need for Simplicity, Scale and Procurement Efficiency<br />Strategic Goods & Services<br />General Indirect<br />Complex Services<br />Infrequent Goods & Services<br />MRO<br />Number of Suppliers<br />Simple Services<br />
    5. 5. 5<br />The CPO Situation<br />Drive more savings<br />Normal channels have less to give<br />You are here<br />What are your top business drivers in 2011?<br />“Can you give me some shade?”<br /><ul><li>Ariba / ISM (Institute for Supply Management) Survey conducted February 23, 2011</li></ul>5<br />© 2011 Ariba, Inc. All rights reserved. <br />
    6. 6. Many CIOs Are Recognizing ERP Shortfalls<br />© 2011 Ariba, Inc. All rights reserved. <br />6<br />“Our research highlights that ERP systems fall short on enabling collaboration with suppliers...and that collaboration aspect is critical. It ensures accuracy, timeliness and efficiency in…the supply chain.”<br />-- Bob Melk, SVP & Group Publisher, CIO Magazine <br />April 2011<br />Survey Question: <br />What are your organization’s policies regarding deployment of new cloud-based applications that are not from your ERP provider? <br /><ul><li>202 CIOs survey responses
    7. 7. North America
    8. 8. EMEA</li></ul>Source: IDG Research, The Cloud and the CIO Report, 2011-April<br />
    9. 9. ERP Reality – The reality of B2B collaboration is that while most companies have successfully deployed ERP systems to optimize processes within the four walls of the enterprise, once you ‘leave the building,’ 75-85% of B2B transactions are still processed manually on paper, resulting in: <br />© 2011 Ariba, Inc. All rights reserved. <br />7<br />Supplier ‘A’ <br />Supplier ‘B’ <br />Your Company<br />Supplier ‘N’ <br />Buyer challenges:<br /><ul><li>Inefficient use of staff
    10. 10. Higher Costs
    11. 11. Increased Risk</li></ul>Supplier challenges:<br /><ul><li>Missed sales opportunities
    12. 12. Inefficient processes
    13. 13. Increased costs and time</li></li></ul><li>Individual Groups Are Already Addressing the Need to Enhance the ERP<br />8<br />© 2011 Quadrem International, Ltd.<br />
    14. 14. Total Number of Documents<br />© 2011 Quadrem International, Ltd.<br />9<br />
    15. 15. Global Adoption Trends<br />P2P ratio: For every1 Order Document, how many other related documents are sent between the Buyers and Supplier<br />N America<br />Europe<br />3.4 : 1<br />2.1 : 1<br />5.5 : 1<br />6.2 : 1<br />Africa<br />South<br />America<br />West<br />2.6 : 1<br />Australasia<br />Brazil<br />3.2 : 1<br />10<br />© 2011 Quadrem International, Ltd.<br />
    16. 16. Network Portal<br />Network Portal<br />Sales / <br />Sales / <br />Sourcing<br />Sourcing<br />Sourcing<br />Marketing<br />Marketing<br />Order <br />Order <br />Management<br />Management<br />Procurement<br />Procurement<br />Procurement<br />Finance /<br />Finance /<br />Receivables<br />Receivables<br />Finance /<br />Finance /<br />Finance /<br />Payables<br />Payables<br />Payables<br />Financing<br />Accounting<br />Payment<br />Financing<br />Accounting<br />Payment<br />Financing<br />Accounting<br />Payment<br />Successful Approaches: COMPLEMENT your Enterprise Source to Settle processes by extending your efficiencies and creating value for both you and your suppliers<br />Buyer Benefits<br /><ul><li>Reduce operating costs 70% or more
    17. 17. Capture 3x more discount savings
    18. 18. Facilitate paperless procurement and invoice compliance
    19. 19. Ensure Contract Rate Compliance & eliminate Maverick Buying
    20. 20. Optimize working capital
    21. 21. Strategic platform for growth</li></ul>Supplier Benefits<br /><ul><li>Manage customers via self-service Portal
    22. 22. Reduce receivables costs 75%
    23. 23. Get paid up to 70% faster
    24. 24. Increase Wallet Share – eliminate price issues
    25. 25. Improve visibility and control
    26. 26. Automate Order-to-Cash process
    27. 27. Access new business opportunities with largest buying community
    28. 28. Strategic platform for growth</li></ul>11<br />© 2011 Ariba, Inc. All rights reserved. <br />
    29. 29. Lessons from Other Leaders<br />Supplier Value<br />Buyer Value<br />Albemarle<br />Walt Disney Corporation<br />Pfizer<br />© 2011 Ariba, Inc. All rights reserved. <br />12<br />
    30. 30. 13<br />© 2011 Ariba, Inc. All rights reserved. <br />
    31. 31. Decisions<br />© 2011 Ariba, Inc. All rights reserved. <br />14<br />
    32. 32. Results<br />© 2011 Ariba, Inc. All rights reserved. <br />15<br />
    33. 33. Top Learnings:<br />This needs to be a business-driven decision with a standard global business model – Disney, Pfizer<br />Focus intensely on the user experience to drive adoption and achieve target results – Disney<br />Schedule design reviews to avoid, “I didn’t think it would work like that.” – Pfizer<br />Know who will do the “IT Stuff” (maintenance, updates, etc.) - Disney<br />You need an ERP expert on your project team. Extract and review the ERP master data immediately to uncover data-related issues – Pfizer<br />Words of advice:<br />Focus on the user experience and results will follow - Disney<br />Ariba Technology Great But in Parallel Training Need for Own Staff to Support - Albemarle<br />You are only as strong as your strongest link - Pfizer<br />© 2011 Ariba, Inc. All rights reserved. <br />16<br />
    34. 34. Case Study<br />© 2011 Ariba, Inc. All rights reserved. <br />17<br />
    35. 35. Session Objectives<br />Look at a real-life case study for a Global Steel Manufacturer based on augmenting 12 SAP ERP systems deployed across Europe<br />There are two central focal points:<br />Improving Collaboration (internal and external)<br />Improving Processes<br />Savings for this initiative were based on three pillars<br />Increase Compliance<br />Improve Visibility<br />Drive Efficiency<br />© 2011 Ariba, Inc. All rights reserved. <br />18<br />
    36. 36. © 2011 Ariba, Inc. All rights reserved. <br />19<br />Situation<br />Procurement<br />Accounts Payable<br />Invoicing<br />Actual (+30% Mismatch)<br />Status<br />PO<br />Change / Cancel<br />Scanning<br />ving<br />Invoice<br />Catalog<br />Appro<br />Current State<br /><ul><li>Invested in scanning solution (Readsoft)
    37. 37. Outsourced AP to competitive priced provider
    38. 38. Shared service center is located in lower cost region </li></ul>Key Stats<br /><ul><li>124 FTEs
    39. 39. 1 Million invoices
    40. 40. € 23 Billion in invoices
    41. 41. Avg 8,065 invoices per year</li></li></ul><li>© 2011 Ariba, Inc. All rights reserved. <br />20<br />Situation<br />Automated<br />Manual<br />Procurement<br />Invoicing<br />Accounts Payable<br />Actual (+30% Mismatch)<br />Status<br />PO<br />Change / Cancel<br />Scanning<br />ving<br />Invoice<br />Catalog<br />Appro<br />Current State<br /><ul><li>Invested in scanning solution (Readsoft)
    42. 42. Outsourced AP to competitive priced provider
    43. 43. Shared service center is located in lower cost region </li></ul>Key Stats<br /><ul><li>124 FTEs
    44. 44. 1 Million invoices
    45. 45. € 23 Billion in invoices
    46. 46. Avg 8,065 invoices per year</li></li></ul><li>Situation<br />Procurement<br />Accounts Payable<br />Invoicing<br />Actual (+30% Mismatch)<br />Status<br />PO<br />Change / Cancel<br />Scanning<br />ving<br />Invoice<br />Catalog<br />Appro<br />Key Stats<br />Procurement Objectives<br />Procurement Activities<br /><ul><li>124 FTEs
    47. 47. 1 Million invoices
    48. 48. € 23 Billion in invoices
    49. 49. Avg 8,065 invoices per year
    50. 50. Increase catalogs usage to drive greater compliance - 500 with same FTE’s
    51. 51. Increase connectivity / visibility with suppliers
    52. 52. Simplify status updates (delivery & payment)
    53. 53. 35 plus fax servers connected to SAP
    54. 54. 83k PO per month
    55. 55. 5 FTE’s managing 125 catalogs</li></ul>21<br />© 2011 Ariba, Inc. All rights reserved. <br />
    56. 56. If Left Alone, Collaboration Would Look Like This…....<br />© 2011 Ariba, Inc. All rights reserved. <br />22<br />Purchasing<br />PO<br />Change Order<br />Cancel Order<br />Supplier<br />Order Conf<br />Adv Ship Not<br />For 1 supplier this means:<br /><ul><li>3 profiles to manage
    57. 57. 3 separate logins
    58. 58. 3 separate process
    59. 59. 3 separate supplier enablement approaches</li></ul>Collab Requests<br />Catalog Mgmt<br />Catalog Upload<br />Catalog Change<br />Supplier<br />Buyer Filters<br />Invoicing<br />Invoice<br />Supplier<br />Credit Memo<br />Collab Requests<br />
    60. 60. So what changed?<br />© 2011 Ariba, Inc. All rights reserved. <br />23<br />The SAP IT team was attending sessions conducted by the AP / eInvoice team as well as Procurement.<br />The focus of both initiatives was similar: improve internal and external collaborations with stakeholders.<br />IT simply asked, is there value connecting these processes?<br />
    61. 61. Collaboration OptionsStandardized Approach<br />Purchasing<br />PO<br />Change Order<br />Cancel Order<br />PO<br />Supplier<br />Change Order<br />Order Conf<br />Cancel Order<br />Adv Ship Not<br />Collab Request<br />Collab Requests<br />Single Connection<br />Payment Status<br />Supplier<br />Catalog Mgmt<br />Order Conf<br />Adv Ship Not<br />Catalog Upload<br />Invoice<br />Catalog Change<br />Supplier<br />Buyer Filters<br />Credit Memo<br />Invoicing<br />Purchasing<br />Invoicing<br />Catalog Mgmt<br />Invoice<br />Supplier<br />Credit Memo<br />Collab Requests<br />24<br />© 2011 Ariba, Inc. All rights reserved. <br />
    62. 62. © 2011 Ariba, Inc. All rights reserved. <br />25<br />Connecting the Processes<br />Moving from 2 parallel processes to a single automated flow<br />Procurement<br />Accounts Payable<br />Invoicing<br />From<br />Actual (+30% Mismatch)<br />Status<br />PO<br />Change / Cancel<br />Scanning<br />ving<br />Invoice<br />Catalog<br />Appro<br />To<br />Actual (+90% touchfree)<br />Real-time <br />Validation<br />g<br />Invoice<br />Status<br />PO<br />Change / Cancel<br />Status<br />Approving<br />Catalog<br />
    63. 63. Collaborative Benefits: the Value of Connecting Processes and Collaboration Documents<br />© 2011 Ariba, Inc. All rights reserved. <br />26<br />Accounts Payable<br />€1.7 M Operational Savings<br />Procurement<br />€1.1 M Operational Savings<br />€5 M Compliance Savings<br />€900k<br />€5Millions (Catalogs)<br />€500K<br />€650K<br />€300K<br />€300K<br />€115K<br />Approving<br />Status<br />eInvoice<br />Status<br />ASN<br />PO<br />
    64. 64. Improving Compliance, Collaboration and Visibility<br />© 2011 Ariba, Inc. All rights reserved. <br />27<br />Catalogues<br />€5 M<br />PO Automation<br />€1.1 M<br />INV Automation<br />€1.7 M<br />Total<br />€7.8 M<br /><ul><li>Triple+ the amount of catalogues using the same number of FTE
    65. 65. Get rid of 30 fax servers (and their phone bills)
    66. 66. Stop your requesters from calling suppliers to check status
    67. 67. Automate the reception of your low-value orders
    68. 68. Reach 98% touchless invoice reconciliation
    69. 69. Stop the suppliers from calling you about payment</li></ul>Catalogs<br />PO<br />Status<br />GRN<br />Invoice<br />
    70. 70. Questions / Open Discussion<br />© 2011 Ariba, Inc. All rights reserved. <br />28<br />
    71. 71. © 2011 Ariba, Inc. All rights reserved. <br />29<br />“Safe Harbor” and Confidential Information Statement<br />This information reflects the status of Ariba solution planning as of January 2011. All such information is the Confidential Information of Ariba (per the contract between our companies), and must not be further disclosed, as stated in the confidentiality clause of that contract. This presentation contains only intended guidance and is not binding upon Ariba to any particular course of business, product strategy, and/or development. Its content is subject to change without notice. Ariba assumes no responsibility for errors or omissions in this document. Ariba shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials.<br />
    72. 72. Maximizing the Value of Your ERP<br />Jason Wolf<br />John Lark<br />© 2011 Ariba, Inc. All rights reserved. <br />

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