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Seizing the Spot Buy Opportunity

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When rush order, one-time buy, and low-dollar buy requests crowd your desk all day, it can spell trouble for your company’s business cadence, not to mention your workload. What’s the best way to …

When rush order, one-time buy, and low-dollar buy requests crowd your desk all day, it can spell trouble for your company’s business cadence, not to mention your workload. What’s the best way to quickly fulfill these requests? With Spot Buy capabilities powered by Ariba Discovery. During this session, industry experts will define “Spot Buy” opportunities and challenges, as well as share tools and best practices for successfully engaging in the Spot Buy market and handing the requirements in different situations.

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  • Add Q1/Q3 detailFTE investment is over 3x less than overall sourcing FTE investment (per 2011 Hackett benchmark database)Average wage rate of $51K is less than already low $63K for PO Processing by World-Class performers.
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    • 1. Seizing the Spot Buy OpportunityModerated by Chris Wang, Director of Marketing, Ariba DiscoveryMay 8, 2013 – Washington, DC© 2013 Ariba, Inc. All rights reserved.
    • 2. #AribaLIVEAgenda• Ariba DiscoveryTMOverview• Panel Introduction• Best Practice Sharing• Q&A© 2013 Ariba, Inc. All rights reserved.2
    • 3. #AribaLIVEWhat is Ariba DiscoveryTM• The premier service for matching business buyers and sellersglobally© 2013 Ariba, Inc. All rights reserved.350 PERCENT OF THEGLOBAL 2000OVER 3,000 BUYERS“I’m looking for…”“I can offer that!”
    • 4. #AribaLIVEHow Does It Work for Buyers?• Buyers describe needs in a posting and get matched to sellersCreate a posting Review proposals Make selectionDescribe your buyingneed in a postingReceive offers from sellerswho offer what you needReview proposals andchoose the best offerFind relevant new sellers faster and easier thanthrough traditional search methods4 © 2013 Ariba, Inc. All rights reserved.
    • 5. #AribaLIVEHow Does It Work for Sellers?• Sign up and get an email notification for every new lead1. Create your profile 2. Get lead notification 3. Submit your proposalRegister and create yourcompany profileGet notified when buyer postingsmatch your profile or when abuyer contacts you – it’s freeSubmit your proposal to thebuyer to build new relationshipsand win businessReach target audience faster and easier thantraditional marketing and sales channels5 © 2013 Ariba, Inc. All rights reserved.
    • 6. #AribaLIVEWhat Can I Use It For?• Finding trading partners for any product or serviceOver 730K buyers and sellersMore than 20K categoriesNearly 200 countries36% of sellers with global reachOver 40K green and diverse sellerso 16,000 Women-Ownedo 11,000 Minority-Ownedo 5,000 Veteran-Ownedo 4,700 Small Disadvantagedo 13,000 Green Buyers can search for green and diverse sellers© 2013 Ariba, Inc. All rights reserved.6
    • 7. #AribaLIVEManufacturing &Machinery 18%Other38%Electronics5%IT &Telecommunications5%Vehicles &Transportation 7%BusinessServices 19%Construction &Engineering 8%Leading Seller Categories© 2013 Ariba, Inc. All rights reserved.7
    • 8. #AribaLIVEDiverse Buying Needs© 2013 Ariba, Inc. All rights reserved.8IT &Telecom 10%ProfessionalServices 8%Construction &Engineering 8%Facilities &Maintenance 7%Parts &Components 7%IndustrialEquipment 6%Marketing &Communications 6%Raw Materials &Chemicals 6%Other 42%
    • 9. #AribaLIVEBuyersSellersAriba DiscoveryAriba Procurement(P2P)How Can I Use It?© 2013 Ariba, Inc. All rights reserved.9Ariba Sourcing(On-Demand, On-Premise)• Ariba Discovery can be accessed from multiple Ariba solutionsAriba Discovery(Website)Ariba Sourcing(Proposals)Ariba Discovery(Leads)Ariba Contract Mgmt(Contracts)Ariba Network(Orders & Invoices)
    • 10. #AribaLIVE© 2013 Ariba, Inc. All rights reserved.10New Forms of Buyer-Seller InteractionSourcing InitiativesBuyer• Large spend of $100K - 50M• Conducted by Sourcing managers• Find new sellers through postings onAriba DiscoverySeller• Receive buyer posting leads• Respond to buyer postings• Interact with buyers to formrelationshipSpot BuysBuyer• Smaller spend of $5K - $100K• Conducted by procurementmanagers, plant managers, spotbuyers• Fulfill non-catalog, rush order, orunplanned purchasing projectsSeller• Quick quotes to meet buyer needs• Showcase detailed, uniquecapabilities in profile• Pursue final sales fastMarket IntelligenceBuyer• Interested in supply marketintelligence for new markets or supplyroadmap• Most relevant sellers are contextuallypresented to buyer based on buyingactivities and seller capabilitiesSeller• Drive awareness to prospects throughtargeted messaging (ProfilePitch) andcomprehensive profile• Have buyers contact you when yourProfilePitch gets their attention
    • 11. #AribaLIVESeller Profile Page• BuyersReview profiles of sellerswho responded to learnmore about capabilitiesand credentialsPreview profile in sellersearches• SellersSubmit your profile withevery proposalShow up with profile inbuyer search resultsPromote your profile totargeted buyers11 © 2013 Ariba, Inc. All rights reserved.
    • 12. #AribaLIVEMore Value for Buyers and Sellers© 2013 Ariba, Inc. All rights reserved.12BUYER VALUE• Achieve incremental savings of 15%• Reduce costs up to 75% for selleridentification and qualification• Save up to 90% of time for selleridentification and qualification• Make better, more informed sellerselection decisionsSELLER VALUE• Tap into over $5B USD buying volumeright in Discovery• Maintain high visibility in front of realdecision-makers, with budget andready to buy• Cost effective lead source versustraditional methods• New sales channel, comprising15-50+% of revenue for many sellers
    • 13. #AribaLIVEThe PanelKurt Albertson,Associate Principal, ProcurementAdvisoryBrian BenderSr. Director, Global PurchasingIan ThomsonHead of Business DevelopmentCal MillerVP Business Development© 2013 Ariba, Inc. All rights reserved.13
    • 14. #AribaLIVEKEY INNOVATIONS FOR MORE EFFECTIVETACTICAL SOURCINGTHE HACKETT GROUP PROCUREMENT ADVISORYKurt Albertson, Associate Principal – Procurement AdvisoryMay 2013Statement of Confidentiality and Usage RestrictionsThis document contains trade secrets and other information that is company sensitive, proprietary, andconfidential, the disclosure of which would provide a competitive advantage to others. As a result, thereproduction, copying, or redistribution of this document or the contents contained herein, in whole or inpart, for any purpose is strictly prohibited without the prior written consent of The Hackett Group.Copyright © 2013 The Hackett Group, Inc. All rights reserved. World-Class Defined and Enabled.
    • 15. #AribaLIVEStrategic Sourcing???Usually managedthrough StrategicSourcingUsually managedthru transactionalbuying (e.g. ―3bids‖)The problem:Critical project purchasesbeing underservedSpend Importance(Spend $, risk, other business outcomes)Recurrence ofSpendingHigh(Highly Recurring)Low(One-off, ad hoc)High(Strategic)Low(Tactical)Gap in traditional procurementapproaches, leaving “tactical” spend poorlysupported15TransactionalBuyingNot transactional, butoften managed throughtransactional buyingchannel – if at all.Objective: Better management of tactical spend to drive savings manage through an efficient processthat takes into account the level of Procurement effort and cycle time requirements of internal customers
    • 16. #AribaLIVEValue proposition is better spend management andimproved stakeholder satisfaction4.3%6.1%Tactical Sourcing Strategic SourcingAnnual Cost Reduction as aPercent of Sourced SpendProcurement“ROI” = 3.5XProcurement“ROI” >3.5XThe Hackett Group, 20111426486296Lowest ComplexityLow ComplexityModerate ComplexityHigh ComplexityHighest ComplexityAverage Sourcing Cycle Time(Business Days)The Hackett Group, 2012TacticalStrategicSupports top two enterprise initiatives:• Improve Operating Margins• Improve Customer Services/Satisfaction16
    • 17. #AribaLIVEWhy bother? Tactical Spend is significantRoughly one-quarter of overall indirect spend is tactically sourced, however on an activity basis, overhalf of sourcing activity is tacticalThe Hackett Group Tactical Sourcing Survey, September, 201117
    • 18. #AribaLIVEWhich of the following problems do you facewith tactical sourcing?The Hackett Group, 201218
    • 19. #AribaLIVECreating Tactical Buying Desk with “Rules andTools” most commonly employed practiceThe Hackett Group Tactical Sourcing Survey, September, 201119
    • 20. #AribaLIVEOpportunities for improving process effectiveness20
    • 21. #AribaLIVEContact Information21Suite N5001117 Perimeter Center WestAtlanta, GA 30338Phone: +1 770 225 3600Martin House5 Martin LaneLondon EC4R 0DPPhone: +44 207 398 9100Torhaus WesthafenSpeicherstrasse 5960327 Frankfurt am Main, GermanyPhone: +49 69 900217 08, rue de Port Mahon75002 Paris, FrancePhone: +33 1 53 43 0400Strawinskylaan 3051G, 1077 ZXAmsterdam, The NetherlandsPhone: +31 20 301 2210Kurt AlbertsonAssociate Principal – Procurement AdvisoryPhone: + 1 770.225.7570kalbertson@thehackettgroup.com1-888-8HACKETTadvisor@thehackettgroup.comwww.thehackettgroup.com
    • 22. 08.03.12
    • 23. #AribaLIVEHuber Engineered Materials(HEM; Formed from existing businesses in 1998)• Four asset-based strategic business units (SBUs)Silica — used in toothpaste, food products, paper, rubber, excipients, cosmeticsFire Retardant Additives (FRA) — ingredients used in wire & cable, plastics, castpolymers, rubber, coatingsHealth & Nutrition — compressible powders used in dietary supplements as well asdisintegration aids, carriers and glidants used in oral dosage tabletsCalcium carbonate (GCC) — used in sealants, sheet rock, cast polymers, coatings• At a Glance…Pioneer in novel use of silica as a dental abrasiveOne of the largest precipitated Silica and Alumina Trihydrate processors globally© 2013 Ariba, Inc. All rights reserved.23
    • 24. #AribaLIVECP Kelco• Three core businesses:BiogumsCMCFoodgums• Global leader in gellan gum, cellulose gum/CMC, carrageenan, pectinand xanthan, with such diverse applications including:Food and BeveragePaperOil Field DrillingOral CarePersonal CarePharmaceuticalDetergents and Household Products• Role: Profitable growth and new business development© 2013 Ariba, Inc. All rights reserved.24
    • 25. #AribaLIVEJ.M. Huber & Its Challenges• Enhance the performance of multiple process manufacturingbusinesses with support across a variety of industries, markets andgeographies• ChallengesComplicated sourcing process across a broad range of products– 7 businesses, 24 process manufacturing plants, 5 R&D centers, 7 admin centersManaging spend across 5 continents in direct & indirect categories– FY 2012 spend = $840 millionManage large capital goods & services– FY 2012 = $80MManage MRO & plant services– FY 2012 = $45 millionCenter led with decentralized execution at the plant level– Plant buys focused on local sellers– Multiple ERP applications© 2013 Ariba, Inc. All rights reserved.25
    • 26. #AribaLIVEJ.M. Huber & Ariba Discovery• Uses Ariba Discovery to easily find sellers for a broad range ofproducts across manufacturing footprint• Ariba Discovery ResultsAllows for identification of potential sellers quickly and easilyProvides easy access for lower dollar value ‗Spot Buys‘Improves sourcing productivityBest used for standard ‗commodity‘ grade equipment vs. specialtyProvides easy platform ability for market tests across geographiesAlleviates local capacity issues and enhances productivity of plant and category buyersQuickly conducts market research and seller identification in new markets© 2013 Ariba, Inc. All rights reserved.26
    • 27. #AribaLIVEAbout Koozoo• First crowd-sourced network of continuouslybroadcasting smartphone video cameras• Venture Capital backed startup• Available on the App Store and Android Store© 2013 Ariba, Inc. All rights reserved.27
    • 28. #AribaLIVEAbout Koozoo© 2013 Ariba, Inc. All rights reserved.28
    • 29. #AribaLIVEKoozoo’s Challenges• No existing supplier database• Time-intensive, manual process of findingpotential suppliers and gathering pricing detailsusing various online channelsLinkedIn – ineffective and tediousAlibaba – suppliers failed to understandrequirementseBay, Amazon – difficult for hard-to-find devicesand custom solutions on sitesGoogle search – laborious and ineffective© 2013 Ariba, Inc. All rights reserved.29
    • 30. #AribaLIVEKoozoo & Ariba Discovery• Quickly found suppliers for iPhone and Androiddevices and custom-made mobile devicemount solutions• Used Q&A functionality to answer suppliers‘questions publicly, clarifying proposals andultimately receiving only relevant bids• Easy to evaluate, compare, respond to bids insingle location, exactly the details needed© 2013 Ariba, Inc. All rights reserved.30
    • 31. #AribaLIVEKoozoo & Ariba Discovery• Created 6 RFPs, received 10 bids each, andfound 5 new suppliers through Ariba Discovery• One supplier was able to deliver custom-madesolution within tight timeframe• Gained predictability – suppliers provided strategicinsight to product development• Cut solution cost from $17 down to $1 per unit© 2013 Ariba, Inc. All rights reserved.31
    • 32. #AribaLIVEAbout Blue Marble Media• Provide full turnkey production of film, video and motiongraphics• Clients: Ariba, Verizon, Georgia-Pacific, McKesson, Hitachi, etc.• Specialize in B2Bcorporate image filmstradeshow and meetings presentationsnew product introductionsrecruitment & orientation films"explainer" filmsweb commercials, etc.© 2013 Ariba, Inc. All rights reserved.32
    • 33. #AribaLIVEBusiness Development Options• Cold calls• Buying mailing lists & email lists• RFPs / RFIs (need to be invited)• Purchasing organizations (pay membership fee)• Business development outsourcing services• Networking events• And Ariba...© 2013 Ariba, Inc. All rights reserved.33
    • 34. #AribaLIVECost to Develop New Business• Time / in-house resources / outside resources• Out-of-pocket money• Wasted efforts on unqualified prospects• Coordination of email, snailmail, calls, tradeshows, etc.© 2013 Ariba, Inc. All rights reserved.34
    • 35. #AribaLIVEBenefits of Ariba Discovery• Time saved, efficient, professional, goodvalue, access to large companies• Best benefit: long term plan & strategy, buildingblocks approach, cost management & savings• ―Good House Keeping Seal” for large firms© 2013 Ariba, Inc. All rights reserved.35
    • 36. #AribaLIVENavigating the Network• Your Profile / References / Attachments• Responding to Introductions – do‘s & don‘ts• Managing your account• Getting help – lots of support to assist you!© 2013 Ariba, Inc. All rights reserved.36
    • 37. #AribaLIVEMake a Plan• Develop your messages (high level & strategic)• Organize your message support docs• Follow up!© 2013 Ariba, Inc. All rights reserved.37
    • 38. Questions?
    • 39. #AribaLIVEMaximize Your Impact as a Buyer© 2013 Ariba, Inc. All rights reserved.391. Add critical details in your posting to allow faster seller response2. Give seller feedback on their bidding process and your decision3. Provide more guidance to sellers through Q&As and messages4. Review seller ratings and customer references5. Share your buyer portal URL broadly to increase awareness ofyour buying opportunities• Top 5 things to do to get what you need fast
    • 40. #AribaLIVEMaximize Your Impact as a Seller© 2013 Ariba, Inc. All rights reserved.401. Update your profile and contact details2. Get the commodities and territories right3. Provide customized responses4. Invite more references5. Promote your profile to buyers• Top 5 things to do to leverage your company
    • 41. #AribaLIVEThank You!