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Tactical Spend? Indirect Purchase? Hear Experts’ Reasons for Choosing Ariba Discovery
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Tactical Spend? Indirect Purchase? Hear Experts’ Reasons for Choosing Ariba Discovery

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One-time purchase? Non-catalog item? Looking for new vendors? Maybe it’s a product or service you haven’t purchased before, or you need to find local or minority-owned vendors. No matter the ...

One-time purchase? Non-catalog item? Looking for new vendors? Maybe it’s a product or service you haven’t purchased before, or you need to find local or minority-owned vendors. No matter the project size, timing, or amount, hear from a panel of customers who have used Ariba Discovery to fulfill a wide range of tactical spend and indirect purchases. This session will focus on the use cases and opportunities for indirect/tactical spend and the challenges buyers face in these scenarios.

Customer panelists will focus why they chose Ariba Discovery and how it fits with their current sourcing and procurement processes. In addition, customers will explain how they use Ariba Discovery across a variety of internal teams and departments to augment their current processes.

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  • The initial time spent conducting market research on a new supplier can make up over 30% of the total sourcing cycle time.

Tactical Spend? Indirect Purchase? Hear Experts’ Reasons for Choosing Ariba Discovery Presentation Transcript

  • 1. #AribaLIVE Tactical Spend? Indirect Purchase? Reasons for Choosing Ariba Discovery Chris Wang, Director of Marketing, Ariba Discovery @AribaDiscovery April 10, 2014 © 2014 Ariba – an SAP company. All rights reserved. @ariba
  • 2. Agenda • Ariba Discovery for Indirect Spend • Best Practice Sharing • Q&A 2 © 2014 Ariba – an SAP company. All rights reserved.
  • 3. Insight-Driven Personal Shopping • We all do price, quality, and service comparisons in our personal lives to make the best purchasing decisions: © 2014 Ariba – an SAP company. All rights reserved.3
  • 4. Insight-Driven Personal Shopping • Whatever personal shopping need, there’s likely a website providing insights: © 2014 Ariba – an SAP company. All rights reserved.4
  • 5. Insight-Driven Business Spend • In business, insights and technology enable us to buy effectively and optimize spend: © 2014 Ariba – an SAP company. All rights reserved.5 Discovery Execute & MonitorStrategy Design Business Requirements Analysis Supply Market Analysis Sourcing Strategy Development Supplier Selection Contract Implementation Achieve Business Goals Change Management Strategies
  • 6. • Indirect Spend is a significant operating cost driver, but often neglected or placed on back burner or auto-pilot Indirect Spend – A Huge Opportunity © 2014 Ariba – an SAP company. All rights reserved.6 *Source: Using Technology to Streamline Tactical Sourcing. Patrick Connaughton and Kurt Albertson The Hackett Group. 4/29/2013. The Hackett Group found 43% of indirect spend is tactical and optimization can lead to purchasing cost reduction by 2-5%.*
  • 7. Technology Plays a Key Role • Technology tools have biggest impact on cost savings: © 2014 Ariba – an SAP company. All rights reserved.7 Source: *Tactical Sourcing Survey, The Hackett Group, 2011. Tactical sourcing capabilities used.
  • 8. Insufficient Technology Tools • While we consult expert websites in our personal lives to make smart purchasing decisions, business buyers typically try to find insights the traditional way: © 2014 Ariba – an SAP company. All rights reserved.8
  • 9. Insufficient Technology Tools • But Internet searches are time-intensive and ineffective when trying to conduct supply market analysis and identify and qualify suppliers: © 2014 Ariba – an SAP company. All rights reserved.9 Unqualified search results Need to visit supplier websites Find right contact person Possibly get a quote
  • 10. Benefits of Technology Tools • Leveraging technology tools for supplier discovery and qualification delivers significant reductions in cycle time: “While most companies take 2-3 weeks to source tactical spend, world-class companies have reduced the total cycle time to just a few days or even hours.“* Days 21 14 7 0 Most companies World-class companies *Source: Using Technology to Streamline Tactical Sourcing. Patrick Connaughton and Kurt Albertson The Hackett Group. 4/29/2013.© 2014 Ariba – an SAP company. All rights reserved.10 5 days 2-3 weeks Time spent on supplier research typically makes up over 30% of total sourcing cycle time.** **Source: Aberdeen Group eSourcing.
  • 11. Leading Technology Tool • Quickly discover and qualify new sources of supply with Ariba Discovery Discover new suppliers in days or hours, not weeks Compare multiple bids for every project Easily import suppliers into other Ariba solutions © 2014 Ariba – an SAP company. All rights reserved.11 *Identifying and qualifying suppliers. Based on documented customer experiences ** 2011 Ariba GSO Case Study Save up to 90% of time and 75% of cost* Lower spend by 15% on average**
  • 12. Strong Supplier Network • Ariba Discovery has grown exponentially with more suppliers than ever before © 2014 Ariba – an SAP company. All rights reserved.12 2012 2013 2014 500K 750K 1.2M Agriculture, Farming & Fishing, 1% Construction & Engineering, 11% Culinary Equipment, Food & Beverage, 3% Education, Organizations & Clubs, 3% Electronics & Electrical Components, 5% Energy, Drilling & Mining, 2% Facilities & Maintenance, 7% Industrial Equipment, 5% Industrial Services, 5% IT & Telecomm, 9% Marketing & Communications, 7% Medical, Heathcare & Lab Equipment, 4% Office Supplies & Printing, 4% Other Products, 5% Paper, Packaging & Containers, 3% Parts & Components, 5% Professional Services, 12% Raw Materials & Chemicals, 4% Vehicles, Transportation & Logistics, 5%
  • 13. Analyze, Discover, Qualify Create Posting on Ariba DiscoveryConduct Analysis on Ariba Discovery RFP PhaseRFI PhaseSupply Market Analysis Create a posting in just a few minutes Target all matching suppliers (or invite selected) Share requirements publicly Receive offers from qualified suppliers Compare all offers in single location Preview suppliers by category or keyword Review supplier profiles Message interesting suppliers for more details Include relevant suppliers in Posting Find suppliers with existing transacting relationships on the Ariba Network Review rich supplier profiles with Ariba Network activity data Access objective third-party financial and risk information Planned Purchases Unplanned Purchases Fully integrated with Ariba Sourcing™ On-Demand and Ariba Procurement 13 © 2014 Ariba – an SAP company. All rights reserved.
  • 14. • Find suppliers for every need Different Buying Situations © 2014 Ariba – an SAP company. All rights reserved. Spot sourcing/ 3 bids & buy Compliance 3-Bids & Buy Meet company requirements Find qualified vendors fast for stock-out, quality problems, or other unexpected needs Unanticipated Rush Orders Unstable services markets Unstable Services Markets Find quick replacement for markets with quick turnover Low-cost country sourcing Low-cost Country Sourcing Keep costs low to enhance margin Specialized seller requirements Specialized Requirements Meet diversity requirements, or customized product requirements New commodity areas New Commodity Find necessary expertise to launch new product/ service or enter new market 14
  • 15. Suppliers – Global and Local • International Supplier Base Over 30% of suppliers are headquartered outside of the United States More than 36% of suppliers have global reach in addition to serving locally and regionally © 2014 Ariba – an SAP company. All rights reserved.15 Other, 5% Asia- Pacific, 15% Europe, Middle East & Africa, 10%North America, 69% Latin America, 1% Geographic distribution of suppliers
  • 16. Diversity and Green Suppliers 16 • Find over 80,000 diverse suppliers Find small businesses that are already on the Ariba Network and reduce on-boarding efforts Highlight diverse and green requirements in postings or during preview and get matched to diverse suppliers See available qualifications on supplier profile pages © 2014 Ariba – an SAP company. All rights reserved.
  • 17. Buyer Successes in Key Categories 17 Reduced time to find suppliers from 4-8 weeks to days or hours Up to 58% cost savings through competitive bidding Solves challenges by tapping into supplier expertise Received 10 bids/posting and found 5 new suppliers 95% unit cost saving for new product launch Gained predictability by working with quality suppliers Connects with suppliers in a few days instead of weeks 15% cost saving across different categories 40% productivity increase Retail High Tech Manufacturing Chemicals Received first responses within 24 hours 20% cost savings for packaging Delivered savings 3x initial investment in Ariba Sourcing © 2014 Ariba – an SAP company. All rights reserved.
  • 18. More Benefits from SAP Integration • Ariba® Spot Quote for easier supplier identification and qualification: ERP system generates automated RFQ and publishes it in Ariba Sourcing Suppliers (invited/matched by Ariba Discovery) provide responses through Ariba Sourcing Responses are sent back automatically to the source system © 2014 Ariba – an SAP company. All rights reserved.18
  • 19. More Benefits from SAP Integration • Ariba® Spot Quote – Benefits: Reduction in processing time for spot quotes through highly automated process New supplier discovery via Ariba Discovery provides increased saving potentials Quick ROI due to out-of-the-box configuration of templates/integration adapters, plus zero implementation and training Bundled customer support for supplier participants and Sourcing administrators Robust out-of-the-box integration with SAP ERP and Oracle E-Business Suite © 2014 Ariba – an SAP company. All rights reserved.19
  • 20. How Ariba Discovery Works © 2014 Ariba – an SAP company. All rights reserved.20
  • 21. How Ariba Discovery Works © 2014 Ariba – an SAP company. All rights reserved.21
  • 22. How Ariba Discovery Works © 2014 Ariba – an SAP company. All rights reserved.22
  • 23. How Ariba Discovery Works © 2014 Ariba – an SAP company. All rights reserved.23
  • 24. How Ariba Discovery Works © 2014 Ariba – an SAP company. All rights reserved.24
  • 25. Integration with Ariba Sourcing • Easy access directly from Create menu “Market Research Posting” (RFI) or “Quick Quote Posting” (RFP) © 2014 Ariba – an SAP company. All rights reserved.25
  • 26. Integration with Ariba Procurement 26 Sourcing Initiatives #AribaLIVE • Easy access, use with or without a requisition To create posting without requisition, click on “Create” menu and select “Quick Quote Posting”, then click on “Post Now” button Create requisition under “Create Non-catalog Item”, then click on “Start Now” button to create a posting
  • 27. How to Get Started 27 • Getting started with Ariba Discovery is easy: 1. Contact us. We will show you how to get the right process set up. 2. Onboard and train team members. Assign user accounts and access permissions. 3. Try different categories. Create postings for different categories to increase success. © 2014 Ariba – an SAP company. All rights reserved. Ariba Procurement (P2P) Ariba Discovery (Website) Ariba Sourcing (On-Demand, On-Premise) discovery.ariba.com
  • 28. Caesars Entertainment • 52 Business Units across the United States 39 Properties in 13 US States 3 Tribal Properties 13 Corporate Business Units • Approximately $2B Addressable Annual Spend $.8B Managed through existing purchasing system $1.2B Spend outside of any purchasing system • Spend Breakdown 4 Portfolios 20+ Categories © 2014 Ariba – an SAP company. All rights reserved.28
  • 29. Supplier Engagement and Management Objectives • x x © 2014 Ariba – an SAP company. All rights reserved.29 Create Value through Competition • Leverage markets and sourcing strategies to derive maximum value Economic Inclusion • Engage and Include Local, Minority, Veteran, and Woman-Owned Business • Support local economies through doing business with local vendors Maintain Strong, Mutually Beneficial Vendor Relationships
  • 30. Supply Market Approach • Ariba SIM Supplier Profiles are maintained for all vendors who have participated in past events and that CET is currently doing business with. • Category Expertise Category Managers maintain industry expertise, including a strong understanding of key industry players. • Ariba Discovery Efficient method of identifying new vendors and easily including them in a Sourcing Event with minimal FTE impact. © 2014 Ariba – an SAP company. All rights reserved.30
  • 31. Make the Most Out of Your FTE • xx • Xx © 2014 Ariba – an SAP company. All rights reserved.31 Let The Software Search For You Easy Compilation and Comparison Of Responses Easy To Add Vendors Into Sourcing Event Free Up FTEs To Do More
  • 32. Driving Economic Inclusion • Caesars Entertainment actively encourages diverse vendors to participate in Sourcing Events. • Ariba Discovery’s “Seller Preferences” allow Caesars to target vendors based on: Geography Specific Small, Disadvantaged Businesses Women-Owned Businesses Minority Owned Businesses Veteran Owned Businesses Businesses with Green Initiatives © 2014 Ariba – an SAP company. All rights reserved.32
  • 33. Building a National Program Through Transactional Competition • Initiative Objectives: Develop a National program with preferred vendors who: Have accepted Caesars standard Terms and Conditions Meet Insurance Requirements Can guarantee a reliable supply chain • Obtain item level data and pricing. Develop item master Progressively reduce transactional touches Leverage competition to find best pricing © 2014 Ariba – an SAP company. All rights reserved.33
  • 34. Building a National Program Through Transactional Competition • . © 2014 Ariba – an SAP company. All rights reserved.34 Leverage Existing Supply Market • Include Vendors From Ariba SIM • Identify Gaps in Regional Vendor Base Investigate The Unknown • Utilize Ariba Discovery to identify new suppliers • Actively reach out to Diverse/Local Vendor Bases, in support of Economic Inclusion Develop Region Specific Preferred Vendor List • Define Region Specific Preferred Vendor List, and monitor Compliance • Periodically validate the Market via Ariba Discovery
  • 35. Q&A 35 © 2014 Ariba – an SAP company. All rights reserved.
  • 36. © 2013 Ariba, Inc. All rights reserved.36 Maximize Your Impact as a Buyer 1. Add critical details in your posting to allow faster seller response 2. Give seller feedback on their bidding process and your decision 3. Provide more guidance to sellers through Q&As and messages 4. Review seller ratings and customer references 5. Share your buyer portal URL broadly to increase awareness • Top 5 things to do to get what you need fast
  • 37. 37 Helpful Resources • Resources on Ariba Discovery for Buyers Live Demo Registration http://www.ariba.com/resources/live-demo/ariba-discovery-for-buyers Buyer Posting Tips Datasheet http://exchange.ariba.com/docs/DOC-2366 Ariba Spot Buy (Tactical Spend) Datasheet http://exchange.ariba.com/docs/DOC-2591 Ariba Discovery Customer Presentation http://exchange.ariba.com/docs/DOC-2101 Quick Start Guide for Ariba Sourcing Buyers http://exchange.ariba.com/docs/DOC-2592 Quick Start Guide for Ariba P2P/P2O Buyers http://exchange.ariba.com/docs/DOC-2361 Quick Start Guide for Ariba Discovery Website Buyers http://exchange.ariba.com/docs/DOC-2517 © 2014 Ariba – an SAP company. All rights reserved.
  • 38. Thank You! 38 © 2014 Ariba – an SAP company. All rights reserved.