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The Collaboration Imperative in eProcurement – More than just Procurement and IT talking

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While Procurement and IT may have historically struggled in the deployment and adoption of business initiatives, today’s increasingly-networked economy is making collaboration even more critical. ...

While Procurement and IT may have historically struggled in the deployment and adoption of business initiatives, today’s increasingly-networked economy is making collaboration even more critical. However, rather than increasing the strain on this relationship, we are actually finding cloud technology offers new opportunities for collaboration and alignment inside of the corporate walls, as well as with global partners and suppliers.

In this session, explore some key lessons learned around leveraging a cloud strategy, increasing collaboration, and extending the business view to a more holistic level.

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  • Retail & CommercialSunTrust FootprintMore than 1,600 Branches2,900 ATMs800+ Relationship ManagersCorporate & Investment BankingNationalFull line of investment banking products and servicesHousehold LendingNationalResidential mortgages, commercial lendingMortgage servicing portfolio of $163BWealth & Investment ManagementNationalFull array of private wealth management and institutional solutions including personal and institutional investment management
  • Financial Services Organizations have a completely different spend profile from a Retail Organization for exampleAround 80% of our spend is a simple or complex service20% of our spend is a traditional purchase order transaction
  • Procurable Spend Under Management Implementation 2009: Achieved 20%Implemented Catalogs and PO solutions (low hanging fruit)Set Up Procurement team2010: Achieved 45%Deeper Integration of New Sourcing Projects into Procurement to ensure Ariba Set Up for all New DealsDeeper Integration of Finance and having shared goals for the Spend Management strategyGreater buy-in from LOB on Commodity Implementations and timelinesStronger Compliance Reporting & User/Supplier Adoption Processes2011: Achieved 80%Procurement Processes Improved – greater understanding of methods of procurementDeeper Awareness & Campaigning of the Ariba tool being the Financial System of Record for Spend ManagementAP Processes Enhanced to Standardize all Suppliers on Ariba processes2012: Achieved 87%Implemented Services ProcurementBegan to implement different phases of PO Contract Release ContractsFurther improvements in Sourcing, Contracting and Procurement ProcessesIncreased leverage of different types of P2P solutions to capture unique spend opportunities2013: Achieved 87.4%Continued to implement Services ProcurementAdded additional types of Contract ComplianceMigrated more spend to PO by using Contract Releases to increase cycle times
  • The ultimate goal of enabling a spend management tool is to strengthen the position of the organization through the process of:Reducing Maverick SpendLeveraging Spend DataOptimizing Cash FlowHowever, depending on an organizations culture and where they are in the spend management maturity lifecycle, the organization may face several challenges to this goalBELOW IS A LIST OF WHAT WE HAVE COME UP WITH AS BEST PRACTICES AND KEY LEARNINGS IN OUR SPEND MANAGEMENT JOURNEYHave Senior Leadership involved and supportive of a spend management strategyNo ensure no one thinks there is an opt-out optionEnsure you have Executive Buy-in to your company’s P2P policyCreate a No PO or C, No Pay policy to let suppliers know you will not pay them without a PO# or C# in advanceCreate a Category onboarding planTo create direction with a plan with milestones and results oriented. Review often. Set achievable spend optimization target (companies that have no direction randomly enable spend)Cease accepting paper invoices for suppliers where you have an Ariba relationshipCreate a stop gap for suppliers you know are set up to process invoices in Ariba to prevent them from circumventing the system and your processUnderstand what commodities work best with each Procurement solution (Catalog, Non-Catalog, Contract Compliance, Services Procurement)Important to create a strong connection/line of communication between sourcing, procurement, APIntegrate P2P solutions into contract strategies Establish an exception handling process for times invoices don’t match contractsDeeper integration of new sourcing projects into procurement to ensure Ariba set up for all new deals (in RFxs and Contract language)Realize P2P strategies for services likely requires a phased approach with a solution that matures in cycles of process improvement Realize…the VIEW IS WORTH THE CLIMB! It may not feel like it while you are climbing

The Collaboration Imperative in eProcurement – More than just Procurement and IT talking The Collaboration Imperative in eProcurement – More than just Procurement and IT talking Presentation Transcript

  • The Collaboration Imperative in E-Procurement – More than Just Procurement and IT Talking Ashley Miller, GVP, Strategic Supply Management, SunTrust Bank @ashleymiller124 March 2014 #AribaLIVE @ariba © 2014 Ariba – an SAP company. All rights reserved.
  • SunTrust Bank 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 $173.4 billion it is one of the nation's largest and strongest financial holding companies Diversified Business and Product Mix • Employs approximately 30,000 teammates Retail & Commercial 2 © 2014 Ariba – an SAP company. All rights reserved. Corporate & Investment Banking Household Lending Wealth & Investment Management
  • Current State Before a Spend Management Strategy • Lack of Robust Spend Visibility Limited Product/Line Item Visibility Imperfect Visibility into What Was Being Purchased and at What Price • No Formal Means for Spend/Contract Compliance Contracts were Negotiated, but Limited Ability to Match Invoices to Contract Terms No Automation to Match Compliance • No Centralized Contract Repository Contracts were All Over the Bank, and No Visibility into How Many There were and What they were • No Place to Store Sourcing Project Documents and Deliverables Documents were Not Retained - Contract, Supplier and Commodity Strategies were Lost 3 © 2014 Ariba – an SAP company. All rights reserved.
  • Spend Profile for a Financial Services Organization • • 80% of spend concentrated with under 400 suppliers • 4 Over $2 Billion of procurable spend with over 8,000 suppliers Critical suppliers account for approximately 40% of total spend © 2014 Ariba – an SAP company. All rights reserved.
  • Goals of a Successful Spend Management Program • Contract Compliance • • • Spend Visibility • • Implement processes and reporting that ensures detailed information on our spend (What was bought, How much was paid, How many received, Who consumed, Supplier utilized) The Path to Success • • • • 5 Ensures financial stewardship and expense management of Supplier Spend Invoices are matched to negotiated Contract Rates with preferred suppliers Identify & Solution Commodities Enable Suppliers Electronically Transact Electronically Implement Continuous Improvements © 2014 Ariba – an SAP company. All rights reserved.
  • Strategic Supply Management Overview STRATEGIC SOURCING Strategic Sourcing Relationship Management PROCUREMENT Procurement Sourcing Procurement Operations OPTIMIZATION Sourcing Transformation Sourcing Analytics Focused on bringing alignment of supply strategy to business partners Focused on efficient delivery, risk management & controls Focused on supporting, enabling, and sustaining the transformation Category Management:  Apply deep market and category knowledge to lead strategic sourcing strategies for products and services owned by the LOB’s & Functions.  Partner with the business to maximize performance, delivery, and value realized in spend clusters  Identify and support global outsourcing & offshoring needs of the enterprise Relationship Management:  Serve as single point of contact to provide clarity & transparency on SSM deliverables to specific RMsupported LOB’s & Functions  Partner with Sourcing, Procurement, & SSM Optimization to ensure LOB & Function business goals are achieved Supplier Diversity: Promote & enable opportunities for SunTrust to do business with minority and woman owned suppliers Provides Outsourcing Transition Management:  Provide guidance to LOBs/Functions on various Outsourcing projects Sourcing & Contract Management:  Concentrates on the routine sourcing and contracting activities in support of Strategic Sourcing  Leads sourcing strategies for products & services owned by SSM (supplies, travel, etc)  Focused on efficient delivery, flexible processes, cycle time reduction, contract risk management Procurement Operations:  Provides back-office operations/support across the sourcing organization  Responsible for Source-to-Pay process optimization Contract Administration:  Provides administration of third party contract repository Sourcing Transformation:  Provides program management for deploying the organization engagement model & ensuring sustainability & change management support  Supports development of governance councils for effective spend management Sourcing Analytics:  Provides analytics & decision support across teams (i.e. spend visibility, category analyses, supplier financial viability, data analytics)  Develops & monitors KPI’s, metrics, and dashboards (i.e. process & organization performance at the category level, LOB level, and executive level) Process, Policy & Audit: • Maintains SSM Policies & ensures processes are established with proper governance & audit Financial Management: • Performance measurement & reporting • Budget and planning for SSM Systems & Tools Administration: • Provide systems & tool support & administration
  • Implementation of Spend Management Platform = Increased Internal and External Collaboration Finance LOB Accounting Supplier Outsourcing AP Procurement Legal Tax Business Continuity Information Security • 7 ARIBA 3rd Party Risk Management Supplier Diversity The majority of collaboration internal and external happens in the tool and can be tracked and reported © 2014 Ariba – an SAP company. All rights reserved.
  • Supplier Experiences • • SunTrust started with no spend under management When spend management platform was implemented, suppliers were trained on the Ariba Network and onboarded Supplier A: 0% to 100% spend transacting across the Ariba Network Supplier B: Repurposes Accounts Receivable man hours because they do not have to follow up on outstanding invoices 8 © 2014 Ariba – an SAP company. All rights reserved.
  • Value Capture from a Spend Management Strategy Identifying Value Analyze Spend Source Savings Category Supplier Management Buyer / LOB Compliance Discounts and Rebates Spend Visibility - Improved Sourcing Accelerated Sourcing 9 Realizing Value Contracts Procure Invoice & Pay Manage Savings Levers Ensure Control and Compliance in our Payment Process by matching all Invoices Expenses direct to negotiated Contract Terms Automated requisitions and approvals enforce use of Preferred Suppliers and Demand Management / No PO No Pay policies before the purchase commitment Automate invoice processing allows (1) negotiate for early payment discounts (2) capture these discounts through timely payments Significantly improve data leads to improved Sourcing Strategies, Pricing, Reduce number of suppliers, and better supplier performance Manage larger projects and source more quickly through tools for integrated project management, contract creation, RFx, & reverse auctions © 2014 Ariba – an SAP company. All rights reserved.
  • Ensuring Value Realization Build a Scorecard and Measure Results Value Lever Price Reduction Reporting Metric Sourcing Project Savings % Rebate Dollars Spend Compliance % of POs on Catalog or Contract % of Invoices Reconciled to PO or Contract % of Addressable Spend with Preferred Suppliers Process Improvement % of POs on Catalog % of Electronic Invoices Invoice Cycle Time Cash Management Invoice Time to Approval Average Days Payable Outstanding Supplier Management & Leverage 10 © 2014 Ariba – an SAP company. All rights reserved. # of Suppliers That Make up 80% of Addressable Spend
  • Best Practices & Key Learnings • • • • • • • • 11 Have Senior Leadership involved and supportive of a spend management strategy Create a No PO or C, No Pay policy to let suppliers know you will not pay them without a PO# or C# in advance Create a Category Onboarding plan Cease accepting paper invoices for suppliers where you have an Ariba relationship Understand what commodities work best with each Procurement solution (Catalog, NonCatalog, Contract Compliance, Services Procurement) Important to create a strong connection/line of communication between sourcing, procurement, AP Realize P2P strategies for services likely requires a phased approach with a solution that matures in cycles of process improvement Realize…THE VIEW IS WORTH THE CLIMB! © 2014 Ariba – an SAP company. All rights reserved.
  • Next Steps for SunTrust Bank • Continue to strive to achieve more spend under management We are currently at 87.4% spend under management, but we want more • • Continuous Improvement, Continuous Improvement, Continuous Improvement Work on continuing to tweak Ariba to make it work better for us so that we can be more efficient and effective Never be satisfied 12 © 2014 Ariba – an SAP company. All rights reserved.
  • APPENDIX 13 © 2014 Ariba – an SAP company. All rights reserved.
  • Ariba Solutions Deployed at SunTrust Supplier Performance Management Performance Surveys Scorecards Sourcing Project Management: Reporting, Project Cycle time, Project Artifact storage, etc Standardization in Process & Templates: Sourcing Library Performance of RFI, RFP, & Auctions Document Archival Savings Tracking Contract Management Contract Administration: Storage, Archival, & Retrieval Establishes linkage between Master & Sub-Agreements (approx. 18,000 agreements) Contract Compliance: Invoice to Contract Match, Contract Releases Reporting: Expiring Contracts, Contracts by Supplier, LOB, etc eSignature getting ready to be deployed Approvals for contracts electronically routed 14 © 2014 Ariba – an SAP company. All rights reserved. Procurement Catalog & Non-Catalog Purchase Orders: Punch-out, supplier hosted, custom workflow, etc (approx. 200,000/yr. & 5,000 users/mo.) Services Procurement in use for Consulting, Print, Recruiting, Training (collaboration feature not currently in use) Accounts Payable Invoice Processing: Invoices matched to PO and/or Contract Invoice Workflow: Exception handling, approvals, receipt verification Payment Terms: Prompt Payment Discounts Ariba Network eBilling: 95% volume of invoices are eBilled & about 50% of spend is eBilled Electronic issuance of POs, Contracts, etc Electronic Supplier Connectivity: EDI, CXML, CSV uploads Catalogs: Hosted and Punch Out (75)