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5 steps-to-smarter-spending
 

5 steps-to-smarter-spending

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5 steps-to-smarter-spending

5 steps-to-smarter-spending

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  • Everyone, no matter who they are – consumers, employees, executives and procurement folks like all of you – are all striving to answer a seemingly simple enough question, “how do I spend smarter and save?” But why the fixation on this one question? After all, industrialized business has been around for centuries and with all the complexities of business, why would everyone be so fixated on this one simple question?
  • Because, by answering this one seemingly simple question, you are able to unlock endless opportunity and value.
  • As consumers, we all know that if we can spend our hard earned money smarter and save a little bit more than we did before, we are able to have a bigger nest egg for retirement, we could own that home, take that dream vacation or fund our children’s education.
  • For employees, if we can find a way to work smarter and help save the company money, we are able to have access to more resources that might not have been available if budgets were cut, we get to focus and be productive in our work and get more opportunity to do things we are interested in and we find rewarding.
  • Executives and organizations are able to take opportunities to grow the company, deliver profits and keep shareholders happy – which in turn keeps everyone else happy and employed - and keep tighter controls on spend.
  • And last but not least, for procurement professionals like all of you, being able to demonstrate smarter spending not only allows you to be more efficient and negotiate better contracts, but provides opportunity to showcase strategy and thought leadership.
  • So, how do you take all the best practices and learning we have, from our experience as professionals and consumers, to empower smarter spending and deliver savings?
  • Rob:In today’s workshop, we will show you how you can start to make changes and put things in place that will allow you to achieve real results like these:Improve purchasing process efficiencies by 20%.Drive 100% spend under management and 100% user adoption.Identify new suppliers, deals and discounts to save upwards of 11% of total spend per year.Produce immediate savings by shaving a minimum of 40% off of your purchasing support costs.
  • And to make these results actionable, we have developed 5 best practices that are easy to implement within your organization, so you can go back to your places of business and actually take the steps toward smarter spending.Build a foundation for success. Get out from under the stacks of requisitions and invoices. Stop pushing paper. Leverage automation.Make it easier than “beg forgiveness” expensing. Give users a familiar experience. Make it as easy to use as Amazon or Google. Drive user adoption.Crowd source savings. Empower employees. Let them find good deals and savings. Keep all purchases within the process.Benchmark against real transactional market data. Skip the surveys. Showcase your strategic value. Accurately measure results.Take advantage of what SaaS has to offer. No software or hardware to buy. Forget about upgrades and maintenance. Save immediately
  • Taleo Story: tell story about existing process and how they are using FileMaker Pro to manage their process and that it is so inefficient that Katy had to literally run up and down the halls to see if things had received the proper approvals. Archaic systemFile maker Pro 100% custom, painful to upgrade / maintain+No visibilityNo way of knowing if anyone had actually looked at the POLiterally had to run up and down the hall to get verification that things are legit=Inefficiency, time-consumption, frustration
  • Before anything else, in order to empower smarter savings you MUST have a foundation that will support success. Building blocks for a successful foundation include:DashboardsBenchmarksReal-time alertsMobile approvalWorkflow automationExpense reportingRequisitioningAuditingSupplier networkComparison shopping
  • Why is the foundation so important?Because at the end of the day it’s this foundation that will determine the success or failure of your smarter spending initiatives. It defines the hard and soft costs associated with managing your spend, which in turn will define
  • The foundation will define 2 things:1: How much does your process cost including hard and soft costs2: How will this impact what purchasing can do to make an impact on the organization
  • Review your existing processHow is it performing? How much does it cost to support the existing system?Are there areas that can be streamlined by automation? Are there unnecessary manual steps that are slowing down the process?Define your process roles and responsibilitiesShould procurement be pushing paper? Or is there time better spent elsewhere?How can employees be educated and empowered to take action?Know your optionsWhat kind of solutions are available? On-premise? SaaS? Cloud?Do you have any specific technology requirements? Will you have to integrate with other systems?What are your long term goals? What solution can grow with you as you evolve and innovate?Try and buyHow can you test the system?Who will be involved in the process? What is their feedback on the change?Which will give you the best value, not just for the price but for improving the process?
  • Taleo Story: marketing was trying to do it on their own and if they would have bought outside of the process and just relied on their Google search and order, they would have ended up getting burned (actual supplier was some guy on the corner, had no actual list to sell).Google search for list brokers+Too good to be true deal =Unreliable, unreputable suppliers
  • For the most part, employees want to do the right thing, work within the system and contribute to company savings. Miles long “to do” lists, compounded by having to do even more work with less resources, means that in many cases employees are going to take the path of least resistance. They are going to do what is easier and helps them meet their immediate need to get the job done. But this isn’t always the most cost effective option.
  • If spend doesn’t happen in the process, it’s not visible. Making it the easiest alternative will encourage adoption.
  • When you make expense management EASY, people will actually use the system and the overall organization benefits. According to a recent Aberdeen Group report on T&E expense management, best-in-class organizations are realizing significant benefits by using an expense management system:51% lower expense-processing costs than enterprises without solution in place41% faster time to complete a single expense report than organizations not utilizing an end-to-end tool21% quicker expense approval time than enterprises without an end-to-end expense management solution
  • Learn from employeesLet them give you feedback, hold a town hall or conduct a quick survey Understand why they work outside of the process and what they are comfortable withEducate employeesMake purchasing policies visible and easily accessibleSend things back – but with clear instructions on how to do it rightEmpower employeesUse role based permissions and give them access to the systemLet them handle one-off requestsRemember to KISSGive them a familiar experienceDon’t make it painful and time consuming
  • Approved suppliers, negotiated contracts+In process comparisons and options=Deals, discounts, savings
  • We are all consumers in our professional and personal lives. Many of us could say that our purchasing skills have been fine tuned in the consumer world where are budgets are smaller and bargain hunting is more important. In some way, every employee in your organization has the ability to contribute to savings. And at the end of the day, the more people you have on the look out for and taking advantage of good deals, the better it is for everyone.
  • Every day we all face time and resource constraints. Procurement cannot be expected to be experts in every purchase need, and in many cases the end user is the most qualified to make the purchase decision. So rather than get procurement involved in EVERY purchase, let employees find deals on ad-hoc requests – freeing up time for procurement to focus on more strategic activities.
  • Technology has changed the way we do everything – including how we buy things and get our jobs done. In the online world, global search and price comparison engines make it possible for anyone to find what they need at a pretty reasonable price. And this couldn’t come at a better time. Purchasing resources are limited. Procurement professionals are having to do more with less and need to find a way to remove themselves from processes that are not an efficient use of their time so the can focus on the big things that will have a bigger impact on the organization.
  • Manage ALL purchases through the same processFamiliar, easy, consistent user experience100% visibility across all purchases and expensesLet employees make educated decisionsPre-negotiated, preferred vendor prices Search for same product from other suppliersIntegrate feedback and ratingsLet them know which suppliers are reliableCollect insight on new potential sources of good deals
  • Taleo Story: how easy it was to get the report information needed to provide procurement results to management.Real-time dataAvailable 24 x 7Instant updates+One central data sourceEasily accessible from anywhere=Accurate, action oriented reporting
  • It used to be difficult to prove the value of procurement because it was hard to get your hands on transactional, spend and expense data in a way that is usable, so at best you could make an educated guess to determine your impact. Now it’s easy to prove procurement success because real-time data and centralized systems make it easy to get the information you need when you need it.
  • You need to be able to measure and access data in order to create an accurate benchmark to compare performance too.
  • Define what you want to measureWhich performance measures are you accountable for?What metrics can you impact?Understand where / how data is capturedWhat systems measure which activities?Collect and MonitorCollect metrics on regular intervalsTrend metrics over time to identify change pointsTest and MeasureImplement calculated changes
  • Taleo Story: cloud computing organization as well, drink our own champagne.No old, dusty hardware or software to install or maintain+ Rapid innovation= Robust, results driven solutions
  • Cloud computing allows you to realize instant results. You immediately save in a number of areas – especially since there is no hardware or software to buy, no consulting to hire or excessive training needed to get up and running.
  • Lower upfront costs = Immediate SavingsLower ongoing maintenance costs = Long Term SavingsFaster time-to-value = Bigger ImpactAutomatic updates = Continuous Innovation
  • Focus on YOUR businessIf spend management solutions are not your core business, don’t waste your timeFind an expert who can guide you with the right technology and best practicesMove to the CloudImplement and innovate fasterTake the burden off of IT – no hardware, no softwareConsider a Phased ApproachStart with key departments Leverage that success across the organization
  • In summary, how can each of us – no matter what role we play – spend smarter and save?
  • By following the 5 best practices we outlined today. Build a foundation for success. Improve purchasing process efficiencies by 20%.Make it easier than any alternative. Drive 100% spend under management and 100% user adoption.Crowd source savings. Identify new suppliers, deals and discounts to save upwards of 11% of total spend per year.Benchmark against real transactional market data. Take advantage of what SaaS has to offer. Produce immediate savings by shaving a minimum of 40% off of your purchasing support costs.

5 steps-to-smarter-spending 5 steps-to-smarter-spending Presentation Transcript

  • Five Steps to Smarter Spending A Hands On, How To Session for the Procurement PractitionerRob Bernshteyn Charlotte LawsonChief Executive Officer Purchasing Manager650/931-3214 904/520-6205rob.bernshteyn@coupa.com clawson@taleo.com
  • consumers employees How do I spend smarter and save?procurement executives
  • consumers employeesprocurement executives
  • consumers
  • employees
  • executives
  • procurement
  • consumers employees How DO I How do I spend smarter spend smarter and save? and save? decisionprocurement makers
  • Today’s WorkshopWe are going to show you how you can achieve these results: Improve purchasing process efficiencies by 30%. Drive 100% spend under management and 100% user adoption. Identify new suppliers, deals and discounts to save upwards of 11% of total spend per year.Produce immediate savings by shaving a minimum of 40% off of your purchasing support costs.
  • 5 Best Practices for Spend Management1. Build a foundation for success.2. Make it easier than any alternative.3. Crowd source savings.4. Benchmark against real transactional data.5. Take advantage of what the cloud has to offer.
  • A Lesson In Efficiency + =Inefficiency, time-consumption, frustration
  • Step 1: Build a foundation for success.
  • Step 1: Build a foundation for success.Success – or failure – is dependent on the foundation you have in place.
  • Step 1: Build a foundation for success.• The foundation defines: – The costs of supporting spend management • How many people are needed • Do you need Hardware? • Will you need to maintain and upgrade the system? – The focus of the purchasing team • Paper pushing or strategic value? • Fixing errors or finding opportunities? • Status quo or innovation?
  • How to DO it• Review your existing process – How is it performing? How much does it cost to support the existing system? – Are there areas that can be streamlined by automation? Are there unnecessary manual steps that are slowing down the process?• Define your process roles and responsibilities – Should procurement be pushing paper? Or is there time better spent elsewhere? – How can employees be educated and empowered to take action?• Know your options – What kind of solutions are available? On-premise? SaaS? Cloud? – Do you have any specific technology requirements? Will you have to integrate with other systems? – What are your long term goals? What solution can grow with you as you evolve and innovate?• Try and buy – How can you test the system? – Who will be involved in the process? What is their feedback on the change? – Which will give you the best value, not just for the price but for improving the process?
  • A Lesson In Spending Surprises + =Unreliable, unreputable suppliers
  • Step 2: Make it easier than any alternative.
  • Step 2: Make it easier than any alternative.In order to get spend under management spend MUST happen within the process.
  • Step 2: Make it easier than any alternative.• According to Aberdeen Group, best-in-class organizations that utilize easy-to-use expense management systems experience: – 51% lower processing costs than enterprises without solution in place – 41% faster time to complete a single requisition or expense report than organizations not utilizing an end-to-end tool – 21% quicker approval time than enterprises without an end-to-end solution
  • How to DO it• Learn from employees – Let them give you feedback, hold a town hall or conduct a quick survey – Understand why they work outside of the process and what they are comfortable with• Educate employees – Make purchasing policies visible and easily accessible – Send things back – but with clear instructions on how to do it right• Empower employees – Use role based permissions and give them access to the system – Let them handle one-off requests• Remember to KISS – Give them a familiar experience – Don’t make it painful and time consuming
  • A Lesson In Bargain Shopping + = Deals, discounts, savings
  • Step 3: Crowd source savings.
  • Step 3: Crowd source savings.It is impractical and inefficient for procurement to be involved in EVERY transaction.
  • Step 3: Crowd source savings.• In the online world, everyone can: – Find the materials and supplies they need – Comparison shop – Find a good deal and save• Purchasing resources are limited – Educate and empower employees – Stop getting involved with every ad-hoc request – Focus on the big initiatives
  • How to DO it• Manage ALL purchases through the same process – Familiar, easy, consistent user experience – 100% visibility across all purchases and expenses• Let employees make educated decisions – Pre-negotiated, preferred vendor prices – Search for same product from other suppliers• Integrate feedback and ratings – Let them know which suppliers are reliable – Collect insight on new potential sources of good deals
  • A Lesson In Measuring Impact + =Accurate, action oriented reporting
  • #4 Benchmark against real transactional data.
  • #4 Benchmark against real transactional market data. It’s impossible to improve spending practices and savings WITHOUT knowing where you stand.
  • #4 Benchmark against real transactional market data. Why is this important?• Benchmark and KPI s provide critical insight into; – savings as a percentage of spend – average requisition approval time – percentage of requisitions rejected – percentage of purchase orders revised – percentage of non-matched invoices
  • How to DO it• Define what you want to measure – Which performance measures are you accountable for? – What metrics can you impact?• Understand where / how data is captured – What systems measure which activities?• Collect and Monitor – Collect metrics on regular intervals – Trend metrics over time to identify change points• Test and Measure – Implement calculated changes
  • A Lesson In Cloud Computing + =Robust, results driven solutions
  • #5 Take advantage of what the cloud has to offer.
  • #5 Take advantage of what the cloud has to offer. One of the few opportunities where you can demonstrate INSTANT results.
  • #5 Take advantage of what the cloud has to offer. Lower upfront costs = Immediate SavingsLower ongoing maintenance costs = Long Term Savings Faster time-to-value = Bigger Impact Automatic updates = Continuous Innovation
  • How to DO it• Focus on YOUR business – If spend management solutions are not your core business, don’t waste your time – Find an expert who can guide you with the right technology and best practices• Move to the Cloud – Implement and innovate faster – Take the burden off of IT – no hardware, no software• Consider a Phased Approach – Start with key departments – Leverage that success across the organization
  • Summaryconsumers employees How do I spend smarter and save? decisionprocurement makers
  • 5 Best Practices for Spend Management• Build a foundation for success. Improve purchasing process efficiencies by 20%.• Make it easier than any alternative. Drive 100% spend under management and 100% user adoption.• Crowd source savings. Identify new suppliers, deals and discounts to save upwards of 11% of total spend per year.• Benchmark against real transactional market data.• Take advantage of what SaaS has to offer. Produce immediate savings by shaving a minimum of 40% off of your purchasing support costs.
  • Q & A
  • Rob Bernshteyn Charlotte LawsonChief Executive Officer Purchasing Manager650/931-3214 904/520-6205rob.bernshteyn@coupa.com clawson@taleo.com