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Cost Cutting Conundrum Final

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  • 1. Greg Tennyson Chief Procurement Officer Dave Stephens Co-founder & Chief Evangelist
  • 2.
    • Welcome to “The Cost Cutting Conundrum”
    • Moderator: Jason Hekl, VP Marketing, Coupa
    • Today’s presentation ~45 minutes
    • Q&A at the end of session
      • Feel free to submit your questions throughout today’s presentation
      • We will also have a couple of polls
      • Any unanswered questions will be responded to via email after today’s session
  • 3. It’s nasty out there!
  • 4. It’s nasty out there! Do not fear the winds of adversity. Remember: A kite rises against the wind rather than with it. - English proverb
  • 5. Not that there aren’t challenges… My budget and headcount have been slashed !
  • 6. Not that there aren’t challenges… I can’t believe they raised my savings targets!
  • 7. Not that there aren’t challenges… Six months?!? How am I going to reach that budget level in 6 months
  • 8. Not that there aren’t challenges… How hard can I really push my suppliers? What’s our risk ?
  • 9. “ A smooth sea never made a skilled mariner” Not that there aren’t challenges… My budget and headcount have been slashed ! I can’t believe they raised my savings targets! Six months?!? How am I going to reach that budget level in 6 months How hard can I really push my suppliers? What’s our risk ?
  • 10. The Cost Cutting Conundrum …and what Procurement can do about it.
    • Greg Tennyson
    • Chief Procurement Officer
    • Salesforce.com
    • 25 plus years of progressive sourcing/commodity management and commercial contracts
    • Subject matter expert around the use of eBusiness/ERP applications and process optimization in driving operational excellence
    • Bachelor's degree and M.S. from St. Mary’s College, Moraga CA
    • Professional certification credentials National Contract Management Association (Certified Professional Contracts Manager) and Institute of Supply Management (Certified Purchasing Manager)
    • Dave Stephens
    • Co-founder & Chief Evangelist
    • Coupa Software
    • 12 plus years helping organizations cut costs through e-procurement
    • Co-founded Coupa to bring the first SaaS e-procurement solution to market dedicated to small and midsized businesses
    • Built and led the development of Oracle’s Procurement Applications
    • Introduced Oracle’s first Apache and Java-based applications and delivered Oracle’s first multi-tenant SaaS offering
    • Bachelor of Science in Chemical Engineering from UC Berkeley
  • 11. BUSINESS VALUE AND DRIVERS Business Reasons for undertaking the project
  • 12. Business Drivers & Value Finance manually accounts for open PO expenses R2P process exists within separate silos without regard to up/downstream impacts Buyer role resides within the line of business
        • Oracle PO module does not allow content to be hosted or punchouts to be enabled
    AP prompts the business to receive Oracle AP provides for a single tolerance PO is printed, signed and sent to the supplier Managers have to log into Oracle to approve ✔ Improves PO accrual process ✔ Adopt best-in-class R2P process ✔ Enhances SOX practices by redefining segregation of responsibilities ✔ Provides for punchouts and catalog content, which drives on-contract spending ✔ Reduces the R2P transaction expense by automating process steps ✔ More advanced GUI and user friendly than the Oracle screens
  • 13. Considerations
      • Adopt self-service model
        • Represents cultural shift
        • Revised segregation of duties
        • Budget accountability
      • Adopt organizational hierarchical approvals
        • Today approvals follow reference table resulting in manual maintenance
        • Proposing organizational hierarchical approvals based on Workday feed
      • Move to a SSC model
        • Bifurcate, aggregate roles/responsibilities
      • Incorporate Purchasing Policy into Coupa’s Buying Policy
        • Enhanced governance
        • Ease of use
      • Sarbanes-Oxley
        • Revised segregation of duties
        • Adoption of BIC practices
  • 14. Requisition-to-Pay Process Flows Future State
  • 15. Purchase Requisition to Purchase Order Process
    • PRs auto generated based on content
    • Non-catalog PRs routed to Buyer for action
    • Provides mechanism to route PRs based on org hierarchy
    • POs sent via email or fax to supplier
  • 16. Invoice to Payment
    • Provides for electronic invoice as well as supplier invoicing online against the PO
    • Automates the receipt process
    • Reduces invoice/receipt transaction expense
  • 17. SCOPE AND ARCHITECTURE What is involved to achieve business value
  • 18. Phased Rollout Scope February 2, 2009 July 1, 2009 August 1, 2009 TBD Phase 1 Americas
      • 223 US buyers and approvers
      • Minimum 1 automated integration for go live: Invoices
      • Additional 5 integrations: Suppliers, GL Accts, PO Hierarchy, Users, Fx Rates
      • Release plan will reflect rolling scope of integrations
    Phase 2 Global Buyers & Approvers
      • Additional Fx integration and localization as required
    Future Self-Service & BI Integration
      • Potential Workday Users & Hierarchy integration to support SS
      • Potential integrations to data warehouse for analytical reporting
    Pilot IT commodity only
      • No integrations, manual configuration in Coupa
  • 19. Technical Architecture Overview diagram
  • 20. The Road Ahead
      • Coupa technology roadmap
      • e Sourcing
      • Business Intelligence
      • Aligning procurement with the Business
      • Doing more with less
  • 21. www.coupa.com
  • 22.
    • Next Steps
  • 23. Build a Solid “Home” for Procurement!
    • Salesforce.com is aggressively establishing a solid “home” for procurement. How about you?
    • Is your procurement infrastructure sound enough to sustain multi-year cost reduction efforts?
      • Do you know what your company is spending on non-payroll
      • If you negotiated great prices from your top 10 suppliers, are you confident that employees would consistently use them?
      • Have you eliminated negative spending surprises that eat away at your bottom line?
    Homegrown and paper-based On-premise and antiquated Solid, on-demand foundation
  • 24. Seek Continuous Improvement Tools & Systems People & Processes A Field of Opportunities
    • Discover your true non payroll spending
    • Estimate what % of purchases are pre-approved
    • Prioritize process areas to streamline
    • Prioritize spend categories to control
    • Evaluate your internal tools
    Just Beginning? Here’s What You Can Do Today! Content adapted from Coupa Proprietary Insight and Aberdeen Group “The CPO’s Agenda for 2008” SWAT team on procurement process Adopt S2S automation solution START! Spend analysis Automate invoice and payment txns Boost supplier accuracy thru self-service Expand supplier enablement programs Set S2S Standards Measure and capture savings Develop pipeline of categories to tackle Category-specific executive sponsor Measure savings as implemented Maximize collaboration with business Then Start Sustainable Cost Reduction Efforts KPI %Selected Identified cost reduction savings 72% % of total spend under management 64% Cost avoidance 58% Implemented / realized cost reduction savings 55% Procurement ROI (savings / operating costs) 52% % of suppliers – 80% of spend 51% Supplier performance (price, delivery, quality, service, etc.) 49% Procurement spend as % of revenue dollars 46% Requisition, PO or invoice transaction volume 34% Procurement spend per procurement employee 33%
  • 25. Measure Success 5-Ways
    • Reduce cycle time by ~30%
      • Best in class procurement groups achieve 75% lower requisition-to-order cycle times (Aberdeen)
    Reduce costs spent on purchasing by ~20% World-class procurement organizations spend about 23% less on labor, outsourcing, and related costs (The Hackett Group) Lower average order costs from by ~50% Best in class procurement groups achieve up to 20% cost savings for each new dollar of spend brought under management (Aberdeen) Reduce maverick spending by ~33% Best in class procurement groups experience 31% lower “maverick” (off-contract) spend (Aberdeen)
    • Increase spend under management by ~20%
      • Best in class procurement groups place 88% of their spend under management – twice the average (Aberdeen)
    Improve Spend Predictability Reduce Operating Costs Reduce Cycle Time Pay Less Spend Less
  • 26. A Q &
  • 27. Get on the Coupa Bus! Group Tour of Coupa e-Procurement Thursday, March 5 th 11AM PT / 2PM ET www.coupa.com Tel +1.650.585.6306