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
Not that there aren’t challenges… My budget and headcount have been slashed !
Not that there aren’t challenges… I can’t believe they raised my savings targets!
Not that there aren’t challenges… Six months?!? How am I going to reach that budget level in 6 months
Not that there aren’t challenges… How hard can I really push my suppliers? What’s our risk ?
“ 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 ?
The Cost Cutting Conundrum …and what Procurement can do about it.
Chief Procurement Officer
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)
Co-founder & Chief Evangelist
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
BUSINESS VALUE AND DRIVERS Business Reasons for undertaking the project
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
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
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%
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