Cost Cutting Conundrum Final

Greg Tennyson Chief Procurement Officer Dave Stephens Co-founder & Chief Evangelist

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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. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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 ,[object Object],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

Considerations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Requisition-to-Pay Process Flows Future State

Purchase Requisition to Purchase Order Process ,[object Object],[object Object],[object Object],[object Object]

Invoice to Payment ,[object Object],[object Object],[object Object]

SCOPE AND ARCHITECTURE What is involved to achieve business value

Phased Rollout Scope February 2, 2009 July 1, 2009 August 1, 2009 TBD Phase 1 Americas ,[object Object],[object Object],[object Object],[object Object],Phase 2 Global Buyers & Approvers ,[object Object],Future Self-Service & BI Integration ,[object Object],[object Object],Pilot IT commodity only ,[object Object]

Technical Architecture Overview diagram

The Road Ahead ,[object Object],[object Object],[object Object],[object Object],[object Object]

Build a Solid “Home” for Procurement! ,[object Object],[object Object],[object Object],[object Object],[object Object],Homegrown and paper-based On-premise and antiquated Solid, on-demand foundation

Seek Continuous Improvement Tools & Systems People & Processes A Field of Opportunities ,[object Object],[object Object],[object Object],[object Object],[object Object],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%

Measure Success 5-Ways ,[object Object],[object Object],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) ,[object Object],[object Object],Improve Spend Predictability Reduce Operating Costs Reduce Cycle Time Pay Less Spend Less

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

Cost Cutting Conundrum Final

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Cost Cutting Conundrum Final