0
Urgent
Purchasing

How
One
Procurement
Professional
Took
Ma=ers
Into
His

        Own
Hand
to
Get
Spend
Under
Control
    ...
Poll
1:


How
have
you
personally
helped
your
company
save?

                                                           I'...
Introducing David Howard

David Howard, Director, Central Purchasing
Reebok-CCM Hockey
With more than 20 years of supply c...
Reebok-CCM Hockey

  A history of challenging conventions to create
products that tap into athletes unlimited potential
  ...
Reebok-CCM Hockey
                                   Non-Product Purchasing




Raw Materials Sourcing                  No...
In Need of a Process
•  The extent of the process
   –  No formal written processes, other than Finance Spend Approval Mat...
No Visibility = No Control

•  Monthly reports from Finance
•  Includes supplier payments only
•  Little visibility on com...
Problems Beyond Purchasing

•  Money being spent without proper approval
   –  No delays in getting business done
   –  Bu...
An Even Greater Challenge


Senior management wasn’t bought
    into the need for purchasing
             automation.


 B...
Leading the Charge

•  Becoming “The Champion”
   for change
  –  Would not take NO for an
     answer
  –  Did the homewo...
Gaining Momentum

•  Internal Audit
   –  Mandated purchasing processes to manage non-
      product spend
   –  Ensure se...
A Plan to Get Management to Say
                                    “YES”

•  Conduct a vendor evaluation
   –  Find a low...
Conducting the Vendor Evaluation
                             Evaluation Options




                Add-on
Factory MRP   ...
Conducting the Vendor Evaluation
                          Evaluation Checklist
    Ease of Entry
    Annual Operating C...
Conducting the Vendor Evaluation
                                           Why Coupa?
✔
    Ease of Entry               ...
Determining Potential Impact
                                   ROI Analysis

•  Analysis on short-list vendors
   –  2 li...
Determining Potential Impact
                                  ROI Checklist
  Improve Control & Accuracy Over Non-Payrol...
Phased Roll Out

•  Slow and calculated, targeting one department at
   a time
   –  Purchasing resources as a constraint
...
Implementation To Date

•  Implemented in 6 of 10
   departments
  –  represents roughly 70% of   Hockey Distribution Cent...
Setting The Example with
                              Coupa e-Procurement
•  The right solution for all users
   –  Easy-...
Real Process, Real Results

                                                                                              ...
Identifying New Opportunities

•  Real-time Insight              •    10-15% cost reduction through SKU &
                ...
A Plan for Success

•  Implement e-Procurement to remaining departments, where spend
   is high, volumes are low and have ...
Poll
#2

What
factors
are
preven<ng
you
from
achieving
your
e‐procurement

and
spend
management
goals
(check
all
that
appl...
Introducing Jason Hekl


                          Jason Hekl
                          Vice President of Marketing
      ...
Part of the Problem is Inertia
The Best Intentions

“In theory, our ERP system could do what we wanted it to
do, but in practicality it would never happe...
The Best Intentions

   "Like tectonic plates adrift on a sea of magma, ERP
instances and the businesses they serve are bo...
The          Question for 2010


How do you save  10% more
           with FEWER

            resources in ½
             ...
Lowest TCO with SaaS

               IT Support
              Maintenance
             Upgrade Costs
          Professiona...
Lowest TCO with SaaS

               IT Support
              Maintenance
             Upgrade Costs
          Professiona...
SaaS Eliminates Hidden Costs

      IT Support
    Over 3X
     Maintenance
    Upgrade Costs
     Cost!
 Professional Ser...
Smarter Spending Across
                                the Enterprise

                     Unified
&
Simple


           ...
Immediate Impact with
                                                     Requisition to PO


               PredicNve

 ...
You and the CFO are more tightly
                  aligned than you think


Performance

Compliance

Visibility
5 Strategies to Cut Costs 2010
                                    with Coupa
                      1.  Spend Under Manage...
If only it were this easy…
It is.


Provide a requestor
 experience that is
 faster and easier,
     than every
     alternative,
   and you will be
...
Addressing the adoption problem with a
      compelling requestor experience


         SUM      1. Know what’s allowed,
 ...
Addressing the adoption problem with a
      compelling requestor experience


          SUM        1. Know what’s allowed...
Addressing the adoption problem with a
      compelling requestor experience


           SUM          1. Know what’s allo...
A flexible approval workflow engine that you
                             can change without help



Control
A flexible approval workflow process that
                         works for busy managers



Control
Proactive alerts and spend dashboards to
                prevent mistakes before they occur



Control
Achieve greater efficiencies in the
                req to PO process




                    Avoidance 5%
                 ...
Achieve greater efficiencies in the
                req to PO process

                 Cycle Time 23 Hours
                ...
5 Strategies to Cut Costs with
                        Coupa in 2010

1
              1.  Spend Under Management
         ...
They’re not making hay of pennies.




        Spend
      Under Mgmt

      + 20%
        Savings

       9.5%
       of ...
Our best spokespeople are our
                 customers…
Satisfying the Skeptical CFO
   What If You Had Visibility Into ALL Non-Payroll Spend?     100%

What if you could use the...
New Year’s Resolutions
THANK
YOU


Dave
Howard
                    Jason
Hekl

Director,
Central
Purchasing
   Vice
President,
Marke<ng

Reebok‐C...
Urgent Purchasing - How One Procurement Professional Took Matters Into His Own Hands to Get Spend Under Control
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Urgent Purchasing - How One Procurement Professional Took Matters Into His Own Hands to Get Spend Under Control

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Transcript of "Urgent Purchasing - How One Procurement Professional Took Matters Into His Own Hands to Get Spend Under Control"

  1. 1. Urgent
Purchasing
 How
One
Procurement
Professional
Took
Ma=ers
Into
His
 Own
Hand
to
Get
Spend
Under
Control 
 Wednesday,
December
16,
2009
 Dave
Howard
 Jason
Hekl
 Director,
Central
Purchasing
 Vice
President,
Marke<ng
 Reebok‐CCM
Hockey
 Coupa
So?ware

  2. 2. Poll
1:

 How
have
you
personally
helped
your
company
save?
 I've
helped
 I've
slept
in
a
 develop
policy
 crummy
hotel;
1%
 that
reduce
 I've
take
a
pay
cut
 wasteful
 or
reduced
my
 spending;
8%
 hours;
5%
 I've
helped
 improve
process
 efficiencies;
33%
 I've
nego<ated
 contracts
that
 offer
beLer
 pricing;
52%
 I've
taken
an
 inconvenient
 flight;
1%

  3. 3. Introducing David Howard David Howard, Director, Central Purchasing Reebok-CCM Hockey With more than 20 years of supply chain and project management experience, David is responsible for the management of resources, processes and key financial and service objectives of purchasing of raw materials for domestic factories, and for non-product supplies and services for the Reebok-CCM Hockey Global Head Office, including 2 large distribution centers. Among his many achievements, David has been able to deliver 10-15% cost reduction in many areas of non-product spend through SKU and supplier consolidation. Prior to joining Reebok-CCM Hockey, David was a subcontracts and project manager at Lockheed Martin Canada, Cost Manager at ASTEC APS, a division of Emerson Electric, and Purchasing Supervisor at Bombardier Aerospace. He holds a Bachelor of Business Administration from St. Francis Xavier University, NS.
  4. 4. Reebok-CCM Hockey A history of challenging conventions to create products that tap into athletes unlimited potential and empower new, innovative ways to solve problems and address issues. •  Headquartered in Montreal, Canada •  Provider of hockey gear and apparel •  Among others, Official sponsor of
  5. 5. Reebok-CCM Hockey Non-Product Purchasing Raw Materials Sourcing Non-product Purchasing •  4 manufacturing facilities in •  Reebok-CCM Hockey Global Canada Headquarters •  $35M in annual spend •  $15M in annual spend
  6. 6. In Need of a Process •  The extent of the process –  No formal written processes, other than Finance Spend Approval Matrix by department –  All departments managed their spend independently and differently, some using manual POs, but most making verbal or e-mail commitments Facility
OperaNons
 Office
 DistribuNon
 MIS
OperaNons
 &
Maintenance
 AdministraNon

  7. 7. No Visibility = No Control •  Monthly reports from Finance •  Includes supplier payments only •  Little visibility on commitments or accruals •  Spend history only payment by account
  8. 8. Problems Beyond Purchasing •  Money being spent without proper approval –  No delays in getting business done –  But spend under-managed and local to functions •  “Monthly” invoice approval exercise –  AP chasing approvals for payment –  Missing most discounts –  Late payments resulting in late fees –  Duplicate payments / no proof of receipt / fraud potential •  Inefficient, multiple ordering and payment systems –  Finished Goods, factory Raw Materials and all non-product invoices, all purchased in separate systems –  Invoice payments are made using a 4th system
  9. 9. An Even Greater Challenge Senior management wasn’t bought into the need for purchasing automation. Believed tighter manual controls would be sufficient to control and manage spend.
  10. 10. Leading the Charge •  Becoming “The Champion” for change –  Would not take NO for an answer –  Did the homework, created a full business case for the requirement –  Publically committed to savings in non-product purchasing
  11. 11. Gaining Momentum •  Internal Audit –  Mandated purchasing processes to manage non- product spend –  Ensure segregation of duties •  Economic Pressures –  Down-sized company resources –  New ways of doing more with less
  12. 12. A Plan to Get Management to Say “YES” •  Conduct a vendor evaluation –  Find a low risk solution Oui Sí Áno •  Perform an ROI analysis –  Determine its potential impact YES Ndiyo Ja •  Phased roll out Hai –  Identify points of failures, Na'am repeat successes
  13. 13. Conducting the Vendor Evaluation Evaluation Options Add-on Factory MRP Modules to Parent- Purchase 3rd Tools Existing A/P Company Tools Party Tools Tool
  14. 14. Conducting the Vendor Evaluation Evaluation Checklist   Ease of Entry   Annual Operating Cost   Functionality / Best Practice Alignment   Ease-of-use / Process Automation w/ Workflow   Segregation of Duties / Audit Trail   Scalability   IT Independence   Real-time Dashboard Reporting   Create Self-Enforcing Process / Controls
  15. 15. Conducting the Vendor Evaluation Why Coupa? ✔   Ease of Entry No CAPEX to push through corporate approvals ✔   Annual Operating Cost Annual cost vs. anticipated “easy” savings ✔   Functionality / Best Practice Alignment Automation, speed of spend ✔   Ease-of-use / Process Automation w/ Simple Google, Amazon type experience Workflow ✔   Segregation of Duties / Audit Trail Segregated duties with password approvals for audit ✔   Scalability Easily add users, business groups ✔   IT Independence No hardware or software to support ✔   Real-time Dashboard Reporting Alerts, immediate action ✔   Create Self-Enforcing Process / Controls Dynamic, flexible controls
  16. 16. Determining Potential Impact ROI Analysis •  Analysis on short-list vendors –  2 license purchases w/ on-site implementation & support requirements –  2 SaaS (software-as-a-service) systems, including Coupa •  Demo each system •  Priority based “qualitative” scoring
  17. 17. Determining Potential Impact ROI Checklist   Improve Control & Accuracy Over Non-Payroll Expenditures   Improve Use of Contract Pricing   Improve Purchase Leverage through Spend Data   Reduce Waste, Duplication, Fraud & Overpayments   Reduce Overhead on Source-to-Settle Process   Expand Purchasing Spend Under Management   Improve Usage of Automated PO Creation and Transmission   Improve Ability to Manage Early Payment Discounts   All with the goal of supporting company re-alignment of cost-structure to invest in value-creating activities
  18. 18. Phased Roll Out •  Slow and calculated, targeting one department at a time –  Purchasing resources as a constraint –  High-volume departments with biggest need and fastest “payback” –  Users who could easily adapt their processes –  Users who wanted the independence of using the system to order with only the approvals of their own organization –  Grass roots; creating a “I want it next” situation
  19. 19. Implementation To Date •  Implemented in 6 of 10 departments –  represents roughly 70% of Hockey Distribution Center Footwear & Apparel our non-product spend Distribution Center Facility Operations & Office volume. Maintenance Administration MIS Applications MIS Operations •  100% planned by Marketing & Advertising R&D mid-2010 Product & Design Sales Management
  20. 20. Setting The Example with Coupa e-Procurement •  The right solution for all users –  Easy-to-use and efficient –  Automated and Controlled –  Quick and cost-effective •  Requestors and approvers actually use the system! –  Users love being independent –  Managers love being knowledgeable –  Improved budget forecasting from detailed historical data •  The entire organization benefits –  Significant reduction in errors –  Defaults ensure accurate information –  Improved supplier invoicing, better cash flow and finance visibility
  21. 21. Real Process, Real Results Supplier Fulfillment Invoice Payment Footwear & Review / Manage Contracts Apparel Distribution Center Issue PO MIS Operations Purchasing Facility MIS Operations & Maintenance Applications Management Office Disposition Administration Request (approve / Hockey reject) Distribution Center Coupa e-Procurement
  22. 22. Identifying New Opportunities •  Real-time Insight •  10-15% cost reduction through SKU & supplier consolidation –  KPI tracking •  20% reduction in suppliers through –  Performance tracking consolidation –  Market benchmarks •  30% reduction in invoice payment transactions •  High compliance to use of contract •  Identify areas to pricing •  Process savings estimated at $50/PO, –  Improve efficiencies primarily from invoice approval process –  Streamline suppliers •  Payment discounts now available in –  Negotiate better prices 100% of invoice opportunities •  Accruals changed from guessing to –  Educate buyers firm numbers
  23. 23. A Plan for Success •  Implement e-Procurement to remaining departments, where spend is high, volumes are low and have unique requirements •  Product & Design / R&D •  Marketing & Advertising •  Sales Management •  Finance / HR / Traffic •  Extend online workflows to receipt and invoicing •  Integrate processes with accounting •  Further automate paper-based processes •  Continue to set the example •  Showcase the power and benefits of a SaaS solution •  Educate users and reinforce industry best practices •  Paint a vision for the future that includes a completely integrated end-to-end procure-to-pay solution •  Influence outside the boundaries of our division
  24. 24. Poll
#2
 What
factors
are
preven<ng
you
from
achieving
your
e‐procurement
 and
spend
management
goals
(check
all
that
apply)?
 Cumbersome
 Skep<cism
from
 ERP
plaXorm
and
 employees
about
 business
 Purchasing's
 applica<ons;
 value;
25%
 24%
 Disinterest
from
 Lack
of
execu<ve
 the
business
 support
for
our
 groups
we
 ini<a<ves;
29%
 support;
22%

  25. 25. Introducing Jason Hekl Jason Hekl Vice President of Marketing Coupa Software Jason Hekl is responsible for all of Coupa’s marketing initiatives, including demand generation, messaging, and marketing communications. Prior to joining Coupa, Jason was with InQuira, where helped grow revenues nearly ten-fold over a four year period. Jason earned a Master of Business Administration degree from the Ross School of Business at the University of Michigan, and a Bachelor of Arts degree in International Relations and Economics from the University of Delaware.
  26. 26. Part of the Problem is Inertia
  27. 27. The Best Intentions “In theory, our ERP system could do what we wanted it to do, but in practicality it would never happen, because the cost of doing that would have been astronomical.”
  28. 28. The Best Intentions "Like tectonic plates adrift on a sea of magma, ERP instances and the businesses they serve are bound to drift apart over time or dramatically collide with earthquake-like consequences.”
  29. 29. The Question for 2010 How do you save 10% more with FEWER resources in ½ as much time?
  30. 30. Lowest TCO with SaaS IT Support Maintenance Upgrade Costs Professional Services Software Subscription Year 3 Year 3 IT Support Maintenance Professional Services Software Subscription Year 2 Year 2 Implementation Hardware Database / Middleware Software Licenses Year 1 Software Subscription Year 1
  31. 31. Lowest TCO with SaaS IT Support Maintenance Upgrade Costs Professional Services Software Subscription Year 3 Year 3 IT Support Maintenance Professional Services Software Subscription Year 2 Year 2 Implementation Hardware Database / Middleware Software Licenses Year 1 Software Subscription Year 1
  32. 32. SaaS Eliminates Hidden Costs IT Support Over 3X Maintenance Upgrade Costs Cost! Professional Services Software Subscription Customer takes on IT Support Maintenance all Risk! Professional Services Software Subscription Broken Implementation Model! Hardware Database / Middleware Software Licenses Software Subscription
  33. 33. Smarter Spending Across the Enterprise Unified
&
Simple

 Cross
Company
RequisiNoning Divisional
 Divisional
 Divisional
 AccounNng
 AccounNng
 AccounNng

  34. 34. Immediate Impact with Requisition to PO PredicNve
 Spend
 Benchmarks
 Crowd
 Sourcing
 RequisiNons
 Purchase
 Orders
 Invoices
 General
 Ledger
 Strategic
&
 AdministraNve
&
 Front
Office
 Back
Office

  35. 35. You and the CFO are more tightly aligned than you think Performance Compliance Visibility
  36. 36. 5 Strategies to Cut Costs 2010 with Coupa 1.  Spend Under Management Attract more spend at the top of the 1 funnel 2.  Compliance With purchasing guidelines and 2 negotiated contracts 3.  Better Deals 3 Crowd source savings on one-off purchases 4.  Control 4 Prevent wasteful spending before it happens 5 5.  Efficiency Increase velocity through the funnel, and save as a result
  37. 37. If only it were this easy…
  38. 38. It is. Provide a requestor experience that is faster and easier, than every alternative, and you will be amazed by what happens.
  39. 39. Addressing the adoption problem with a compelling requestor experience SUM 1. Know what’s allowed, and what’s not.
  40. 40. Addressing the adoption problem with a compelling requestor experience SUM 1. Know what’s allowed, and what’s not. Compliance 2. Guide requestors to preferred suppliers and contract pricing, greatly reducing “maverick” spend
  41. 41. Addressing the adoption problem with a compelling requestor experience SUM 1. Know what’s allowed, and what’s not. Compliance 2. Guide requestors to preferred suppliers and contract pricing, greatly reducing “maverick” spend Best Pricing 3. And for those ad-hoc items not covered by existing contracts, find deals online
  42. 42. A flexible approval workflow engine that you can change without help Control
  43. 43. A flexible approval workflow process that works for busy managers Control
  44. 44. Proactive alerts and spend dashboards to prevent mistakes before they occur Control
  45. 45. Achieve greater efficiencies in the req to PO process Avoidance 5% Self Approval 29% Efficiency
  46. 46. Achieve greater efficiencies in the req to PO process Cycle Time 23 Hours Savings 9.5% of Spend Avoidance 5% Self Approval 29% Efficiency
  47. 47. 5 Strategies to Cut Costs with Coupa in 2010 1 1.  Spend Under Management Attract more spend at the top of the funnel 2 2.  Compliance With purchasing guidelines and negotiated contracts 3 3.  Better Deals Crowd source savings on one-off purchases 4 4.  Control Prevent wasteful spending before it happens 5 5.  Efficiency Increase velocity through the funnel, and save as a result
  48. 48. They’re not making hay of pennies. Spend Under Mgmt + 20% Savings 9.5% of Spend
  49. 49. Our best spokespeople are our customers…
  50. 50. Satisfying the Skeptical CFO What If You Had Visibility Into ALL Non-Payroll Spend? 100% What if you could use the same APPROVAL Spend Under workflow across purchases and expenses? Management What if you could BENCHMARK your expense Expenses? management practices against the market? What if you could effectively AUDIT the expense process to reduce fraud and save even more? With Coupa + 20% Spend Under Management Baseline 41% Spend Under Management
  51. 51. New Year’s Resolutions
  52. 52. THANK
YOU
 Dave
Howard
 Jason
Hekl
 Director,
Central
Purchasing
 Vice
President,
Marke<ng
 Reebok‐CCM
Hockey
 Coupa
So?ware
 david.howard@reebokccm.com

 jason.hekl@coupa.com


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