Capgemini SRM Research 2010 2011

Supplier Relationship Management (SRM)Research 2010-2011Solution Analysis and Business Insights

Contents Prepared and edited by: Sarissa Alleijn Capgemini Consulting NL Hamish McKechnie-Sharma Capgemini Consulting UK Ton van Dolder Capgemini Consulting NL Richte van Wijngaarden Capgemini Technology NL Special thanks to: Charlotte Baratti Capgemini Consulting US Andreas Bernhard Capgemini Procurement Services Bob Booth Capgemini Consulting UK Robbert den Braber Capgemini Consulting NL Sarah Conway Capgemini Consulting UK Rutger Lamers Capgemini Consulting NL Merel Plante Capgemini Consulting NL Willem Scheerder Capgemini Consulting UK Remy Schook Capgemini Consulting NL 2

Contents4 Foreword7 Business Insights 26 Functionality Analysis 8 The Tipping Point of BPO 32 Analysis per category Procurement Rethink Procurement for BPO Procurement 12 a contribution to 52 innovation 16 55 International Channel selector⁺ supports decision making for all P2P options Footprint and Supplier Profiles 20 In-house or as a Service? – CPOs challenge the role of the CIO 23 Can we ever fully automate Spend Analysis or do we need to have human intervention 3

Supplier Relationship Management Research 2010-2011Foreword 4

W e are pleased to present to you the In addition to the 2008-2009 SRM survey, we assessed Supplier Relationship Management (SRM) the level of support in the area of Business Process survey 2010-2011. It is interesting to see Outsourcing (BPO) Procurement. BPO Procurement that over the last ten years we have been remains a strong area for growth that is driving current doing this survey, the market for SRM is demand in organisations. Organisations are seeking thestill growing and investing in these applications. Although ability to migrate easily to such functionality so the needwe all assume that implementing an SRM tool is quite is great given the economic uncertainty that remains ineasy, reality shows different. Q4 2010.Apart from the survey, which gives you an overview of Another new item in our research is the implementationthe major players in the market, we also want to share footprint of the different vendors. We learned throughour experiences, issues and questions we daily see as our projects that this is valuable information for packageprocurement professionals implementing and optimizing selections. The footprint shows the geographicalSRM. We therefore asked our foremost colleagues to dimension and the functional dimension ofshare their view and experiences on SRM, which resulted implementations.in 5 expert opinion stories, each telling something aboutSRM, all from a different perspective. Major themes Our procurement experts have worked on this study withinclude: BPO Procurement, Innovative Driven great pleasure. We hope you enjoy reading it as much asProcurement (IDP), Channel Selection, In-house or we enjoyed writing it and look forward to your feedback.software as a Service (SAAS), Spend Analysis. Let it be an inspiration for your further initiatives.Second part of the study analyses the results of the SRMfunctionality survey. This analysis is based on a series of We wish to thank all vendors and colleagues who havequestions designed to address whether the software contributed to this year’s SRM study.covers a specific set of functions within the SRMfunctionality. Ton van Dolder Procurement Transformation Practice Leader NL Capgemini Consulting 5

A note ofthanks….Capgemini Consulting would like to extend itsthanks to the vendors who made time toparticipate in the Supplier RelationshipManagement Survey. Without theircooperation and support, research of thisnature would not have been possible. 6

Supplier Relationship Management Research 2010-2011Business Insights 7

The Tipping Point of BPOProcurementThe business process outsourcing (BPO) market is one Over the last five years, the BPO Procurement marketthat is still relatively immature, particularly when has been growing steadily and while growth ratecompared to the IT outsourcing (ITO) market. This is forecasts for the next five years vary, analysts agree thatabout to change: Outsourcing of indirect spend the rate of growth will increase, fuelled by a recession inbecomes more and more popular, as procurement Western economies. The four mature BPO markets haveorganizations will have their hands full managing all of matured beyond a point of critical mass of supply andthe risk elements in their direct materials spend. demand, and can be said to have reached the “tipping point”.The phrase Tipping Point was popularised by MalcolmGladwell in his book, The Tipping Point: How Little Things The BPO Procurement market is starting from a smallerCan Make a Big Difference. In his book, Gladwell talks base. TPI Momentum’s analysis of the 2009 BPOabout the point at which a trend which may only have a Procurement market is $778m (see figure 1), showingshort life span tips and becomes an epidemic on a global Annual Contract Value (ACV) for deals over $25m. Thescale, i.e. in commercial terms how a fashion or trend market has been growing at between 30 and 40% overbecome permanent feature of the business world. Each the last five years. Forecasts for the next five years areof the larger four BPO markets: customer contact, also varied with no consensus on the expected growthfinancial services, HR and finance & administration, have rates.now passed the point at which they have tipped. Theyare here to stay, and are all forecasting healthy growthrates for the next five years. Finance Services Outsourcing $4.909 20% Contact Center Services $4.245 17% Human Resources Outsourcing $3.138 13% Finance & Accounting $2.126 9% Facilities Management $2.045 8% Document Management $1.557 6% Industry-specific $1.287 5% Procurement $778 3% Supply Chain Management $585 2% Research & Development $488 2% Knowledge Process Outsourcing $108 <1% BPO Multi-Process $1.307 5% BPO/ITO Multi-Tower $1.783 7%Figure 1: Cumulative ACV of Active BPO Contracts by Service Line ($US Millions) 8

What services are included in a BPO- • Compliance management – active reporting on andProcurement deal? management of compliance. Often involves interaction with HR to drive changes in or compliance with HR policies.BPO Procurement deals typically have one or more of the Reporting is often executed in low cost locations;following components (unsurprisingly aligned to the often compliance policy is managed locally inservices that a typical procurement department will conjunction with the category managers.provide): • Reporting – provision of management information for sourcing category, compliance and supplier• Strategic sourcing – the negotiation of new contracts management. This is typically managed from a low with suppliers and the associated services, generally cost Far East location. in accordance with the commodity or the overall procurement strategy. As the BPO procurement market matures, the services Some providers offer this service locally to the client that are being bought are growing up the value chain. where the buyers are close to the client and to the Operational procurement deals often now include the supply market. Some offer this service from low cost spot buy desk, whereas two years ago, the service may locations and some offer a hybrid of this model with have been only transactional procurement with spot a local front office supported by low-cost COE in a buying being retained within the client organisation. low cost country (typically Far East locations such as Similarly some companies are in the market for one or The Philippines, China or India). more indirect categories and a few stand out as willing to• Category management – the development of outsource all of their indirect spend. category strategies, subsequent management of the category after sourcing and management of the contracts to ensure that the benefits identified are The group of eligible suppliers is growing delivered through active compliance management. Typically, any supplier management is undertaken in this area. At the beginning of 2008, the only companies who had Some providers deliver this service local to the made credible inroads into global BPO procurement business, some regionally in delivery centres and services were Accenture and IBM. Since then, the some in low cost, typically Far East locations. market has been maturing through partnership, merger• Tactical procurement (spot buying) – the and acquisition and organic growth. management of spot buying for high value and unusual items through a purchasing desk. This is • GenPact has had a successful partnership with ICG usually augmented with a front office which supports Commerce since April 2008, which has brought two employees and supplier contact in local languages. powerful players together to market, This is typically provided regionally from delivery • Steria and HPI GMBH, one of the leading centres in Eastern Europe, Latin America and Asia procurement services providers across Europe, Pacific. announced a collaboration in the procurement• Transactional procurement – the management of outsourcing space in November 2009, the requisitions and PO process plus master data • In February 2010, Capgemini acquired IBX, the management and query management that supports European procurement services and SaaS technology employees and supplier contact in local languages. business, to broaden and deepen their capability in outsourced procurement This is typically provided regionally for voice contact and regionally or in a low cost region for transactional elements. 9

• The pure play Indian providers are placing great The business case for BPO Procurement differs focus on procurement, with most of the larger from traditional F&A players recruiting in this area and pricing deals aggressively to win business and grow their practice. The business case for traditional business process outsourcing is well proven; typically the service can be delivered as effectively, i.e. with no consequentialAs a result, the BPO-Procurement supply market is worsening in quality of service, and more efficiently in amaturing and there are more eligible suppliers who will lower cost location, typically with an improved system ofcompete for potential business, which makes it easier for controls.customers to move into the market confident aboutsupplier price and capability. The majority of the business case comes from a combination of efficiency of centralisation, standardisation, process improvement and automationIncreasing focus on technology as part of the coupled with labour economic benefits of low costwhole… locations. The combination of these two factors can result in benefits of 40-50% as against original cost.With Capgemini’s acquisition of IBX and SAP and Oracle’s However the business case for procurement is moreprovision of on demand (Software as a Service, SaaS) often driven out of sourcing savings, or complianceprocurement technology solutions, the provision of SaaS savings, i.e. effectiveness savings, which can dwarf theprocurement technology on demand now seems to be a efficiency savings. Also the efficiency savings instandard part of the BPO Procurement proposition. For procurement are often less (perhaps 20-30%) as theboth eProcurement and eSourcing, customers expect resources will need to be located across locations otherservice providers to be able to provide a suite of than India and other Far Eastern low cost locations,integrated services and technology as a service. This hence average saving will be less than the 40-50% above.gives them an option other than undertaking complexand expensive technology implementations that sitbehind their own firewalls. Figure 2: Building the business case for BPO Procurement 10

We therefore believe that a significant portion of thebenefit from outsourcing can come from effectiveness Conclusionsavings through sourcing and in particular through bettercompliance management. 2010 and 2011 will see the announcement of a number of key new BPO Procurement contracts, with some customers being prepared to outsource large areas ofHowever approaching the overall process in a way to strategic sourcing spend, and with many othersmaximise the efficiency (process) savings and maximise outsourcing operational procurement and spot buying.the (sourcing) effectiveness is the key to success,particularly as associated processes such as accounts As with any new market, there will be new entrants andpayable will need to be impacted if compliance savings players who are bold in scope and approach. Whetherare to be maximised. The potential savings can be quite this will become the norm, and at what rate of adoption,essential - up to 40 percent depending of the maturity of remain to be proven.the organization. Combined effects of better spend Either way, the pressures on the CPO to make savings arevisibility, better framework agreements and lower cost greater than ever, and outsourcing some areas offor managing the spend, make such a result possible procurement will be necessary to achieve these savings.. Whether this results in a tipping point for BPO Procurement will depend on whether those CPOs who choose to outsource and their chosen BPO solution provider can provide a compelling proposition to their business that locks in the sourcing value required and enhances the business’ ability to survive in this difficult market. 11

Rethink Procurement for acontribution to innovationFor companies that focus on innovation as a key Challenges for Procurementbusiness driver, finding innovation with the supplychain remains a challenge. Even though Procurement is The move towards open innovation creates the need toregarded as the interface with suppliers, it traditionally leverage and manage the innovation capabilities in thehas little role in advancing business processes. In this supply base, to:article, we discuss what Procurement should do to take • deliver more innovationsthis role successfully and contribute to innovation. • accelerate design and launch cycles • improve quality • meet more intense demands to reduce cost and riskMarkets develop towards more openinnovation These are not the usual Procurement KPI’s, with the exception of the cost/risk reduction. The economic downturn has only increased the emphasis on theseMost industries increase the outsourcing of non-core traditional KPI’s. Because of this focus, Procurement’sactivities: the average percentage of revenues procured involvement in innovation is limited to work on cost/riskexternally has risen to over 60% in the last decade due to reduction by sourcing and contracting suppliers. Inincreased outsourcing. In addition, companies are practice, this means Procurement is involved once allincreasingly outsourcing critical business functions, specifications are set in stone and the innovation is readyincluding the outsourcing of R&D to the supply base. In for ramp-up. This is a characteristic of siloed thinking, insome industries, where 70-90% of products are sourced which departments (silos) are involved one at a time infrom suppliers, the majority of products are actually order to add their value. That has remained while thedesigned and developed by these suppliers. This is in part innovation processes have become more open anddue to a shift in design towards manufacturing of whole collaborative. Although usually working in teamsystems, which results in an increase in the complexity of structures, silo-thinking remains prevalent withinsupplier relationships. departments and people (typically due to differing CXOThe increase in outsourcing coincides with an increased directives). The result is a very linear process withopenness of innovation processes. Companies are finding handovers to the next department, with a fresh set ofit more and more difficult to keep up with the pace of specific targets at every step.innovation through internal R&D alone. Intelligentlytapping into knowledge bases of (amongst others)suppliers speeds up the process of innovation andreduces total cost. To manage a greater dependency onsupplier innovation, Procurement departments havebeen moving towards stronger partnership models with alimited set of key suppliers. These partnerships are basedon shared risks and rewards instead of traditionaltransactional relationships. But strong supplierrelationships alone are not enough and a limited set of(incumbent) partners is not necessarily a good source ofinnovation. To leverage that relationship, Procurementneeds to feed end-customer needs into the supply base. 12

Traditional versus Innovation Driven Procurement The difference between traditional and Innovation Driven Procurement is best explained with a simple example. Say you are looking for a home espresso machine that serves you the perfect coffee in the morning without hassle. You will have a wide range of needs and criteria the product must meet such as newness, appeal, reliability, value for money, etc. As we live in an open innovation world, we would expect the manufacturer to combine internal know-how with the latest technology available in the market to create the best product for your needs. The manufacturer in fact manages a system of solutions including the design, the pressure system and coffee packaging from a wide array of suppliers. The innovation process of this espresso machine will look completely different for the two Procurement business models.Figure 1: Procurement involvement innovation Traditional ProcurementFigure 1 gives an indication of the effect this may have. To deliver this kind of machine, the traditionalThe hand-over to Procurement usually occurs after manufacturer has started an extensive innovationsupplier involvement and beyond a point where a project. This began with efforts by Sales & Marketing tosignificant impact can be made on cost reduction and understand your needs, and R&D trying to develop this.value creation of the product. At this point it is too late As we are in an open innovation domain, R&D will haveto deliver new innovations or significantly increase worked with suppliers or even players from completelydevelopment. The only remaining factors are cost and different industries to develop a new espresso system. Inrisk reduction, and even these have been compromised. this traditional Procurement setting, there will have beenProcurement can no longer fully influence cost or risk as no involvement until there is a complete picture of thethe specifications are largely set and suppliers have been future product and its specifications. Procurement willdeeply involved in the design process. Furthermore, then be asked to deliver its services. The internal clients’traditional Procurement targets (such as savings, security needs are often specified in terms of contracts, savings,of supply, contract coverage and compliance) conflict security of supply, etc. Procurement in other words iswith project targets which may compromise the value of expected to negotiate a good deal to drive down totalthe end product for the customer. Delays or unrealistic cost and risk. As we have seen before, this may causeexpectations of supply chain capabilities are likely to serious conflicts as the specifications are largely set andoccur through these conflicts. freedom of choice in the supply base is limited. The bestTo move forward from this situation, Procurement Procurement can do now is to set up multi-disciplinaryshould have an earlier involvement. However, teams to discover what the internal clients’ needs areProcurement in its traditional form is not capable of and make the most out of it. To do this, Procurementhandling the ‘chaotic’ processes found in early connects with (potential) suppliers and conductsinnovation stages. Making a true contribution to sourcing activities, negotiates contracts and puts theinnovation processes requires Procurement to redefine operational processes to work. If conflicts occur (i.e. aits business model. This will enable them to tap into part cannot be sourced at a decent price), it will besupply base capabilities and manage supplier forced to push the innovation project back into theinvolvement. design phase. This may compromise specifications, the 13

total cost and the time-to-market. The end result is that organize innovation projects with dual leadership, oneyou will eventually find your “traditional” espresso R&D and one Procurement leader. Others havemachine on the store shelves at a reasonable price. But dedicated project managers, defined specific roles andyou’ll probably have lost interest in it because it was responsibilities for Procurement in each innovationovertaken by a competitors’ machine before it even stage, and used decision making between innovationcame to market. stages to enforce further Procurement support. The required competences of Procurement change as well. There will be a stronger need for people withInnovation Driven Procurement (IDP) knowledge of technology and supplier managementThe IDP producer will also listen to your needs as a capabilities, together with project management skills andpotential customer through Marketing & Sales. But now traditional Procurement skills. This can be achieved byit’s not just R&D who’s listening in; Procurement has for instance recruiting internal technical experts andjoined the project from day one. This enables training them on Procurement skills. In any case theProcurement to thoroughly understand the external Procurement, Marketing & Sales and R&D experts needclients’ needs and to assist R&D with the development to be able to communicate effectively. Beside strongeffort. Now that Procurement knows what to look for, it competencies, this requires a rigid data exchangecan connect the supply base with R&D and at the same between various systems. Integration of data providestime work on a sound supplier involvement strategy insight on both sides on specifications and impact of(reducing the risk of conflicts). The team setup above changes to designs.changes the partner structure of Procurement; it nowconsists of both suppliers and the “internal clients” in theentire innovation process. With involvement in Steps to take towards Innovation Driveninnovation, Procurement must match its activities to Procurementearly innovation stages. This still includes costawareness, but there is much greater focus on scoutingsupplier markets, enabling supplier involvement and Innovation Driven Procurement starts with a clear focusmanaging supplier inputs in the project. All of these are on the role of Procurement in innovation processes.focused on the wide range of targets of the external Once it is clear what Procurement should contribute, aclient. In later stages traditional Procurement activities business model of Procurement throughout thecome back into play to operationalize the new product, innovation process can be set up. A broader focus on thebut the real value is created in the earliest stages. The external customer and involvement from the start has aend result here is that you’re the proud owner of the big impact on the organization of Procurement and its“IDP” espresso machine standing on your kitchen table. activities. After defining the impact, the governance structure needs to be formalized with the role of Procurement in innovation firmly embedded. Once Procurement is firmly rooted in the innovation processes,Impact of Innovation Driven Procurement it can make the step to effectively line up the supply base for a contribution to innovation projects.Involvement in innovation exceeds merely involving Implementation involves selecting the right people,Procurement earlier. A change of attitude and embedding the Procurement role in processes, setting upperspective of Procurement must be embedded in the teams and structures and supporting communicationgovernance of the organization. The role of Procurement technologies.in innovation projects changes, and the way This will enable Procurement to drive much more valueProcurement is managed is clearly different from from the supply base, while improving time-to-market,Traditional Procurement as it breaks through functional collaborating internally and creating a better focus onsilos. This means companies need to review decision the end product. In other words, it enables Procurementmaking protocols, process design, target setting, to make a significant contribution to innovation and theleadership involvement, team structures, competences bottom-line.and information flows. For instance, some companies 14

The Client Case:The Passion Value ChainA company’s corporate image is probably one of its most How can your business achieve a passionateunderestimated assets when it comes to purchasing. value chain?Wouldn’t we all love to supply well-known companiessuch as Rolls Royce, Nokia, Audi, Chanel, Asics, eBay or Firstly, a passionate value chain takes time to create byRed Bull? Brands leverage not only sales, but also exchanging ideas and challenging existing processes. Topurchasing success. Even if you are not amongst the stimulate this kind of change, a good first step is tobrand leaders in your industry, you are more likely to create regular newsletters and conduct suppliersucceed if you stick to the values of your company and summits. If you can spare 20 minutes a day, you couldcommunicate these when you qualify new suppliers. even consider writing an online blog.Steiff is a German-based plush toy company known for When it comes to managing one on one relationships, itproducing high quality toys and teddy bears. The pays to be selective about which suppliers to spend timecompany’s co-chief executive Martin Frechen said in a with. The first choice will generally be your mostrecent Financial Times article that some suppliers only strategic suppliers, however it is always worthwhile to“think in terms of price and volume” and concludes that spend time with people who have innovative ideas, even“for children, surely only the best is good enough – the if they are not the biggest position on your categorybest design, the best production, the best safety budget.standards”. The next step is to integrate truly innovative suppliersThis kind of attitude and way of looking at your supplier with your company. To do, this, think like Mr Frechenbase makes a difference which cannot be found on an from Steiff, but backwards. Once the employees of yourRFQ template. Commitment, dedication and a passionate supplier have developed a personal connection to yourattitude have a huge influence on your bottom line products and services, there will be increased likelihoodresults. Finding high quality and passionate suppliers of innovations, improvements and true commitment. Inleads to lower reclamations, higher adherence to doing so, be aware that making the value contribution ofdelivery dates and to greater innovation. A supplier who your supplier visible could have a negative impact on theis passionate about your products is much more likely to next price negotiation. However, on balance if yourthink about your company and your products and intention is to buy value, integrating your suppliers is atherefore much more likely to deliver innovation to your beneficial way to achieve this.value chain.Frechen is not looking to discuss about his own needs, orhis productions processes, or even the needs of hiscompany Steiff. He talks about the needs of hiscustomers, or to be even more precise, the children ofhis customers. He demands that his suppliers think aboutthe needs of his “end users” – and that is the first step increating a passionate supply chain.customers, or to beeven more precise, the children of his customers. Hedemands that his suppliers think about the needs of his“end users” – and that is the first step in creating apassionate supply chain. 15

Channel selector⁺ supportsdecision making for all P2PoptionsThe increasing range of commodities that can be P2P channelsupported by Supplier Relationship Management (SRM)tools, together with the increased functionality of the A channel is a defined combination of processes andvarious SRM tools, makes the selection of SRM tools a tools with common characteristics to support thecomplex decision. Selecting the most effective sourcing (sourcing or the) P2P processes. A traditional Purchase-and procurement processes (or channels) for the to-Pay process will go through the steps portrayed in thevarious commodities represents a formidable challenge. Procurement Order Cycle (right side of figure 1) as soonIn particular, the lack of understanding of how to as the source to contract process is finalized and theorganize the entire Purchase-to-Pay P2P process turns contract is implemented.out to be a bottleneck for many organizations duringthe implementation of a SRM tool. The ChannelSelector⁺ provides a framework that supports thedecision making process of all possible variants in theP2P options from requisitioning to payment includingapproval of requisition, receiving goods or services,invoice settlement and communication. Figure 1 SRM process model – Procurement order cycle 16

Channels are grouped according to their level of buyer involvement in the requisition-order process. See the possiblechannel combinations in figure 2. Figure 2 Channel combinationsThese channel combinations are characterized by compliance, insight into commodity and processdifferent dynamics. It is these characteristics that performance and efficient operational support. If thedetermine the channels suitability for a particular balance between control, visibility and efficiency is notcommodity. These include: correct, the gains can be absent. For instance, by only• Control: Provide more control for the business and maximizing control and visibility of all commodities, procurement to ensure compliance to suppliers, unnecessary resources could to be allocated to some of contracts and specifications. High levels of the commodities where there is no need for control or visibility. This could happen in the commodity office compliance will result in better use of volume supplies, which account for a low percentage of total discounts, spend and has a low risk profile. On the other hand, if effort is put only into maximizing efficiency for all• Visibility: Provide a high level of visibility for spend. commodities, over time the risk of insufficient High visibility will result in leveraging data with compliance with the supplier contracts will increase. suppliers, which supports the sourcing process and provides savings improvement, Channel selection⁺• Efficiency: Generate transaction savings through the reduction of process time, particularly invoicing The Capgemini Consulting P2P Channel Selector⁺ processes. provides a framework that supports the decision-making process of what commodity should be acquired throughCommodities have different requirements, in terms of which P2P Channel. By running the commodityhow much control, visibility and efficiency is appropriate characteristics through a questionnaire, the differentto apply to its associated P2P channel. channel options are ranked automatically.By selecting P2P channels on a commodity basis, The Channel Selector⁺ includes all the variants of the P2Pcompanies can optimize: Contract and supplier process, including the largest bottleneck in the 17

implementation of a procurement system, namely how 1. Specify (Product profile): complexity,to arrange the P2P process as a whole (requisition – standardization, configurability, service or product,approval – order – receive – payment). The Channel service/product variations, volatility of price, +Selector includes: eReadiness of the supplier.• Requisition channels (for example: catalogue, free 2. Place requisition: purchasing frequency, number of text order), people requisitioning, absolute spend, inventory-• Purchase channels (for example: planned order, driven. blanket order), 3. Approve requisition: necessity of approval by• Payment channels (for example: p-card, expenses, procurement or expert or management (budget). direct invoice), 4. Place order: Number of orders, necessity of matching• Approval of requisition invoice with purchase order.• Receiving goods/services 5. Receive goods/services: necessity of goods receipt• Invoice settlement (standard, qualitative).• Communication 6. Verify process and invoice: purchase order based,Using the Channel Selector⁺, commodities can be self billing, specification.characterized according to the following P2P processsteps:Figure 3 shows the P2P process steps and all possible outcomes of the Channel Selector⁺ and includes an example of astandard commodity. Figure 3 P2P process stepsExplanation of the purchase order process in the figure for the standard commodity channel: The requisition will most likelybe placed by means of a standard catalogue. Because of the standard specification, there is no need for an expert orProcurement to be involved in the approval of the requisition, instead the approval will be transactional. After approval,the requisition automatically turns into a standard purchase order that is send to the supplier. The goods/services receivedfrom the supplier will be checked and recorded based on quantity but not quality. Invoice settlement will probably bebased on the purchase order and the preferred way to exchange messages in the P2P process will be electronic. 18

In order to apply Channel Selector⁺, at the outset, it isimportant to involve all stakeholders from the Conclusionorganization in the decision making process. Differentcommodities are likely to require different channels,therefore a series of multidisciplinary workshops is When organisations undertake the decision to tackle therecommended when selecting channels. Based on the P2P challenge, they should not underestimate theoutcome of the questionnaire and a valuation of the challenges they will face. Nor, however should they shybenefits and the total cost of ownership, the organization away from these challenges, or underestimate thecan choose the most appropriate channel for each strength of the tangible and non-tangible benefits thatcommodity. Future state channels must be detailed and are expected to arise.validated on a commodity basis, to ensure that channel Organisations taking on this challenge must follow aprocesses fully support additional anticipated future structured approach in order to realise the benefits.changes. This interaction through workshops is also Firstly, the organisation needs to have a vision of the P2Pcritical to achieve high levels of user acceptance, few objectives it wants to achieve. It must then use aoperational exceptions, and not least, robust functional process-focused, business-driven approach to establishrequirements. the P2P channels by means of the Channel Selector⁺, and P2P process support it wants to deploy. This, in turn, willImplementation define the business and technical requirements for the desired P2P solution. The critical success factor lies within the organization:As the implementation of all channels and commodities None of the above can be achieved without thecannot be achieved at once, an approach is needed to appropriate level of sponsorship from senior managersphase this over time. A preferred approach is to and buy-in from the key stakeholders which can beimplement the most value adding and easily achieved by multidisciplinary workshops.implementable channels and commodities in the firstphase. The second group of channels and commodities isthen selected in terms of value and ease-of-implementation, and so on. When assessing ease ofimplementation, it is important to consider factors likesupplier contractual status and eReadiness, requiredprocesses changes, availability of system support,organisational impact, change readiness, and resourceavailability. 19

In-house or as a Service? –CPOs challenge the role ofthe CIOIn his book, “The Big Switch”, the American IT lateral weakening economy the issue is once more gainingthinker Nicholas Carr challenges CIOs and heralds the appeal. The following are particularly appropriate forend of IT departments. He compares the trend towards outsourcing: 1. The supporting IT roles where thecloud computing and away from business computing in decision to outsource is merely an issue of cost; 2.the company’s own data centres with the transition Specialist IT functions that are not part of the corefrom self-generated to centralised power supplies by business. These roles require specialist expertise that isservice providers at the start of the 20th century. generally not available in-house.According to Carr, IT could be controlled by externalspecialists and without hordes of technical experts Purchasing as a central competitive factorwithin the company. His forecast may be radical, but itmay also serve as a wakeup call for CIOs to rethink theirstrategic role: adviser to the company, communicator or On the backdrop of the global financial downturn and theengineer. The crux of the matter is essentially looming recession, cost-cutting measures were movingoutsourcing versus in-house: should companies focus on to the fore in the corporate world - and with it,their core business and outsource those IT tasks that inevitably, the subject of purchasing. After all, theothers can do better? Take the example of purchasing; potential for cutting costs is high in this area: dependingso far in this sector, many CIOs have been somewhat on the sector of business in question, the entiresceptical of external, web-based SAP e-procurement purchasing volume can account for between 40 and 60solutions. These models are regarded by many decision percent of the companys total turnover. It is not withoutmakers as all too unsecure and inflexible. That said, on- reason that the role of purchasing has evolved fromdemand models fare well in a precise analysis of the being purely operational to being strategic; companiesindividual factors. expect their purchasing to make a significant contribution to their overall corporate performance. As aThe CIO is pulled in two directions: should he rather benchmark figure, a logical procurement strategy andassume the role of technology provider, or that of a the use of the right IT solution can save from four tostrategic business designer? Should he provide all the IT eight percent of the total purchasing volume.in-house, or act as the head of a network of specialistswho each play their part in the added value chain by If the CPO (Chief Purchasing Officer) and the CIO arecontrolling the outsourced IT? In his role as CIO, he looking for a suitable IT solution, then the decisiondecides on which IT activities are to be outsourced to quickly comes down to a question of faith. For the CIO,external service providers. the primary factor is whether the solution can be integrated into the companys own IT systems andAccording to a study by Ernst & Young on outsourcing in whether it complements the existing strategy. TheEurope in 2008, 70 percent of all companies’ surveyed – strategic question for the CPO is which operator model is600 decision makers in European companies – stated the most suitable one for his organisation, and which willthat outsourcing was an integral part of their business bring the greatest possible efficiency in terms ofmodel. For many years outsourcing has been seen as the procurement activities. He can choose between aoverall cure for a company’s problems. In times of a licensed in-house solution and an equivalent on-demand supplier model. The solution is then provided and managed by an external service provider. 20

On-demand on the riseThere are important reasons why on-demand has been on the rise for a numberof years in purchasing especially, and thecohort of licensing models is in jeopardy.According to a study by the AberdeenGroup (figure1) on-demand models arefaring significantly better than licensingmodels. They can be implemented morequickly and provide a faster Return onInvestment (ROI) – especially since thecompany no longer needs to implementthe solution itself. If a company, on theother hand, acquires a software licence, itis generally dependent on the expertise ofa consulting company for the Source: Aberdeen Groupimplementation and customisation of thesoftware. Many of the company’s own Figure 1: Top factors driving enterprises to consider on-demandresources are also taxed in the process,and high additional costs are incurred.When solutions are installed, humanresources, running and hardware costs arefound to be hidden cost drivers.With an on-demand solution forpurchasing the company pays only for themodular service elements it needs.Moreover, it has easier and more rapidaccess to the modules, since the solutionsalready run on the service provider’splatform and are being used by numerouscustomers – each with their own individualcustomisations. All the users need is apopular Internet browser. An on-demandoffer is essentially of interest to allcompanies that want to profit from loweroverall costs, faster implementation and asmooth upgrade process – and want to doso without high initial investments.Another benefit is the fact that, accordingto an outsourcing study by the Experton Source: IBXGroup, the contracts for on-demandsolutions have become more flexible as aresult of increased demand. Figure 2: Total cost comparison: On-demand vs. software 21

They can also be concluded over shorter periods than The second reservation as regards on-demand solutionspreviously. A sample calculation by IBX (figure 2) shows is their lack of flexibility. An in-house solution can bethat from the start the overall costs of a software adapted more easily to the company’s specific needs.installation are higher than the costs with an on-demand The advantages of an on-demand solution and itssolution. The overall costs include Equipment, adaptation to customer-specific requirementsManagement and Operations. (customisation) are not easy to combine. The issue is comparable with the purchase or hire of a weekend cabin. The purchased cabin can be designed more easilyReservations about on-demand in line with the owner’s personal tastes. It is much cheaper to rent, with a lower Total Cost of Ownership (TCO). It also makes no sense to repaint a house if it’sMany CIOs still have major reservations about a rental only going to be used once a year anyway. In this case,model. This is particularly true for the management of the standard functionalities are usually adequate.enterprise-critical data outside the firewall. Accordingly,IT security officers first need to check whether the on- The third reservation focuses on the ability of on-demand solution satisfies the internal security demand solutions to be fully integrated. The end-to-endregulations. linking of all the functionalities of the solution to the system is one of the central challenges for the CIO. An in-Historically, it has been a company’s core business to house solution in this instance, however, has tosafeguard their enterprise network so one might think overcome the same hurdles as an external solution andthat by nature, an in-house installation has an advantage therefore enjoys little advantage.over the on-demand solution provided by an externalservice provider. However, this assumption might not beas clear cut as it seems due to a variety of factors: The future: coexistence of both models?One factor is that purchasing solutions are different from“classic” in-house solutions in the way that they require Many CIOs often regard on-demand supplier models as aexchange of data with a lot of different external partners threat to their justified existence. On-demand representswhich are outside the enterprise network. This includes an attractive alternative for the CIO, especially in timesinformation such as catalogues, orders or bids. Many where IT budgets are tight.times these partners are not even integrated into the But is an on-demand supplier model the best possiblecompany’s extranet. Therefore a different approach in solution for every company and every organisation? Thesecurity infrastructure and operations is required. In that following factors are crucial for or against an on-demandcase an experienced and specialised on-demand provider service: cost-benefits analysis, speed and risks.can actually have a clear advantage over an in-houseinstallation. The on-demand supplier model will not threaten to oust the licensing model. The world of procurement hasAnother factor is that significant improvements have enough space for both. They can even complement eachbeen achieved over the last years in terms of Information other perfectly.Security Management Systems that have beenimplemented by on-demand operators. Many service The on-demand model drives the focus away from theproviders are in the process of gaining certification based technology and towards strategic usage, as well ason best practice IT security and process standards like towards the use of purchasing-assisting solutions such asISO 27001 and ITIL. There also have not been any high e-sourcing and e-procurement. Buyers can thereforeprofile security problems with on-demand solutions focus more effectively on their core tasks, on reducingeither. complexity and on the relationships within the company and not lose valuable time sorting out technical queries.Sometimes it seems that the security problem is more ofa philosophical issue: Do I trust the Internet enough toconduct business over it? 22

Can we ever fully automateSpend Analysis or do weneed to have humanintervention?Spend Analysis is undertaken by most organisations in The Spend Analysis Processorder to provide spend visibility information onsuppliers, spend and compliancy and is considered acontinuing point of attention of our CPO’s. Spend analysis is essentially a tool; it is the process of collating, cleansing, categorising and analysing expenditure information. The end goal of any SpendSpend analysis tools Analysis should be to provide clear, consistent spend information which can feed into the sourcing process, identify sourcing opportunities, enable benefits trackingIncreasingly, tools are becoming available on the market and provide the visibility for compliance monitoring. As awhich highlight the ease and speed that can be delivered concept it should be regarded as the fundamentalby automating the process but does this change our foundation of sourcing however the process can startapproach to Spend Analysis? Over the last few years an from many different data points and by leveragingabundance of vendors has entered the Spend Analysis different sources and quality of data. The level ofmarket ranging from those for whom the move into data complexity that this drives often results in a highlyenrichment was a logical step in their respective SRM arduous and time consuming process. So how do thesuite such as Ariba, Oracle and SAP, to more recent increasingly sophisticated software tools feed into thisentrants into the Spend Analysis arena such as Emptoris, process? In order to make sense of data there are variousZycus and SynerTrade. Our survey findings have levels of intelligence that can be applied. Data analysishighlighted that both sets of players have a part to play tools use a variety of these methods to enhance data, byin managing the demand for the market, particularly if rationalisation and consolidation.some organisations wish to focus purely on a one-offspend analysis (e.g. Zycus) or have this linked into end to At a basic level, spend data is extracted straight from theend procurement visibility with an ongoing opportunity source system and displayed in reports. Usually this isto track and manage spend better. Each of these major the starting point for realising the need for Spendplayers will be able to conduct detailed spend analysis Analysis as few organisations have the fundamentals ofhowever our experience indicates that none of them Master Data so thoroughly embedded that the data cansupport entirely automated process. be reviewed immediately and used to guide sourcing decisions let alone have this conducted dynamically.Technological and digital automation is increasing in all Often data sits in numerous systems so using one sourceareas of our lives. Will we ever reach the point where system alone will not provide a fully comprehensiverobots and computers will do away with the need for picture of the spend landscape. To get the most effectivehumans? As Supply Chain professionals we need to result on spend analysis at the very basic level, multipleconsider what technology and automation can mean to extracts from different systems are needed to provideus and our roles. Thinking about this in the context of the full data set. So from this very first stage humans areSpend Analysis we’re left with the question – Can we needed in order to identify where the data should beever do away with the need for human intervention gathered from; Accounts Payables, Purchase Order orwhen conducting something as fundamental as Spend from somewhere else.Analysis? 23

Technology versus human like but are not spelled the same way as the search term. The logic is based on (seemingly) fuzzy rules that at first glance don’t make sense but do provide alternativeOn their own the analytics tools cannot interpret the interpretations of data that will make sense to the enddata so the tools must be programmed and algorithms user.developed which ‘tell’ the software how the data shouldbe mapped. To get the most effective result on spendanalysis at the next level the tool must be ‘told’ what Advancing Technologydata is synonymous and what isn’t. For example somevendors might have different names, but in reality are We have now reached a level where human interactionthe same; Capgemini UK, Capgemini Plc, Capgemini Ltd, with a data analysis tool is diminishing more and more.CapGem etc. The data analysis tool uses synonyms and Current technology provides fuzzy logic and learningassociated probabilities to consolidate and recognise capabilities, though arguably ‘learning’ in a very simpledata before presenting it to the user. This also applies to way. Human intervention is still required to tell softwaremisspelled data, or data with typing mistakes, which in what can be learned.both cases requires a list of possible alternative contentfor certain data, or some routine that checks alternative With more powerful computers and ever largerspelling of data. Whilst there are some tools which can databases data analysis tools can seem very advancedrecognise and highlight some of the basic inconsistencies when using the methods mentioned above, but evenit still requires human intervention. It requires someone ‘learning’ tools require a person to interpret andto tell the system what the data looks like, where to find necessitate monitoring of any invalid data or even wrongit, how to use it, how it could be misspelled or what the results that a tool can produce.synonyms are or aren’t when incorrect synonyms are All of these aspects highlighted assume a minimum levelflagged and ultimately what rules to use. That said it is of information, that of supplier name and itemfair to assume that this type of logic and business rule categorisation but what of the scenarios where thebased application can be built into spend analysis information available is almost non-existent? It may betoolsets but still requires a degree of human that the only information is the supplier name and ainvolvement. spend total. Can a tool take this data and provide aThe next step in order to ensure the most effective result reliable trusted output? Even the providers of spendon spend analysis is to have a tool that can ‘learn’ how to analytics software would have to agree that this cannotmake sense of data with minimal intervention of an end be fully automated. For example the tool may beuser. Using a tool that learns how to analyse data at first programmed to state that Capgemini should be classifiedwill not give great results, and requires the procurement as a Consultancy; however it could also be classified asprofessional to interpret the data and extract the reports an IT provider or an Outsourcing organisation. With arequired. The tool however tracks what the professional recent client (a leading CPR Manufacturing company)does to the data, and as usage of the tool progresses it there were over 3,000,000 lines of vendor and spendcan ‘learn’ from these actions what to do with it. If the details which all had to be categorised. Conversationsprofessional has extracted data from two different with several spend analytics providers stated that theirsystems to obtain purchase order and invoice data, the approach would be to manually categorise in the firsttool can do this automatically next time. If data for two instance and then use the software to harmonise andproduct categories is put together manually, next time cleanse the data clearly demonstrating the importance ofthe tool can do this automatically. Further improvements human intervention in the process. There may also be anto data analysis tools can come from methods like ‘fuzzy additional level of analysis needed to re-classify existinglogic’, where the relationship between data is information where items have been mis-classified ordetermined based on rules that are less clearly defined simply identified as “miscellaneous”, the software canthan conventional rules. As an example Google search only interpret the data to a finite level before humancan be used, where the search engine interprets the intervention is needed to validate and confirm theuser’s input in multiple ways including words that sound categorisation. A viable alternative is a hybrid approach where pending the quality of the data, spend analysis 24

tools are used to drive accelerated categorisation prior tohuman intervention. Conclusion So in answer to the question can we ever do away withUncovering the subtleties of expenditure the need for human intervention in Spend Analysis? Well it varies on situation but human intervention willThe requirement for human validation of data leads onto increase based on the quality of the data, the complexitythe importance of understanding what level of data of the business rule logic and ultimately the nature of theaccuracy and information is needed by the end user in suppliers for the respective organisations. Will aorder to meet their sourcing requirements. Is it just to procurement professional ever be able to wholly rely on aknow how much is spent and with which Supplier? Does piece of software to perform a full and proper datait need to go down to category level or should it be to analysis without second guessing the result? Again thissub-category level? It may become clear that spend with almost seems a rhetorical question which can only beCapgemini is labelled as Consultancy however in order to answered with an empathic “No”. Whilst the analyticalbe useful to the end user, they may need to know if the tools on the market really do a play a part in accelerationspend is Technical Consultancy, Strategy or Supply Chain of categorisation for procurement professionals and can– and this supplier is likely to be treated differently expedite what has historically been a time consumingacross organisations. It is at this point that the human process, the systems are not yet advanced oreye is needed in order to uncover the subtleties of the sophisticated enough to completely remove the need forreal expenditure. This can also highlight the differences human involvement. Spend Analysis continues to be ain interpretation, in some organisations the category tool to enable us to buy better and importantly it is theConsultancy is used to identify any services provided by a input into the human generated process of sourcing,third party be it temporary labour, project management, procuring and negotiation.and advisory. In other industries and in differentorganisations ‘Consultancy’ may be restricted toManagement Consultancy. The need at this point for thehuman eye to uncover these idiosyncrasies leads ontoanother key aspect of Spend Analysis which requireshuman intervention: that of Focus Interviews. All SpendAnalysis should be supported by Focus interviews inorder to put the data into context. As identified everyorganisation is different and so the application of datarules will vary. 25

Supplier Relationship Management Research 2010-2011Functionality Analysis 26

F or organisations embarking on their Supplier Relation Management (SRM) journey, the most difficult challenge is being able to understand thespectrum of suppliers that could satisfy yourrequirements. • Top Acquisitions in 2010 Google acquired ITA Software • SAP acquired SybaseThe key questions in support of this that are oftenconsidered are which applications are available on the • IBM acquired Sterling Commerce, Bigfixmarket and what functionalities do these applications • Oracle acquired PhaseForwardprovide? Do applications offer the same services acrossall aspects of the procurement function or are they • HP acquired Palmspecific to one component of SRM? This chapter will • Capgemini acquiring IBX (now known aselaborate further on these questions. Capgemini Procurement Services) • Cisco acquired Optic networksInsights into the vendor market • Symantec acquired PGP, Versign SecurityIncreasingly organizations and government agencies are Divisiondemonstrating that supplier relationship management • Apple acquired Quattrohas a key part to play in addressing immediate economicpressures. For those already on the journey, the • VMWare acquired Zimbraemphasis is on re-evaluating contracts to improve • Iron Mountain acquired Mimosaefficiency and savings. Supplier relationship managementdepends on collaboration amongst the enterprise’s • CA acquired Nimsoftinternal and external suppliers for survival and progress. • Avnet acquired Bell MicroCollaboration across sourcing strategies, managementand governance remains critical to the success of • Juniper Network acquired Akeenasupplier relationship management.As we move into the first quarter of 2011, the abundance Today, as companies seek greater synergies and try toof mergers and acquisitions continues in earnest across jump-start growth coming out of the recession, thetechnology vendors. Market values have dropped, relationship between IT and Business Processcreating bargains for value shoppers, and smaller Outsourcing (‘BPO’) is strengthening and becomingcompanies have experienced more difficulty obtaining increasingly vital. Although the IT Outsourcing marketfinancing, and as such the market for technology (‘ITO’) is outpacing BPO the BPO market is fast catchingmergers and acquisitions has accelerated. Technology up. In many instances ITO and BPO are merging into onevendors have put together several multi-billion dollar seamless enterprise wide solution. Market exit,deals so far this year as the economy comes out of what acquisitions and the ascent of new vendors willmany believe is the worst recession since the 1920s. rearrange the BPO provider landscape in the comingIndeed, there have been more than a handful of deals years.worth hundreds of millions of dollars as the technologyvendor marketplace has consolidated through thesemergers and acquisitions. 27

Setup of the SRM Survey Good or bad?A functionality analysis is conducted based on a list of When interpreting the data it is important to remember221 questions, covering the entire spectrum of the that this analysis is based on a series of questionsprocurement process. These questions represent the designed to address whether the software covers a“most asked-for” and the “most-critical functionalities”, specific set of functions. We stress that it is importantas we recognise them from our clients discussions and that all the questions have been scored withoutinteractions. Vendors are given the opportunity to weighing. This means that a high or low score does notindicate whether the requested functionality is available indicate whether an application is good or bad; it merelyor not. states the coverage of the SRM functionality within the application.Compared to our previous SRM surveys the setup of thisyear’s survey has been changed. We want to ensure that When selecting or evaluating an application, it isthe survey evaluates the market to a level of depth and important to determine which functions are critical forcompletion required to accurately present the relative your company’s procurement processes. Therefore astrengths/weaknesses of the vendor landscape. weighted score addressing your preferred functionalities,Therefore, we build in a random check to ensure that the may result in a different outcome from those shown forsolutions score as accurate as possible. The following this survey. In order to distinguish the functionalities ofvendors were invited to give a demonstration of the the applications, it is necessary to understand whichfunctionalities in their solution. functionality supports the procurement processes.Company Product Modules To assess the level of support, we divided the overall SRMBupros Bupros Open Sourcing, process, into eight sub-categories: Source Spend Contract Management Management • Procurement Intelligence and • Project Management Procurement Intelligence • SourcingEeebid.com Inc. ebidQL Operational o Electronic Tendering Procurement o eAuctioning and Contract Management • Contract ManagementSynerTrade SA SynerTrade 6 Operational • Supplier Management Procurement • Catalogue Management and Procurement • Operational Procurement Intelligence • External ResourcesTable 1 Participating vendors in demonstrationSpecific details on the participating vendors can be foundin the ‘International Footprint and Supplier Profiles’chapter. 28

In addition to the 2008-2009 SRM survey, we assessed In each chapter we will indicate to which part of thethe level of support in the area of Business Process procurement process the application is relevant in ourOutsourcing (BPO) Procurement. BPO Procurement model as shown below.remains a strong area for growth that is driving currentdemand in organisations. Organisations are seeking theability to migrate easily to such functionality so the needis great given the economic uncertainty that remains inQ4 2010. Figure 1: Capgemini Procurement Process ModelOverall Functionality AnalysisAs in previous studies, this year’s vendor review shows reviewed SRM applications are very capable, there arethat the differences between applications are most substantial differences between these applications andvisible in coverage at a functional level. of course each of them will have a different fit withinSome applications provide full coverage for all sub- your organisation. Although it might seem that certainprocesses, whilst others can be considered niche players applications have a low overall score, we cannotsupporting only a selected functionality. Although the conclude these applications are of lesser quality. . 29

Overall conclusions from this year’s survey immediate economic pressures. Compliance remains one of the number one aspirational areas ofConsidering the survey as a whole, the following reporting which is being identified in the market as arepresent the major findings and conclusions: major driver.1. Across the top 10 vendors there is little to choose 4. Surprisingly 25 percent of the responding vendors across the principle functionality, whilst rich and cited no form of Project Management functionality varied, remains common and meets the majority of being in place. Given the necessity to ensure tighter requirements in the market – this includes timelines for all procurement activity and the advent specifically ensuring visibility and transparency of benefits being clearly documented this remains across the entire Procurement suite of technology. surprising but in essence a differentiator. At a detailed level this common set of functionality accounts for over 60 percent functional coverage across the vendors interviewed, and represents a 5. Year on year the area of functionality that is marked improvement which witnessed below 50 improving at a pace is Contract Management. It is percent from previous functional reviews. This this area that is now becoming the pivotal demonstrates the maturity of the vendor market and component of SRM functionality given its link to both demand necessity organisations are striving for. operational sourcing through P2P and strategic sourcing. Only 3 vendors responded with a score of less than 70 percent coverage in this area, with the2. In line with the observations in the 2008-2009 SRM average alone above 85 percent. Contract survey, the survey shows that an integration of Compliance is the next phase once P2P compliance functionalities is still evolving with respect to those has been achieved or is maturing so it is anticipated vendors that remain focused either on Sourcing or that this area will only further increase in Operational Procurement. functionality and richness of capability over the next In addition, the focus on Sourcing is still greater than year. on Operational Procurement demonstrated by the following observations: 6. External resources still proves to be a key • 90 percent of the vendors offers Sourcing differentiator. A major difference lies within the functionality, whereas only 75 percent offers dependency between Operational Procurement Operational Procurement functionality. functionality and External resource functionality. In • 50 percent of the vendors have a higher score on previous years there was a direct dependency Sourcing functionality compared to Operational between both functionalities, however this year’s Procurement; 30 percent of the vendors have a survey shows that the dependency is decreasing. higher score on Operational Procurement functionality compared to Sourcing; 20 percent of the vendors have an equal score for Sourcing 7. With an average of 62 percent and with more 100 and Operational Procurement functionality. percent functional coverage (other than project management) Business Process Outsourcing (BPO) remains a strong area for growth that is driving3. The survey indicates that there is little overall current demand in organisations. Organisations are increase of Procurement Intelligence functionality seeking the ability to migrate easily to such compared to the SRM survey of 2008-2009. This was functionality so the need is great given the economic a surprise as an increase was expected given the uncertainty that remains in Q4 2010. importance of tracking operational improvement benefits and assessing and ensuring compliance which have a key part to play in addressing 30

Figure 2 gives an overview of the available functionality of each vendor. The Y axis represents the vendors and the X axisrepresents the categories within the SRM suite. In addition a line graph displays the average full suite functionality score ofeach vendor. Figure 2: Overview of the functionality analysis 31

Analysis per category We do not aim to show the answers to every question in this report; rather, we provide the outcomes of theWhen selecting a tool, you might have certain analysis per functionality group.requirements that are more critical than others. If youare looking for a full suite application the overall Throughout the report the same structure is applied perfunctionality scores may be sufficient for your selection. sub-category. First we start each sub-category explainingHowever if you are looking for a particular functionality what this specific category means. Secondly theor a set of functionalities, you will require a more in- conclusions we have drawn for this category are detailed,depth review of the results. followed by the total scores per vendor, presented in a graph. This graph shows the scores for each application’sThe in-depth application review is structured according functionality within the category.to the eight subcategories listed earlier. These sub-categories have been further divided into a number offunctional categories as shown in Table 2. Procurement Project Sourcing Supplier Contract Catalogue Operational External Intelligence Management Management Management Management Procurement Resources General Project General General General General General Specify Management Spend Strategy Evaluation & Authoring User Requisitioning Approvals Analytics development Development Capabilities Compliance Request for Requisitioning Operational Demand Database Supplier quotation Repository Selection & reporting aggregation capabilities Approval Order Electronic Administration- Purchase Monitoring tendering content & Order review After Care eAuctioning transmission approval Negotiation Receiving Administration- and goods and creation services Contract Administration- signing Invoicing maintenanceTable 2: Additional Functional Categories 32

Procurement Intelligence diversity in coverage ranging from 98 percent to 48 percent. Reporting remains diverse and demonstrates that no one vendor has been able toWhat is Procurement Intelligence? support the need to address what is ‘standard’ – partly down to the markets requirements but also inProcurement Intelligence is the process of collecting, line with the need to be flexible which reportingcleansing, structuring and drawing insight from market lacks across the majority of providers, withoutanalyses through process measurements (both Sourcing significant adaptation or customisationand eProcurement), spend data, supplier performanceand knowledge management applications. Theknowledge gained from Procurement Intelligence aims to 2. Within the Procurement Process Model (see figure 4)simplify decision making, making this sub-process a a relationship exist between Procurementcritical part of both the strategic sourcing process and Intelligence and:procurement governance. • SourcingProcurement Intelligence is key to assessing and ensuringcompliance, tracking operational improvement benefits • Operational procurementand in implementing sourcing strategies. ProcurementIntelligence software typically supports spend analytics Procurement intelligence and Sourcingand operational reporting. The three vendors that do not offer ProcurementThe ability to clearly communicate findings is critical to Intelligence do offer sourcing functionality. So thereachieve staff and management buy-in. Therefore the is scope for improvement since Procurementfunctionality to graphically represent findings is of high Intelligence is a critical part of both the strategicimportance in this type of application. sourcing process and operational procurement.Functionalities reviewed within Procurement Procurement intelligence and OperationalIntelligence Procurement:Procurement Intelligence is divided into the following The previous survey highlighted that several vendorssub-functionalities: were offering Operational Procurement but did not• Spend analytics- Mathematical algorithms used for offer Procurement Intelligence and vice versa. This cleansing, normalizing and classifying spend data survey shows that an increasing percentage of vendors are working on both the functionalities. The• Operational reporting - Operational reporting is three vendors that do not offer Procurement typically used by the front-line operations personnel. Intelligence do not offer Operational Procurement Very short-term, detailed decisions are made from functionality as well. operational reports There is one vendor (Vendorlink) that offers Procurement Intelligence but no Sourcing and Operational Procurement functionality.Observations regarding ProcurementIntelligence 3. The survey shows that 30 percent of the vendors provide full coverage (100 percent) of Spend1. Out of all the vendors surveyed three vendors (15 analytics (with an average of 76 percent) and percent) do not offer Procurement Intelligence Operational reporting (with an average of 63 functionality (Upside Software, Commerce hub and percent). This is a positive step in development over Negometrix). Even though 85 percent of the vendors the last 2-3 years of SRM functionality that is offer Procurement Intelligence there is huge available on the market and is in part down to the 33

acquisitions that have occurred in the last 12-18 months for spend analytics4. Most diversity within the Procurement Intelligence functionality can be found across Operational reporting. The requirements with the most different offering per vendor are; • trend watching functionality; • the possibility to enter and track cost saving targets per market and product group. Within Spend analytics the requirement with the most different offering per vendor is: depth of vendor and item knowledge bases that feed mathematical algorithms used for cleansing, normalizing and classifying spend data. Figure 3 Procurement Intelligence scores Figure 4: Procurement Intelligence 34

Project Management timelines for all procurement activity and the advent of benefits being clearly documented.What is Project Management? 2. Within the Procurement Process Model aProject Management is the discipline of defining and relationship exist between Project Management and:achieving targets while optimising (or just allocating) theuse of resources (time, money, people, materials, energy, • Operational procurementspace, etc.) over the course of a project. The place of • SourcingProject Management within the complete procurementprocess is illustrated in Figure 5. Project Management and Operational Procurement: Last year’s survey showed that Project ManagementWithin sourcing activities, Project Management helps to is something typically expected to be found ininstitutionalise and embed the sourcing processes which Sourcing Processes. Therefore, it was not surprisingin our Clients experience results in greater savings being that the applications that primarily focused on P2Pdelivered and increased knowledge captured for future processes did not provide functionality to supportre-use. Project Management. This year 75 percent of the vendors that offer Operational procurement also offer Project Management (compared to 80 percentProject Management software supports: in Sourcing). This highlights the importance to ensure visibility and transparency across the entire• Creating a project team Procurement suite of technology.• Phasing of a project• Maintaining a project calendar containing an Project Management and Sourcing: overview of scheduled and running projects 80 percent of the vendors that offer Sourcing• Resource planning covering the team members functionality also offers Project Management. assigned to the project Although project management is typically expected to find in Sourcing Processes four vendors (Bupros,• Running reports for the scheduled projects Basware, Upside Software and ProcureStaff Technologies) that do offer Sourcing, do not have the Project Management functionality. ProjectFunctionalities reviewed within Project Management Management is not perceived to be a functionalityFor the Project Management section of this vendor specifically required in a SRM application. Perhapsreview we analysed the functionality: this is because there are many other solutions to monitor the progress of the sourcing project.• Project Management 3. Most diversity across the Project ManagementObservations regarding Project Management functionality can be found in the following requirement: Possibility to link Project Management to Product development.1. Project management remains a key differentiator given it is not provided across all vendors (75 percent). However we are seeing a trend where vendors are capitalizing on project management functionality given the necessity to ensure tighter 35

Figure 5 Project Management Figure 6 Project Management scores 36

Sourcing supplier and buyer collaboration through eRFX based activities and events. From a Public Sector perspective this is proving invaluable given theWhat is Sourcing? necessity to demonstrate rigour and audit ability through the process – coupled with ProjectSourcing is the part of the procurement process that Management this area serves as a core focus for thecontinuously improves and re-evaluates the purchasing market as we enter 2011.activities of a company.The sourcing process consists of selecting theappropriate suppliers, the full tendering process, 2. Within the Procurement Process Model aelements of the go to market strategy and developing relationship exist between Sourcing and:the required supplier relationships on the basis of the • Supplier Managementdefined sourcing strategies. Sourcing strategies aretypically developed per product category. • Contract ManagementFunctionalities reviewed within Sourcing Sourcing and Supplier ManagementSourcing is divided into the following sub-functionalities: Supplier Management is part of the Strategic Sourcing Cycle therefore it can be expected that• Strategy development vendors offering Sourcing also offer Supplier• Demand aggregation Management functionality. The survey shows that, in line with the expectations, 90 percent of vendors• Negotiation and contract signing providing Sourcing functionality also support• Electronic tendering Supplier Management.• eAuctioning Sourcing and Contract ManagementThe sub-functionalities Electronic Tendering and There seems to be an expectation that if a vendoreAuctioning are reviewed separately. has sourcing functionality, Contract Management will be the logical next step. The survey shows that only one vendor (ProcureStaff Technologies) whereObservations regarding Sourcing Sourcing functionality is present does not offer Contract Management functionality.1. Looking at the overall scores in the Sourcing area, we can conclude that almost all applications provide 3. Interestingly the areas with the most questioning, some sort of sourcing functionality. Over 60 percent namely eAuctioning and eTendering based of the vendors are demonstrating an increased focus functionality were answered similarly for those on eSourcing in line with market demand and only vendors that are providing this functionality. two vendors have highlighted no functional coverage Consequently it is fair to assume a parallel of across eSourcing (Vendorlink and INCONTO). functionality moving into a diminishing return eSourcing is seeing a rapid surge in ‘e’ based advantage similarly to transactional procurement did requirements and the move from more paper based only a few years ago. environments. Whilst only two vendors highlighted no functional coverage across eSourcing those that have this in place need to continue to demonstrate 4. The majority of the vendors see Strategy that this is not just a focus on auctioning but genuine Development and Demand Aggregation as the core functionalities. 37

As in previous surveys we see that those vendors that have a high overall score see an added value in the functionality Negotiation and Contract Signing. Indeed it is worthy of attention that 50 percent of the vendors scored a maximum functionality coverage of 100 percent in this area of eSourcing. However in practical terms this is not often used in the market by Customers and the need to demonstrate its potency rests firmly with the suppliers. If suppliers can forge a greater link towards demand aggregation, the ability to tie in reporting, spend analytics and procurement intelligence will be all the more greater as Customers seek to focus more on 2nd and 3rd generation sourcing activities5. Most diversity across Sourcing functionality can be found in Strategy development. Most diversity across the Sourcing functionality can be found in the following requirement: Recommendations of automated sourcing strategy regarding the sourcing strategy development. Figure 7 Sourcing scores Figure 8 Sourcing 38

Electronic Tendering and eAuctioning Electronic Tendering eAuctioningSince the functionality within Sourcing typically lies insupport for tendering, negotiation and auctioning, twosub-categories have been defined: Electronic Tendering General Types of auctioningand eAuctioning. These were then subdivided in order to Building Strategycompare functionality, as illustrated in table 3. Figure 10and 11 represent the total scores of the application’s Sending & answering Processfunctionality within the Electronic Tendering and Aggregation & analysis Bid formatseAuctioning sub-categories Scoring Calculation. Viewing Distribution of shortlist Messaging Table 3 Sub categories Electronic eTendering and eAuctioning Figure 9 Electronic Tendering and eAuctioning 39

Electronic Tendering 3. Most diversity across Electronic Tendering functionality can be found in ‘Aggregation and analysis’ in the following requirements:What is Electronic Tendering? Availability of tools for what-if and sensitivityThe core functionality of strategic sourcing partially lies analysis by altering the number of hours, number ofin support for Electronic Tendering. To a large extent, units, transaction values, etc. and re-calculating totalthis is where the value of strategic sourcing is captured. score (55 percent diversity);Electronic Tendering also includes eRfX (Request forInformation, Request for Proposal and Request for Creation of own custom report formatting using theQuote), which is often part of a tendering exercise. report tool (45 percent diversity).Electronic Tendering can be used by a buyer to requestinformation from potential suppliers for the purpose ofevaluation and comparison. The more structured thisinformation is, the easier it is to compare the suppliers.Functionalities reviewed within Electronic TenderingElectronic Tendering is divided into the following sub-functionalities:• General• Building• Sending & answering• Aggregation & analysis• Scoring• Distribution of shortlistObservations regarding Electronic Tendering1. All the vendors offering Sourcing offer Electronic tendering functionality. Figure 10 Electronic tendering scores The scores are particularly high for this functional category with an average of 89 percent.2. Compared to eAuctioning, Electronic Tendering is perceived by all vendors as core functionality. 40

eAuctioning 3. For vendors that only partially support eAuctioning, ‘Types of eAuctions’ in addition to ‘Calculation’ and ‘Process’ plays a significant role in the score.What is eAuctioning? The main differentiator in the Sourcing functionalityeAuctioning is a negotiation tool which can help to select can be found across Types of eAuctions. Mostthe appropriate suppliers. Depending on the approach, diversity across this functionality can be found in thebuyers or sellers may specify costs or invite bids and following requirement: Gives the system an advicetransactions can be initiated and completed. Ongoing on the type of auction that is most suitable (50purchases may qualify customers for volume discounts or percent diversity).special offers. eAuctioning software may make it possibleto automate some buying and selling.Functionalities reviewed within eAuctioningeAuctioning is divided into the following sub-functionalities:• Types of auctioning• Strategy• Process• Bid formats• Calculation• Viewing• MessagingObservations regarding eAuctioning1. Responses to the survey questions indicate that compared to last year’s survey (average score of 82 Figure 11 eAuctioning scores percent) the eAuction functionality remains stable with an average of 81 percent. The market is saturated with specialist auction providers and indeed the need to enhance the functionality has dried up given the richness is now in place. This is less down to technology and more down to strategy where the ability to tie strategy and technology together would remain critical to success for a Customer when deploying and executing eAuctions2. 75 percent of the vendors offers eAutioning, three vendors that offer Sourcing do not offer eAuction functionality. 41

Supplier Management Within the Procurement Process Model a relationship exist between Supplier Management and:What is Supplier Management? • SourcingSupplier Management includes supplier performancemonitoring where agreed performance indicators and Supplier management & Sourcing:scorecards are evaluated and acted upon. Goals and The survey shows that, in line with the expectations,objectives are set and evaluated; improvements are 90 percent of vendors providing sourcingidentified and implemented in collaboration with functionality also support supplier management.suppliers. Both hard aspects of the supplier relationship, There is however one vendor (Vendorlink) that doessuch as price, quality, delivery and service, and soft offer Supplier Management but no Sourcingaspects of this relationship such as visits, surveys and functionality.certifications are managed. 3. The main differentiator in the Supplier ManagementFunctionalities reviewed within eAuctioning functionality can be found across ‘Evaluation andSupplier Management is divided into the following sub- Development’. Most diversity across thisfunctionalities: functionality can be found in the following• Evaluation & Development requirements• Database Supplier monitoring on measurement for soft aspects that are outside limits. The system supports the automatic aggregation ofObservations regarding Supplier Management the answers on the different questionnaires as filled out by the buyers.1. As compared to the previous surveys we see that there is a trend among the vendors wherein most of them tend to support supplier management fully. Out of the vendors surveyed, three vendors (15 percent) do not offer Supplier Management functionality at all (Basware, INCONTO and Negometrix).2. The group that offers this functionality scores very high with an overall score higher than 82 percent. When we look at the subcategories, we see that vendors have extensive elaborate support for supplier evaluation and development (average 95 percent) and database functionality (average 93 percent). 42

Figure 12 Supplier Management Figure 13 Supplier Management scores 43

Contract Management 2. Within the Procurement Process Model a relationship exist between Contract Management and:What is Contract Management? • SourcingContract Management includes the construction ofcontracts and their terms and conditions, contract • Operational Procurementregistration, and keeping track of contracted products,financial obligations, critical dates, etc. In addition, it also Contract Management and Sourcing:includes monitoring agreed targets and practicesspecified agreements in the contract. When necessary There seems to be an expectation that if a vendorthe Contract Management software helps to initiate has Sourcing functionality, Contract Managementactions to either adjust agreed terms and conditions, or will be the logical next step. The survey shows, in lineto remedy contract breaching behaviour. with expectations, that 95 percent of the vendors that offer Sourcing also offer Contract ManagementContract Management software supports the writing of functionality.contracts, giving overviews of current contracts andcontracted parties. Contract Management provides However 60 percent of the vendors that offerinsight into the related (financial) obligations, flow of Sourcing have a higher score in Contractfunds and critical dates, such as contract renegotiation or Management functionality compared to Sourcingdates that trigger penalties if they are not met. Contract indicating that Contract Management can be used asManagement applications support team collaboration, a stand alone or as an extension from Operationalcontract construction, document management, and Procurement to the Sourcing circle and vice versa.contract approvals, budget control and contractevaluation. Contract Management and Operational Procurement:Functionalities reviewed within Contract Management In line with the observation above, 80 percent of theContract Management is divided into the following sub- vendors that provide Contract Managementfunctionalities: functionality also offers Operational Procurement• Authoring functionality. For the remaining 20 percent, Contract• Usage Management is used as an extension of the Sourcing• Compliance cycle (Commerce hub, Iasta, Negometrix and Upside• Repository Software). Only one vendor (Vendorlink) offers Contract Management as a stand alone module since Sourcing and Operational Procurement functionalityObservations regarding Contract Management is totally absent.1. Vendors appear to have invested significantly in this 3. Although all sub-functionalities of Contract module, which has resulted in a high score. This is Management score reasonably high, we see that the not a surprised given the need to link heavily the sub functionalities ‘Compliance’ (average score of benefits that are identified (Sourcing) through to 76%) and ‘Usage’ (average score of 80%) scored less benefits being delivered (Operational) – this is and thus there is still scope for improvement. achieved through benefits being captured as part of Repository is a sub-category where 90% of the Contract Management activities. Three vendors vendors scored 100 percent. This is partly down to responded with a score of less than 70 percent the need to tie Operational and Contract compliance coverage in this area, with the average alone above jointly to demonstrate compliance through the 85 percent. Only one vendor has no Contract Procurement process without leakage. Management functionality (ProcureStaff). 44

Figure 14 Contract Management Figure 15 Contract Management scores 45

Catalogue Management Observations regarding Catalogue ManagementWhat is Catalogue Management?Catalogues contain the preferred goods and services 1. The scores of the vendors in the category Cataloguefrom suppliers that were selected during the strategic Management are quite similar to the total score ofsourcing process. All the article information is stored in the vendors with regards to the total SRM suitethe catalogue. This makes it possible to select and order coverage. There is little to improve functionally withitems electronically. Catalogues can either be located in most Customers focusing on the uptake and internalthe procurement application itself, at the suppliers’ side adoption within the respective organisationsor at a third party. For companies that have managed toput the majority of their spend onto catalogues, there isoften a combination of different types because different 2. Within the Procurement Process Model apurchase-to-pay channels are applicable depending on relationship exist between Catalogue Managementcategory profile, order profile, spend profile, supplier and:profile and the business requirements. Static/standardcatalogues, form catalogues and punch-out catalogues • Operational Procurementare examples of catalogue-based channels. CatalogueManagement involves entering article data, validating Catalogue Management and Operationalthe data, and generating and maintaining the catalogue Procurement:content. Catalogue Management is primarily carried outby the party keeping the catalogue, but different Catalogue Management is a fundamental part of thearrangements are possible. An external catalogue can be Operational Procurement process. Therefore, ifaccessed in several ways: a relatively simple solution is a there is no Operational Procurement functionalitypunch-out or roundtrip, where the user temporarily then there is no Catalogue managementleaves the procurement application and is typically functionality present.directed to the supplier’s website. After selecting aproduct he returns with the article information neededto generate a requisition, this will then pass through the 3. All sub-categories within Catalogue Managementnormal internal approval procedure. In some solutions, score relatively high (average >70 percent), howeverthe external catalogue data can be viewed and handled in certain instances the administration subin the procurement application in the same way as functionalities could be improved (e.g. supplierinternally stored articles. As the critical success factor for capabilities).self service requisitioning is usability and userfriendliness, a coherent working environment foremployees is of great importance in achieving good 4. The main differentiator in the Cataloguecompliance with preferred products, suppliers and Management functionality is ‘Look and Feel’contracts. demonstrated by the following requirements; Punch-out catalogues have the look and feel of theFunctionalities reviewed within Catalogue Management own application (within ‘Catalogue maintenance’;Catalogue Management is divided into the following sub- Possibility to use different setups for look& feelfunctionalities: (within ‘Catalogue creation’).• User capabilities• Supplier capabilities• Administration(content review & approval)• Administration-Creation• Administration-Maintenance 46

Figure16 Catalogue Management Figure17 Catalogue Management scores 47

Operational Procurement Functionalities reviewed within Operational ProcurementWhat is Operational Procurement? Operational Procurement is divided into the following sub-functionalitiesThere are several terms for Operational Procurement; • Requisitioningsome well-known terms are Purchase-to-Pay (P2P) and • Request for quotationeProcurement. Usually eProcurement refers to an • Approvalautomated solution for Operational Procurement where • Purchase order transmissionP2P refers to the process. Therefore eProcurement is the • Receiving goods and servicesautomated solution for the P2P process. • InvoicingOperational Procurement is primarily made up of theorder process, the supply process and the paymentprocess. The order process typically follows the following Observations regarding Operationalsteps: Procurement1. Needs capture and requisitioning.2. Approval, normally by the next level manager, a 1. 75 percent of the vendors offers Operational subject matter expert, or by the finance department. Procurement functionality. Most of the players offering Operational Procurement module offer high3. After approval of the requisition the order is placed functionality (>70 percent). This is by far the most at the supplier. If necessary a sourcing process can common suite of provision from all of the vendors be entered into prior to the order placement if not interviewed. all details are clear yet (for example if the item was not in a catalogue) 2. Within the Procurement Process Model a relationship exist between Operational Procurement4. In the supply process the goods and/or service are and: received and an assessment of received goods and/or services on quality and quantity is done. If • Catalogue Management necessary exceptions will be processed. • Contract Management (see Contract5. Finally, in the payment process the invoice is Management) received and matched against the Purchase order • Procurement Intelligence (see Procurement and the received goods. If this is correct, the invoice Intelligence) can be paid. Some companies have a self-billing process. In this situation the company will make • Project Management (see Project Management) their own invoice based on the Purchase order and the goods received. Operational procurement and CatalogueApplications for Operational Procurement normally Management:support both product related goods & services (direct) 25 percent of the vendors do not provide theand not product related goods & services (indirect). Operational Procurement functionality. TheseExamples of the latter are: External resources, MRO, vendors also do not provide Catalogue Management,capital goods and utilities. since Catalogue Management is an element of Operational Procurement. 48

3. Most of the vendors support the first part of the process, Requisition creation, Request for Quotation and Approvals, more than support the second part of the process.4. The main differentiators across Operational Procurement are: The way purchase orders acknowledgements can be received; The way purchase order acknowledgements can be handled; The way (electronic)invoices can be received. Figure 18 Operational Procurement scores Figure 19 Operational Procurement 49

External Resources Functionalities reviewed within External Resources External resources is divided into the following sub-Why External resources? functionalities • SpecifyOver the past few years it has been noted that, • Approvalspredominantly indirect goods have been subjected to • Requisitioningsome form of SRM implementation. In reviewing the • Selection & Orderlevel of benefit generation, it could be expected that • MonitoringExternal resources has already been reviewed at various • After Caretimes. However evidence shows that this is not the case.Many large organizations have a relatively high level ofspend External Resources, but have very little visibility tothe spend breakdown.. Most companies should know Observations regarding External Resourcesexactly how much money they spend per supplier, butbelow this level information is inconsistent and they maynot be able to know the grade or level of the hired 1. External resource proves to be a key differentiator;person, if they are registered, the rate per hour or day or vendors either provide functionality in this area (50even insight as to whether the vacancy could be fulfilled percent of surveyed vendors) or it is completelywith an internal candidate. absent.With the expected constraints within the labour market,companies will need to get a better understanding of 2. There is an assumption that External Resourcetheir external resources, and it is anticipated that functionality appears in applications that also offersupporting applications will have a bright future. Operational Procurement processes. In the 2008-We have chosen to separately survey the vendors on this 2009 SRM survey there was a direct dependencyfunctionality as we believe that the process of External between both functionalities, however this year’sresources is very different from any other P2P process. survey shows that the dependency is decreasing. 50 percent of vendors offer External resource functionality but no Operational ProcurementWhat is External Resources Management? functionality.External resources management is a tool to manage anorganization’s external resources to enable the reduction 3. Some of the niche players are not looking from ain the company’s cost of management of external Procurement point of view, but from a HRemployees. Organization’s often lack insight into their perspective. Some full suit vendors do not offerobligations with regard to temporary labour, a external External resource functionality yet, which leavesresource solution can create this insight. A external scope for more improvement.resource solution will allow an organization to specify itsrequirements and select the appropriate workers. Thesolution allows creation of a contract between the 4. Most diversity in External Resources functionality liesorganization and workers; ensures that workers are within the ‘Selection and Order’ subcategory. Themonitored by creating reports such as time and main differentiator is whether the applicationexpenses. The solution allows self-billing and evaluation supports Facility Management Requests.of employees afterwards thus the solution helps tomitigate the organization’s risk in employing externalresources. 50

Figure20 External Resources scores 51

Supplier Relationship Management Research 2010-2011 BPO Procurement 52

BPO Procurement interaction with HR to drive changes in or compliance with HR policies. • Reporting – provision of management informationWhat is BPO Procurement? for sourcing category, compliance and supplier management.BPO Procurement is a solution that many are turning tofor the delivery of world class procurement services. A Why BPO?BPO Procurement service consists of two main types ofservices (and the combination of these two is called full There are several motivating factors as to why BPO isservice BPO Procurement): gaining ground which include:• Purchase-to-Pay which is the provision of • Factor Cost Advantage transaction processing support to manage the • Economy of Scale administration involved in the ‘procure-to-pay cycle’ • Business Risk Mitigation for indirect goods and services or direct • Superior Competency procurement; • Utilization Improvement• Source-to-Contract includes strategic sourcing and the management of contracts. The spend managed by the BPO service provider creates a continuous Observations regarding BPO Procurement: leverage for spend aggregation 1. With an average of 62 percent, and with more 100What services are included in a BPO-Procurement deal? percent functional coverage BPO Procurement remains a strong area for growth that is drivingBPO Procurement refers to the processes and current demand in organisations.infrastructure associated with, typically, the following 2. Only 45 percent of the vendors indicates that ititems: offers all BPO based scenario’s.• Strategic sourcing – the negotiation of new contracts with suppliers and the associated services, generally The survey shows that the top 5 BPO based in accordance with the commodity or the overall scenario’s in use are: procurement strategy. • Sourcing• Category management – the development of • Electronic tendering, category strategies, subsequent management of the category after sourcing and management of the • Supplier Management contracts to ensure that the benefits identified are • Procurement Intelligence. delivered through active compliance management. Typically, any supplier management is undertaken in • Project Management this area. Catalogue management and External resources are• Tactical procurement (spot buying) – the used less as BPO scenario’s. management of spot buying for high value and unusual items through a purchasing desk. This is usually augmented with a front office which supports employees and supplier contact in local languages.• Transactional procurement – the management of the requisitions and PO process plus master data management and query management that supports employees and supplier contact in local languages.• Compliance management – active reporting on and management of compliance. Often involves 53

3. 40 percent of the vendors offer software supporting BPO based scenarios and customers in all the following regions; Western Europe, Eastern Europe, Africa, Northern America, Southern America, Middle East, Asia, Far East, Australia and New Zealand. The region where most BPO based scenario’s are supported by the surveyed vendors is Western Europe (55 percent). This can be explained by the fact that most surveyed vendors are based in western Europe.4. 35 percent of the vendors are collaborating with another provider in support of their BPO Procurement. Figure 1 BPO Procurement scores 54

Supplier Relationship Management Research 2010-2011International Footprintand Supplier Profile 55

Ariba inc.Spend Management solutionsImplementation scope Ariba implemented the solution: “Globally” Headquarter: USAFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“Total number of suppliers on the Network - 241,548 unique ANIDs Connection:(out of which there are 223,555 unique supplier names)” Information not disclosed Pricing model:Geographical scope of connected suppliers Information not disclosed“Globally” 56

Ariba inc.Spend Management solutionsAvailabilityCurrent version operational since 2010First version operational since Ariba Sourcing Sept 2001, Ariba Category Management Feb 2003, Ariba Contract Workbench Feb 2004, Supplier Performance Management June 2003, Ariba Data Enrichment April 2004, Ariba Analysis Feb 2002, Ariba Buyer June 1997, Ariba Contract Compliance Feb 2002, Ariba Invoice April 2002, Ariba Settlement Feb 2004, Ariba Travel & Expense Sept. 1998, Ariba Cateogory Procurement Feb 2004, Ariba eForms Sept. 1998, The On-Demand solutions were first introduced in 2006.Company ProfileThe service is offered as: Inhouse and SAASCountry in which is the Corporate United StatesHeadquarter locatedTotal number of employees 1.663 employeesTotal number of employees working on 315developing the product?Frequency for delivering patches and Patches are deployed to all users by Aribas IT team in off-hours, typically after 8upgrades PM PST on Fridays.Is there a user association set-up Yes there are ASUG and DSUG user groups for these solutions as well asaround the package? extensive online communities on SAP BPX and SDN, as well as on Linked In and other forums.Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases and New VersionsA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support, Bespoke software, Implementation support, Project management during Implementation, Training on the supplied packageTotal number of implementations 1000+ Customers globallyworldwideSoftware is available in Dutch, English, German, French, Spanish, Russian, Japanese, Chinese,The URL of the companys website www.ariba.com 57

Basware.Basware.Enterprise Purchase to Pay Enterprise Purchase to PayImplementation scope Basware implemented the solution: “Globally” Headquarter: FinlandFigure 1 Geographical scope & location headquarter Sustainability Policy: Information not disclosed Suppliers: “Integration of supplier processes as far as possible” Sourcing: “Basware has a RFx Module which is continiously improved” Operational Procurement: “Basware has a Procurement ModuleFigure 2 Total number of implementations worldwide and per SRM module which is continiously improved”Supplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”Total number of suppliers connected is not specified. Connection: “Via 1“Via roamingagreements with the biggest operators” Basware platform, direct and partnering”Geographical scope of connected suppliers Pricing model: “Staffed“Suppliers are connected all over the world” based on volume” 58

Basware.Basware.Enterprise Purchase to Pay Enterprise Purchase to PayAvailabilityCurrent version operational since 2010First version operational since 1988Company ProfileThe service is offered as: Inhouse and SAASCountry in which is the Corporate FinlandHeadquarter locatedTotal number of employees 761Total number of employees working on 195developing the product?Frequency for delivering patches and 1 major release and 4 patches per yearupgradesIs there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Noavailable on the webThe company provides Helpdesk support ,Implementation support, Project management during Implementation, Training on the supplied packageTotal number of implementations More than 8000worldwideSoftware is available in Dutch, EnglishThe URL of the companys website www.basware.com 59

Black Peacock ProcurementSolutionsPROACTISImplementation scope BBPS implemented the solution in: Information not disclosed Headquarter: USAFigure 1 Geographical scope & location headquarter Sustainability Policy: Information not disclosed Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”Information not disclosed Connection: Information not disclosedGeographical scope of connected suppliers Pricing model:Information not disclosed Information not disclosed 60

Black Peacock ProcurementSolutionsPROACTISAvailabilityCurrent version operational since 2009First version operational since 1999Company ProfileThe service is offered as: Inhouse and SAASCountry in which is the Corporate USAHeadquarter locatedTotal number of employees 12Total number of employees working ondeveloping the product?Frequency for delivering patches and Patches regular, new release per yearupgradesIs there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Nohours a day?The maintenance contract include New Releases New VersionA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 380worldwideSoftware is available in Dutch, English, German, French, Spanish, RussianThe URL of the companys website www.proactis.com 61

BuprosOpen Source Spend ManagementBupros is launching the Sourcing, Contract Management, Supplier Management and ProcurementIntelligence modules in Q4 2010Implementation scope Bupros implemented the solution in: The Netherlands (30) and Germany (20) Headquarter: The NetherlandsFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“Total number of suppliers: 20” Connection: “Down- and unloadable file in supplierGeographical scope of connected suppliers portal and punch out”“ The Netherlands and Germany “ Pricing model: “unsupported for free, a fee in case of managed services” 62

BuprosOpen Source Spend ManagementAvailabilityCurrent version operational since 2008 (Bupros Open Source Spend Management operational procurement)First version operational since 2003 (Bupros Procurement)Company ProfileThe service is offered as: SAASCountry in which is the Corporate The Netherlands AntillesHeadquarter locatedTotal number of employees 30Total number of employees working on 10developing the product?Frequency for delivering patches and ContinuouslyupgradesIs there a user association set-up Noaround the package?Is there a helpdesk operational for 24 Currently operational at West European business hours.hours a day?The maintenance contract include New Releases New VersionA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 50worldwideSoftware is available in Dutch, English, German, FrenchThe URL of the companys website www.bupros.com 63

Commerce-hubC- SourceImplementation scope Commerce – hub implemented the solution in: The Netherlands, Belgium, Romenia, US Headquarter: The NetherlandsFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”Information not disclosed Connection: Information not disclosedGeographical scope of connected suppliers Pricing model:Information not disclosed Information not disclosed 64

Commerce-hubC- SourceAvailabilityCurrent version operational since 2007First version operational since 2000Company ProfileThe service is offered as: SAASCountry in which is the Corporate The NetherlandsHeadquarter locatedTotal number of employees 15Total number of employees working on 3developing the product?Frequency for delivering patches and MonthlyupgradesIs there a user association set-up Commerce-hub is in the process of setting up user groups which are planned toaround the package? become operational second half 2010. Currently Commerce-hub customers meet informally during release update meetings, presentations and workshops.Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Noavailable on the webThe company provides Helpdesk support Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 75worldwideSoftware is available in Dutch, English, German, French, Spanish, Greek, Russian, Czech, Polish, Japanese, ChineseThe URL of the companys website www.commerce-hub.com 65

Eeebid.com inc.ebidQLImplementation scope Eeebid.com implemented the solution in: USA, Germany, Switzerland/ Liechtenstein, Hungary, Czech Republic, Romania, France, Denmark, Sweden, China Headquarter: USAFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: “eeebid offers an eeebid supplier directory including sustainability criteria” Sourcing: “eeebid supports verification of social and environmental standards in its sourcing and software solutions”Figure 2 Total number of implementations worldwide and per SRM module Operational Procurement: “Similar to sourcing”Supplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“245.000 suppliers are connected” Connection: “Key model is private marketplace /Geographical scope of connected suppliers direct partnering”“160.000 Europe, 53.000 Asia, 27.000 USA; Pricing model: “Free ofRest of the world: 5.000” charge for basic connection, annual fee for extended listing in eeebid supplier directory” 66

Eeebid.com inc.ebidQLAvailabilityCurrent version operational since 2010First version operational since 2000Company ProfileThe service is offered as: Inhouse SAASCountry in which is the Corporate United StatesHeadquarter locatedTotal number of employees 29Total number of employees working on 12developing the product?Frequency for delivering patches and 4 annual versions, weekly patches all managed comprehensively via CVSupgrades sourcecode managementIs there a user association set-up Yes, there is a customer clubaround the package?Is there a helpdesk operational for 24 Yes, if you order Platinum supporthours a day?The maintenance contract include New Releases: depending on negotiation New Version: depending on negotiationA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 280worldwideSoftware is available in Dutch, English, German, French, Czech, ChineseThe URL of the companys website www.eeebid.com 67

ESIZEESIZE procurement solutionsImplementation scope ESIZE implemented the solution in: The Netherlands, Belgium, Germany, France, UK, Nordics, Middle-East, Spain, Portugal, Italy, Austria, Switzerland, Luxembourg, USA, Baltics, Russia, Mexico, Brasil, China, Japan, Australia Headquarter: The NetherlandsFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers, Sourcing and Operational Procurement: “ESIZE complies with common sustainability policies that are checked by their controllers/advisors”Figure 2 Total number of implementations worldwide and per SRM module Type of connection and pricing modelPrimodel:Supplier connections “ ff d b d l ” Connection: “MarketTotal number of suppliers connected: place, direct integration, e- mail, fax, XML,“More than 150.000” Webservices, EDIFACT, C-XML, CSV, eb-XML EDI,Geographical scope of connected suppliers PDF, Hr-XML ,etc.”“The Netherlands, Belgium, Germany, France, UK, Nordics, Middle-East, Pricing model:Spain, Portugal, Italy, Austria, Switzerland, Luxembourg, USA, Baltics, Russia, “Depending on the type ofMexico, Brasil, China, Japan, Australia” connection it ranges from a free connection to full customisation/integration with various price levels” 68

ESIZEESIZE procurement solutionsAvailabilityCurrent version operational since 2010First version operational since 1999Company ProfileThe service is offered as: SAASCountry in which is the Corporate The NetherlandsHeadquarter locatedTotal number of employees 150Total number of employees working on 100developing the product?Frequency for delivering patches and 3 major releases (new development) and 4 minor releases (pro-activeupgrades maintenance).Is there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 70worldwideSoftware is available in Dutch, English, German, French, Spanish, Greek, Russian, Czech, Polish, Japanese, ChineseThe URL of the companys website www.esize.com 69

HubwooCloud Procurement SuiteImplementation scope Hubwoo implemented the solution in: Global eProcurement implementations that span 20+ countries including: USA, Canada, Mexico, Columbia, France, Spain, Germany, UK, Poland, Turkey, Italy, The Netherlands, Hungary, Romania Headquarter: FranceFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers, Sourcing and Operational Procurement: “Huwboo enables supply risk data from various third party sources such as Kortera, Compass, and Coface”Figure 2 Total number of implementations worldwide and per SRM module Type of connection andSupplier connections pricing modelPrimodel: “ ff d b d l ”Total number of suppliers connected: Connection: “The Hub. Hubwoos connect once -“74. 000 suppliers are connected” connect to all marketplace solution”Geographical scope of connected suppliers Pricing model: “Pricing“USA, Europe, Asia, Latin America” depends on whether its a "direct connect" or Integrated supplier, a Portal supplier or a Fax/eMail supplier” 70

HubwooCloud Procurement SuiteAvailabilityCurrent version operational since 2007First version operational since 2001Company ProfileThe service is offered as: SAASCountry in which is the Corporate FranceHeadquarter locatedTotal number of employees 250Total number of employees working on 40developing the product?Frequency for delivering patches and 3 major upgrades per year. Minor patches and enhancements as needed.upgradesIs there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Noavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 150worldwideSoftware is available in Dutch, English, German, French, Spanish, Greek, Russian, Czech, Polish, Japanese, ChineseThe URL of the companys website www.hubwoo.com 71

Iasta IncSmartSource SRMImplementation scope Iasta implemented the solution in : USA (70%) and UK (30%) Headquarter: USAFigure 1 Geographical scope & location headquarter Sustainability Policy: Information not disclosed Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”Information not disclosed Connection: Information not disclosedGeographical scope of connected suppliers Pricing model:Information not disclosed Information not disclosed 72

Iasta IncSmartSource SRMAvailabilityCurrent version operational since 2010First version operational since 2002Company ProfileThe service is offered as: SAASCountry in which is the Corporate United StatesHeadquarter locatedTotal number of employees 52Total number of employees working on 15developing the product?Frequency for delivering patches and All patches and upgrades are done 2-3 times per year. Patches are done asupgrades needed.Is there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Nohours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Project management during Implementation Training on the supplied packageTotal number of implementations > 150worldwideSoftware is available in Dutch, English, German, French, Spanish, PolishThe URL of the companys website www.Iasta.com 73

IBXIBX eProcurementImplementation scope IBX implemented the solution in: USA, Portugal, Finland, Canada, Australia, Russia, Italy, Spain, Poland, The Netherlands, Czech Republic, Hungary, Slovakia, UK, Sweden, Japan, France, Ireland, Austria, Switzerland, Belgium, Norway, Germany, Denmark Headquarter: SwedenFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“27.000 suppliers are connected worldwide” Connection: “Supplier activation programGeographical scope of connected suppliers including methodology, tools and resources”“Suppliers are connected in more than 100 countries” Pricing model: “Per supplier” 74

IBXIBX eProcurementAvailabilityCurrent version operational since 2005First version operational since 2003Company ProfileThe service is offered as: SAASCountry in which is the Corporate SwedenHeadquarter locatedTotal number of employees 400Total number of employees working on 50developing the product?Frequency for delivering patches and 3 yearly releases of enhancementsupgradesIs there a user association set-up Noaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionA demo-version of the software is Yes - but not publicavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 13worldwideSoftware is available in Dutch, English, German, French, Spanish, Czech, PolishThe URL of the companys website www.ibxgroup.com 75

INCONTOINCONTO E-Procurement and Contract ManagementImplementation scope INCONTO implemented the solution in: The Netherlands, Belgium, UK Headquarter: The NetherlandsFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM module Type of connection andSupplier connections pricing modelPrimodel: “ ff d b d l ”Total number of suppliers connected: Connection: “Supplier“100 suppliers are connected” connections are initiated by the clients, INCONTO is an independent supplier ofGeographical scope of connected suppliers procurement software”“Mainly The Netherlands” Pricing model: “Connections are easily created and therefore are low in cost. Clients forward the invoice to the suppliers” 76

INCONTOINCONTO E-Procurement and Contract ManagementAvailabilityCurrent version operational since Version 2.7 since April 2010First version operational since 2000Company ProfileThe service is offered as: Inhouse SAASCountry in which is the Corporate The NetherlandsHeadquarter locatedTotal number of employees 75Total number of employees working on 10developing the product?Frequency for delivering patches and Upgrades are delivered twice a year, patches as soon as necessaryupgradesIs there a user association set-up Noaround the package?Is there a helpdesk operational for 24 No, only during working hourshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is No, we prefer to demonstrate the software to our prospects.available on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 30worldwideSoftware is available in Dutch, EnglishThe URL of the companys website http://www.inconto.com 77

NegometrixNegometrixImplementation scope Negometrix implemented the solution in:” Most european countries ( 80% in the Netherlands)” Headquarter: The NetherlandsFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: Information not disclosed Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”Information not disclosed Connection: “Sourcing market place, pooling of buying power”Geographical scope of connected suppliers Pricing model:“Most european countries, 80% in The Netherlands” Information not disclosed 78

NegometrixNegometrixAvailabilityCurrent version operational since 2009First version operational since 2000Company ProfileThe service is offered as: SAASCountry in which is the Corporate The NetherlandsHeadquarter locatedTotal number of employees 14Total number of employees working on 4developing the product?Frequency for delivering patches and 1 x per monthupgradesIs there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Only for special projectshours a day?The maintenance contract include New Releases New VersionA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 10.000worldwideSoftware is available in Dutch, English, German, French, RussianThe URL of the companys website www.negometrix.com 79

Oracle CorporationOracle Advanced ProcurementImplementation scope Oracle implemented the solution: Globally Headquarter: USAFigure 1 Geographical scope & location headquarter Sustainability Policy: “Oracle has 35.000+ applications customers amongst Suppliers, Sourcing and which a great deal has procurement functionality Operational Procurement: implemented. No specific numbers are disclosed” “Find out more on www.oracle.com/green/in dex.html”Figure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“Oracle connects suppliers via the Oracle Supplier Network transaction platform” Connection: “MarketplaceNo specific numbers are disclosed (Oracle Supplier Network)” Pricing model: “OracleGeographical scope of connected suppliers Supplier Network is the“Mostly USA” free online service” 80

Oracle CorporationOracle Advanced ProcurementAvailabilityCurrent version operational since 2008First version operational since 1988Company ProfileThe service is offered as: Inhouse SAASCountry in which is the Corporate United StatesHeadquarter locatedTotal number of employees Approximately 86.000 full-time employeesTotal number of employees working on Approximately 1/4 the of the employees are in product developmentdeveloping the product?Frequency for delivering patches and In average a major release every two years, and point releases in between.upgradesIs there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is No, self running demos can be downloaded.available on the webThe company provides Helpdesk support Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 75worldwideSoftware is available in Dutch, English, German, French, Spanish, Greek, Russian, Czech, Polish, Japanese, ChineseThe URL of the companys website www.oracle.com 81

ProcureStaff TechnologiesConsolImplementation scope ProcureStaff Technologies implemented the solution in: Australia (2), Brazil, Belgium (1), Canada (2), Czech Republic (2), France (3), Germany (3), India (1), Ireland (1), Italy (2), Japan (1), Malaysia (1), The Netherlands (2), Singapore (1), Scotland (1), Slovakia (1), Spain (3), United Kingdom (6), United States (32) Headquarter: USAFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“1.357 suppliers are connected” Connection: Information not disclosedGeographical scope of connected suppliers Pricing model:“Australia (2), Brazil (1), Belgium (1), Canada (58), China (1), Czech Republic (4), Information not disclosed France (45), Germany (23), India (2), Italy (2), Japan (21), Malaysia (12),The Netherlands (45), Poland (3), Puerto Rico (10), Singapore (1), Scotland (12),Slovakia (1), Spain (37), United Kingdom (190), United States (870)” 82

ProcureStaff TechnologiesConsolAvailabilityCurrent version operational since 2009First version operational since 1996Company ProfileThe service is offered as: SAASCountry in which is the Corporate United StatesHeadquarter locatedTotal number of employees 233Total number of employees working on Proprietarydeveloping the product?Frequency for delivering patches and There is a release schedule for Nov 2010 and June 2011upgradesIs there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 65worldwideSoftware is available in English , SpanishThe URL of the companys website www.procurestaff.com 83

Proquro B.V.ProquroImplementation scope Proquro implemented the solution in: The Netherlands (more than 100), Belgium (1) Headquarter: The NetherlandsFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: Information not disclosed Sourcing: Information not disclosed Operational Procurement: Information not disclosedFigure 2 Total number of implementations worldwide and per SRM moduleSupplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“Unknown” Connection: “Proquro Connect module”Geographical scope of connected suppliers Pricing model:“Netherlands, Germany, Belgium” “Connecting Module” 84

Proquro B.V.ProquroAvailabilityCurrent version operational since 2010First version operational since 2000Company ProfileThe service is offered as: Inhouse SAASCountry in which is the Corporate The NetherlandsHeadquarter locatedTotal number of employees 13Total number of employees working on 7developing the product?Frequency for delivering patches and Depends on new developments and bug fixes, 1 major update per yearupgradesIs there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 No, only during working hourshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is yes, but only for consultantsavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations >100worldwideSoftware is available in Dutch, English, German, FrenchThe URL of the companys website www.proquro.nl 85

SAP AGSAP SRM, SAP E-Sourcing, SAP Contract Lifecycle Management,SAP Spend Performance Management, SAP Invoice ManagementImplementation scope SAP implemented the solution: Globally Headquarter: GermanyFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: “SAP is taking a leading corporate role in this critical topic area, both in our own actions as well as how we develop our solutions” Sourcing and Operational Procurement: “SAP is building new sustainabilityFigure 2 Total number of implementations worldwide and per SRM module parameters, metrics and tools into their procurement portfolio”Supplier connections Type of connection andTotal number of suppliers connected: pricing modelPrimodel:“Hundreds of thousands. Some of these are customer-to-supplier direct connections, “ ff d b d l ”while some customers use partners networks” Connection: “Direct connection (e.g., EDIGeographical scope of connected suppliers tools), partners networks”“Customers are connecting to suppliers all over the globe, both directly and Pricing model: “No usagevia partner networks” charges from SAP to make direct connections; partner networks charge usage fees typically based on number of suppliers or 86 transactions”

SAP AGSAP SRM, SAP E-Sourcing, SAP Contract Lifecycle Management,SAP Spend Performance Management, SAP Invoice ManagementAvailabilityCurrent version operational since SAP Spend Performance Management version 2.1 (Q2 2009), SAP E-Sourcing version 6.0 (Q4 2009), SAP Contract Lifecycle Management version 3.0 (Q4 2009), SAP SRM version 7.0 (Q2 2009).First version operational since 1998 for most applications in the portfolio, 2007 for Spend Analytics.Company ProfileThe service is offered as: Inhouse and SAASCountry in which is the Corporate GermanyHeadquarter locatedTotal number of employees 47.500Total number of employees working on Approximately 1000+ across the portfoliodeveloping the product?Frequency for delivering patches and For on premise solutions, approximately 1x per 12 - 18 months for major releaseupgrades and patches as needed. For on demand solutions, approximately 2x per year releases.Is there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases and New VersionsA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support, Bespoke software, Implementation support, Project management during Implementation, Training on the supplied packageTotal number of implementations Across portfolio over 1800 implementationsworldwideSoftware is available in Dutch, English, German, French, Spanish, Greek, Russian, Czech, Polish, Japanese, ChineseThe URL of the companys website www.sap.com 87

SynerTrade SASynerTrade 6 SynerTrade implemented the solution in: 65Implementation scope countries this includes all EU countries, in Asia (China, India, Japan, South-Korea, Vietnam, Thailand, Pakistan, some 10 more), Austrialia/ NewZealand, America (USA, Kanada, Mexico), South/MiddleAmerica (Brazil, Argentine, Chile, Venezuela,), Africa (Algeria, Lybia, Agyt, South-Africa, Mozambic, Kongo) MiddleEast (Arabia, Kuwait, Jordania, Iran) Headquarter:Figure 1 Geographical scope & location headquarter Luxemburg Sustainability Policy: “We have an advanced sustainability methodology developed jointly on international level with EY, it has preconfigured templates of quetsionnaires, KPI, certificats, processes, controlling reports,Figure 2 Total number of implementations worldwide and per SRM module interactive drill downs and management reports”Supplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“25.000 suppliers are connected” Connection: “Default is direct partnering, we offerGeographical scope of connected suppliers self-service, hotline supported onboarding, full“65 countries” service, catalog creation service Pricing model: “Basic connection free of charge” 88

SynerTrade SASynerTrade 6AvailabilityCurrent version operational since 6.6.2 (since February 2010)First version operational since Release 1.0.0 (April 2000)Company ProfileThe service is offered as: Inhouse SAASCountry in which is the Corporate LuxemburgHeadquarter locatedTotal number of employees 105Total number of employees working on 38developing the product?Frequency for delivering patches and 2 Sub-Releases per year, 10 sub-sub releases and daily automatic patchesupgradesIs there a user association set-up Yes, the SynerTrade Key Customer Clubaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases: ASP yes / license typically not New Versions: ASP yes/ license yesA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations More than 186worldwideSoftware is available in Dutch, English, German, French, Spanish, Russian, Czech, Polish, Japanese, ChineseThe URL of the companys website www.synertrade.com 89

TBloxTBlox online softwareImplementation scope TBlox implemented the solution in: USA and Europe Headquarter: The NetherlandsFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: “Suppliers have free choices to accept or reject client invitations. Sourcing: “TBlox offers both basic and advanced sourcing solutions via TBlox-PAAS” Operational Procurement: “TBlox offers newFigure 2 Total number of implementations worldwide and per SRM module generation ERP software”Supplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”Information not disclosed Connection: “Free Supplier Portal and services provided via partnerGeographical scope of connected suppliers network”“USA and Europe” Pricing model: “ Free for use. Supplier can connect own OCI-enabled webshop or activate free webshop. Optional free and paid service packages available” 90

TBloxTBlox online softwareAvailabilityCurrent version operational since 2010First version operational since 2004Company ProfileThe service is offered as: SAASCountry in which is the Corporate The NetherlandsHeadquarter locatedTotal number of employees 120Total number of employees working on 35developing the product?Frequency for delivering patches and +200 upgrades per year, stage policy for releases, client may select stageupgrades (frequency upgrades)Is there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 1worldwideSoftware is available in Dutch, English, German, French, SpanishThe URL of the companys website www.tblox.com 91

Upside SoftwareUpsideRFXImplementation scope Upside implemented the solution in: “More than 180 countries” Headquarter: CanadaFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: “Suppliers must demonstrate consistent efforts in ensuring green practices and these are followed and monitored” Sourcing and Operational Procurement: “Processes are automated and electronic to ensureFigure 2 Total number of implementations worldwide and per SRM module minimal paper usage”Supplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”Information not disclosed Connection: Information not disclosedGeographical scope of connected suppliers Pricing model:Information not disclosed Information not disclosed 92

Upside SoftwareUpsideRFXAvailabilityCurrent version operational since 2010First version operational since 2000Company ProfileThe service is offered as: Inhouse SAASCountry in which is the Corporate CanadaHeadquarter locatedTotal number of employees 160Total number of employees working on 160developing the product?Frequency for delivering patches and Patches every 10 weeks, upgrades every 3 to 6 months.upgradesIs there a user association set-up Yesaround the package?Is there a helpdesk operational for 24 Yeshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Noavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 300worldwideSoftware is available in EnglishThe URL of the companys website www.upsidesoft.com 93

Vendorlink B.V.VendorlinkImplementation scope Vendorlink implemented the solution in: The Netherlands Headquarter: The NetherlandsFigure 1 Geographical scope & location headquarter Sustainability Policy: Suppliers: “Vendorlink partners with EvoSwitch for hosting activities. Vendorlink tries to select suppliers and partners based on their sustainability policy” Sourcing: “Not applicable”Figure 2 Total number of implementations worldwide and per SRM module Operational Procurement: “Not applicable”Supplier connections Type of connection and pricing modelPrimodel:Total number of suppliers connected: “ ff d b d l ”“Not applicable” Connection: “Not applicable”Geographical scope of connected suppliers Pricing model:“Not applicable” “Not applicable” 94

Vendorlink B.V.VendorlinkAvailabilityCurrent version operational since 2009First version operational since 2008Company ProfileThe service is offered as: SAASCountry in which is the Corporate The NetherlandsHeadquarter locatedTotal number of employees 7Total number of employees working on 3developing the product?Frequency for delivering patches and Maximum of 2 major upgrades per year.upgradesIs there a user association set-up Noaround the package?Is there a helpdesk operational for 24 No, only during working hourshours a day?The maintenance contract include New Releases New VersionsA demo-version of the software is Yesavailable on the webThe company provides Helpdesk support Bespoke software Implementation support Project management during Implementation Training on the supplied packageTotal number of implementations 150worldwideSoftware is available in Dutch, EnglishThe URL of the companys website http://www.vendorlink.nl 95

Australia France Susan Stuart Jean-Gabriel Padovani E-mail: susan.stuart@au.capgemini.com E-mail: jean-gabriel.padovani@capgemini.com Tel.: +61 2 9293 4055 Tel.: +33 1 49672140 Dave White Jean-Pierre Pellé E-mail: dave.white@au.capgemini.com E-mail: jean-pierre.pelle@capgemini.com Tel.: +61396133222 Tel.: +33 1 49675159Italy Sweden Marco Alberti Bo Karlsson E-mail: marco.alberti@capgemini.com E-mail: bo.x.karlsson@capgemini.com Tel.: +39 02 414931 Tel.: +46 8 5368 4065 Michael SkordbyBelgium E-mail: michael.skordby@capgemini.com Tel.: +46 8 5368 4021 Philip Van Gasse E-mail: philip.vangasse@capgemini.com Tel.: +32 2 7081111 UK & Ireland Filip Paenhuysen Graham Skinner E-mail: filip.paenhuysen@capgemini.com E-mail: graham.skinner@capgemini.com Tel.: +32 2 708 13 63 Tel.: +44 870 366 0704 Hamish Mckechnie-SharmaNetherlands E-mail: hamish.mckechnie-sharma@capgemini.com Tel.: +44 870 366 0435 Ton van Dolder E-mail: ton.van.dolder@capgemini.com Tel.: +31 30 689 1323 Finland Markus KarkiCentral Europe E-mail: markus.karki@capgemini.fi Tel.: +358 9 4526 5612 Martin Raab E-mail: martin.raab@capgemini.com Tel.: +49 221 9126 44150 Spain Stefan Becker Pedro Provedo E-mail: stefan.becker@capgemini.com E-mail: pedro.provedo@capgemini.com Tel.: +49 89 9400 1126 Tel.: +34 91 657 7521North America India Matthew Shull Sanjeev Itagi E-mail: matthew.shull@capgemini.com E-mail: sanjeev.itagi@capgemini.com Tel.: +1 312 395 5805 Tel.: +91 984 545 3017 Global (all other queries): Adrian Penka E-mail: adrian.penka@capgemini.com Tel.: +1 404 806 5082 96

Capgemini SRM Research 2010 2011

by Robbert den Braber on Dec 22, 2010

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Capgemini SRM Research 2010 2011 Document Transcript

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