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Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
Yes, Virginia! There is More to e-Procurement than Software
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Yes, Virginia! There is More to e-Procurement than Software

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  • 1. Yes, Virginia! There is More to e-Procurement than Software Conference: Commonwealth of Virginia – Forum 2008 Presentation Dates: November 18 th , 2008 Conference Duration: 60 Minutes
  • 2. Yes, Virginia!
    • Central Theme
    • Process Before Technology, Collaboration Before Results!
  • 3. Yes, Virginia!
    • Creating the technology to operate such a marketplace (Covisint) turned out to be more difficult than expected, while suppliers remained hesitant to compete for business online. (12/31/2003)
    • 75% of all such initiatives (e-business) will fail despite the benefits to all transactional stakeholders. (2001)*
    • * Dale Neef – e-Procurement: From Strategy to Implementation
  • 4. Yes, Virginia!
    • Ford Scraps Oracle-based procurement system
    • “ Not all of our suppliers touched a piece of Everest . . . Ford felt it was in its partners’ best interests to make this decision.” (8/18/2004)
    • In August 2001, Ford hired Covisint to develop and host the next generation of the Ford Supplier Network . . .
    • . . . Covisint has also come to be considered a failure across the auto industry. (8/18/2004)
  • 5. Yes, Virginia!
    • 73% of all implementations result in partial or total failure. (2/2005 )
    • FORTUNE Magazine
    • Execs Tell Software Makers: “Some of You Are Doomed.” (2/5/2005)
  • 6. Yes! Virginia
    • Financial Executive Magazine Robert A. Rudzki April 1 st , 2006 New technology is of value only if it provides a suitable financial return . . . Unfortunately the benefits claimed are often unrealistic and unsubstantiated.
    • This leads to significant creditability issues . . . And to a lack of confidence . . . http://www.fei.org
  • 7. Yes, Virginia! Looking beyond the technology Process, not technology drives business and results
  • 8. Yes, Virginia!
    • What do you want to achieve?
  • 9. Yes, Virginia Enhanced supplier engagement Standardization Real world visibility Best “value” Flexibility Reliability Standardization Quantifiable savings Achieve performance objectives (Expedited Delivery) Minimal support requirement (Support) Fast ROI (Productivity) Increased efficiency Reliability (Responsiveness) Good budget fit Ease of use (Training & Support) Ease of integration with back-end ERP Low cost of ownership User Technological Economical
  • 10. Yes, Virginia! Non-adversarial Enhanced supplier engagement Standardization Maintain or increase revenue Real world visibility Best “value” Flexibility Business intelligence Reliability Standardization Quantifiable savings Convenience and speed Achieve performance objectives (Expedited Delivery) Minimal support requirement (Support) Fast ROI (Productivity) Non-invasive technology Increased efficiency Reliability (Responsiveness) Good budget fit Ease of use Ease of use (Training & Support) Ease of integration with back-end ERP Low cost of ownership Suppliers User Technological Economical
  • 11. Yes! Virginia
    • Financial Executive Magazine Robert A. Rudzki April 1 st , 2006 World-class supply practices boost shareholder value: a focus on both direct and indirect spending, including smaller items, can have a powerful effect on corporate performance. Top companies involve their procurement group and other internal functions, plus suppliers, to boost competitive advantage. http://www.fei.org
  • 12. Yes! Virginia
    • Purchasing.com Paul E. Teague December 20 th , 2008 CPOs and CFOs are on the same page, but speak a different language http://www.purchasing.com
  • 13. Yes! Virginia
    • Less than 20% of CFOs consider the work of CPOs and their staffs as having “a very positive impact on competitiveness.”
    • Of the 11.9% of average annual identified savings only 3.2% actually gets booked, a difference of 73% from ID identification to realization.
    • On average only 46% of CFOs feel that the procurement team has contributed to enterprise growth, while just 57% feel that procurement contributes to enterprise profitability.
  • 14. Yes! Virginia
    • CFO’s report that their efforts to drive savings and boost profitability are being stymied, in part, by non-compliance.
    • (Supply & Demand Chain AMEX Survey 2005)
  • 15. Yes! Virginia
    • Of the 45% of customers who have contracted vendors, 33% of their purchases are from non-contract suppliers. In Canada, 79% of all purchases are from non-contracted suppliers. (2004)
  • 16. Yes! Virginia
    • Business Process Improvement Is IT's Main Mission By Allan E. Alter October 4, 2006 One of the most important lessons from the last 25 years of business computing is that you can't throw technology at a problem and expect it to go away, or fling a system at an opportunity and expect the dollars to rain down. Ziff Davis Media 28 East 28th Street New York, New York 10016 www.ziffdavis.com
  • 17. Yes! Virginia
    • A Tale of Two Initiatives . . .
    • It was the best of times . . .
  • 18. Yes! Virginia
    • Results Speak!
    • An increase from 1% of the Commonwealth’s total $3.5 billion spend being processed through the system in 2001 to over 80% in 2007
    • An increase in the number of registered suppliers from 20,000 in 2001 to 34,000 in 2007
    • An increase in the distribution of Commonwealth contract awards to suppliers from 23% in 2001 to more than 46% of the total supply base in 2007
    Virginia's Total e-Procurement Solution 
  • 19. Yes! Virginia
    • How Did They Do It
    • Reversed direction after realizing the degree of stakeholder resistance to a “shared services” platform.
    • Recognized that government is “not just a single business but is actually comprised of many different lines of business.”
    • Government “goes beyond a mere org chart.”
    Virginia's Total e-Procurement Solution 
  • 20. Yes! Virginia
    • How Did They Do It
    • Senior management actively sought, and ultimately understood the “special needs, special rules and special challenges” at the department and agency level.
    • Communication is actually a desire and not a skill!
    Virginia's Total e-Procurement Solution 
  • 21. Yes! Virginia
    • How Did They Do It
    • Recognizing the flaws with a shared services strategy, Virginia’s team had the courage to change course.
    • Avoided the trap of eVA becoming a software (IT) project.
    • Shifted focus from application (ERP) compliance and cost justification to one of process understanding and refinement.
    Virginia's Total e-Procurement Solution 
  • 22. Yes! Virginia
    • How Did They Do It
    • Recognized that success was not dependent upon a particular vendor or technology.
    • Virginia was one of the first to successfully leverage the Software as a Service (SaaS) pricing models.
    • A win-win scenario for all stakeholders.
    Virginia's Total e-Procurement Solution 
  • 23. Yes! Virginia
    • A Tale of Two Initiatives . . .
    • It was the worst of times . . .
  • 24. Yes! Virginia
    • mySAP 10 year, $15 million contract
    • Part of a $23 million system of streamlined business processes
    • Additional $8 million on hardware interfaces, conversion services and software, project management support and additional staffing
    • Options to implement SAP’s E-procurement and business warehouse reporting applications
  • 25. Yes! Virginia
    • Standardize the city’s administrative functions across all departments
    • Project to fundamentally change how the city handles key business and admin. functions
    • A significant change for the city
  • 26. Yes! Virginia
    • “ But no cost savings estimate is complete yet, so officials are not sure how much Houston will save because of efficiencies.”
    • (Government Computer News 12/16/05)
  • 27. Yes! Virginia
    • Oracle 6 year, $95 million computer contract
    • Dept.’s of Finance, IT and General Services signed-off on the project
    • No independent analyses was done, savings est. provided by Oracle
    • “ Nearly site unseen”
  • 28. Yes! Virginia
    • Oracle est. that the software could have saved California as much as $163 million
    • The consultant (Logicon) est. a savings of $111 million
    • State auditors found that to be “wildly inaccurate”
    • The state est. that the contract would cost taxpayers $41 million
    • At the time of the audit, no state workers were actually using the Oracle product
  • 29. Yes! Virginia
    • It is a far, far better thing that I do . . .
  • 30. Yes! Virginia
    • Process (Communicate & Collaborate)
    • Technology (Align & Assign)
    • Results (Identify & Quantify)
  • 31. Yes! Virginia
    • Process (Communicate & Collaborate)
    • Do not confuse collaboration with shared services
    • Collaboration is driven internally, involving all key stakeholders . . . and takes place outside of the framework of a particular vendor or technology
    • Shared services within the public sector is in reality an outsourcing arrangement in which responsibility for structure and implementation is transferred to the selected vendor . . . less internal involvement, and more external control
  • 32. Yes! Virginia
    • Technology (Align & Assign)
    • Misalignment is linked to the agenda of the vendor and is usually driven by the desire for continuity or compatibility with an application (ERP system)
    • Technology is a supporting player – accelerating process efficiency, not defining it
    • Under a SaaS model, the vendor assumes the proper share of the risk
  • 33. Yes! Virginia
    • Results (Clarify & Quantify)
    • Clarify and verify what can be achieved by leveraging technology to accelerate process (CAPS 2003 Study/Humber College)
    • Understand how the financial imperatives of the program will “translate” projected savings into tangible bottom line results
    • Savings realization – think in terms of months instead of years
  • 34. Yes! Virginia
    • It is a far, far better rest that I go to . . .
  • 35. Yes! Virginia
    • Technology-centric Approach
    • Increasing cost, questionable results over a long period
    • Process-centric approach
    • Reducing cost and increasing results in a short time period
  • 36. Yes! Virginia
    • Central Theme
    • Process Before Technology, Collaboration Before Results!
  • 37. Procurement Insights Blog Your Link to Thoughtful, Leading Edge Procurement Insights by and for Procurement Professionals URL Link http://procureinsights.wordpress.com/ Yes! Virginia Posts Yes Virginia Revisited! Why some e-procurement initiatives succeed and others don’t! *(A Summit Simulpost) – October 23, 2007 Yes Virginia! There is more to e-procurement than software (Part 2) -September 20, 2007 Yes Virginia! There is more to e-procurement than software (Part 1) - September 12, 2007
  • 38. Yes! Virginia
    • Other Conferences with Jon Hansen
    • The Changing Face of Procurement (2-Day Seminar)
    • Dangerous Supply Chain Myths (2-Day Seminar)
    • The Evolution of the Public Sector Procurement Practice (2-Day Seminar)
    • The Shifting Sands of the ERP Vendor Landscape (2-Day Seminar)
    • The Purchasing Professional – Making the Transition from a Functional Role Player to a Strategic Leader (1-Day Seminar)
    • Sustainability Facts and Fiction: Linking Green Idealism and Practical Business Application
    • http://procureinsights.wordpress.com/2008/02/04/new-seminars-for-supply-chain-professionals/
    © 2007-2008 Hansen Consulting & Seminars Inc.
  • 39. Resource Index 1 © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 40. Resource Index 2 © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 41. Resource Index 3 © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 42. Resource Index
    • Resource Index 1
    • AMMG http: //www.ammg.ca/
    • Beyond Referrals http://www.beyondreferrals.blogspot.com/
    • Canadian Public Procurement Council http://www.cppc-ccmp.ca/index.php
    • Contingency Workforce Solutions http://www.cwsolutions.ca/
    • Enterprising non-profits http://www.enterprisingnonprofits.ca/
    • Future Path http://www.futurepath.com/dnn/
    • Grand & Toy http://www.grandandtoy.com/sites/corp/default.aspx
    • IACCM http://www.iaccm.com/
    • MERX http://www.merx.com/
    • Print Vision http://www.slideshare.net/piblogger/print-vision-presentation-august-2008-presentation
    • QStrat http://www.qstrat.com/index.html
    • Smarter Solutions http://www.smartersolutions.com/
    • Summit Magazine http://www.summitconnects.com/index.htm
    • Toshiba http://www.toshiba.ca/web/home
    • Resource Index 2
    • Baxter Planning Systems http://www.toshiba.ca/web/home
    • Bellwether Software http://www.bellwethercorp.com/
    • CABiNET http://www.cabinet-business-network.ca/
    • COUPA http://www.coupa.com/
    • ecademy http://www.ecademy.com/?xref =
    • Katzscan http://www.katzscan.com/
    • Network Global Logistics http://www.nglog.com/
    • Source One http://www.sourceoneinc.com/
    • Next Level Purchasing http://www.nextlevelpurchasing.com/
    • VIADOR http://www.viador.com/
    • WHY ABE http://www.whyabe.com/
    © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 43. Resource Index
    • Resource Index 3
    • PurchSearch http://www.purchasingcourses.com/2008/10/forget-google-try-purchsearch.html
    • eWorld Purchasing & Supply http://www.eworld-purchasing.com/
    • IBX http://www.ibxeurope.com/
    • LM3 online https://www.lm3online.org/Default.aspx
    • Zycus http://www.zycus.com/
    © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 44. Resource Index
    • The resource index was created as a means of responding the increasing number of audience questions regarding various services, solutions, associations as well as information resources.
    • The listings include direct links to the resource web sites.
    • To access Resource Profiles, Reports, PowerPoints, Videos and White Papers visit the Procurement Insights Blog at: http://procureinsights.wordpress.com/
    © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 45. Resource Index 1 © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 46. Resource Index 2 © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 47. Resource Index 3 © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 48. Resource Index
    • Resource Index 1
    • AMMG http: //www.ammg.ca/
    • Beyond Referrals http://www.beyondreferrals.blogspot.com/
    • Canadian Public Procurement Council http://www.cppc-ccmp.ca/index.php
    • Contingency Workforce Solutions http://www.cwsolutions.ca/
    • Enterprising non-profits http://www.enterprisingnonprofits.ca/
    • Future Path http://www.futurepath.com/dnn/
    • Grand & Toy http://www.grandandtoy.com/sites/corp/default.aspx
    • IACCM http://www.iaccm.com/
    • MERX http://www.merx.com/
    • Print Vision http://www.slideshare.net/piblogger/print-vision-presentation-august-2008-presentation
    • QStrat http://www.qstrat.com/index.html
    • Smarter Solutions http://www.smartersolutions.com/
    • Summit Magazine http://www.summitconnects.com/index.htm
    • Toshiba http://www.toshiba.ca/web/home
    • Resource Index 2
    • Baxter Planning Systems http://www.toshiba.ca/web/home
    • Bellwether Software http://www.bellwethercorp.com/
    • CABiNET http://www.cabinet-business-network.ca/
    • COUPA http://www.coupa.com/
    • ecademy http://www.ecademy.com/?xref =
    • Katzscan http://www.katzscan.com/
    • Network Global Logistics http://www.nglog.com/
    • Source One http://www.sourceoneinc.com/
    • Next Level Purchasing http://www.nextlevelpurchasing.com/
    • VIADOR http://www.viador.com/
    • WHY ABE http://www.whyabe.com/
    © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 49. Resource Index
    • Resource Index 3
    • PurchSearch http://www.purchasingcourses.com/2008/10/forget-google-try-purchsearch.html
    • eWorld Purchasing & Supply http://www.eworld-purchasing.com/
    • IBX http://www.ibxeurope.com/
    • LM3 online https://www.lm3online.org/Default.aspx
    • Zycus http://www.zycus.com/
    © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 50. Resource Index
    • The resource index was created as a means of responding the increasing number of audience questions regarding various services, solutions, associations as well as information resources.
    • The listings include direct links to the resource web sites.
    • To access Resource Profiles, Reports, PowerPoints, Videos and White Papers visit the Procurement Insights Blog at: http://procureinsights.wordpress.com/
    © 2007-08 Hansen Consulting & Seminars Inc. ©
  • 51. Procurement Insights Blog The Power of Insights – Procurement Insights
    • URL Link
    • http://procureinsights.wordpress.com/
    • Procurement Insights reaches 300,000 syndicated subscribers each month worldwide, and is available in English, Chinese, Portuguese and Russian
    • Procurement Insights was rated as the top supply chain/procurement Blog in North America by the Blogged Rating Service
    • The Procurement Insights Sponsorship Program offers the best value in terms of marketing in the industry – use the following link to learn more about promoting your organization: http://procureinsights.wordpress.com/pi-sponsorship-opportunities/
  • 52.  

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