Instructions:Purpose: Introduce the key issues facing procurement LOB as a result of macro effects in the marketSummary:Difficult economyToday, we are seeing unprecedented levels of volatility and uncertainty in economies worldwide. Most financial indexes are down 40-50% from their peaks. In January 2008, the Dow Jones Industrial Average was at 12,735 (from an all time high of 14,279 in October 2007). On New Years Eve of the same year, we had reached the lows of 8,842, a drop of almost 40%!. Growing importance of supplier risk from the extended global supply baseThe world has rapidly changed to a single global integrated market. This integration is ushered in the importance of supply base for most companies becoming more global. This trend has produced an intense global competitive environment with companies simultaneously facing low-cost and high-end niche competitors. For example IBM has relocated its supply chain headquarters from the US to China so that all the company's global procurement operations will now be run from Shenzen. IBM hopes the relocation will allow it to capitalize on further purchasing opportunities in China and reducing supply riskRegulatory complianceThe importance of meeting regulatory compliance continues to be a driving issue for most companies locally, regionally and globally. Regulations like SOX, BASEL II, ROHS (Restriction of Hazardous Substances). Ensuring that new regulatory requirements are not a burden but also an opportunity to differentiate and provide organizational and business process improvement both internally and when working with suppliers as well as customersDeclining Budget and well as availability of resourcesBudgets continue to decline – do less with more and there is greater need to more efficient across the internal and external business processes. More and more important to distribute the transactional elements of procurement to employee base to drive their own procurement activities – procurement of office supplies, mobile phones, travel etc. This results in procurement professionals able to focus on more strategic activities focused on cost management, strategic sourcing etc. But there is scarce availability of resources that can do these more strategic areas.Increasing Focus on Sustainability and Green ProcurementThe importance of sustantOnce regarded as less important, the growing importance of sustainability is rapidly rewriting the rules for business, suppliers and in particularly Procurement. Procurement is being asked to be included as part of their source to pay process, in particular in supplier engagement and performance, contract enforcement and in delivering on cost savings KPIs.
Instructions:Purpose: Make the trends and implications relevant to the CPO – Procurement LOB and direct towards your prospect/ customer. Typical CPO – Procurement LOB Questions:How do we most effectively manage and reduce costs?How do we increase spend under management?How do we respond to increasingly rapid demand changes?How do we manage suppliers performance and risk? How do we measure compliance – regulatory and savings?How do we meet the growing need to include sustainability as part of our processes?How do we grow our talent from operational to strategic?
3 process then it is detailed in 6 stepsAutomates the contract creation cycle from draft to reviews and approvalsIncludes contract authoring with clause and template librariesCreates a contract repository with access-controlled search and reportingIncludes standard integration with SAP ERP functionality for materials management (MM) for procurement contract complianceDeep bi-directional integration within the source to contract processDrives rapid time to value via on-demand deployment and integration into ERP