Ariba Network Helps Cox Enterprises Manage Procurement Through Six Company-wide ERP Systems
Ariba Network Helps Cox Enterprises Manage ProcurementThrough Six Company-wide ERP SystemsTranscript of a sponsored BrieﬁngsDirect podcast on how eProcurement helped Cox Enterprisesget a handle on indirect spend.Listen to the podcast. Find it on iTunes/iPod. Sponsor: AribaDana Gardner: Hello and welcome to a special BrieﬁngsDirect podcast series coming to youfrom the 2012 Ariba LIVE Conference in Las Vegas. Were here in the week of April 10 to explore the latest in cloud-based collaborative commerce and learn how innovative companies are tapping into the networked economy. Well see how they are improving their business productivity along with building far-reaching relationships with new partners and customers. [Disclosure: Ariba is a sponsor of BrieﬁngsDirect podcasts.]Im Dana Gardner, Principal Analyst at Interarbor Solutions and Ill be your host throughout thisseries of Ariba-sponsored BrieﬁngsDirect case study discussions.Our next innovator interview focuses on Cox Enterprises, a major communications, media, andautomotive services company, with revenues of nearly $15 billion and more than 50,000employees, and with major subsidiaries, including Cox Communications, Manheim, Cox MediaGroup, and AutoTrader.com.Well learn how Cox, through the Ariba Network, manages multiple ERP systems for animproved eProcurement strategy and has moved towards more efﬁcient indirect spend efforts toimprove ongoing operations and drive future growth.To hear more about how they have done this, were here with Brooke Krenn, the Senior Managerof Procurement Systems for Cox Enterprises, based in Atlanta.Welcome to BrieﬁngsDirect.Brooke Krenn: Thanks, Dana. Great to be with you.Gardner: I am glad you could join us. Let me ask you ﬁrst about these multiple ERP systems. Ithink thats pretty common. A lot of organizations either have organically developed multiplesystems for different groups or, for merger and acquisition reasons, have different ERP. How hasthat been a challenge, when it comes to procurement?
Krenn: We have six separate ERP systems. Cox is a very interesting company in that our business units are very diverse and very unique. Across four divisions and our holding company we have those six ERP systems. So with that, obviously, there are a lot of challenges. Theres not a lot of common ground, when it comes to purchasing. Across those six ERP systems we needed some way to drive consistency, as we focused on really capitalizing on our indirect spend across all the business units.Gardner: Let’s hear a bit more about the scale of your operation as a very large company. Tellme about your position and the depth and breadth of the procurement activities that you areresponsible for?Procurement systems teamKrenn: My team is the Procurement Systems Team. We fall under supply chain in Cox Enterprises. I have a team of three, and we manage our eProcurement platform, with which we do about $50 million year-end POs, and average about 1,500 POs a month. We also manage our P-Card program, which is about $130 million a year in spend, and also our fuel card program, which is about $50 million a year.Gardner: I brieﬂy described what Cox is and does, but maybe you could ﬁll that out a little bit.It’s a very large organization with a fairly diverse group of products and services.Krenn: All across the United States our Cox Communications division is the cable Internettelephone. We have Manheim, which is the wholesale car industry. AutoTrader.com, whichhopefully a lot of your listeners are familiar with or maybe even used in the past, is an onlineform for buying and selling used as well as new vehicles. Also our Cox Media Group, which isour TV stations, radio stations, and newspapers, are all throughout the U.S.Gardner: So with 50,000 employees, that’s a lot of indirect procurement to keep themproductive and engaged. Back to the whole issue of procurement. What’s been your story? Whathave you been doing for the past few years, and why has that been important in the way in whichyouve used Ariba to accelerate your beneﬁts?Krenn: Historically, our spend, speciﬁcally the indirect spend, has been all over the place. Wehaven’t had a lot of visibility into that spend and haven’t had a consistent manner in which wepurchased.We had an eProcurement solution for about 10 years. We were on that software for a decade, andit was just very dated. It wasnt supported very well. We knew it was time to make that change.Where we were in the economy, everyone was looking at the most logical places to save timeand money and to become more efﬁcient. Obviously, procurement was one of those areas wherewe could do very quickly.
We knew the ﬁrst step was replacing the software that we did have. Immediately, Ariba was oneof the top contenders, as we looked for a new solution simply because of the user experience wasmost important to us, and also how quickly we could implement it.Gardner: So you’re going from an on-premises software installed affair to now more of asoftware-as-a-service (SaaS) and cloud affair. Was that something that was difﬁcult or somethingyou were looking forward to?Krenn: Moving to the cloud in an on-demand solution was great for us. Having the on-premisessoftware in the past, any time there was an upgrade or an update, we had to be sure IT knewabout it and we scheduled the time on a night or a weekend. We had to call on resourcesinternally within the company. So it was very exciting for us to move to an on-demand solutionand all of the technology that was available with that.Gardner: Let’s hear more about what this has done for you, not just in terms of savings, but interms of productivity and agility. How have the users adapted to this, and what has it brought tothem in terms of a business beneﬁt?A great changeKrenn: For the users, its been a great change, because now they consistently know theres oneplace to go. When they need to order ofﬁce supplies, when they need to order something for theirbreak room, when they need to order business cards, they know where to go. In all of ourdivisions and all of our locations, employees want to do the right thing. They want to purchasethe right way. A lot of times theyre just not sure of what to do.So with this implementation of a new tool, we were able to really drive them in the rightdirection, and it was an easy solution for them. It was easy for us to implement, and its beenvery easy for our end users and our employees to adopt.Gardner: Has that, in fact, translated into other metrics of success that you could describe forus. Maybe theyre hard numbers, like dollar savings, or maybe they’re the ability to ﬁnd betterproducts that suit your constituents needs when they’re in a certain new or interesting activity?Krenn: Probably one of the biggest wins for us has been just driving compliance against ourcontracts. We’re able to see very easily now when a location or a business unit within one of thedivisions is purchasing off-contract or when theyre not utilizing one of our preferred ornegotiated suppliers. Thats probably been the biggest win for us.Gardner: How often does that happen? Have you been able to effectively reduce how often thathappens? And what does that mean when you can get everyone on the same page?
Krenn: We have the visibility now to see very quickly within our P2P tool and also within ourspend management tool to see where this spend is taking place and able to reach out directly tothose locations or to those employees that are purchasing off-contract. Obviously, the morepurchasing power we have, the more spend we are driving to these contracts, the better ourpricing is going to be going forward.Gardner: How about for folks who might be thinking about a different eProcurement strategy,recognizing that they also have multiple ERP systems? Tell us a bit what you suggest,particularly on how you bridged those multiple ERP systems with this new sort of centralizedstrategy?UnconventionalKrenn: We went about implementing our new P2P solution a bit unconventionally, you couldsay. About 98 percent of our transactions are actually on a supplier card -- a P-Card model,which has just been tremendously successful for us. With that, we didnt have to integratedirectly into our six separate ERPs because our payment method is with that supplier card.Ease of implementation was one of the biggest wins. Also with that is the ease of use for the enduser. Theres no reconciliation for them at the end of the month. We’re taking care of all of thatGL coding information, all of the approvals, upfront.The supplier card model, again, has been great on the end user side as well as on the APreconciliation side.Gardner: We’ve been talking about how Cox Enterprises, through the Ariba Network, hasgained insight and control over its procurement and instituted a strategic approach toeProcurement with their indirect spend efforts.Id like to thank our guest. We’ve been here with Brooke Krenn. She is the Senior Manager ofProcurement Systems at Cox Enterprises. Thanks so much.Krenn: Thanks so much, Dana.Gardner: And thanks to our audience for joining this special podcast coming to you from the2012 Ariba LIVE Conference in Las Vegas.Im Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series ofAriba-sponsored BrieﬁngsDirect discussions. Thanks again for listening, and come back nexttime.Listen to the podcast. Find it on iTunes/iPod. Sponsor: Ariba
Transcript of a sponsored BrieﬁngsDirect podcast on how eProcurement helped Cox Enterprisesget a handle on indirect spend. Copyright Interarbor Solutions, LLC, 2005-2012. All rightsreserved.You may also be interested in: • Ariba CMO Tim Minahan on how networked economy beneﬁts spring from improved business commerce and cloud processes • Ariba Dynamic Discounting Gives Companies New Visibility into Cash Flow to Improve the Buying Process • Ariba, IBM Deal Shows Emerging Prominence of Cloud Ecosystem-Based Collaboration and Commerce • Ariba Steps Up Cloud Efforts with StartContracts, On-Demand Contract Management for SMBs • Ariba Live Discussion: How Cloud Alters Landscape for eCommerce, Procurement, and Supply Chain Management • Cloud-Based Commerce Network Helps Florida Manufacturer MarkMaster Reach New Markets, Streamline Transactions • Aribas Jason Kurtz on How IT Financial Trends are Maturing Technology Procurement and Management Needs