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eps executive overview

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  • In an auction, buyers are bidding the price up…..the seller benefits with each uptick In a reverse auction, sellers are bidding the price down…..for each price change downward the buyer is benefitting. For example, what had been previously a $100K/ year store fixtures buy is now to be awarded through a reverse auction. Sellers who meet a buyer’s qualification criteria will compete for that business as specified and typically bid it down 16%+ (to $250K or $83K/year or less). Sellers are motivated to participate in reverse auctions because: 1. it’s a lower cost of new sales for them 2. They have a commitment of revenue (usually a multi year term) that they did not previously have 3. They have the lifetime of the award to make changes to their internal processes to recapture any margin lost 4. Incumbents participate, if requested, because they do not want to lose the business they had Following the event, the buyer may request samples, request a modified production run, interview low bidders, visit factories and are free to select any supplier who meets their criteria regardless of price. Of course they will usually begin the vetting of suppliers based upon price.
  • In 1a the impact on profit margin from reducing COGS or OpEx by 10% is valued both in terms of $ and %. In 1b the impact of an improvement to operating profit , after taking into account taxes and when factoring in PE, is shown on market capitalization and stock price Most impressive, at the bottom, the amount of revenue needed to replicate the same amount of operating profit generated through cost reduction is identified
  • There are three primary elements of value the managed service generates: It identifies and pre-qualifies a critical mass of suppliers to participate in an event including incumbents It optimizes the bid’s structure by identifying and taking into account all bid variables including: market demand, direct material (and labor) price fluctuations, exchange rates, payment terms, length of contract etc. The dynamic of suppliers competing against each other in a transparent environment itself identifies market pricing Clients post bid and during due diligence have the opportunity (and now the time) to evaluate all bidders and identify (and negotiate) additional savings
  • The key to the optimized leveraged buy is: a governance structure so that the one supplier can be selected by all participants i.e. if multiple suppliers are selected the value created is sub-optimized structuring the bid so that the individual operating company’s needs can be met by the one supplier is selected
  • DMARC Extensions & Service includes cabling, computers, PoS service for <amount withdrawn> outlet stores Store lighting also includes installation
  • November 4, 2011 Copyright Tactica (Asia) Ltd-Kymmene Group
  • Advanced, customizable, multi-panel screen that enables buyers to have full control and visibility over their events from one location Can be configured to display multiple actions such as Event Log, Supplier Tracking, Supplier Messaging, Bid List (Standard, Unit and History views), Bid Graph and Collaboration November 4, 2011 Copyright Tactica (Asia) Ltd-Kymmene Group
  • November 4, 2011 Copyright Tactica (Asia) Ltd-Kymmene Group
  • Transcript

    • 1. Profitability Improvement, Game Changing Capability Executive Overview Steve Sparough Partner eps Summary: eps drives EPS higher eps improves EPS e-procurement services (eps)
      • on demand, leveraged buying for items & services
      • e-sourcing managed service
      • supplier paid fee model
      • up to 50% shorter cycle times & level of effort
      • WW reach to NA, SA, AP, India, Europe
    • 2.
        • eps game changing business model overview
        • Client business transformation proof points
        • Getting started
        • Back Up: Software screen shots
      Today’s Agenda By the end of the meeting we will have discussed: 2 eps improves EPS e-procurement services (eps)
    • 3. eBid (reverse auction) level-set 3 eps improves EPS e-procurement services (eps)
    • 4. eps’ Game Changing Value Reducing OpEx 10% has exponential impact on margin and shareholder value 4 $3Bn in Revenue would be required to replicate $200Mn in operating profit eps improves EPS e-procurement services (eps) ILLUSTRATIVE
    • 5. eps unique value add
      • eps’ value add:
      • Level 0
      • Objective 3 rd party
      • Collaborative continuous improvement
      • Level 1
      • Market research to optimize bid structure and determine savings opportunity
      • WW supplier identification not bound by networks
      • Supplier pre-qualification
      • Custom RFQ development
      • Level 2:
      • Configurable s/w to create varying event s (language, currency, rank, price, weight)
      • Supplier communication/training
      • Level 3:
      • Time to identify /negotiate additional value add of suppliers
      eps’ managed service creates four levels of value to maximize savings Illustrative Project 5 eps improves EPS e-procurement services (eps)
    • 6.
      • For The
      • Supplier:
      • No fee unless they win
      • Additional sales channel at lower cost
      • eBid managed service & tool
        • 3 rd party facilitation
        • A transparent & fair bid process
        • ID of market pricing for benchmarking
        • Web based, no S/W to install
        • Instant notice of RFQ’s
        • All eBids are awarded
      • Other
        • Catalyst to reduce costs & restore margin
      eps benefits eps is win-win for buyers and suppliers Lower costs @ less time New Revenue @ Lower Cost
      • For The
      • Buyer:
        • No client paid fee (supplier paid fee structure)
        • eBid managed service & tool
          • Enables quicker time-to-value
          • Up to 80% less client time expended per sourcing project
        • Each bid is customized to client’s requirements
        • Market data to support eBid strategy
        • Open, competitive bidding leading to 5%-24%++ cost savings
        • Benefit of 10 years experience & best practices on every eBid
      Time spent on sourcing or sales activity Activity completed by eps 6 eps improves EPS e-procurement services (eps)
    • 7. eps enables & optimizes leveraged buying 7 Lighting Requirement Store A B. Bid Requirements Lighting Requirement Store B Lighting Requirement Store C Lighting Requirement Store D Re-lamping Requirement Store A, B Lamp Servicing Requirement Store A, D Store A Store C Lamp Servicing Requirement Store C, B Store D Re-lamping Requirement Store C, D Store B ILLUSTRATVE eps improves EPS e-procurement services (eps)
    • 8.
        • eps game changing business model overview
        • Client business transformation proof points
        • Getting started
        • Back Up: Software screen shots
      Today’s Agenda By the end of the meeting we will have discussed: 8 eps improves EPS e-procurement services (eps)
    • 9. $200K $165K Vehicles Savings of 10% + have been achieved across most categories Size of Bubble : (Relative Value Generated from ebids) $1.5M $1.75M $2M $2.25M 5% 10% 15% 20% 25% 30% 35% 40% 45% $250K $500K $750K $1M $1.25M % Savings Bid Value $62K Energy 9 $780K Store Shelving/Fixtures $240K Store Re-model $27K Store Const’n $119K DSL Service $550K Store Lighting Services $120K PoS H/W, S/W* $48K Roofing $52K HVAC 50% $90K Pkg Supplies $140K Temp Labor $150K Wireless $212.5K Office Supplies Print Services $266K Media Services $150K DMARC Extensions& Service eps improves EPS e-procurement services (eps)
    • 10.
        • eps game changing business model overview
        • Client business transformation proof points
        • Getting started
        • Back Up: Software screen shots
      Today’s Agenda By the end of the meeting we will have discussed: 11 eps improves EPS e-procurement services (eps)
    • 11. in 2. Administer e bid 1. Design project 3. Due Diligence & Award Capture Value Draft Specs QA & Format RFQ Prepare Suppliers (Conduct Pre-Event Site Tours; Distribute Samples) Contact Low Bidders 1 5 Answer RFQ Questions Distribute RFQ to Suppliers Perform Due Diligence Award Contract Negotiate Contract 3 4 1 2 3 4 eps’ process Authorization is needed to begin supporting you eBid Managed Service step Client responsibility 0. Plan projects 3 Review and sign eps engagement authorization Analyze Spend Opportunity Conduct eB id Event 8 Distribute Event Access Code to pre-Qualified Suppliers 1 2 Engage Buyers; Confirm eBid Readiness 3 Confirm RFQ 2 Prepare Suppliers for eB id Event 6 Research suppliers Confirm Specs 5 4 Conduct Market Check 6 Cut Blanket Purchase Order 5 7 Sequence eBid events 4 Purchase Review 2 Define eBid scope (objective, volume, current price, switching costs, incumbent suppliers, service level, T&Cs, event & award timeline) 4. Lessons Learned 6 12 * If the award threshold price and specs are not met, a client need not award Go/ No-Go 1 eps improves EPS e-procurement services (eps)
    • 12.
      • Store Services
      • Cleaning & Maintenance
      • General Contracting
      • Electrical Work and Maintenance
      • Fixtures and Installation
      • Flooring and Installation
      • Painting
      • Paving
      • Snow Removal
      • Security Service
      • Signage and Installation
      • Waste Management
      • Office Items
      • Furniture
      • Office Supplies
      Potential indirect spend events Professional Services Advertising/Media Services Audit/Accounting Service Call Center Service Credit Service Engineering Service Food Services Health Assessment Human Resource IT Consulting Leasing Service Legal Services Limo/Van Services Mail Service Marketing Services Medical Services Outsourcing Service Payroll Service Printing (Marketing, HR) Real Estate Services Temporary Labor Training IT Equip./Services Cell Phones Computer Rentals Computing Storage Copiers Data Streaming Database Mining / Warehousing DSL Hard Drives Key Boards Laptops, Cell Phones etc. Midrange Computers Modems Monitor PoS Equipment, Istallation and Maintenance Printers Software Telecommunications Video Cards Travel/Transport/Freight Air Travel Hotels Rooms International Air Freight Logistics Roadside Assistance Store & DC Supplies Abrasives Bags Cleaners Corrugate Dunnage Labels Light Bulbs & Ballasts Material Handling Packaging Paper Plastic Totes Receipt Tape Safety Supplies Tools Uniforms 13 eps improves EPS e-procurement services (eps)
    • 13.
        • eps game changing business model overview
        • Client business transformation proof points
        • Getting started
        • Back Up: Software screen shots
      Today’s Agenda By the end of the meeting we will have discussed: 14 eps improves EPS e-procurement services (eps)
    • 14. RFX TEMPLATES eps supports different sourcing strategies 15 eps improves EPS e-procurement services (eps)
    • 15. Bid administration screen 16 eps improves EPS e-procurement services (eps)
    • 16. Bidder enters bids Feedback on ranks and bid prices Supplier bidding screen 17 eps improves EPS e-procurement services (eps)
    • 17. Buyer detailed view Bid price after applying handicap Download result to Excel 18 eps improves EPS e-procurement services (eps)
    • 18. Thank You Steve Sparough Partner, Account Executive 1-303-521-8136 (mobile) sparough@my-eps.com 19 eps drives EPS higher eps improves EPS e-procurement services (eps)