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Customer Success: Procurement Transformation to Create Efficiencies


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Leading companies are revolutionizing their procurement process by leveraging new technologies. During this session, you will learn how our customer has implemented SAP Ariba solutions to automate, streamline, and provide visibility into their procure-to-pay processes to better manage spend, reduce costs, have control on compliance, and enable better supplier collaboration.

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Customer Success: Procurement Transformation to Create Efficiencies

  1. 1. Thiery Bourany, Purchasing Transformation Director, Nexans Knut Olav Irgens Høeg - Head of Procurement Europe division, Circle K Europe / June 15, 2016 Customer Success: Procurement Transformation to Create Efficiencies Public
  2. 2. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public Procurement transformation to create efficiencies
  3. 3. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Public But seriously. How do we go from this…To this – fully enabled collaboration
  4. 4. SAP Ariba solution deployment in Nexans Thiery Bourany, Purchasing Transformation Director, Nexans June15th, 2016
  5. 5. A worldwide leading expert in the cable industry Sales in 2015 of about 4.6 billion Euro (1) Listed on the NYSE Euronext Paris Industrial presence in 40 countries and commercial activities worldwide 26,000 local experts (1) By origin, at constant metal prices. (2) Global business group. 13% North America 7% South America 30% Europe 14% Asia-Pacific 18% High Voltage (2) 8% Middle East, Russia, Africa 10% Harnesses (2)
  6. 6. Serving essential needs Demographic growth, urbanization, industrialization in emerging markets, global trade, digitization and massively increasing volumes of data exchange are all generating huge needs for energy, infrastructure, transport and buildings. As a result, these factors are driving demand for energy and data cables in the four main markets we serve. ENERGY RESOURCES  On- and off-shore oil and gas  Renewable energies: On- and off-shore wind farms, solar power  Thermal and nuclear power plants  Mining TRANSPORT  Aeronautical and spatial  Automotive  Shipbuilding  Rolling stock and railway networks  Airports, railway stations and ports BUILDING  Industrial, logistics, tertiary and commercial buildings  Collective buildings  Housing  Data centers ENERGY AND DATA INFRASTRUCTURE  High-, medium- and low-voltage submarine, underground and overhead electricity transmission and distribution networks  Land-based and submarine telecommunication networks, using copper and optical fiber cables
  7. 7. Nexans in everyday life 3 to 5 km of cables to equip a car 650 km of cables in an advanced civil aircraft 1,500 km of cables to equip an oil platform 3,000 km of cables to equip a large cruise ship
  8. 8. The genesis of e-Procurement in Nexans Nexans uses an E-procurement solution since 2005 for indirect purchasing in France In 2011, SAP Ariba software was selected as core system for E-procurement After 5 month of project The SAP Ariba e-procurement solution is live on June 2012 to replace the initial solution in France and Germany Main Benefits Compliance on purchasing process and better traceability Savings better use of frame agreement and catalogs (10%) Rationalization of supplier panel Efficiency and conformity of purchasing invoice management
  9. 9. Nexans e-Procurement today 1000 users over 25 sites in France and Germany 25000 orders per year 2500 vendors of which 1000 on the Ariba Network 70% Electronic Invoices with 200 suppliers
  10. 10. In the frame of the Group transformation, the PACE 2017 project was launched in June 2015 to improve Purchasing Harmonization and simplification of purchasing processes, policies and procedures Speed-up Purchasing modernization and deployment of eTools Creation of a Purchasing Shared Service (PSS) Core model developed for S2P processes to bring more compliance and conformity SAP Ariba solutions for e-procurement Ariba Collaborative Sourcing New BI Improvement of SAP functionalities Externalisation of low value-added tasks as PR to PO process and support of new tools and processes
  11. 11. SAP Ariba solutions are in the heart of PACE 2017 project E-procurement Indirect purchasing Catalogs Compliance P2P 20 countries WW 4000 users Collaborative Sourcing E-RFX, Auctions Contracts Supplier management the whole Purchasing community 150 users
  12. 12. PACE2017 – Planning Go-Live (SAP Ariba solutions +PSS)
  13. 13. Challenges and difficulties for the project USERS For the purchasers, adoption of the e-sourcing tool For the end-users, acceptance of the project - PR2PO process - External PSS and adoption of tools - Catalogs -’tool made for users Amazon style’ SAP ARIBA TOOLS E-Procurement - Screen ergonomy - Catalog ergonomy - Supplier compliance - Speed - Lack of preprod system E-Sourcing - Ergonomy - Number of supplier/events - SPM Bugs on production SR Reactivity SUPPLIERS Enablement of SAP Ariba solutions - Full / Light - Fees SAP Ariba solutions not really in some countries Creation of Catalogs : new work for some small suppliers To improve To monitor carefully Improvement already
  14. 14. Main benefits expected Procurement Efficiency by using catalogs and ergonomy of system Cost and Delay Compliance and control of spends for end users. Better conformity of buying channels Synergies within Purchasing community Best practices on Contracts and RFx Transparency and monitoring of the whole purchasing processes Direct savings on e-RFx and Auctions Supplier panel rationalization Sharing panel of 48000 supplier database coming from 15 ERPs
  15. 15. Thank you for your attention
  17. 17. 15,000 locations 100,000 colleagues 20 countries 66 customer meetings per second 6,000,000 customers every day
  18. 18. June 13, 2016 18
  19. 19. WE HAD ALL THE RULES IN PLACE – BUT DID WE CREATE VALUE FOR THE BUSINESS? Circle K Europe used to be a part of Oil-Giant Statoil - We where very good on compliance – tons of manual forms that we could and did fill out - We where very good on world class security standards for the Norgth Sea on our Hot-Dog - We did all our procurement processes by the book But in all this we did forgot to think about how we created value for our customers and owners Circle K Europe needed to do a step-up on how we did think and act in our procurement - Ensure that we actually did buy what was needed – not the Rolls Royce - Ensure we did have the products that our customers wanted - Ensure we had good requirements, but still that both we and suppliers could live with - Be commercial in our thinking and negotiations with our vendors and at the same time enable our suppliers to be better in their deliveries towards us
  20. 20. THEN IT WAS JUST TO START IMPLEMENTING, OR HOW SHOULD WE DO THIS? We decided to go for a three step approach to ensure the right drive 1. Establish one common Procurement Organisation across all regions - We needed to be one team driving together with the same goals for the organisation - We needed to ensure synergies across markets and work the same way with the same suppliers – not let them split between us - Establish one common back office/support function for procurement 2. Ensure we had the right tools in place so our people could be efficient and we could get the necessary control - We decided to implement the Ariba Source to Pay suite as one comon solution - Necessary to have everyone on the same platform to work efficient - Made it much easier to share both information and knowledge 3. Bulid further knowledge in the team to enable further benefits with the platform - Identify what GAP we have in the team to further develop how we work and how we can benefit from the platform we have invested in
  21. 21. SO WHY DID WE SELECT SAP ARIBA AS OUR PLATFORM? 1. We needed to work efficiently across 8 markets 2. We needed to track supplier requirement and monitor actual status vs contract 3. We needed to follow up the requirements we had put on the suppliers (like certificates etc) actually was in order 4. We needed to link contractual terms to payments 5. We needed to see the total overview of spend with the suppliers and on the contracts in a consolidated view 6. We needed to manage our POs and Invoices in an efficient way 21
  22. 22. EFFICIENT SOURCING ACROSS 8 MARKETS AND ALL CATEGORIES 1. SFR have a complex business with diversified needs and high requirements • Terminal operations with high explosion requirements • Transport of fuel with pollution and traffic risks • Fresh and food sales at stations with high food safety requirements • Pumps and other equipment on stations that needs to work 24/7 • High requirement on IT solution across 2500 locations (many automated) that needs to work 24/7 2. Different regulations in different markets challenge the possibility to standardize • Need to ensure that we are compliant in all markets • Suppliers tries to split contracts and agree to make us pay a premium in some markets • Enables us to involve people from all countries in the evaluation 22
  23. 23. NEED TO ENABLE END USERS TO MANAGE THEIR OWN PO AND INVOICES 1. The end users are the ones that know their needs the best • Need to ensure that they also select the products they want – but inside frames of what we can accept that they buy • Invoices needs to be managed and approved by the people that actually ordered – they know if this is correct or not • No room for support organization to manage tasks that can be automated 2. Challenging to make end-users act differently • People are lazy and want others to manage tasks on their behalf • Important that the users understand the importance of them actually performing this tasks • Secure that mandate structures are followed and that we secure good control of our cost base 23
  24. 24. ARIBA COVERED THE WIDEST SCOPE FOR PROCUREMENT 24 Key deliverables Business impact 1. Collaborative Sourcing module • Automated and simplified processes (e.g., suppliers register themselves) • Contract system and Procure to Pay system fully integrated 2/3. Contract management tool • 45% less time on administration 4/5. Procure to pay process and workflow • Reduction in manual process steps of ~87%, release FTEs in BC and BU 1. Spend Visibility module • Automatic live KPI and report generation and better control • 40% less time on administration Deliverables for Ariba implementation (S2P) Covered by the project
  25. 25. SOURCING AND CONTRACT WAS A QUICK IMPLEMENTATION Sourcing and Contracts up and running with full speed • All contracts converted to SAP Ariba – but additional updates needed • New Sourcing events made every week in SAP Ariba – Making us more professional towards the market • Continuous learning as we move along – have to learn to know one part at the time Not yet started with Supplier Performance Management and Spend Visibility • SPM implemented, but need to do one thing at the time • SpendVis decided to wait until P2P was ready implemented
  26. 26. BUT SOME MORE STRUGGLE WITH P2P Longer Journey to get the P2P in place • Supplier Enablement takes longer time then expected • SAP Ariba not that strong in Europe yet – but will be easier as more companies get on Ariba Network • We did spend to long time to end up on the final design • We did not have the right people from the AP side in the beginning. They believed this was a Procurement project and accepted everything without thinking – making us re-do everything when they realized the issues • Not all functionality that we required available in SAP Ariba • We had higher expectations on what end-user should do then normal Ariba P2P set-up • SAP Ariba has developed and are developing nearly all functionality that we have requested, significantly improving the solution • Working with SAP Ariba, the Invoice module is ready to manage European requirements
  27. 27. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 27Public Please complete session survey Locate Session Click Surveys Button Select Breakout Survey Rate Session