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#AribaLIVE
@ariba
Realizing the Strategic Sourcing Vision
through an Ecosystem Approach
Speakers:
 Scott Gray, MasterCard...
#AribaLIVE @ariba
Agenda
© 2015 Ariba – an SAP company. All rights reserved.2
• Overview and Introductions
• Panel Present...
#AribaLIVE @ariba
The Panel Team
3
Zach Barber, Senior Manager,
Global Expense Management
Abercrombie & Fitch
© 2015 Ariba...
#AribaLIVE @ariba
Global Trends Are Driving Change in
Sourcing and Procurement
Increasing Globalization
• Expansion into n...
#AribaLIVE @ariba
Creating a Challenge/Opportunity for
Procurement
Top 3 Procurement Drivers
54%
cutting cost
51%
becoming...
#AribaLIVE @ariba
Innovation
Source: CPO Rising, Ardent Partners
Top CPO Strategies (Next 3 Years)
© 2015 Ariba – an SAP c...
#AribaLIVE @ariba
55%
47%
42%
32% 31% 31%
Collaboration
Source: CPO Rising, Ardent Partners
Top Strategies for Sourcing Te...
#AribaLIVE @ariba
Approach to Building a Strategic
Sourcing Program
Vision Technology
Metrics
Process
People
Best
Business...
Realizing the Strategic Sourcing Vision through an
Ecosystem Approach
Zach Barber and Emily Laski
AGENDA
• Company Profile
• Challenges
• Strategic Sourcing Program
WHO WE ARE
Abercrombie & Fitch Co. operates as a global retailer of casual apparel for men, women,
and kids. Its stores se...
CHALLENGES WE FACED
• Disparate systems and methodologies
• Inconsistent reporting
• No formal contract management process...
OUR AREAS OF FOCUS
• Savings
• Improved Payment Terms
• Reduced Risk
• Improved Budget Productivity / Increased ROI
• Decr...
OUR FOCUS
People
ProcessTechnology
HOW WE DO ITProcessPeopleTechnology
ANALYZE
CATEGORY
SPEND
DEVELOP
BUSINESS
NEEDS
ASSESS
SUPPLY
MARKETS
DEVELOP
CATEGORY
S...
ANALYZE
CATEGORY
SPEND
DEVELOP
BUSINESS
NEEDS
ASSESS
SUPPLY
MARKETS
DEVELOP
CATEGORY
STRATEGY
EXECUTE
STRATEGY
IMPLEMENT
N...
HOW WE DO ITProcessPeopleTechnology
Sourcing / Category Leads
ANALYZE
CATEGORY
SPEND
DEVELOP
BUSINESS
NEEDS
ASSESS
SUPPLY
...
TEAM STRUCTURE
VP GEMS
TRAVEL
GLOBAL
UTILITIES
IT/DTC
STORE
SUPPORT
SUSTAINABILITY
EUROPEAN
UTILITIES
VENDOR
SETUPS
IT/DTC...
HOW WE DO ITProcessPeopleTechnology
SOURCE
GEMS
PROCURE
AP
PAY
AP
Sourcing / Category Leads
ANALYZE
CATEGORY
SPEND
DEVELOP...
THE SOURCE-TO-PAY TECHNOLOGY
SOURCE
GEMS
PROCURE
AP
PAY
AP
Spend
Classification
Commodity
Management
eSourcing
Contract
Ma...
THE SOURCE-TO-PAY TECHNOLOGY
ARIBA IMPLEMENTATION
Spend Analytics Contracts eSourcing
• $3B in total spend
• 5 source syst...
OUR SOURCE-TO-PAY MODEL
Procurement
Supplier
Registrations
Supplier
Management
Spend Analytics
7-step Sourcing
Contract
Ma...
LESSONS LEARNED
 Grow into Solution – “Evolve at a Steady Rate”
 Leverage Existing Budgets – “Avoid Special Funding Requ...
WHAT ARE WE FOCUSED ON
 Continued Mastery of eSourcing
 Leverage Spend Analytics
 Explore Workflow in Contracts Managem...
#AribaLIVE
@ariba
Realizing the Strategic Sourcing Vision
through an Ecosystem Approach
Scott Gray – MasterCard
Sr. Direct...
#AribaLIVE @ariba
MasterCard Today
*This represents MasterCard-branded GDV, does not include Maestro or Cirrus. All figure...
#AribaLIVE @ariba
Life Cycle Management
• Onboarding
• Information Management
• Risk Management
• Spend
• Performance
• Co...
#AribaLIVE @ariba
4/6/2015
Supplier Lifecycle Management
© 2015 Ariba – an SAP company. All rights reserved.28
#AribaLIVE @ariba
MasterCard Sourcing Technology
© 2015 Ariba – an SAP company. All rights reserved.29
#AribaLIVE @ariba
• Partnerships & Stakeholders
• Measuring the Value
– Data Accessibility
– Savings
– Rationalized Supply...
SUMMARY - WRAP UP
Establish a clear Vision Standardize Process/Policy
Automate with Business Network Build a Strong Talent...
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Thank you!
Contact information:
Sundar Kamak
Global Vice P...
#AribaLIVE
@ariba
© 2015 Ariba – an SAP company. All rights reserved.
Q&A
Realizing the Strategic Sourcing Vision
through ...
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Realizing the Strategic Sourcing Vision through an Ecosystem Approach

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Gaining actual savings from the best laid sourcing plans requires organizations to put in place a closed loop strategy―one that addresses operational sourcing as well as the processes around it. Be it cutting-edge analytics to drive better decisions, water-tight contract management to improve adherence, or disciplined supplier management to improve performance, this session features stories from organizations that have translated savings from paper to the bottom line through a tightly woven collaborative sourcing process.

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Realizing the Strategic Sourcing Vision through an Ecosystem Approach

  1. 1. #AribaLIVE @ariba Realizing the Strategic Sourcing Vision through an Ecosystem Approach Speakers:  Scott Gray, MasterCard  Zach Barber and Emily Laski, Abercrombie & Fitch Moderator: Sundar Kamak, Ariba, an SAP Company @ksundar1 © 2015 Ariba – an SAP company. All rights reserved.
  2. 2. #AribaLIVE @ariba Agenda © 2015 Ariba – an SAP company. All rights reserved.2 • Overview and Introductions • Panel Presentations • Q&A @ksundar1
  3. 3. #AribaLIVE @ariba The Panel Team 3 Zach Barber, Senior Manager, Global Expense Management Abercrombie & Fitch © 2015 Ariba – an SAP company. All rights reserved. Emily Laski, Associate Procurement Specialist Abercrombie & Fitch Scott Gray, Senior Director, Supplier Life-cycle Management MasterCard @ksundar1
  4. 4. #AribaLIVE @ariba Global Trends Are Driving Change in Sourcing and Procurement Increasing Globalization • Expansion into new markets • Global process standardization • International supply chains • Increased off/near shoring Economic Volatility • Volatility in markets • Decreased stock valuation • Slow economic growth • High expense ratio More Competition • Pricing pressures • New sources of competition • Decreased budgets and spending Greater Risk • Supply chain disruption • Financial risk and fraud • Commodity risk Accelerating Technological Change • Changing business models • Faster innovation cycles • Expanding partnerships and channels • Leveraging big data for decisions Regulatory Changes • Increasing disclosure requirements • Country-specific regulations • Industry-specific disclosures @ksundar1
  5. 5. #AribaLIVE @ariba Creating a Challenge/Opportunity for Procurement Top 3 Procurement Drivers 54% cutting cost 51% becoming more strategic 44% quality suppliers Source: Procurement Leaders Where is there “great” opportunity for Procurement to increase its contribution? Percentage of respondents rating the procurement function’s opportunity to contribute as a “great opportunity” 14% 25% 29% 36% 44% 57% 64% 73% Serving an advisory role in M&A deals Expanding into new markets / business lines Managing financial risk Managing working capital Managing risks to business performance Working with suppliers to enhance product offerings Strengthening relationships with suppliers Finding opportunities for cost savings Source: CFO Research Services © 2015 Ariba – an SAP company. All rights reserved.5
  6. 6. #AribaLIVE @ariba Innovation Source: CPO Rising, Ardent Partners Top CPO Strategies (Next 3 Years) © 2015 Ariba – an SAP company. All rights reserved.6
  7. 7. #AribaLIVE @ariba 55% 47% 42% 32% 31% 31% Collaboration Source: CPO Rising, Ardent Partners Top Strategies for Sourcing Teams in 2014 © 2015 Ariba – an SAP company. All rights reserved.7 @ksundar1
  8. 8. #AribaLIVE @ariba Approach to Building a Strategic Sourcing Program Vision Technology Metrics Process People Best Business Outcomes + Innovation © 2015 Ariba – an SAP company. All rights reserved.8 @ksundar1
  9. 9. Realizing the Strategic Sourcing Vision through an Ecosystem Approach Zach Barber and Emily Laski
  10. 10. AGENDA • Company Profile • Challenges • Strategic Sourcing Program
  11. 11. WHO WE ARE Abercrombie & Fitch Co. operates as a global retailer of casual apparel for men, women, and kids. Its stores sell casual apparel, such as knit shirts, graphic t-shirts, jeans, and woven shirts; and personal care and other accessories under Abercrombie & Fitch, abercrombie and Hollister. A&F operates a total of 1,022 stores across 22 countries. They include: • Domestic –278 Abercrombie & Fitch stores –154 abercrombie kids stores –486 Hollister Co. • International –17 Abercrombie & Fitch –6 abercrombie kids stores –101 Hollister Co. Our e-commerce websites can be found at www.abercrombie.com, www.abercrombiekids.com and www.hollisterco.com.
  12. 12. CHALLENGES WE FACED • Disparate systems and methodologies • Inconsistent reporting • No formal contract management process • Goals and objectives not aligned across the business • Enterprise understanding of what is strategic sourcing • No aggregate view of spend data
  13. 13. OUR AREAS OF FOCUS • Savings • Improved Payment Terms • Reduced Risk • Improved Budget Productivity / Increased ROI • Decreased Effort with Contracts under Legal Review • Increased Compliance with Legal Approved Contract Language • Corporate Procurement Policy • Procurement as a Financial Control
  14. 14. OUR FOCUS People ProcessTechnology
  15. 15. HOW WE DO ITProcessPeopleTechnology ANALYZE CATEGORY SPEND DEVELOP BUSINESS NEEDS ASSESS SUPPLY MARKETS DEVELOP CATEGORY STRATEGY EXECUTE STRATEGY IMPLEMENT NEW AGREEMENTS SUSTAIN RESULTS 1 2 3 4 5 6 7 Understand internal spend and current state Understand business requirements Understand market players and key market drivers Develop strategy to effectively source category Develop and execute sourcing strategy and negotiation plan Sign new agreement, develop implementation plan Monitor supplier performance, capture savings, evaluate market
  16. 16. ANALYZE CATEGORY SPEND DEVELOP BUSINESS NEEDS ASSESS SUPPLY MARKETS DEVELOP CATEGORY STRATEGY EXECUTE STRATEGY IMPLEMENT NEW AGREEMENT S SUSTAIN RESULTS •ID stakeholders, sourcing team •Roles and responsibilities •Work plan •Collect internal baseline •Understand requirements •Sign-off on baseline •Document current sourcing approach •Develop market insight •ID opportunities •Develop sourcing strategy •Align on potential opportunity •Finalize objectives •Develop supplier selection criteria •Develop supplier list •Profile supplier capabilities •Filter using pre- screening criteria •Review final list •ID Strategic Sourcing position •Align stakeholders with strategy and workplan •Develop go-to- market approach •Develop/publish RFPs •Analyze bids •Develop negotiation plan •Develop award scenarios, anticipated benefits •Create negotiation team, hold negotiations •Finalize awards •Notify suppliers •Create transition team •Develop implementation plan •Finalize contracts •Implement new agreements •Track performance •Participate in savings audits •Periodically re- evaluate purchases and supplier performance •Team member/ stakeholder list •Workplan •Draft cost model •SWOT analysis •Current procurement process map •Incumbent supplier list •Supplier assessment matrix •Sourcing Strategy •Negotiation plan •Draft transition plan •Stakeholder approval checklist •Signed contracts •Finalized transition plan •Key Learning report •Supplier management plan •Savings tracking plan KEYACTIVITIESDELIVERABLES FINANCIAL BASELINE SOURCING STRATEGY EXECUTE CONTRACT GATES A&F STRATEGIC SOURCING PROCESS 1 2 3 4 5 6 7
  17. 17. HOW WE DO ITProcessPeopleTechnology Sourcing / Category Leads ANALYZE CATEGORY SPEND DEVELOP BUSINESS NEEDS ASSESS SUPPLY MARKETS DEVELOP CATEGORY STRATEGY EXECUTE STRATEGY IMPLEMENT NEW AGREEMENTS SUSTAIN RESULTS 1 2 3 4 5 6 7 Understand internal spend and current state Understand business requirements Understand market players and key market drivers Develop strategy to effectively source category Develop and execute sourcing strategy and negotiation plan Sign new agreement, develop implementation plan Monitor supplier performance, capture savings, evaluate market
  18. 18. TEAM STRUCTURE VP GEMS TRAVEL GLOBAL UTILITIES IT/DTC STORE SUPPORT SUSTAINABILITY EUROPEAN UTILITIES VENDOR SETUPS IT/DTC HOME OFFICE SUPPORT TRAVEL & EXPENSE TRAVEL AGENTS TRAVEL & EXPENSE $500MM+ SPEND UNDER MANAGEMENT SUPPLY CHAIN
  19. 19. HOW WE DO ITProcessPeopleTechnology SOURCE GEMS PROCURE AP PAY AP Sourcing / Category Leads ANALYZE CATEGORY SPEND DEVELOP BUSINESS NEEDS ASSESS SUPPLY MARKETS DEVELOP CATEGORY STRATEGY EXECUTE STRATEGY IMPLEMENT NEW AGREEMENTS SUSTAIN RESULTS 1 2 3 4 5 6 7 Understand internal spend and current state Understand business requirements Understand market players and key market drivers Develop strategy to effectively source category Develop and execute sourcing strategy and negotiation plan Sign new agreement, develop implementation plan Monitor supplier performance, capture savings, evaluate market
  20. 20. THE SOURCE-TO-PAY TECHNOLOGY SOURCE GEMS PROCURE AP PAY AP Spend Classification Commodity Management eSourcing Contract Management Supplier Registration Spend Analysis Opportunity Identification Supplier Enablement Requisition Management Invoice Exceptions Catalog Supplier Collaboration Payment Gateway ERP Supplier Collaboration Invoice Imaging & Workflow Vendor Portal Payment Audit Supplier Performance Management
  21. 21. THE SOURCE-TO-PAY TECHNOLOGY ARIBA IMPLEMENTATION Spend Analytics Contracts eSourcing • $3B in total spend • 5 source systems • Quarterly refreshes • +80 data elements loaded based on source system • Scope: all Non-Merch Agreements • +1,400 contracts, loaded • 49 fields of data extracted • “Call for all contracts” • Legacy Load of +8,000 agreements • +50 events • 45 users • RFP • Reverse Auction
  22. 22. OUR SOURCE-TO-PAY MODEL Procurement Supplier Registrations Supplier Management Spend Analytics 7-step Sourcing Contract Management Pay GEMS Manage supplier information and track performance Ensure compliant procure-to-pay cycle on a daily basis Create, store, search contracts & track compliance Use this information to source efficiently
  23. 23. LESSONS LEARNED  Grow into Solution – “Evolve at a Steady Rate”  Leverage Existing Budgets – “Avoid Special Funding Requests  Obtain Executive Support – “Leverage Organizational Alignment“  Build Transparency – “Maintain Pipeline”  Create Center of Excellence – “Drive Adoption”  Optimize Sourcing Process – “Add Velocity  Alignment of Resources – “Do what you do best”  BE PATIENT!!
  24. 24. WHAT ARE WE FOCUSED ON  Continued Mastery of eSourcing  Leverage Spend Analytics  Explore Workflow in Contracts Management  Fully Load Legacy Contracts  Supplier Performance Management
  25. 25. #AribaLIVE @ariba Realizing the Strategic Sourcing Vision through an Ecosystem Approach Scott Gray – MasterCard Sr. Director – Supplier Management Lifecycle Management © 2015 Ariba – an SAP company. All rights reserved.
  26. 26. #AribaLIVE @ariba MasterCard Today *This represents MasterCard-branded GDV, does not include Maestro or Cirrus. All figures as of Dec. 31, 2013 210 countries and territories 2 Billion branded cards issued 8,200 employees 38.6 billion processed transactions US $4.1 trillion* gross dollar volume
  27. 27. #AribaLIVE @ariba Life Cycle Management • Onboarding • Information Management • Risk Management • Spend • Performance • Contract • Social Responsibility Supply Chain Systems & Processes Governance & Compliance Merger & Acquisition Integration Training & Communications Manage Spend Per Policy Demand Management Cost Saving Enablement Supplier Selection Fair Value Analysis Category Strategies Long-Term Savings Impact Global Spend Analysis Market Intelligence Cost Structure Development Functional Roles Sourcing Global Strategy Sourcing Operations Supplier Management Sourcing & Supplier Management © 2015 Ariba – an SAP company. All rights reserved.27
  28. 28. #AribaLIVE @ariba 4/6/2015 Supplier Lifecycle Management © 2015 Ariba – an SAP company. All rights reserved.28
  29. 29. #AribaLIVE @ariba MasterCard Sourcing Technology © 2015 Ariba – an SAP company. All rights reserved.29
  30. 30. #AribaLIVE @ariba • Partnerships & Stakeholders • Measuring the Value – Data Accessibility – Savings – Rationalized Supply Base – Risk and Performance • Managed Spend ROI Results © 2015 Ariba – an SAP company. All rights reserved.30
  31. 31. SUMMARY - WRAP UP Establish a clear Vision Standardize Process/Policy Automate with Business Network Build a Strong Talented team Drive Business Outcomes
  32. 32. © 2015 SAP SE or an SAP affiliate company. All rights reserved. Thank you! Contact information: Sundar Kamak Global Vice President – Solutions Marketing Email: sundar.kamak@sap.com | Twitter: ksundar1
  33. 33. #AribaLIVE @ariba © 2015 Ariba – an SAP company. All rights reserved. Q&A Realizing the Strategic Sourcing Vision through an Ecosystem Approach

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