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Bill Stankeiwicz Copy Scope 2010 Bristlecone Co. Strategy


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Scope conference 2010 in Florida, Bill Stankiewicz attended.

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Bill Stankeiwicz Copy Scope 2010 Bristlecone Co. Strategy

  1. 1. Beyond the Hype: Building a Sustainable Supplier Risk Strategy April 12, 2010 Michael Hartman Director, Field Marketing
  2. 2. Agenda  Industry Update  A Solution for Today  Customer Benefits  Time to Value © SAP 2010 / Page 2
  3. 3. Industry Update  Industry Update  A Solution for Today  Customer Benefits  Time to Value © SAP 2010 / Page 3
  4. 4. Decreasing External Spend Contributes Significantly to Change in Net Income How? Freight Decreasing Increasing Current External Revenues Income Statement 9% Savings ($ Millions) Spend by 5% by 5% ($ Millions) ($ Millions)  Standardized policies Revenues $1,000 $1,000 $1,050  Reduction of overnight usage Cost Margin $700 $677.50 $735  Domestic vendor consolidation Selling General $200 $178 $210 and Administrative Telecom Operating Income $100 $145 $105 23% Savings Taxes at 38% $38 $55 $40  Vendor consolidation Net Income $62 $90 $65  Signing bonus  Policy changes Change in Net Income $28 $3 Utilities Change in Net Income % 45% 5% Vanessa C. Smith, Shruti Goel and Tushar Gulhane 12% Savings “Enabling Profitable Growth through Procurement: Transforming the Sourcing and Procurement  Spend consolidation Organization” (ASUG/SAP Benchmarking and Best  Renegotiated rates Practices Program, 2007).  Cogeneration
  5. 5. Suppliers Facing Business Challenges
  6. 6. So Mr. CEO, what exactly do you mean by price? Crude Oil $144 $125 $100 $70 $55 $25 2003 2004 2005 2006 2007 2008 2009
  7. 7. Sunflower Oil: No longer a stable staple
  8. 8. CPO’s Top Priorities Impact Financial Bottom-line Source: SAP CPO Roundtable © SAP 2009 / Page 8
  9. 9. Methods Used To Mitigate Risk & Most Successful Methods
  10. 10. Kraftliner: An example of complex global trade flows 1000 tons 140 1700 360 1170 440 110 50 420 120 750 470 20 190 310 1610 220 20 40 120 90 20 60 60 60 50 170 250 40 280 80 Total 9 million tons 710EY01
  11. 11. Procurement Objectives “$10 MM earned through Russian roulette does not have the same value as $10 MM earned through the practice of dentistry. To an accountant though, they would be identical.” - Nassim Nicholas Taleb Fooled by Randomness
  12. 12. Where do you stand in the Procurement Journey? Full Procurement 5 Accountability Supply chain company Increasing Business benefits 4 Strategic Procurement Control 3 buy-sell Centralized company procurement 1 2 Decentralized Centrally co- Procurement ordinated procurement Increasing corporate leadership • Little overall • Information • Center asserts • Procurement • Procurement now control sharing more control takes full title of part of full supply • Poor integration • Central strategy • Increasingly goods chain company with corporate • Execution sophisticated info • Performance structure objectives decentralised mgt managed centrally • Likely with tax • Limited sharing of • High risk of rogue • Key deals • Full visibility of key advantages information buying negotiated numbers centrally
  13. 13. Sourcing Frontiers A Quick Look Lower Responsiveness Acceptable Small Cost Advantage to Low Cost Large Cost Advantage to Low Cost Countries Countries High Responsiveness Required
  14. 14. Where do you stand in the Supply Risk Management Journey? Full Risk 5 Accountability Integrated Risk company Business benefits Increasing Strategic 4 Enterprise Control Risk 3 Centralized Management Risk 1 2 Siloed Risk Centrally co- Management ordinated Risk Increasing corporate leadership • Little overall • Information • Center asserts • Risks considered • Risk now part of control sharing more control across entire full supply chain • Poor integration • Central strategy • Increasingly organization company structure with corporate • Execution sophisticated info • Performance • Proactive objectives fragmented mgt managed centrally determination of • Limited sharing of • High risk • Key risks • Full visibility of key potential future information exposure across managed centrally numbers risks issues
  15. 15. Supplier Risk Scorecard – Quantitative and Qualitative Weighting and Indexing Overall Performance (H, M, L) Financial Risk Legal Risk Operational Risk Replacement Other Risks (H,M, L) (H, M, L) (H, M,L) Risks (H, M,L) (H, M,L) 40% 20% 20% 15% 5% • Financial • No. of Suits • On time • On-boarding • Geo-Political Health • No. of delivery cost Risks • Bankruptcy Judgments • Fill Rate • Qualification • Supplier Eco- Index • No. of Liens • Lead time lead time system Risks • Acquisition • Defects • Compliance • Management Risk • Returns • Operational Policy Risks • Credit Risk • Compliance performance
  16. 16. Supplier and Risk Management Requires Analytics Source: Thomas Davenport, “Competing on Analytics”
  17. 17. Cutting Costs: Chopping a Tree or Pruning the Right Branch? © SAP AG 2010 / 17
  18. 18. Maintaining Perspective
  19. 19. A Solution for Today  Industry Update  A Solution for Today  Customer Benefits  Time to Value © SAP 2010 / Page 19
  20. 20. Procurement Organizations Measured on Savings Delivery & Spend Under Management To meet strategic business This requires: goals, procurement needs to …  Quickly identify savings  Enterprise-wide visibility and opportunities context to spend and buying patterns  Avoid or mitigate supplier risk  Complete, accurate, trustworthy data  Ensure contract and regulatory compliance  Powerful information at the hands of the business user “ If I can take the data from my spend analysis tool and understand where it comes from and tie it to performance, then I can easily address the opportunities to drive savings and reduce spend.” CPO, Large North American Insurance Company © SAP AG 2010 / 20
  21. 21. SAP BusinessObjects Spend Performance Management Why SAP? SAP can address immediate needs of business  Unique approach for spend data classification  Proven BI platform for actionable analytics SAP provides a platform for a mid/long-term strategy  Enterprise process integration with SAP E-Sourcing  Cornerstone solution for our comprehensive Procurement Performance Management vision SAP provides the lowest risk & TCO  30+ years in spend data cleansing/classification  Leverages investments made with SAP
  22. 22. SAP BusinessObjects Spend Performance Management Comprehensive Roadmap for Procurement Performance Mgmt Tomorrow Today Spend Global Analysis E-Sourcing Trade Services Supply Chain Harmonized Risk Performance User Management Mgmt Experience Procurement Performance Management  Comprehensive procurement performance management platform SAP Spend Performance Mgmt  Integration with Risk Management  Integration with Global Trade Services  Enterprise data extraction  Integration with Supply Chain Performance  Data standardization & enrichment Management  Comprehensive SAP BW data model  SAP BusinessObjects universe layer  Pre-delivered analytics & reporting  Harmonized UI across SAP EPM products  Flexible deployment options  Delivered integration with E-Sourcing
  23. 23. Empower Procurement Business Users with Relevant Insights To Support Spend Initiatives Spend Related Comparison to Insight Plan or Budget  Over 130 packaged analytics Savings  Four role-based Evaluate Potential dashboards Supplier Risk  Create new reports and dashboards (self-service)  Create custom measures Price Contract Variance Performance © SAP AG 2010 / 23
  24. 24. Addressing the #1 Challenge: “How Do I Get to My Spend Data?” Disparate Data Sources Disparate Data Sources Dirty Data Difficult to Access Government watch lists GL Supplier financial/ Operational data P-Cards BW  Partial Solutions: MDM,  Can’t quantify buying  Complex spreadsheets ETL leverage without  Reliance on IT for reports  Manual processes are knowing supplier parent- child  Complicated analysis expensive tools  Multiple vendor licenses  Can’t identify aggregate volume by category  Analysis not integrated to of spend transaction systems  Can’t optimize for common purchases across departments © SAP AG 2010 / 24
  25. 25. Integrated Data Management Enables Continuous and Clear Spend Analysis Data Standardization Spend & Supplier Data Integration & Enrichment Risk Analysis Phase 1: Supplier Phase 2: Data Standardization Spend Data & Enrichment Classification BW GL/AP Global Reference Transactional Database Knowledge Base Supplier data P-Cards  SAP extractors (SAP ECC,  Global coverage  Over 120 pre-built spend analysis SAP SRM) models  1.6T transactions in knowledge  Data Integrator ETL license for non- base  Out-of-the-box support for supplier SAP systems risk analysis  100+ external data sources  Support to bring in third-party  Set & Track Performance Targets data feeds  Supplier financial and risk data with Spend Advisor  Diversity and government  Comprehensive set of Analytics watch lists functionality  Briefing book supports stakeholder collaboration
  26. 26. SAP Spend Performance Management Dashboards and Reports  Relevant Out- of-the-box Analytics  Personalized Access  Dashboard Wizard © SAP 2010 / Page 26
  27. 27. SAP Spend Advisor Set Goals, Measure Performance  Set Goals  Measure Performance  Identify Opportunities © SAP 2010 / Page 27
  28. 28. Briefing Books  Build and Store Analytics  Aggregate  Communicate © SAP 2010 / Page 28
  29. 29. Multiple Disparate Solutions or an Integrated Closed- Loop Solution? Today: Sustainable Solution: Multiple Solutions from different vendors Integrated, Insight Driven, Actionable Supplier Supplier Performance Rating/Risk Spend Supplier Analysis Evaluation/ Audits Supplier Intelligence  Multiple systems  One solution  No data integration  Complete visibility (No single view of data) © SAP AG 2010 / 29
  30. 30. Enable Sourcing & Procurement Excellence Integrated Spend & Risk Management Approaches Enable Supply Chain Decisions Through Spend Visibility  Dashboard visibility to key supplier and contract manufacturing opportunities  Immediately identify cost and renegotiation opportunities with supply chain  Free up cash based on optimized category strategies aligned to demand requirements Automate Spend Data Management to Enable Sourcing & Procurement Strategies  Packaged extractors and ETL capability to ensure data capture. Quickly Improve Operating Margin  Supplier normalization and classification  Implement spend reduction strategies based on robust automated methodology based on global priorities  Initiate renegotiation backed by hard data  Reduce overall contract leakage Embed Risk Mitigation Into Sourcing Approach  Risk alerts and mitigation strategies built into KPIs  Balance supplier scorecards based on financials, liquidity, and traditional evaluation criteria (cost, etc.)  Enable supplier declaration on critical compliance initiatives Quick Short-Term Wins with Sustainable Long-Term Gains © SAP AG 2010 / 30
  31. 31. Summary Maximize Savings, Reduce Supplier Risk  Visibility into accurate spend data  Increase spend under management  Rapidly identify savings opportunities  Reduce supply disruptions “ We selected SAP not only based on the functionality of its solutions, but for its experience and commitment to helping companies like ours achieve rapid ROI. Because we have a variety of spend categories across numerous company divisions, we needed a solution that was versatile enough to accommodate our current needs, yet scalable enough to grow with our company.” Christine Rousseau, SVP Information Technology, Callaway Golf Company © SAP 2010 / Page 31
  32. 32. Customer Benefits  Industry Update  A Solution for Today  Customer Benefits  Time to Value © SAP 2010 / Page 32
  33. 33. Leading Companies Already Benefiting Today In Procurement with SAP BusinessObjects Solutions 4x leverage with a single global supplier, with local relationships [CPG] 50% improvement in RFQ process cycle time with sub- contract supplier visibility [High  Aggregated data from 19 business Tech] units, 22 source systems at one company  In 12 weeks, classified all spend into $150 million in procurement- a proprietary taxonomy and related savings from supply performed supplier normalization base rationalization  Consolidated billions in spend across [Entertainment] ~15 sites and multiple business units © SAP AG 2010 / 33
  34. 34. Proven Supplier Validation and Spend Classification Supplier Normalization Financial Client - 66% Reduction Electronics Client - 44% Reduction 13% 3% 19% 34% 16% 56% 25% 34% Predictive Coding Classification methodology: business context focused Freight Telecom Utilities 9% Savings 23% Savings 12% Savings  Standardized policies  Vendor Consolidation  Spend consolidation  Reduction of overnight usage  Signing bonus  Renegotiated rates  Domestic vendor  Policy changes  Cogeneration consolidation © SAP AG 2010 / 34
  35. 35. Sara Lee Sourcing Excellence in 45 Days! Savings from 12-22% “SAP E-Sourcing has helped to save over 12% on $240M of Standardized process across Indirect procurement spend.” the organization Driven value in >$240M in spend John Freel Director of Procurement © SAP 2010 / Page 35
  36. 36. A fluid success at a large petroleum company The Challenge  One of the largest Petroleum with upstream and downstream services  Diverse systems spread over multiple geography  Multiple vendors for same products with no central visibility  Extensive duplication of material, vendors and services Key Deliverables:  Challenging contract management Supplier The Solution Normalization  Implemented Spend Analysis, Contract Management and Supplier Evaluation Supplier evaluation Contract Management  Activated custom classification schema for mapping Spend Analysis  Enabled Bristlecone spend analysis and optimization methodology  Implemented BI and Portal solutions as well The Result Service Enabled:  Enabled strategizing of sourcing  Consolidated the spend to a focus group of suppliers On Premise  Optimized spend data visibility across the board Environment  Enabled across the board purchase price visibility Refresh Services  Activated streamlined contract management Consulting Services  Huge savings on direct and indirect spend
  37. 37. Revlon Managing 95% of Their Supply Base In Production in 3 Weeks! 250% increase in COGS savings over three years “The rapid, three-week phase I implementation 300% increase in managed process allowed us to spend, using same staff levels immediately start generating benefits.” Live implementation in three William Reis, weeks Chief Procurement Officer © SAP 2010 / Page 37
  38. 38. Time to Value  Industry Update  A Solution for Today  Customer Benefits  Time to Value © SAP 2010 / Page 38
  39. 39. Accelerated Savings in Procurement Identify, Optimize, and Sustain Supplier Value Rapid Business Enablement Offer Leveraging years of expertise, Bristlecone offers a fixed-fee and fixed time implementation. Impact your organization in as little as 90 days and $125,000! Rapid Business Enablement Investment ($USD) Duration Offer Small Medium Large (weeks) (<$1B Spend) ($1-3 B Spend) (>$3B Spend) DSE + SPM 10 + $190,000 + $255,000 + $380,000 + Rapid SPM Only 6+ $125,000 + $175,000 + $250,000 + Business E-Sourcing + CLM 18 + $330,000 + $425,000 + $535,000 + Enablement CLM Only 13 + $280,000 + $330,000 + $375,000 +  Risk mitigation – Fixed price deployment contract  Deferred payment – Customers who simultaneously sign a Bristlecone services contract with an SAP license agreement, will have only 25% of the services contract amount due in 30 days, with the remaining amount due upon going live.  Services discount – If the Bristlecone contract contains Spend Performance Management and Data Standardization and Enrichment Services then the customer is eligible for a 10% services discount.  Flexibility – Deployment may be hosted, on-premise, or on-premise with managed services. For more information contact:
  40. 40. Key Points to Take Home  Traditional focus on efficiency and cost alone is not sufficient; proactive visibility to supply risk is critical  Ensure information is complete, accurate, and timely  Establish an integrated process from insights to action  Empower business users with easy-to-use solutions to drive adoption and deliver results  Drive collaboration with key internal stakeholders and suppliers; provide management visibility to drive informed decision making  Pre-packaged applications deliver out-of-the-box capabilities that are best in class  A cohesive approach looking across cost factors, mitigation actions, and monitoring of KPIs is required to minimize supply chain disruptions © SAP AG 2010 / 40
  41. 41. About Bristlecone © SAP 2010 / Page 41
  42. 42. Bristlecone: Our Parent Company – The Mahindra Group  US$ 6.7 Billion Conglomerate with Diversified Interest across 6 Segments The Mahindra Group Automotive • Leadership Information Technology • Innovation • Global Potential • Financial Returns Trade and Automotive • Customer Financial Services Components Centricity Farm Equipment Infrastructur e Development
  43. 43. Our Global Services Capability Diagnose. Design. Enable. Enhance. Supply Chain Planning & Collaboration Technology & Supply Chain Integration Services Execution Integrated Sourcing Managed Services & Procurement Information Management
  44. 44. SAP and Bristlecone – Unique Relationship  SAP AG Works and Services Partner  SAP Services Partner  SAP BPO Partner  SAP Business Partner (All-in-One Solutions for Auto, Hi-tech, OGSD)  SAP xAPPs Partner  SAP Ramp-up Partner for NetWeaver  SAP Indian Offshore Partner  Core Product & Custom Development Partner  Founding partner for SAP Testing Competency Center (TCC)  Founding partner for CRM on Demand  Part of the Hi-tech Industry Value Network We are not only just a Global SI Bristlecone is consistently Strong and pro- 200,000 Man rated as one of the top active relationship days of but have “Co-developed” SAP - to earn hands-on experience on quality partner for with SAP since development deployment services at SAP inception all phases of SAP’s product relationship development lifecycle. Labs
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  46. 46. Thank you! Michael Hartman (404) 964-8966 Copyright © 2010 Bristlecone