AgendaTime            Item                            Presenter8:30 – 9:00     Coffee                          All9:00 – 9...
Purchasing
Procurement              Purchasing
Procurement    Spend                  PurchasingManagement
Procurement    Spend                        PurchasingManagement             Spend Optimization
Coupa Overview   Tony WesselsVice President, Marketing
Coupa’s Mission    Delivering software innovation that    breeds responsible spending while   impacting the company bottom...
Innovation
Responsible Spending
Bottom Line
Spend Optimization
Coupa’s Explosive Growth180% Bookings            +95%            150%            Renewal Rate   Platform Usage    YOY     ...
One World, One Platform10 Languages40 Countries100,000        Users
Customers Highlights Retail   Finance   Mfg.   Health Care   High Tech
Amplifying Procurement’s Role              Ravi Thakur Vice President, Customer Success & Services
CFO     Financial BooksSales & Mktg   Customer Records         HR    Personnel Files
Procurement Needs To Own Spend Transactions
Own The                 Optimize SpendTransactionSpend Optimization Platform & Processes
Procurement Must Orchestrate             VS.
How Do You Do It?   Proactively participate in growth strategy   Manage change effectively   Measure & demonstrate succ...
Participate In Growth Strategy
Understand Growth Strategies    Geographic Expansion
Understand Growth Strategies    Geographic Expansion    New Lines Of Business
Understand Growth Strategies    Geographic Expansion    New Lines Of Business    Acquisitions
Provide Truly Strategic Value   Ensure executive team supports your Spend    Optimization strategy   Work with R & D / P...
Develop Agile Spend Processes   Bring distributed locations    under management   Involve all stakeholders    e.g. facil...
Managing Change
Change Management Requirements      Leveraging        Frictionless    change agents        transition
Leveraging Change Agents           Functional Users                  IT             Procurement              Payables     ...
Functional Users            Needs                    Solution    A solution that they      Familiar user     can use    ...
Procurement           Needs                    Solution    Ensure policy             Enables transaction     compliance ...
Payables            Needs                Solution    Reduce manual &        Automation for     error prone steps       i...
IT          Needs                    Solution   Reduce burden on IT      SaaS/Cloud based    resources                 p...
Suppliers          Needs                     Solution   No additional cost of      No network fees or    doing business ...
Frictionless Transition   Familiar & convenient user interface   Weave into daily life
Demonstrate Success
Measure Success                   • Establish benchmarks and determine   Set Targets       targets                   • Use...
Benchmark Success         Effectiveness                   Productivity   Spend under management        Transaction cycle...
Communicate Success
CFO    Financial BooksSales & Mktg   Customer Records         HR    Personnel FilesProcurement    Spend Transactions
Break
Project: Get Smart      Mike Wilding  Chief Procurement Officer        Rent A Center                              44
Crank the Savings World TourMay 1, 2012                               - 45 -
Executive SummaryAbout Rent-A-Center•   The largest operator in the United States rent-to-own industry•   Over 4,000 locat...
A peek into the past•   Two procurement tools in past 18 months prior to June 30, 2010•   Lack of visibility into invoice ...
Need for Change                 Process Path Migration                                  Supporting Modules                ...
RAC Technology Scope                                     Source-to-Contract             Procure-to-Pay              Report...
The RAC Technology Assessment Approach                    The RAC team assessed our spend needs and capabilities, develope...
The Business Case - Executive Summary                                                           Scope of Business Case    ...
The Technology Selection ProcessThe RAC technology selection team conducted a 4 step process to identify the right technol...
RAC Technology Scope                                      Source-to-Contract             Procure-to-Pay              Repor...
Technology Implementation Timeline                                June                                 July               ...
eSourcing Overview                                                                        Module Assessment               ...
eContracting Overview                                                                     Module Assessment               ...
eProcurement Overview                                                                               Module Assessment     ...
eInvoicing Overview                                                                    Module Assessment               Sou...
Reporting & Supplier Management Overview                                                                    Module Assessm...
Lessons learned•   View a live environment, see how other companies use the product and see what    hardware they are usin...
Contact informationMike WildingSVP- Accounting/Global Controller & CPOMike.wilding@rentacenter.com972 801 1404            ...
Extended Business Relationship                        Management (EBRM)                                Bruce McQuillen    ...
Extended Business Relationship Management (EBRM)A Deloitte PerspectiveMay 2012Deloitte Consulting LLP
Companies across industries are feeling the impact of ineffective management oftheir business relationships               ...
A peek into the past at Rent-A-Center and where Coupa addressed key EBRMconcerns•   Two procurement tools in past 18 month...
How do you rate your organization’s relationship management capabilities?                                                 ...
Lack of effective business relationship management can expose your company torisk in four broad areas                     ...
Business relationships have evolved significantly over the last decade with increased       focus on effectively integrati...
Extended Business Relationship Management (EBRM) is a strategy to monitor andmanage key business relationships across the ...
Successful EBRM strategy requires building capabilities at a people, process and technology level                         ...
Our EBRM Lifecycle Framework provides the capability to assess and manage       relationship across multiple elements of E...
The EBRM framework applies across industries, however, the prioritization ofEBRM elements differs                   Financ...
The key to effective EBRM is capturing and managing three inter-connected layers ofdata: Strategic, Tactical and Transacti...
EBRM Technology can be classified into 3 broad categories – Transactional, Tactical,Strategic, in conjunction with the typ...
EBRM is not just implementation of a technology solution An effective EBRM strategy requires    Understanding and priorit...
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
Coupa roadshow master deck atlanta
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Coupa roadshow master deck atlanta

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Coupa Crank Up the savings roadshow presentation. See how your company can save by using innovative on demand spend management software.

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Coupa roadshow master deck atlanta

  1. 1. AgendaTime Item Presenter8:30 – 9:00 Coffee All9:00 – 9: 30 Welcome – Coupa Roadmap Tony Wessels, V.P. Marketing Coupa9:30 – 10:30 Amplifying Procurement’s Role Ravi Thakur, V.P. Customer Success, Coupa10:30 – 10:45 Break All10:45 – 11:30 Project : Get Smart Mike Wilding, CPO, Rent A Center11:30 – 12:15 Extended Business Relationship Bruce McQuillen, Management (EBRM) Deloitte Consulting12:15 - 12:30 Closing Remarks12:30 – 1:30 Coupa Demo Ravi Thakur, V.P. Customer Success, Coupa
  2. 2. Purchasing
  3. 3. Procurement Purchasing
  4. 4. Procurement Spend PurchasingManagement
  5. 5. Procurement Spend PurchasingManagement Spend Optimization
  6. 6. Coupa Overview Tony WesselsVice President, Marketing
  7. 7. Coupa’s Mission Delivering software innovation that breeds responsible spending while impacting the company bottom line.
  8. 8. Innovation
  9. 9. Responsible Spending
  10. 10. Bottom Line
  11. 11. Spend Optimization
  12. 12. Coupa’s Explosive Growth180% Bookings +95% 150% Renewal Rate Platform Usage YOY YOY YOY
  13. 13. One World, One Platform10 Languages40 Countries100,000 Users
  14. 14. Customers Highlights Retail Finance Mfg. Health Care High Tech
  15. 15. Amplifying Procurement’s Role Ravi Thakur Vice President, Customer Success & Services
  16. 16. CFO Financial BooksSales & Mktg Customer Records HR Personnel Files
  17. 17. Procurement Needs To Own Spend Transactions
  18. 18. Own The Optimize SpendTransactionSpend Optimization Platform & Processes
  19. 19. Procurement Must Orchestrate VS.
  20. 20. How Do You Do It? Proactively participate in growth strategy Manage change effectively Measure & demonstrate success
  21. 21. Participate In Growth Strategy
  22. 22. Understand Growth Strategies Geographic Expansion
  23. 23. Understand Growth Strategies Geographic Expansion New Lines Of Business
  24. 24. Understand Growth Strategies Geographic Expansion New Lines Of Business Acquisitions
  25. 25. Provide Truly Strategic Value Ensure executive team supports your Spend Optimization strategy Work with R & D / Product Development Be aligned with M & A and global expansion
  26. 26. Develop Agile Spend Processes Bring distributed locations under management Involve all stakeholders e.g. facilities, marketing Proactively integrate acquisitions
  27. 27. Managing Change
  28. 28. Change Management Requirements Leveraging Frictionless change agents transition
  29. 29. Leveraging Change Agents Functional Users IT Procurement Payables Suppliers
  30. 30. Functional Users Needs Solution  A solution that they  Familiar user can use interface  Not stand in their  Support for function way specific spend
  31. 31. Procurement Needs Solution  Ensure policy  Enables transaction compliance ownership  Attain savings goals  Measurable results
  32. 32. Payables Needs Solution  Reduce manual &  Automation for error prone steps invoice processing  Simplify tasks  Eliminates tedium
  33. 33. IT Needs Solution Reduce burden on IT  SaaS/Cloud based resources platform Focus on value-add  User configurable tasks solution
  34. 34. Suppliers Needs Solution No additional cost of  No network fees or doing business processes to support Ease of adoption  Innovation e.g. Universal Search
  35. 35. Frictionless Transition Familiar & convenient user interface Weave into daily life
  36. 36. Demonstrate Success
  37. 37. Measure Success • Establish benchmarks and determine Set Targets targets • Use data to analyze: Achieve Targets • Tradeoffs and interdependencies • Root cause • Measurement excellence = capability Be Excellent to improve and stay ahead
  38. 38. Benchmark Success Effectiveness Productivity Spend under management  Transaction cycle time User adoption = customer  PO & invoices processed satisfaction per FTE (#) % saving / spend  Support costs – not just IT
  39. 39. Communicate Success
  40. 40. CFO Financial BooksSales & Mktg Customer Records HR Personnel FilesProcurement Spend Transactions
  41. 41. Break
  42. 42. Project: Get Smart Mike Wilding Chief Procurement Officer Rent A Center 44
  43. 43. Crank the Savings World TourMay 1, 2012 - 45 -
  44. 44. Executive SummaryAbout Rent-A-Center• The largest operator in the United States rent-to-own industry• Over 4,000 locations (2,983 Core U.S.; 763 RAC Acceptance; 87 International, 218 ColorTyme franchisees)• Stores offer high quality, brand name durable products such as major consumer electronics, appliances, computers, and furniture and accessories under flexible rental purchase agreements• Allows customers to obtain ownership of the merchandise at the conclusion of an agreed-upon rental period• Approximately 20,000 employees• Annual revenues projected to exceed $3.0 billion in 2012• NASDAQ: RCII• Headquarters: Plano, Texas (opened a Field Support Center in Monterrey, Mexico dedication is May 15th) - 46 -
  45. 45. A peek into the past• Two procurement tools in past 18 months prior to June 30, 2010• Lack of visibility into invoice submitted by vendor at store location• Punch out catalogues and catalogues in general not consistently utilized• Existing platform extremely clunky and lacked ability to find product quickly (minimum of five clicks before you were able to place an order)• User adoption was slow and intermediate; complaints were fast and frequent• On boarding of suppliers was not an easy, friendly process• Invoices were entered into ERP by hand• Procurement of approximately $600 million of indirect spend was very decentralized• No consistent esourcing tools utilized• Invoicing off of a contract was foreign• No central repository for contracts• Spend analyzing was performed by tearing apart general ledger accounts - 47 -
  46. 46. Need for Change Process Path Migration Supporting Modules How They Help  Procurement  Catalog creation and  EIPP (for non-EDI enabled management 1 suppliers)  PO creation, routing, and tracking  Reporting  Visibility to purchasing accruals Catalog with Purchase  Three way matching and issue Order identification 2  Procurement  Purchase request/PO creation, Non-Catalog  EIPP routing, and tracking with  Reporting  Three way matching and issue Purchase identification Order  Visibility to purchasing accruals 3  Electronic Invoice Presentment  Invoice creation, routing, and Invoice and Payment (EIPP) tracking Directly  Reporting  Ability to invoice against a Against contract (or against open P.O.) Contract  Two way matching 4  NA  Futurespend expected to be exception/emergency only Invoice Only - 48 -
  47. 47. RAC Technology Scope Source-to-Contract Procure-to-Pay Reporting & Supplier Travel & Process (Upstream) (Downstream) Management Expense Supplier Module eSourcing eContracting eProcurement eInvoicing Reporting T&E Management  Increased savings through  Increased electronic PO use for  Ability to monitor SMO  Online booking with RAC competitive pressure and pricing spend management, compliance, and performance and identify future policies visibility 2, 3, and 4 way matching savings opportunities  Automated expense  Automated project workflow for  User-friendly interface to support field  Supplier portal to enable vendor management RAC sourcing methodology and adoption and compliance initiated electronic invoicing andBenefits contract authoring  Ability to invoice against a contract payment  Contract repository to support (or against an open P.O.) to increase  Vendor score carding to monitor invoicing against contracts (PP 3) pricing compliance pricing and service compliance  Automatedinvoicing will lower AP department costs  Concurimplementation complete on 6/14/2010 - 49 -
  48. 48. The RAC Technology Assessment Approach The RAC team assessed our spend needs and capabilities, developed the future state vision for the SMO, and created the options that the Technology Steering Committee assessed to make the final recommendation Project: Get SMarT Accomplishments Potential Next Phase As – Is Assessment Strategy Development Technology Selection ImplementationMajor Activities  Maturity survey  Implementation scenario  Formation of steering  RAC solution design  SMO vision development development committee  Solution implementation  Needs assessment  Scenario ROI analysis  RFP development and  User training prioritization  Implementation prioritization distribution  Process and technology  Response analysis assessment  Technology selectionOutcome Business and technology Technology Business Case Solution and vendor Technology implemented needs identified created recommendation developedExample Documents Tech Selection RFP Scoring Results RAC stakeholders have completed the scoring process and identified SAP, Oracle, and Ariba as the best full suite providers, and Emptoris as a leading single process provider. Full Suite Upstream Only Downstream Only Oracle SAP Ariba Ketera Emptoris BravoSolution Basware Lawson 3.9 3.9 3.7 3.6 3.8 3.9 3.4 3.7 General Company Information 3 2 1 4.4 4.7 4.6 3.0 4.8 3.3 N/A N/A Source to Contract 2 3 1 4.6 4.3 4.3 3.3 N/A N/A 3.8 2.9 Procure to Pay 1 2 3 4.2 4.2 4.3 3.5 4.2 3.8 2.9 3.4 Spend Analysis & Reporting 2 1 3 4.5 4.4 4.4 3.2 2.7 1.9 3.1 3.2 Supplier Management 1 2 3 4.0 3.4 3.8 2.9 3.5 3.4 3.4 3.6 Technical 1 2 3 Considering the strong performance of the full-suite providers and the relatively weak performance of the niche providers, the team has not included Aravo and JPMC in this assessment. Note: RAC stakeholders include M. Wilding, T. Fuller, P. Hall, J. Whitehead, B. Corley, N. Stevens, J.Chanani, M. Douglas, J. Arnette and R. Salvans -3- Maturity model assessment Technology cost / benefit Technology demo Technology Example and gap analysis assessment scripts RFP evaluation implementation roadmap - 50 -
  49. 49. The Business Case - Executive Summary Scope of Business Case Reporting & Supplier Travel & Process Source-to-Contract Procure- to- Pay Management Expense Supplier Module eSourcing Contracts eProcurement Invoicing Reporting T&E ManagementRAC had some spend management technology in place, however further investments were required to reach the desired to-bestate  RAC had limited Sourcing and Contracting technology in place  The eProcurement technology was at a low level of maturity and required an upgrade to support new process paths if not replaced  RAC had very limited spend management Reporting capabilities, and no Supplier Management technology  Beyond basic electronic forms, the Travel and Expense (T&E) analysis, audits, and reporting were at a low level of maturity5 Year financial analysis shows net savings of $ – $ MM for RAC - 51 -
  50. 50. The Technology Selection ProcessThe RAC technology selection team conducted a 4 step process to identify the right technology solution to meet our needs Vendors included in Vendors included in Vendors that provided Vendors receiving RFP initial assessment capability assessment demonstrations 1. Market Research 2. Detailed Analysis 3. RFP 4. Demo Analysis Conducted high level market  Conducted capability  Developed and distributed  Developed seven page script analysis 44 vendors assessment and detailed detailed RFP consisting of: and executed detailed vendor Perform functionality review financial analysis ‒ 6 sections demos and financial assessment  Down selected from 19 to 11 ‒ 275 questions  Identified best-fit solution and Down select to 19 vendors vendors that would receive implementation scenario for  Evaluated responses and that could potentially meet RFP RAC identified 4 vendors that best met RAC needs RAC’s needs and provided competitive pricing estimates Where’s Coupa? - 52 -
  51. 51. RAC Technology Scope Source-to-Contract Procure-to-Pay Reporting & Supplier Travel & Process (Upstream) (Downstream) Management Expense Supplier Module eSourcing eContracting eProcurement eInvoicing Reporting T&E Management  Increased savings through  Increased electronic PO use for  Ability to monitor SMO  Online booking with RAC competitive pressure and pricing spend management, compliance, and performance and identify future policies visibility 2, 3, and 4 way matching savings opportunities  Automated expense  Automated project workflow for  User-friendly interface to support field  Supplier portal to enable vendor management RAC sourcing methodology and adoption and compliance initiated electronic invoicing andBenefits contract authoring  Ability to invoice against a contract payment  Contract repository to support (or against an open P.O.) to increase  Vendor score carding to monitor invoicing against contracts (PP 3) pricing compliance pricing and service compliance  Automatedinvoicing will lower AP department costs eSourcing eProcurement Reporting  Concurimplementation Emptoris Coupa Spend Analysis / Business complete on 6/14/2010What was Objects eContracting eInvoicingselected? Emptoris Coupa Supplier Management Emptoris / Coupa - 53 -
  52. 52. Technology Implementation Timeline June July August September October December Q1, 2011 6/7 6/14 6/21 6/28 7/5 7/12 7/19 7/26 8/2 8/9 8/16 8/23 8/30 9/6 9/13 9/20 9/27 10/4 10/11 PMO Program Leadership (PMO) Source to Contract Go- Plan Design Build Validate • eSourcing Live • eContracting Installation Configuration completed completed Go-Spend Analysis Plan Design Build Validate Live Installation Configuration Integration completed completed completed Build Validate Go-LiveProcure to Pay Coupa Release 21 Plan Design Build Validate Go-Live • eProcurement (Invoice to Contract, PP3) • eInvoicing Installation Configuration Integration Coupa Release 1 completed completed completed (Blanket PO) Build Validate Go-Live Coupa Release 31 (Tiered Pricing) Supplier Go- Plan Design Build Validate Management Live Installation Configuration Integration completed completed completed Master Data Master Data CTC Change, Training, Communications - 54 -
  53. 53. eSourcing Overview Module Assessment Source-to-Contract Procure-to-Pay Reporting & Supplier Process (Upstream) (Downstream) Management Supplier Module eSourcing eContracting eProcurement eInvoicing Reporting Management eSourcing Benefits to RAC  Increased competitive pressure and visibility into market pricing  Streamlined RAC supplier evaluation for rapid “apples to apples” analysis  Automated workflow to ensure enforcement of RAC’s 6 step sourcing methodology What’s at Stake for RACeSourcing advanced functionality will be used by the SMO to achieve incremental soft dollar savings for RAC. Sourcing Impact  All current and future events can use traditional and advanced sourcing functionality  SMO can use auction functionality for rapid “spot sourcing” events  Like other retailers, RAC can use the eSourcing tool for merchandise - 55 -
  54. 54. eContracting Overview Module Assessment Source-to-Contract Procure-to-Pay Reporting & Supplier Process (Upstream) (Downstream) Management Supplier Module eSourcing eContracting eProcurement eInvoicing Reporting Management eContracting Benefits to RAC  Contract authoring automates contract development, enforces internal approval flows, and provides visibility to progress  Contract repository enables uploading of new and existing contracts for automated procurement and invoicing (PP3)  Automated tracking enables pricing, commitment, vendor compliance, and lifecycle management What’s at Stake for RACeContracts automated authoring, storage, and procurement integration will drive efficiencies, compliance, and savings identification. - 56 -
  55. 55. eProcurement Overview Module Assessment Source-to-Contract Procure-to-Pay Reporting & Supplier Process (Upstream) (Downstream) Management Supplier Module eSourcing eContracting eProcurement eInvoicing Reporting ManagementWhat Coupa brings to RAC Electronic PO acknowledgements and approval flows lower cost to serve and increase visibility and compliance Reduction of headcount in our AP group Advanced search functionality and user friendly interface drives compliance and use of catalogs and punch-outs in the field Extremely high adoption rate of tool Ability to order supplies from the desktop keeping our employees in the store renting and selling merchandise  Labor hours under control; sales going up Business partner to discuss other needs and solutions (sales tax) Increased performance against established KPIs Transparent Controlled 1 Catalog with Purchase 2 Order (PO) Non- Catalog Invoiced spend will with PO 3 be moved to PO Invoice based process path Directly Against (PP 1 & PP 2) 4 Contract Invoice Only - 57 -
  56. 56. eInvoicing Overview Module Assessment Source-to-Contract Procure-to-Pay Reporting & Supplier Process (Upstream) (Downstream) Management Supplier Module eSourcing eContracting eProcurement eInvoicing Reporting Management What Coupa brings to RAC  Ability to invoice against a contract (or against an open P.O.); pricing compliance to negotiated agreements  Automated invoicing lowered our AP department costs and shorten the time required to process payments  Electronic approvals and tracking has increased our visibility and compliance for our users and vendors - 58 -
  57. 57. Reporting & Supplier Management Overview Module Assessment Source-to-Contract Procure-to-Pay Reporting & Supplier Process (Upstream) (Downstream) Management Supplier Module eSourcing eContracting eProcurement eInvoicing Reporting Management Reporting Benefits to RAC  Spend analysis has provided visibility into our costs and helped us prioritize the activities of SMO  Supplier Portal has facilitated automated registration and management of supplier information  Supplier Management gives us data and scorecards to identify pricing compliance issues and new sourcing opportunities - 59 -
  58. 58. Lessons learned• View a live environment, see how other companies use the product and see what hardware they are using• Engage internal IT group earlier and more frequently in the process (what will be required on ongoing basis after implementation)• Engage Internal Audit and IT Security earlier in the process• First significant Software as Service model for RAC (IT, Legal, IA) - 60 -
  59. 59. Contact informationMike WildingSVP- Accounting/Global Controller & CPOMike.wilding@rentacenter.com972 801 1404 - 61 -
  60. 60. Extended Business Relationship Management (EBRM) Bruce McQuillen Deloitte Consulting LLP 62Confidential and proprietary
  61. 61. Extended Business Relationship Management (EBRM)A Deloitte PerspectiveMay 2012Deloitte Consulting LLP
  62. 62. Companies across industries are feeling the impact of ineffective management oftheir business relationships Examples The closure of the German company responsible for supplying a convertible model’s folding roof left the otherwise finished car in purgatory while the automaker searched for a new supplier. A toy maker was forced to recall nearly 2 million toys and pay $2.3 million in fines due to identification of lead paint in toys made by one of its Chinese contract manufacturers. Due to a concern over the role of third party risk in bank failures, the Office of the Comptroller of the Currency has required that national banks establish a “comprehensive program for managing the relationship” with third parties. The launch of a technology company’s long-anticipated white smartphone was delayed for 10 months because of the quality and longevity of the white paints manufactured in China. Coupa is one of several components that can help address the impact of ineffective business relationships Note: Sources listed on slide 17 - 64 -
  63. 63. A peek into the past at Rent-A-Center and where Coupa addressed key EBRMconcerns• Two procurement tools in past 18 months prior to June 30, 2010• Lack of visibility into invoice submitted by vendor at store location• Punch out catalogues and catalogues in general not consistently utilized• Existing platform extremely clunky and lacked ability to find product quickly (minimum of five clicks before you were able to place an order)• User adoption was slow and intermediate; complaints were fast and frequent• On boarding of suppliers was not an easy, friendly process• Invoices were entered into ERP by hand• Procurement of approximately $600 million of indirect spend was very decentralized• No consistent esourcing tools utilized• Invoicing off of a contract was foreign• No central repository for contracts• Spend analyzing was performed by tearing apart general ledger accounts Coupa enabled Rent-A-Center to capture consistent data on transactions and suppliers in order to accurately understand and manage its key business relationships - 65 -
  64. 64. How do you rate your organization’s relationship management capabilities? PARTIALLY YES Survey Questions NO YES1. Do you have risk assessment and mitigation strategies in place to manage your business relationship risks effectively? 0 1 2 Do you monitor them on a periodic basis?2. Do you monitor globally and on a continuous basis the performance of your extended value chain in terms of service 0 1 2 levels, responsiveness and quality?3. Do you gather intelligence from third party and other sources on your business partners to identify potential financial and 0 1 2 compliance issues?4. Do you have an effective technology solution that provides “one stop” enterprise wide visibility into the extended value chain of your company i.e., the network of suppliers, 0 1 2 customers, outsourcers etc.? A net score between 0 – 5 indicates the lack of an effective business relationship management strategy within your organization - 66 -
  65. 65. Lack of effective business relationship management can expose your company torisk in four broad areas Loss of Revenue − Supply disruptions caused by environmental, financial or political issues − Lack of adherence to sell side contract terms Increased Costs − Inefficient process of measuring business relationship performance on a periodic basis − Lack of adherence to buy side contract terms A Score of 0 – 5 means Legal Issues − Lack of effective contract management practices − Lack of contract compliance, standardized contracts, etc. Brand Reputation − Lack of adherence to CSR by its suppliers or customers − Improper monitoring of the carbon footprint of trading partners - 67 -
  66. 66. Business relationships have evolved significantly over the last decade with increased focus on effectively integrating and managing those relationships Integrated Relationships  Information centralization An evolving strategy to  Centralized or center-led enable companies management of relationships manage business  Effective risk prediction and relationships effectively mitigation strategies  Advanced analytics to assess relationshipsBusiness Relationship Management Risk prone Relationships Capability  Information dispersed across the organization Collaborative Relationships  Limited organizational capability to manage relationships  Significant increase in number of  Lack of visibility into data across business partners systems  Centralized internal support functions  Lack of risk mitigation strategies Legacy  Limited information visibility across the enterprise transactional Transactional  Transactional systems and point Relationships systems solutions  Decentralized functions No significant change in  Limited internal and external existing business collaboration  Basic data analysis capabilities relationship  Limited integration across systems management practices Past Present Future Time - 68 -
  67. 67. Extended Business Relationship Management (EBRM) is a strategy to monitor andmanage key business relationships across the company Corporate Functions Buy Side Partners Sales Direct Materials Suppliers Finance Indirect Suppliers Extended Business Relationship Management (EBRM) Logistics Contract Manufacturers  Provide central visibility to business relationships Outsourced Service Operations Providers  Measure, monitor and manage relationships risk, performance, compliance and HR information Sell Side Partners  Manage relationships proactively vs. Customers IT reactively  Deepen and improve key relationships Trade Partners Marketing  Improve top ad bottom line performance Other Partners Procurement Alliance Partners - 69 -
  68. 68. Successful EBRM strategy requires building capabilities at a people, process and technology level Illustrative Capabilities  Ability to assess and correct existing  Responsibility and ownership to take business processes that monitor risk necessary actions for risk mitigation and performance metrics  Alignment of organizational structure  Continuous benchmarking with and governance with EBRM strategy industry best practices to measure the effectiveness of the relationship  Shift in mindset towards the nature of business relationships – from  Standardized data capture, transactional to a long term strategic management and reporting processes perspective EBRM Strategy Technology Capability  Superior database management and data analytics capabilities  Integration of different information systems within the enterprise  Improved visibility into the systems across different functions - 70 -
  69. 69. Our EBRM Lifecycle Framework provides the capability to assess and manage relationship across multiple elements of EBRM EBRM Lifecycle Framework Prioritize Relationships Evaluate Relationships Manage Relationships Segment / Define Set Target Monitor Implement Identify Prioritize Criteria Levels Performance improvements • Identify key • Segment • Define • Assess • Monitor • Identify and existing relationships evaluation criteria performance of performance of execute relationship types within each type (quantitative and companies based companies within performance (suppliers, based on various qualitative) for on pre-defined a relationship improvement customers, criteria (e.g., each relationship criteria type on a opportunities channel partners, importance, type and • Set performance periodic basis based on gaps contract business impact, segment targets for each against the set observed against manufacturers, financial • Identify data relationship type targets the key criteria outsourced obligations, etc.) required to and segment service providers, measure defined etc.) criteria Risk ManagementElements of Performance Management EBRM Compliance Management (regulatory, financial, sustainability, etc.) Information Management - 71 -
  70. 70. The EBRM framework applies across industries, however, the prioritization ofEBRM elements differs Financial Services Health Care & Life Consumer & Industrial Technology, Media & Element Industry Sciences Products Telecom • High debt levels • Brand damage • Supply chain disruption • Supply chain disruption Risk • Default/Credit risk • Success rate of drugs • Over-reliance on few • IP security • Fraud vendors • Data security • Brand equity • Expensive delays • Co-manufacturingPerformance • System reliability • Co-manufacturing • Higher cost management management • Quality issues • Project costs and delays • SEC guidelines • Federal/State/Local • Safety, Health, Environment • IT laws and securityCompliance • Regulatory approvals and regulations policy • Global e-Sustainability licenses • International and country • Carbon footprint Initiative (GeSI) regulations • Labor laws • Labor laws • Customer database • Electronic Health Records • Customer Relationship • Customer RelationshipInformation • Portfolio management (EHR) Management ManagementManagement • Audit • Seamless mobilization of • Vendor and item master • Vendor and item master health information exchange (HIE) Applicability High Low - 72 -
  71. 71. The key to effective EBRM is capturing and managing three inter-connected layers ofdata: Strategic, Tactical and Transactional Data Management Example: Performance Management Data Category Description Example Data Data that directly drives shareholder value Increased Strategic such as revenues, costs of goods sold, and Supply Cost Lost Revenue cost of capital Data that is used to help make day-to-day management decisions Tactical data is derived by consolidating Purchase Price % of On-Time Tactical transactional data elements such as Variance Deliveries contractual price and invoice price to calculate purchase price variance Data that describes a business transaction Transactional such as orders, invoices, payments, and Invoice Price Delivery Date delivery details - 73 -
  72. 72. EBRM Technology can be classified into 3 broad categories – Transactional, Tactical,Strategic, in conjunction with the type of data it handles EBRM Solutions by Data Type Transactional Tactical Strategic Hiperos Aravo Xcitec SAP Oracle Coupa Emptoris CVM solutions Tools like ERP and CRM capture  Solutions like spend analysis, e-  Consolidate information from transactional data useful primarily sourcing, contract management several solutions like ERP, CRM, at an operational level provide expertise in respective and CLM domains Typically fail to capture tactical or  Provide seamless data integration strategic data  Can access tactical and even and analysis for “one-stop” transactional data but fail to enterprise-wide snapshot of Some ERP providers also provide assess strategic aspects (e.g., relationships “upstream” tactical solutions risk)  Enable comprehensive  Lack an enterprise-wide view of assessment and management of business relationships key business relationships - 74 -
  73. 73. EBRM is not just implementation of a technology solution An effective EBRM strategy requires  Understanding and prioritizing the key drivers of a business relationship - performance, risk, compliance, sustainability  Understanding industry trends and supplier/customer behavior  Understanding the right data elements to track and maintain in order to monitor the effectiveness of the business relationship  Assessing the readiness of an organization to implement EBRM strategy from a people, process and technology standpoint  Identifying the right technology based on the business needs  Understanding the change management practices of the firm  Developing a roadmap to implement an EBRM technology solution Deloitte Approach 1 2 3 4 Understand “As-Is” Business Identify Risk Areas and Gaps Develop Improvement Build EBRM Solution Roadmap Relationship Landscape based on Benchmarks Opportunities - 75 -

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