The Impact of Cloud on Procurement Presentation 30th may 2012


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The Impact of Cloud on Procurement Presentation 30th may 2012

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The Impact of Cloud on Procurement Presentation 30th may 2012

  1. 1. The Impact of the cloud on procurement: A Breakfast briefing on how new technologies are changing the way companies do business30th May at the ITC Livery Hall London
  2. 2. Agenda• Welcome Dom O’Riley Andomise• Views from the bridge Andy Mathieson Andomise• Sourcing in the cloud Nick Drewe/Alun Rafique Market Dojo• P2P Trends Tony Dawson Coupa• Q and A Panel
  3. 3. The Cloud: A disruptive technology? Some figures…• Gerhard Gschwandtner: publisher of Selling Power, predicted that the number of sales people in the US would fall from 18m to 4m by 2020 – “Death of a Salesman: Bob Apollo 2012”• A Recent Gartner report projected that 85% of interactions between businesses will be automated, without any need for human interaction• 70% of the buying process takes place before the buyer and salesperson meetRoles and functions are changing and how we adapt will determine howsuccessful we are as individuals as well as companies
  4. 4. A View from the Bridge Andy Mathieson Chairman Andomise
  5. 5. What is it? Cloud computing refers to the delivery of computing and storage capacity as a service to a heterogeneous community of end-recipients. ……….. wikipedia
  6. 6. What Changes for (ICT) Vendors?• Planned subscription revenue vs system/licence sale + annual maintenance• Salesforce engage later in the sales cycle with you (if at all).• Marketing must inform the buyer at all points of research & need• Cost of sale driven lower• “Zero touch” sales & service
  7. 7. Contract Suggestions1. Get a wet-ink contract:2. If you can, negotiate:3. Termination: Protect & Safeguard4. SLA:5. Be sure you can get out easily: Extracts from The Cloud | April 30, 2012 | | US
  8. 8. Contracts6. Make sure you can’t be bullied:7. Demand full disclosure:8. Guard against mergers and acquisitions:9. Maintain your right to audit:10. Know who you’re dealing with: The Cloud | April 30, 2012 | | US
  9. 9. Sourcing in the cloud 30th May 2012 Nick Drewe, Alun Rafique
  10. 10. • Who are we?• Cloud Software o Adoption o E-Sourcing
  11. 11. Who?• New UK company based in the South West, focusing on procurement “software-as-a-service”• Founded by Bristol graduates with experience in engineering, consultancy, software development and procurement• Currently offering e-Sourcing software with the following characteristics:
  12. 12. • Who are we?• Cloud Software o Adoption o E-Sourcing
  13. 13. Software adoption - CostPay per use instead of ownership is not a new concept:• Power by the hour • Power-by-the-Hour is a term coined by Bristol Siddeley in the early 1960s• PFI initiatives • such as the FSTA – Future Strategic tanker Aircraft Cloud software -Pay for what you use.
  14. 14. Software adoption - adaptation• Traditional software o clunky o led by technicians o You need to adapt• New cloud solutions o look at best practice o customisable o Adapts around youCloud software - Better fit
  15. 15. Software adoption - Usability Traditional Software implementations - Where are the benefits? End Users Managers Directors Usability? Visibility Reporting Efficiency? Control... Auditability Difficulty – uptake? New Cloud Solutions - little training, easy to use, fast ROI - Users want to use it Cloud software - Bringing benefits to the end user
  16. 16. • Who are we?• Cloud Software o Adoption o E-Sourcing
  17. 17. E-Sourcing in the cloud The trends we have seen: •A shift away from consultancy-based services •Cloud applications used on top of ERP •Inexpensive proof of concepts becoming the norm •SMEs also want a piece of it •Accessibility and on-demand opens up new markets •Customers get a solution that fits around them
  18. 18. E-Sourcing in the cloud Recommendations •Increasing awareness and easy technology is reducing barriers •Cloud enables a low risk, affordable way to try new approaches •Best of breed is a viable alternative to an enterprise suite •Use proof of concept to fund greater roll-outs •e-Sourcing is a commodity
  19. 19. Aberdeen Group 2012
  20. 20. The Impact Of Cloud OnProcurementTony DawsonVice President, Coupa Software
  21. 21. Topics1. Traditional Procurement Role2. Impact of Cloud3. Key Takeaways
  22. 22. The Traditional Procurement Role - EnforcerSpend and Policy Investigators The Gatekeeper
  23. 23. Traditional Approval Chain • Based on chain of command • Budget owner often not involved • No domain knowledge of purchase • No accountability
  24. 24. Urgent Approvals Information about purchases not readily available No time to make informed decision Lost negotiation leverage
  25. 25. Lack Of Visibility Unable to block redundant spend across departments Inability to leverage volume
  26. 26. Cloud Changes Procurement Role -Orchestrator
  27. 27. How Does It Change The Role?Key enablers to shift the mindset are theability to-• Map approvals to budget ownership• Manage by exception• Gain early visibility in the process
  28. 28. Map Approvals To Budget Ownership Key Benefits • Drives accountability • Involves domain experts in decision makingOwners Provide What is being purchased What part of organization for What project/product for new product development
  29. 29. Manage By Exception Key Benefits • Focus on high value tasks • Promotes responsible spending cultureEmpower Employees Rationalized approval limits Self approvals for low $
  30. 30. Early Visibility In The Process Key Benefits • Spend avoidance • Gain negotiation leverageLeverage Technology Insert yourself early in the process as an observer Ready access to critical information e.g. spend analytics, supplier info
  31. 31. Cloud Lowers TCO For Technology Old Model IT Support Cloud Maintenance Upgrade Professional Services Software Fees Year 3 Year 3 IT Support Maintenance Professional Services Software Fees Year 2 Year 2 Implementation Hardware Database/Middleware Software Fees Year 1Year 1
  32. 32. Final ThoughtsCloud enables Procurement to:• Orchestrate rather than play cop• Stretch comfort limits to be effective• Enjoy the benefits including lower TCO
  33. 33. Q and A• Panel – Andy Mathieson Chairman Andomise Ltd – Nick Drewe Director Market Dojo – Alun Rafique Director Market Dojo – Tony Dawson VP Alliances Coupa – Nick Bacon Managing Director EVR