[SirionLabs Webinar] How Vestas is Driving Winds of Change in IT Supplier Management

© 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
A WEBINAR BY SIRIONLABS FEATURING IACCM AND VESTAS
Aug 23, 2017
How Vestas is Driving Winds of Change
in IT Supplier Management

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© 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.
THE HOUSEKEEPING ITEMS:
• Webinar slides, recording, and Q&A will be emailed
• Enter questions in chat on webinar panel
Before we get started

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AJAY AGRAWAL
Founder and CEO
SirionLabs
ajay.agrawal@sirionlabs.com
TIM CUMMINS
President and CEO
IACCM
tcummins@iaccm.com
HENRIK KRARUP STEFANSEN
Senior Director, Global IT Sourcing
Vestas
HNST@vestas.com
Meet the speakers

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IACCM insights on effective
management of IT
outsourcing contracts
Overview of Vestas' IT
outsourcing journey
Why integrated supplier
management is important for
success in IT outsourcing
How Vestas leverages Sirion
to drive higher value in its IT
outsourcing program
What will be covered today

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The International Association for Contract & Commercial Management enables organizations and professionals to achieve world-
class standards in their contracting and relationship management process and skills.
For more information, visit www.iaccm.com
SirionLabs is transforming the way buyers and suppliers of complex services engage with each other using its SaaS platform –
Sirion. Leveraging automation and advanced analytics, Sirion helps buyers and suppliers create higher value and more successful
relationships, while effectively managing cost and risk in strategic services engagements.
For more information, visit www.sirionlabs.com
About the organizers

Strategic requirements
• Speed
• Flexibility
• Outcome-focused
• Value driven
• Adaptable
• User-based

Enabling characteristics
• Digitized
• Adaptive standards
• On-demand
• Agile
• Integrated networks

Key principles
• We no longer buy things: we buy outcomes
• Negotiations will be based on principles, not terms
• Major projects and programs must be handled
through ‘virtual' enterprises
• Businesses need a ‘trading relationship gearbox’
• Contracting must be streamlined
• Cut the cost of production
• Raise the quality of performance

It’s time to re-think the contracting process!

10Vestas Proprietary
How Vestas is Driving Winds of Change in
IT Supplier Management

Vestas in brief
The only global wind energy company
We employ more than 22,000
people worldwide and have
more than 35 years of
experience with wind energy
+ 22,000
We have more than 38,000
turbines under service
agreements, or around 73 GW
+ 38,000
We have more than 60,000
turbines or more than 83 GW
cumulative installed capacity
in 75 countries worldwide
spanning six continents
+ 60,000
Vestas revenue for Q1
2017 was EUR 1,885m
€ 1,885m

IT is central to our business
Strong IT capabilities are critical
Vestas’ high performance, data-heavy
computing capabilities are incorporated
into our business offerings.
• Determining the optimal turbine
placement
• Analyzing weather data and wind
patterns
• Monitoring wind turbine performance

Global IT’s strategy house
Agility, Quality & Cost supported
by Outsourcing
Increased maturity & focus on value creating activities supported by Outsourcing
The role of outsourcing

Vestas’ journey into IT outsourcing
First-time outsourcing now driven by IT strategy
100%
In-house IT
2011
2011 20152012 20142013
Application Development
(HCL)
2016
Infrastructure
Services
(NNIT)
AMS
SAP Basis
ERP Ops
(HCL)
EUC
Service Desk
Onsite
(Wipro)
Comm.
Services
(Various)
Office 365
(MS / NNIT)
Sourcing Strategy
V1
Sourcing Strategy
V2
Tactical, reactive sourcing driven by
changes in the environment
Strategic, proactive sourcing driven by
IT Vision & Strategy
2017
Preparing for
2nd generation
of outsourcing

Supplier management
Where we started
Manual processes built around disjointed systems were both ineffective and non-scalable

Key challenges
• Keeping the contract updated with change requests (complexity
drastically increased)
• Ensuring that all stakeholders are using the latest version of the
contract and interpreting the terms in a consistent way
• Visibility of upcoming obligations
• Monitoring supplier performance against agreed service levels and
obligations
• Validating invoices for accuracy before making payments
• Moving away from a subjective assessment of relationships
• Reporting effectively and efficiently to executive management
Managing the volume and complexity of contracts manually became unfeasible

Vestas’ sourcing context & objectives
And the importance of integrated supplier management
SIAM a critical element of current &
future success
A limited, but tightly integrated
vendor eco-system
Partnership orientation based on
open collaboration & competition
Still building supporting capabilities
& maturity
Significant scope of sourced services‘Build & Run’ largely outsourced
Coordination critical across a number
of interfaces
A transparent & shared
‘One Version of the Truth’ required
Professional delivery non-negotiable
(market  Global IT  Customers)
Processes, governance & reporting
need tool support
Context & objectives Importance of integrated management

Technology backbone for integrated supplier management
• Contract
interpretations
• D & O tracking
• SLA reporting
• Invoicing (incl.
credits &
earnbacks)
• Relationship
health
Vestas
desired a
unified
view across
Contract,
Delivery,
SLA and
Invoice.
Selection criteria
• Ability to
automate across
multiple data
sources
• Organisational
flexibility/
Operational
support
Ability to map
complex frame
agreements
‘One Version of
Truth’ for Vestas &
key suppliers /
partners
Process support
for increased
maturity &
quality of
execution
Cost-effective,
flexible solution
(TCO, T&Cs, etc.)
Sirion
allows
Vestas to
have a
unified
view.

True alignment with suppliers
Both parties are now tightly aligned to the underlying contract
VESTAS
SUPPLIERS
Single Version of
the Truth
CONTRACT
PERFORMANCE
INVOICES
RELATIONSHIP

Analytics and insights
Dummy Data for Illustration Purposes
Dashboards

Dummy Data for Illustration Purposes
Analytics and insights
Dashboards

Reflecting on the journey so far
Kick-off
Migration of
Suppliers and
Contracts
Extraction of
Service Levels
and KPIs
Integration of ITSM
data
+
Onboarded suppliers
start reporting
performance on Sirion
Access to
suppliers for SL,
obligation and
invoice data
Invoice
Validation
April 2015
Go-live
300% ROI
70-80% of all
IT
Outsourcing
Spend
Managed on
Sirion
Jun 2015 Aug 2015 Dec 2015 Nov 2016
Key Implementation Milestones
Internal process
alignment and
implementation

Reflecting on the journey so far
Contract Spend
Under Management
€170M
Bottom-line: Improved business outcomes, savings and relationships, but don’t underestimate
internal Change Management & Process training
• Clear visibility and understanding of contractual obligations and service levels for true alignment
• Automated monitoring and validation of obligations, service levels and invoices
• Integrated view of supplier engagements across enterprise functions
• Improved collaboration with suppliers through better management of issues and action items
Benefits, impact and lessons learned
70-80%
IT Outsourcing Spend
Managed on Sirion
300%
Return on Investment
Realized in Year 1

The road ahead
Full of promise and possibilities
• Inclusion of global Print, Telecom and
Consulting services contracts
• Transition of high-volume tier 2 IT services
contracts with focused governance
objectives
• Expansion to other Vestas business units,
e.g. Sales & Services

© 2017 SirionLabs. The contents of this presentation are confidential.
Source: Forrester
Services dominates
enterprise sourcing
spend today
Purchased services as %age of aggregate
procurement spend (2015)
Industry sectors which are
at or above the median, in
particular, need a solution
that combines P2P hygiene
with deeper governance of
services suppliers
Services
$21.6
Direct Materials
$7.5
Indirect Materials
$5.7
Energy
$1.6
Global business purchases 2015 ($T)

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RELATIONSHIP
MANAGEMENT
PERFORMANCE
MANAGEMENT
ENTERPRISE
SILOS
TECHNOLOGY
&TOOLS
FINANCIAL
MANAGEMENT
FINANCIAL
MANAGEMENT
S E RVIC E
DE LIVE RY
RISK
MANAGEMENT
CORPORATE
RISK
LEGAL /
CONTRACTS
RELATIONSHIP
MANAGEMENT
Strategic supplier lifecycle
PROCUREMENT
WHAT WAS PROMISED? WHAT ACTUALLY HAPPENED?
WHAT WAS
INVOICED?
PRE-SIGNATURE
PROCUREMENT
PROCESSES
CONTRACT
MANAGEMENT
PRE-CONTRACT
(6-12 MONTHS)
SERVICE
DELIVERY
INTEGRATION THROUGH REST API LAYER
FINANCIAL
MANAGEMENT
PERFORMANCE
MANAGEMENT
RISK
MANAGEMENT
CONTRACT
MANAGEMENT
RELATIONSHIP
MANAGEMENT
CONTRACT
AUTHORING
Sirion – Integrated Enterprise Platform for Supplier Governance
Supplier governance is broken, causing value leakage of 15-20% of ACV………..

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….and P2P systems are not ‘deep enough’ to address this problem
P2P hygiene required for all suppliers
REGULATORY
AND POLICY
COMPLIANCE
AI/NLP DRIVEN
CONTRACT
METADATA
CAPTURE
(OBLIGATIONS,
SL/KPIs, PRICING,
RESOURCE UNITS)
CHANGE
MANAGEMENT
OBLIGATION
COMPLIANCE
AUTOMATED
SERVICE LEVEL
MGT.
CREDITS &
EARNBACKS
PREDICTIVE
INVOICE
AUDITING FOR
SERVICES
Deeper functionality required
for strategic services suppliers
DYNAMIC RISK
ASSESSMENT
AUTHORING OF
COMPLEX
CONTRACTS
(DOCUMENT
FAMILIES)
CAPTURE OF KEY
CONTRACT DATA
DURING
AUTHORING
SUPPLIER
PERFORMANCE
PxQ INVOICE
AUDIT
RISK
MANAGEMENT
RFx MGT. CONTRACT
MANAGEMENT
REVERSE
AUCTION
REQ.
GATHERING
CONTRACT
SIGNATURE
SPEND
ANALYSIS
PO MGT. INVENTORY
AND
CATALOG
RELATIONSHIP
MGT.
SUPPLIER
INFORMATION
CONTRACT
AUTHORING
ISSUES,
ACTIONS,
DISPUTES MGT.
GOVERNANCE
FORUMS

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Sirion’s end-to-end solution for effective supplier governance
DOCUMENT REPOSITORY
OBLIGATION CAPTURE
DOCUMENT CHANGE MANAGEMENT
CONTRACT INTERPRETATIONS
SERVICE LEVEL MANAGEMENT
OBLIGATION COMPLIANCE
SOW/WO/PO MANAGEMENT
CREDITS & EARNBACKS
INVOICE AUDITING
SPEND POOL MANAGEMENT
FINANCIAL ANALYSIS AND PLANNING
VALUE ASSURANCE
GOVERNANCE FORUMS
ISSUE/ACTION ITEM MANAGEMENT
GOVERNANCE PROCESS HEALTH
SURVEY MANAGEMENT
REGULATORY COMPLIANCE
POLICY COMPLIANCE
SUPPLIER AUDITS

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Computational
Objects
Key Risks
• Hierarchical storage
• Advanced search capabilities
• Change management
Contract Repository
Expected
Outcomes
Base Charges
Rate Cards
SL Credits
Earn Backs
KPI Calculations
Pricing Adjustments
Regulatory
Liability
Indemnity
Insurance
Obligations
Milestones
Service Levels
Deliverables
Contract Authoring
Bringing contracts to life - 1

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Smart contract repository

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Bringing contracts to life – 2 – An ERP-ready CLM
COMPUTATIONAL
OBJECTS
KEY RISKS
Algorithms
EXPECTED
OUTCOMES
DATA FROM ENTERPRISE SYSTEMS
Workflows
Workflows
Reports and Analytics
PERFORMANCE
INVOICECONTRACT

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Unified control over outcomes and payments

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With Sirion, organizations have reduced services invoices by 9.78% and reduced
manual governance cost by 44%
$1.75B
INVOICE AMOUNT
VALIDATED
450,000+
TOTAL OBLIGATIONS
MANAGED
$12.3B
TCV UNDER MANAGEMENT
250,000+
SUPPLIERS ON SIRION
49.1%
39.7%
9.3%
1.9%
Consumption/Usage Errors Contract Deviation Errors
Computational Errors Delivery Failures
$172M
Sirion has delivered hard savings of over $172M
Hard savings = Invoicing discrepancies successfully enforced (see major types below)
44%
reduction in
governance cost
through automation
9.78%
hard savings delivered
through invoice
reduction

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Unprecedented intelligence and insights

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[SirionLabs Webinar] How Vestas is Driving Winds of Change in IT Supplier Management

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