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Love Your Sourcing Strategy By Letting It Go

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Love Your Sourcing Strategy by Letting it Go

Access this presentation where our expert speakers will guide you on how you can responsibly put sourcing into the hands of distributed buyers and empower them to select their suppliers and scale procurement’s impact.

Learn to:

1. To identify the most common fears procurement experiences in the wake of decentralized buying
2. To understand the root cause of those fears so they can be overcome
3. To articulate the advantages (for procurement and the enterprise) of effectively managed distributed buying

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Love Your Sourcing Strategy By Letting It Go

  1. 1. Access an on-demand webinar on this topic here: https://zyc.us/2FaQMK3 Love Your Sourcing Strategy by Letting it Go
  2. 2. Love Your Sourcing Strategy by Letting it Go Kelly Barner and Richard Waugh
  3. 3. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Today’s Presenters Kelly Barner Buyers Meeting Point / Palambridge Richard Waugh Zycus, VP Corporate Development
  4. 4. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay The Psychology of Fear
  5. 5. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Fear as a Motivator • Hormesis: a phenomenon by which something that could significantly impair or even kill you in high doses can make you stronger in low doses • Better advance planning • Willingness to consider more innovative (if untried) solutions • More perceptive to signs of trouble • Actively open to soliciting and accepting offers of help • Amygdala: where fear lives in the human brain, constantly on guard to ensure our survival • Fear is the most primitive and powerful human emotion • Inability to prioritize efforts • Defensive posturing – unwilling to consider new ideas or make changes • Distrust of others’ help and suggestions
  6. 6. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Advantages of Decentralized Procurement
  7. 7. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Breaking Our Fears Apart  Common types of procurement fear • Loss of savings • Loss of standardization • Loss of control • Loss of procurement’s role  Source of the fear in procurement’s ‘evolution’  Positive and negative responses to the fear  Advantage to overcoming the fear  Real life examples
  8. 8. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Fear: Loss of Savings  Source: procurement’s primary mandate, “food and shelter”  Positive response: ensure that distributed buyers understand why they need to save and receive quantifiable reinforcement  Negative response: savings at the expense of all other benefits, including innovation and competitive advantage  Advantage to overcoming this fear: improved relationships and greater value creation
  9. 9. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Sourcing FTEs Focused on Higher Spend/Long Cycle Categories
  10. 10. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Half of Sourcing Cycle Time Spent on Evaluation and Selection
  11. 11. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Quantifying Benefits of Sourcing Process Automation • Reduce Overall Sourcing Cycle Time 30% • Standardize Process for More Consistent, Repeatable Results • Increase Process Transparency, Data Accuracy
  12. 12. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Best Practice: Sourcing Portfolio Management – Concierge to Self- Service • Focus Sourcing FTEs • Collaborate Globally • Standardize Process • Self-Service Sourcing • Ensure Compliance • Standardize Process
  13. 13. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Phase 1 Identify Opportunities Phase 2 Develop Category Profile & Strategy Phase 3 Prequalify Suppliers & Conduct RFX Phase 4 Develop & Negotiate Agreement Phase 5 Implement Agreement Standardizing the Sourcing Process for Strategic Spend
  14. 14. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Standardizing End-User, Self-Service “Quick Source” for Tail Spend Tactical, Spot Buys – 3 Bids & Buy Create and Invite New Suppliers on the Fly Create RFQ Inquiry on Single Screen
  15. 15. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Fear: Loss of Standardization  Source: traditional reliance upon repeated processes flows  Positive response: ensures critical steps are not skipped  Negative response: lack of all flexibility, fearing a “slippery slope”  Advantage to overcoming this fear: new approaches to managing spend, building supplier partnerships, and innovating
  16. 16. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Best Practice: AI-Driven Source-to-Pay Yields Better Decisions Contract Management Spend Analysis Supplier Management eSourcing Procure-to-Pay Financial Savings Management Spend Mining Spend Monitoring Guided Buying“SmartAssist” Suggestions Supplier Risk Monitoring
  17. 17. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Fear: Loss of Control  Source: positioning procurement as responsible for governance and compliance  Positive response: articulate the freedoms that are beneficial to the enterprise v. those that are potentially damaging/risky  Negative response: Becoming more controlling, especially when a natural ‘easing’ has started to take place  Advantage to overcoming this fear: remove procurement from ‘command & control’ role
  18. 18. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Best Practice: Striking Proper Balance Between Control/Efficiency Source: Hackett Group P2P Performance Study 2017 For Some Purchases a 2- Way – Not the Traditional 3-Way Match is Optimal. How Can Approval Workflows and Buy/Pay Processes be Optimized Based On: • Purchase Type (Opex/Capex, Project) • Category • $ Amount • BU/Geo/Dept.
  19. 19. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay How It Works: Configurable Workflows Drag and Drop creation of category- specific workflows to govern buy/pay process Reduced cycle time due to comprehensive, automated approval workflow Real-time, graphical view of approval status with automated alerts and reminders
  20. 20. 20© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pa Top Performers are more than 3X more likely to be “very effective” in driving requisitioners to the preferred buy/pay channel – what best practices account for the disparity? Best Practice: Make it Easy for End-Users to Follow the Process Source: Hackett Group P2P Performance Study 2017
  21. 21. 21© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pa GUIDED BUYING AI suggests relevant categories based on user’s natural language search term and organizational buying patterns Steer users to approved suppliers and Buy/Pay channel for the category Invoke category-specific workflows, map to GL account and default bill to/ship to based on user profile How It Works: Guided Buying
  22. 22. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Fear: Loss of Procurement’s Role  Source: increased automation  Positive response: take as an opportunity to re-create procurement’s role  Negative response: territorial response, hoarding information, blocking access to suppliers  Advantage to overcoming this fear: opening the capacity to take on new roles, responsibilities, and project types
  23. 23. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Best Practice: Create Customer-Centric Procurement Role
  24. 24. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay How it Works: Request Management Gives Users a Portal to Procurement Reject inappropriate requests eSourcing Contract Management Project/ Savings Management Supplier Management/ P2P ProcurementApproverRequester Sends requests Approves requests Manages and Processes Requests Create Contract Create Sourcing Event Onboard a Supplier Pre-purchase Request Supplier Performance improvement PO Amendment Contract Amendment Task Assignment Initiating a Project Price or terms change request by Supplier Configurable Flexiform Configurable Approval Workflow Conditional Logic / Rules Calculated Fields Delegation Comprehensive Reporting Process Use Cases Features
  25. 25. Need more insights? Access an on-demand webinar on this topic here: https://zyc.us/2FaQMK3
  26. 26. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay  Automated request management and tracking triages procurement’s work queue – empowers and engages end-users  Sophisticated, conditional approval workflows (>175 conditions, 4-5 approvals per form)  Conditional logic integrates IT security reviews with on-boarding requests  Supports multiple request use cases, e.g. negotiate contract, run sourcing project, on-board supplier, capital appropriation project approval  Seamless process flow from request to execution – e.g. approved request initiates activity in target module  Also supports non-procurement (Hotel, Facilities, HR, IT) requests Extending Beyond Procurement Users Integrating Business Processes Customer- Centric iRequest - Porsche Customer-Centric Case Study: Request Management
  27. 27. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay  How can Procurement more effectively measure and communicate performance and value delivered to the business?  In particular, how can Procurement align more effectively with Finance to ensure value contributions are acknowledged?  Which processes/platforms can enable Procurement to create credibility with the C-Suite and sign- off from the CFO on value delivered? Source: Key Issues Study, The Hackett Group, 2018 Best Practice: Re-define Procurement Role by Measuring Value
  28. 28. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Challenges • Most organizations tracking with spreadsheets/home- grown tools • Existing tools lack Finance collaboration and approval workflow • No standard definition of savings calculation and allocation methods exists, and lifecycle tracking visibility is missing Solution Align: • Import baseline spend from Spend Analytics • Establish Finance-approved spend baseline and savings calculation formulae on common, enterprise platform Validate: • Employ workflow to obtain validation from stakeholders • Map savings projects to stakeholders and approvers Analyze: • Segregate savings by type, e.g. cost reduction vs. avoidance, and accounting period • Identify savings by project/sourcing strategy • Map savings impact to P&L, Balance Sheet, Cash Flow Source: Gartner/Rutgers Survey How it Works: Financial Savings Management Challenges/Solutions
  29. 29. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Case Study: Financial Savings Management 600+ Savings Projects Initiated $40-50M Annual Incremental Savings Realized To Date 000’s of Users 40 Power Users Create Savings Projects and Collaborate with 000’s of Stakeholders (600 Financial Analysts Alone) 25% Productivity Gain Category Managers Save 2 Hours per Day from Data Gathering Tasks Single Version of Savings Truth  Standardized calculation/allocation formulae  Full audit trail and version control  Secure user access by BU/Div/Dept/Cat  Fx conversion and multi-lingual UI  Flexible/multiple savings types/definitions  Approval workflow sign-off by budget owner and Finance  Dashboard analytics and Financial Statement impact reporting: P&L/Budget/Balance Sheet,/Cash Flow Savings Tracking for Non-Procurement Platform applied to non-procurement savings projects (e.g. Reorg, ERP Consolidation, M&A), Budgeting/S&OP, Cash Flow Forecasting iSave - Qualcomm
  30. 30. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Questions? &
  31. 31. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay REGISTER NOW
  32. 32. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Speaker Contact Information Kelly Barner Buyers Meeting Point / Palambridge Twitter: @BuyersMeetPoint Email: kelly@buyersmeetingpoint.com Richard Waugh Zycus, VP Corporate Development Twitter: @Zycus Email: richard.waugh@zycus.com
  33. 33. Need more insights? Access an on-demand webinar on this topic here: https://zyc.us/2FaQMK3 Follow us on social media for more updates! Twitter | LinkedIn | Google+ | Xing
  34. 34. +1 866 563 9219 info@zycus.com www.zycus.com Thank You

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