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Raising the Bar in Procurement Through Digitization

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As businesses across virtually every industry face pressure to remain on the cutting edge of technology to maintain competitive advantage, the role of today’s CPO is about going beyond the numbers.

View this presentation on "Raising the Bar in Procurement Through Digitalization" and learn how the procurement digitalization is driving significant improvements. Including:

1. Pointers for creating a digitalization roadmap
2. Success in digitizing business relationships with suppliers
3. A huge leap forward in procurement efficiency and control.
4. A dramatic improved invisibility and controls to identify savings and reduce the risk of fraud.

Published in: Technology
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Raising the Bar in Procurement Through Digitization

  1. 1. RAISING THE BAR IN PROCUREMENT THROUGH DIGITIZATION Access our On-Demand Webinars and gain knowledge on Procurement Thought Leadership here: https://zyc.us/2q0Kd88
  2. 2. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Today’s Presenter Kanishka Ghosh, Director – Product Management, Zycus Inc. Email: kanishka.ghosh@zycus.com  Mr. Ghosh heads the Product Management team for Zycus’ Source- to-Pay Suite. He has been working in the enterprise product management space for more than a decade, primarily involved in designing best-of-class applications. He has been instrumental in successful procurement application adoption by a large number of Global 1000 organizations.  He has created numerous whitepapers, solution documents and patents and has been actively evangelizing world class procurement practices in different industry events.  Previously, he was responsible for managing a number of products in Oracle’s EBS Advanced Procurement product family.
  3. 3. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Setting the Context: The Digital Journey Where it all started Electronic records filing and retrieval. Bringing IT tools to support manual processes Process optimization and value driven technology adoption. Leveraging AI / ML / Cognitive computing The Digital Transformation Journey
  4. 4. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Why is the Digital Journey Essential for the Procurement Organization Directly or indirectly driven by technology adoption Source: Zycus Pulse of Procurement Study, 2017
  5. 5. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Contributing to Cost Reduction Percentage procurement process cost reduction attributable to digital transformation Source: The Hackett Group, Digital Transformation Framework
  6. 6. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay And drives ROI for the Procurement team Source: Zycus Pulse of Procurement Study, 2017 % respondents claiming very high RoI from their technology investments A very direct co-relation of technology adoption and performance on critical procurement benchmarks
  7. 7. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay But the benefits extends beyond the cost savings Decision Support: New Insights And Intelligence Shift Effort: Commercial And Supply Relationships Business Alignment & Communication: Enhance Agility And Internal Customer Experiences Value Beyond Cost Savings: Enhanced Value Above Spend Cost Reduction Source: The Hackett Group, Digital Transformation Framework Digital Transformation In Procurement: Improving customer experiences, operational efficiency, agility and business value contribution by fundamentally changing the way procurement services are delivered using digital technologies as the enabler of holistic transformation
  8. 8. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Defining ‘Procurement Digital Transformation’ Source: The Hackett Group
  9. 9. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Embracing Digital Transformation: The new Blueprint • Embrace a fail fast philosophy • Execute pilots in targeted areas and scale up rapidly • Shift focus from discrete projects to continuous transformation • Move beyond just automating existing processes • Define completely new ways of doing things • Enable with new technologies (e.g., cloud, big data, RPA, social media) • Move beyond internally focused transformation • Design from the “outside in”, starting with customer needs • Design new ways to engage the customer (internal and external) Source: The Hackett Group
  10. 10. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay New technologies will drive the Digital vision Source: 2018 Key Issues Study, The Hackett Group
  11. 11. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Technology Expected as Biggest Change Driver “Traditional” Responses Include: - Strategic Transformation - Supplier Relationship Management - Global Competitiveness - Outsourcing
  12. 12. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Request Management Project/Savings Management Spend Analytics Sourcing Contracts Supplier Management Supplier Performance eProcurement eInvoicing Request and track Contract creation Create events from requests Create, track and manage sourcing/savings projects Review past performance before inviting suppliers Create sourcing projects Convert PRs to RFP and award POs Validate contract terms for catalogs, PO to contract matching Update preferred vendor lists Refer master data for creating invoices Review supplier history Create, track and manage contracts Transfer Attachments, T&Cs, Pricelist for Contract creation Create and invite potential suppliers Control Layer Strategic Layer Operational Layer Refer supplier data Review supplier scores before ordering Connecting the Dots….for a Single Version of S2P Truth
  13. 13. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Technology Use Cases: Automated Invoice Processing & Reconciliation A large # of paper invoices + Invoice & PO discrepancies requires manual intervention Digital Procurement system receives, scans and creates invoices. AI driven automation looks at attributes to provide resolution or suggest next steps Matched and processed for Payment. Reduces processing time and manual intervention Customer Case Study: A large global hospitality provider
  14. 14. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Technology Use Cases: Supplier Management Supplier Master has hundreds of thousands of suppliers. Tracking quality, performance and timely action are critical Digital Procurement system identifies missing information or updates pending, tracks quality, delivery KPIs and sends notifications & manages escalations System is always kept up to date and potential high risk situations are identified and averted Customer Case Study: A large Automobile parts manufacturer
  15. 15. 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 Financial Savings Management Challenges/Solutions
  16. 16. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay 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 Case Study: Financial Savings Management (Qualcomm)
  17. 17. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Poll Question: How prepared are we for digital transformation?  Question: As the procurement function within your organization, do you have the resources & competencies to execute on your digital transformation roadmap?  Options: • Strongly Agree • Agree • Do not Agree
  18. 18. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay But are we ready? Source: 2018 Key Issues Study, The Hackett Group
  19. 19. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Technology roadmap is very different from real Adoption  Ensure end user adoption • Right selection of tools • Training • Business process mapping • Cross-functional ownership  Define RoI and KPI targets  Actionable plan  Senior management focus
  20. 20. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Human capital & enablement becomes more critical than tech. adoption Zycus University ~ 500 webinars in an year ~ 1 ‘on-request’ training session / day ~ 200 product videos ~ 70% of active users trained every year 2016 2017-18 (Projected) Percentage of companies ranking issues as “high risk” Source: The Hackett Group, 2017 The 6 skills that are crucial for today’s procurement workforce: • Business acumen • Relationship management • Supply risk management expertise • Strategic mindset • Data analysis and modeling • Savings and financial analysis
  21. 21. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Zycus SmartAssist
  22. 22. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Zycus has been Recognized as a LEADER in Gartner’s 2013, 2015 and 2017 Magic Quadrant for Strategic Sourcing Application Suites Zycus : The Consistent Leader
  23. 23. Questions?
  24. 24. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Disclaimer This document contains Zycus’ product plans, designs, approaches, product prototypes that are used by Zycus’ product management team to explain Zycus’ product vision. These Zycus’ product related designs and ideas and other contents mentioned herein are tentative in nature. Zycus reserves the right to make changes without further notice to any products to improve reliability, function, or design. and further Zycus does not commit to deliver any of the product features or changes thereof mentioned in this document. You acknowledge that no promise, representation, warranty or undertaking has been made or given by Zycus in relation to the profitability of or any other consequences or benefits including any purchase or planning decisions to be obtained by relying on the contents of this document
  25. 25. Need more insights? Access our On-Demand Webinars and gain knowledge on Procurement Thought Leadership. https://zyc.us/2q0Kd88 Follow us on social media for more updates! Twitter | LinkedIn | Google+ | Xing
  26. 26. +1 866 563 9219 info@zycus.com www.zycus.com

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