Procurement Intelligence

7,253 views

Published on

1 Comment
2 Likes
Statistics
Notes
  • Procurement Intelligence (PI) ensures you have up -to-date relevant information to aid procurement decision making. Procurement Intelligence should not be a one -off exercise but a continuous, including opportunistic information gathering about suppliers, geopolitics, economics, the competition as well as the supply networks. The PI must feed into the overall procurement information system of an organization (PIS) for analytical purposes that will eventually lead to better decisions and risk mitigations.
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
7,253
On SlideShare
0
From Embeds
0
Number of Embeds
23
Actions
Shares
0
Downloads
172
Comments
1
Likes
2
Embeds 0
No embeds

No notes for slide

Procurement Intelligence

  1. 1. Procurement Intelligence ­ the  fuel that accelerates ROI and  savings
  2. 2. Defining Procurement Intelligence  “The skills, tools and  and practices used to  help a business acquire an enhanced  understanding of its commercial context  to support better buying and sourcing  better buying and sourcing decision­making.”  2 
  3. 3. Agenda  §  Defining “Procurement Intelligence”  §  Why is procurement intelligence so  important  § Using it to your advantage  Using it to your advantage  §  Building procurement intelligence  framework & adding intelligent plug­ins framework & adding intelligent plug  3 
  4. 4. Neil Deverill  Chairman of the Procurement Leaders Advisory Board Chairman of the Procurement Leaders Advisory Board 
  5. 5. The Headlines  5
  6. 6. Introduction  §  Without correct data & information procurement is no  more than a lottery  §  Missed sourcing opportunities & miscalculated  sourcing risks lead to:  §  Excessive operating & overhead costs  §  Exchange rate penalties & unseen derivative exposure  §  Technology lag  §  Loss of critical supply chain capacity  §  Procurement intelligence is too important to overlook  Procurement intelligence is too important to overlook 6 
  7. 7. Spend Analysis: Who, how much & with  whom for what?  §  Spend analysis is fundamental and a starting point if  you’re spending too much  §  Improve leverage for price & other benefit advantages  §  Control off­contract spend  contract spend – uninformed and maverick  §  Remove duplicate specifications – save cost & inventory  Remove duplicate specifications  §  Optimise payment terms – synchronise to cash flow needs  §  Consolidate spend to increase your customer ranking  §  Use improved transparency to build internal relations  Use improved transparency to build internal relations 7 
  8. 8. Supplier Intelligence  §  Is your supplier financially sound?  §  Ensure clarity of your future requirements to assist supplier  planning  §  Are your suppliers and their supply chains structurally stable?  §  Ask suppliers about their marketing strategies & where you fit into  them  §  Are your suppliers’ business strategies compatible with yours?  §  Senior management can flush out important facts during supplier  Senior management can flush out important facts during supplier visits  8 
  9. 9. Supplier Market Intelligence  §  Are your suppliers’ operations/sourcing strategies cost  competitive?  §  How will economic changes impact demand for your key  commodities?  §  Have your competitors recently recruited commodity traders?  §  How will regional political developments impact your business?  §  What is your foreign exchange exposure?  §  Can regional development plans assist your suppliers/ create new  Can regional development plans assist your suppliers/ create new suppliers?  9 
  10. 10. Using Intelligence to Your Advantage  §  Ensure that you create intelligent business processes  §  Create nodes for information collation & systematic dissemination  §  Use good supplier relations for ‘me too’ solutions  Use good supplier relations for ‘me too’ solutions – avoid  recreation  §  Use intelligence cross­functionally  functionally  §  Ensure collective actions arise from intelligence  §  Plan how to use intelligence to motivate your suppliers  Plan how to use intelligence to motivate your suppliers 10 
  11. 11. Executive Summary  §  Timely use of Procurement Intelligence turns amateurs into  serious players  §  Economic and geopolitical events continually create new  opportunities that can provide competitive advantage  §  It is probable that some competitors know more than you do  §  Internal intelligence will provide control and lower costs  §  Market intelligence identifies financial risk, exposure, but also  opportunities  §  Supplier intelligence ensures your supply chains work optimally  Supplier intelligence ensures your supply chains work optimally 11 
  12. 12. Building procurement intelligence framework & adding intelligent plug‐ins  Presented by © 2009 Zycus Inc. All rights reserved 
  13. 13. AGENDA  Presented by  ü Zycus Overview ü Building Procurement Intelligence Framework ü Adding Intelligent Plug‐ins ins ü Implementation Approach ü Intelligent investment decisions 13  © 2009 Zycus Inc. All rights reserved 
  14. 14. Zycus – Continued Success Story  §  Recognized as one of the Top 3 Global Market Leaders in  Recognized as one of the A worldwide leader in  Spend Management Domain by leading analysts and Industry  observers  Spend Management  .  §  More than  More than 150 customers in 15 countries across industry  Software solutions  verticals  .  §  One of the most  One of the most rapidly growing customer base with a growth  rate of 50% rate of 50% ‐ 70% year on year  .  §  Receives  Receives Red Herring 100 Asia & Global 200 2008 Award ‐  Cited as one of the most promising private tech firms with  Asian origin  .  §  Profitable, Global organization with multiple offices in US,  Profitable, Global organization with Europe and Asia Europe and Asia  “ “ Zycus, the Spend Management provider has quietly branched  out from a leadership position in the data cleansing and  classification market to offer a wide array of sourcing, contract  management and analytics capabilities, all of which are quite  novel in their approach to the market.”  novel in their approach to the market  Jason Busch, Spend Matters  14  © 2009 Zycus Inc. All rights reserved 
  15. 15. Why Zycus?  Easy to use SaaS based software solutions that accelerate ROI  ü  Flexible deployment options based on immediate priorities and goals  ü  Creative pricing models linked to ROI  Faster user adoption  ü  Web 2.0 software that requires minimal training  ü  Entire suite built on a single frame work that facilitates integration  ü  Efficient International support: UI and support in multiple languages  “Zycus is a strong alternative to pricier ERP products. In  Zycus is a strong alternative to pricier ERP products. In  this economy, best of breed continues to advance, which  begs the question, what will the ERP vendors do to counter  and stop the movement to best.”  Mickey North Rizza‐  Mickey North Rizza  Research Director, AMR Research. Research Director, AMR Research  15  © 2009 Zycus Inc. All rights reserved 
  16. 16. Why Zycus?  ü  Dedicated customer success manager  §  Regularly track and measure customer ROI and user adoption  §  Share and help implement best practices that enhance user adoption  ü  Agile product management methodology  §  4­5 product upgrades delivered seamlessly in a year eliminating wait time of 6  5 product upgrades delivered seamlessly in a year eliminating wait time of 6­12 months to get a critical  feature in the product  §  Strong process to include customer voice in the Product road map  ü  Dedicated and responsive delivery and customer support team  §  Rated 9 or 10 on the scale of 10 in customer satisfaction surveys every quarter  §  Support through phone, email and unique tools like chat, follow  me browsing etc  Support through phone, email and unique tools like chat, follow­ “We consider Zycus to be an excellent provider of Spend Management technology. They are very responsive; it's an effective product  “We consider Zycus to be an excellent provider of Spend Management technology. They are very responsive; it's an effective pr  and technology solution.”  ‐ Miguel Miciano, Director of procurement, Amgen.  Director of procurement, Amgen. 16  © 2009 Zycus Inc. All rights reserved 
  17. 17. Zycus Spend Management Solutions  Analyze Spend & identify  Source and Implement  Manage Savings &  savings opportunities  savings  contract compliance  Spend Analysis  Strategic Sourcing  Contract Management  Products  > Auctoclass  > iSource  > iContract  > iAnalyze  > Opportunity Identification  > Category Sourcing services  > Contract Audit Services  Services  services  > Event  Management services  > Contract Digitization &  > End to End services  Migration  > AI based classification  > Powerful and easy event  > Contract compliance  Differentiators  engine  modeling  > Contract to market  > Opportunity tracker  > Exhaustive & easy analysis  indices linkages  > Powerful and easy  > Guided & free text search  collaboration  17  © 2009 Zycus Inc. All rights reserved © 2009 Zycus Inc. All rights reserved 
  18. 18. Building Procurement Intelligence Framework Framework  Recommendation  Benefits SPEND ANALYSIS § Spend by supplier/commodity/ § Consolidate spend data BU & other dimensions § Classify & analyze the data leveraging § Eliminate maverick spend software § Identify leakages, e.g. PPV § Refresh periodically § Manage opportunity pipeline 18  © 2009 Zycus Inc. All rights reserved 
  19. 19. Adding intelligent plug‐ins Recommendation  Benefits Benefits+ SPEND ANALYSIS § Spend by supplier/commodity/ § More spend under § Consolidate spend data BU & other dimensions management § Classify & analyze the data leveraging § Eliminate maverick spend § Increased sourcing software § Identify leakages, e.g. PPV efficiency § Refresh periodically § Manage opportunity pipeline Opportunity Identification & Assessment 19  © 2009 Zycus Inc. All rights reserved 
  20. 20. Building Procurement Intelligence Framework Framework  Recommendation  Benefits Benefits+ SPEND ANALYSIS § Spend by supplier/commodity/ § More spend under § Consolidate spend data BU & other dimensions management § Classify & analyze the data leveraging § Eliminate maverick spend § Increased sourcing software § Identify leakages, e.g. PPV efficiency § Refresh periodically § Manage opportunity pipeline Opportunity Identification & Assessment SOURCING § Competitive negotiations § Create a web‐based platform § Easily 5% 5%‐25% more savings § Automate sourcing process § Reduction in sourcing cycle time § Plan adoption by over 25% 20  © 2009 Zycus Inc. All rights reserved 
  21. 21. Adding intelligent plug‐ins Recommendation  Benefits Benefits+ SPEND ANALYSIS § Spend by supplier/commodity/ § More spend under § Consolidate spend data BU & other dimensions management § Classify & analyze the data leveraging § Eliminate maverick spend § Increased sourcing software § Identify leakages, e.g. PPV efficiency § Refresh periodically § Manage opportunity pipeline Opportunity Identification & Assessment SOURCING § Competitive negotiations § 10%‐35% increased § Create a web‐based platform § Easily 5% 5%‐25% more savings savings § Automate sourcing process § Reduction in sourcing cycle time § Right price, § Plan adoption by over 25% suppliers to source Sourcing Strategy 21  © 2009 Zycus Inc. All rights reserved 
  22. 22. Building Procurement Intelligence Framework Framework  Recommendation  Benefits Benefits+ SPEND ANALYSIS § Spend by supplier/commodity/ § More spend under § Consolidate spend data BU & other dimensions management § Classify & analyze the data leveraging § Eliminate maverick spend § Increased sourcing software § Identify leakages, e.g. PPV efficiency § Refresh periodically § Manage opportunity pipeline Opportunity Identification & Assessment SOURCING § Competitive negotiations § 10%‐35% increased § Create a web‐based platform § Easily 5% 5%‐25% more savings savings § Automate sourcing process § Reduction in sourcing cycle time § Right price, § Plan adoption by over 25% suppliers to source Sourcing Strategy CONTRACT MANAGEMENT § Enhanced contract Visibility § Create dynamic contract repository § Auto alerts & reminders § Consolidating contracts across BU’s § Reduction in maverick spend § Upload contracts 22  © 2009 Zycus Inc. All rights reserved 
  23. 23. Adding intelligent plug‐ins Recommendation  Benefits Benefits+ SPEND ANALYSIS § Spend by supplier/commodity/ § More spend under § Consolidate spend data BU & other dimensions management § Classify & analyze the data leveraging § Eliminate maverick spend § Increased sourcing software § Identify leakages, e.g. PPV efficiency § Refresh periodically § Manage opportunity pipeline Opportunity Identification & Assessment SOURCING § Competitive negotiations § 10%‐35% increased § Create a web‐based platform § Easily 5% 5%‐25% more savings savings § Automate sourcing process § Reduction in sourcing cycle time § Right price, § Plan adoption by over 25% suppliers to source Sourcing Strategy CONTRACT MANAGEMENT § Enhanced contract Visibility § Higher contract § Create dynamic contract repository § Auto alerts & reminders compliance § Consolidating contracts across BU’s § Reduction in maverick spend § Plug saving § Upload contracts leakages Spend to Contract match 23  © 2009 Zycus Inc. All rights reserved 
  24. 24. Implementation Approach § Understand the primary pain area } Spend Invisibility } Cumbersome manual sourcing process } Lack contract compliance § Start where it hurts you most § Complete the process in a phased manner  24 © 2009 Zycus Inc. All rights reserved 
  25. 25. Intelligent investment decisions § When your primary driver is Spend Analysis } Couple with eSourcing } Follow it up with contract management § When your primary driver is eSourcing } Couple with Contract management } Follow it up with Spend analysis § When your primary driver is Contract Management } Couple with Spend Analysis } Follow it up with eSourcing § You can implement all three at one go  25 © 2009 Zycus Inc. All rights reserved 
  26. 26. World Leader in Medical devices accelerates savings of over 6 Million US  dollars within 6­8 weeks with Zycus' iSource.  8 weeks with Zycus' iSource. Profile  § Large med‐tech company and a global leader in its field  § Operates in 32 countries and generates annual sales of $3.4B  Business Challenges  “The intuitive UI and the  §  Critical analysis of  suppliers to ensure they source the best medical equipment in a highly  controlled industry  guided navigation of Zycus  §  Expensive process to be able to meet critical quality parameters due to manual  iSource further facilitated the  sourcing process  ease of use and continues to  §  Tremendous time pressure from hospitals to meet their scheduled and urgent requirements  accelerate global adoption””  Solution – Zycus iSource  §  Manual processes were automated  §  Accelerate ROI – Enable global organization to easily and quickly use the solution with minimal training  §  Increased savings by enabling sourcing managers to implement lean analysis with ease  Results  §  Savings of over $6 million in a project  that lasted 6‐8 weeks resulted in a cost reduction of 30  8 weeks resulted in a cost reduction of 30‐35%  §  Total volume of spend sourced during pilot approx $18M across 40+ unique items  §  Managed entire event (event authoring, event scheduling, event scoring and ranking, event analysis and awarding) on behalf  of the suppliers  26  © 2009 Zycus Inc. All rights reserved 
  27. 27. Zycus’ Spend Management Solution enables Norwegian giant to save 100 Mn USD Zycus’ Spend Management Solution enables Norwegian giant to save 100 Mn USD  Profile  §  A 350‐year‐old conglomerate & one of the largest listed company  on the Norwegian stock exchange  §  Turnover exceeding NOK 70 billion (10 billion USD)  §  Rapidly expanding into new business areas though mergers & acquisitions  “The Zycus solution enables us to  Business Challenges  capture the inter‐company synergies in  §  With operations in countries as dispersed and linguistically diverse, the company  purchasing, thus creating substantial  predicted severe challenges to the profitability of its businesses  value and revolutionizing the  §  Upward strain on raw material prices  possibilities for collaboration.”  §  Pressure on the company’s bottom lines  Sr. Project Manager  Spend Success  §  Spend Visibility  §  Solution Efficiency  §  Sustainability and spend control  Results  §  The initiative provided spend transparency across 40+ ERP platforms and systems in less than six months  §  A customized taxonomy structure that reflects supplier market was developed to gain visibility and valuable supplier sight.  §  The solution was implemented under extreme time pressures to meet overall plan of reducing spend by approximately 850 M NOK  (approximately 100 M USD) by 2008  §  The company continues to realize savings with Zycus spend analysis solution, setting even higher ambitions going forward  27  © 2009 Zycus Inc. All rights reserved 
  28. 28. THANK YOU ! Presented by  Anurag Dixit Vice President, Marketing, Zycus Inc. +1 888 451 0145 anurag@zycus.com www. zycus.com © 2009 Zycus Inc. All rights reserved 28

×