The summary provides an overview of key topics discussed in the document: 1) The document discusses challenges with traditional benchmark surveys and how a transactional, cloud-based approach can provide more actionable insights. 2) It outlines 10 must-measure metrics and KPIs related to procurement efficiency and effectiveness that organizations should track, including approval cycle times, spend under management, and cost savings. 3) The document provides examples of how Williams-Sonoma can develop a benchmarking strategy, such as identifying key KPIs, establishing a baseline, and aligning processes and technology with measurement.

2. Today’s SessionChallenges with traditional benchmark surveysInnovation that is changing reporting and benchmarkingThe 10 must measure metrics and KPIsHow to build a benchmarking and measurement strategy

3. Who We AreRavi ThakurVice President of Services & SupportCoupa SoftwareWarren GandaCorporate PurchasingWilliams-Sonoma

4. About CoupaEmpowering organizations to:Spend Less: Reduce maverick spending by ~33% Pay Less: Lower average order costs by ~25%Reduce Cycle Time: Reduce time to get goods by ~30%Reduce Operating Costs: Reduce time spent on purchasing / auditing by ~20%Improve Spend Predictability: Increase spend under management by ~20%Total Customers: 150+ including Platform Spend: More than $2.5B through 35,000 suppliersSpend Growth: 704% year-over-yearSystem Availability: 99.999% uptime

5. About Williams-SonomaThe first store opened in 1956Brand sells hundreds of products from around the worldMore than 250 stores nationwideDirect-mail business that distributes millions of catalogs a yearHighly successful e-commerce siteDedication to customer service and strong commitment to quality

6. The Thing About Traditional Benchmark Surveys

7. They Can Tell You A Lot…Market metrics and trendsSavings / spend 2 – 8%Quality: Rejection % 4.1%Cost of Processing per Order / Invoice (USD) PO: $217 averageSpend Under Management 48% - 87%Req Approval Cycle (Time) 5.79 - 9.35 daysTotal Procurement Costs .34 -.38% of revenue, .80-.85% of spend (Source: AMR Research)

8. …but what can you do with it?High level data Limited segmentation ability by role or industryInsightful – but inactionable – findingsPromotes the results of “best-in-class”But doesn’t tell you specifically how to get thereData qualityOften collected 6-to-12 months prior to publicationSelf-reported, survey data subject to interpretation

9. A New Approach to Benchmarking & Measurement

10. Transactional – Not Survey – Driven BenchmarksNecessary to track your performance and demonstrate successWithout true measurement, you cannot quantify results or define action plansTremendous value to measure oneself against other organizations by industry, employees, spend, etc.

11. Establishing Transactional BenchmarksBenchmarks are only as good as the data being collected!The Cloud can help organizations incorporate benchmarks as a part of business flowsMulti-Tenant architecture on one code line allows for the same set of measurements for the same metricsInstant scaling and load balancing for real-time data collection and calculation

12. Success in the Cloud

13. Innovation in the CloudTraditional Dev ModelLengthy Independent UpgradesDifficult Independent ImplementationsMultiple Code BasesNon-viable long-term business modelCloud Dev ModelQuick and Simple UpgradesRapid ImplementationOne Optimized Code BaseSustainable Business ModelVSCloud Platform

14. The Cloud is the Most Cost EffectiveIT Support

15. Maintenance

16. Upgrade

17. Professional Services

18. Software Fees

19. IT Support

20. Maintenance

21. Professional Services

22. Software Fees

23. IT Support

24. Maintenance

25. Professional Services

26. Software Fees

27. Implementation

28. Hardware

29. Database / Middleware

30. Software Fees

31. Implementation

32. Hardware

33. Database / Middleware

34. Software Fee

35. Implementation

36. Hardware

37. Database / Middleware

38. Software Fee

39. Services fees

40. Service fees

41. Service fees

42. Service fees

43. Service fees

44. Service feesYear 2Year 3Year 1

45. 10 Must Measure Metrics & KPIs

46. How To Demonstrate SuccessSpend management success measured by improvement in:EfficiencyRemoving road blocks that cause delaysEliminating need for manual interventionDriving user adoption of systemEffectivenessEnsuring purchase policy complianceMoving toward 100% of spend under managementDelivering savings to the organization’s bottom line

47. 10 Must Measure MetricsEfficiencyReq & PO Approval Cycle (Time)Orders & Invoices Processed per FTE (#)Purchasing Operating Costs (USD)Days Payable Outstanding (DPO)‘Touchless’ ProcurementEffectivenessSavings / spendQuality - Rejection %Cost of Processing per Order & per Invoice (USD)Spend Under ManagementCustomer Satisfaction Ratings

48. Ways to Improve Allow for mobile approvals

49. Provide pertinent information in requisition emails

50. Give real time budget information to approversRequisition Approval Cycle TimeRequisition Approval Cycle TimeAmount of time taken to approve a requisition from the time it is submittedImportant to track the velocity of business

51. % of Requisitions RejectedPercentage of Requisitions RejectedHow many requisitions are being rejected to eliminate wasteful spendHigh percentage could indicate: Poorly documented/visible A lot of off contract spend that is reigned in via the approval processWays to Improve Policies available at time of requisition

52. Flexible catalogs and e-forms to drive employee request process Number Processed per FTEWays to Improve Streamline processes with advanced approval workflows, contract checks, etc.

53. Enable invoice submission vis cXML or EDI

54. Utilize a supplier network to flip PO’s into invoicesNumber of requisition / invoice line items processed per FTE A large amount of requisitions / invoices should be processed by each FTE Should not touch each requisition / invoice, simply review exceptions

55. Total Cost of ProcurementWays to Improve Do more with less resources

56. Streamline processes with advanced approval workflows, contract checks, etc.Total Cost of ProcurementHow much of your revenue and spend go to cover procurement costs, including:Soft costs: FTEsHard costs: applications, hardware, maintenance costs, software, etc.TCO should be as low as possible

57. Days Payable OutstandingDays Payable OutstandingTime from Invoice Receipt to Invoice PaymentNeed to balance cash on hand vs. payment terms vs. early payment discount opportunitiesWays to Improve Integrate finance / invoice management as a part of process

58. Take advantage of favorable payment terms and discounts‘Touchless’ ProcurementWays to Improve Reduce manual intervention points

59. Move processes online when possible

60. Leverage workflow automation‘Touchless’ ProcurementThe efficiency of your procurement processShould require as little manual processing as possibleManual handling should be the exception, not the rule

61. Cost of ProcessingCost of processing requisitions / invoicesBased on the loaded cost per FTE and the number of requisitions / invoices processedThis number should be as low as possibleWays to Improve Utilize automation to continually move this metric downSavings Percent of SpendWays to Improve Understand why employees are not using negotiated pricing

62. Sole-source or find two or three vendors that can fit your needs

63. Negotiate with vendors to gain favorable pricing

64. Put controls in place to route employees to use the new negotiated pricingSavings as a % of spend Total amount saved through discounts, negotiated prices, avoidance, etc. across all spendLow percentage would indicate that certain areas of spend are not being covered by strategic activities

65. Spend Under ManagementWays to Improve Drive user adoption

66. Ensure all spend goes through one centralized system

67. Include all spend: POs, expenses, indirect, etc.Spend Under ManagementHow much of your spend is visible to the appropriate decision-makersDefines spend visibility and impacts the ability to properly control spend100% spend under management means no spending surprises

68. Customer SatisfactionWays to Improve Continuously collect feedback and measure

69. Let customers provide input into the processCustomer Satisfaction RatingsHow is the process impacting the ability to meet customer needsEmployees get what they need to meet customer needsNegotiated pricing, discounts, etc. help keep customer costs low

70. Develop a Metrics StrategyPlan: Develop migration plan for the metrics with timeframes and milestonesScope: Define feasible and actionable scope, by supply chain, end-to-endProcess: Pay attention to ownership, roles, responsibilities, and structureCulture: Manage the culture and motivationTools: Invest in the tools that will enable repeatabilityPilot: Use pilots to test the approachTradeoffs: Beware of tunnel vision and understand the interdependencies Turning data into action: Identify conclusions using patterns and levers, prioritize results, and manage the communicationPower through Process: Institutionalize the measurement program through a business process (e.g., S&OP/Procurement) to make it “sticky”

71. Williams-SonomaBuilding a benchmarking and measurement strategy

72. The Benchmarking Challenge in RetailA distributed modelEach brand operates “independently” Limited consistency in process, spend categorization and suppliersDifficult to access complete spend data by category

73. Benchmarking Today3 BIG challengesNo spend visibilityInformation “after the fact”No spend controlSpend not approved prior to purchaseLost opportunityLimited ability to act based on insights available

74. A New ApproachCloud spend management One platform for all brands to manage spendReal-time data, benchmarks, alerts, actionStarting with the end in mindBenchmarking is to key to long-term successMust be included as a part of upfront implementation efforts – you can’t go back after the fact to get the data you need!

75. Developing the StrategyStep 1: Identify Key KPIsStep 2: Establish a BaselineStep 3: Align Process, Technology & Measurement

76. Identify Key KPIsSpend category measuresCommodities, supplier contracts, brandsEfficiency measuresTime / cost to process PO / invoiceEffectiveness measuresSavings vs. spend, rejection / approval rateRetail measuresStore / warehouse inventory, sales vs. operating costs

77. Establish a BaselineReview: requisitions and categorize spend appropriatelyCalculate: spend by category, spend by budget, effectiveness metricsReview: existing processes and resource requirementsCalculate: processing time, efficiency metricsReview: supplier contracts and spend complianceCalculate: % of spend that is on contract, preferred supplier savings, most favorable payment terms

78. Align Process & Technology…Stakeholder RequirementsSupplierRelationshipManagementCategory PlanningContractNegotiations &ManagementRequisition IssuedRequisition ApprovalPO Issued to SupplierItems ReceivedPurchase NeedInvoice MatchingInvoice ReceivedInvoice Matched to POItem Receipt ConfirmedInvoice Paid

79. …and Technology & MeasurementStakeholder RequirementsSupplierRelationshipManagementCategory PlanningContractNegotiations &ManagementRequisition IssuedRequisition ApprovalPO Issued to SupplierItems ReceivedPurchase NeedMetrics: Goods & Services, Suppliers, Amounts, Budget, Submission TimestampMetrics: Accepted / Rejected Status, Approval / Rejection TimestampMetrics: PO Number, Issue Timestamp, Supplier Transmission TimestampMetrics: Receipt Timestamp, Supplier RatingsMetrics: Billed Amount, Budget, Invoice TimestampMetrics: Final Amount Paid, Budget, Payment TimestampMetrics: Discount Rate, Preferred Suppliers, Payment TermsInvoice MatchingDatabase / Reporting EngineInvoice ReceivedInvoice Matched to POItem Receipt ConfirmedInvoice Paid

80. Fully Equipped for Effective Spend ManagementReal-Time Executive DashboardsUp to the minute views into spend and budgets, real-time savings and performance reporting Real-Time Transactional BenchmarksPerformance comparison with others in the market based on actual transactional data and trends Database / Reporting EngineMonthly / Quarterly Performance ReviewIn-depth spend / performance review, identify areas for long-term improvement, adjust accordingly

81. Ambitious Goals & Targets Get 100% spend under managementRegain spend visibility and controlDrive 100% user adoptionPhased rollout with 150 initial users, then company wideCut process costsContinue to fine-tune for efficiency and resource optimizationConsolidate to suppliers / categoryReduce category overlap for the best deals and discountsPut an emphasis on expense managementDrive savings not just through purchasing, but tighter expense management

82. A Plan for SuccessBaseline benchmark for comparisonData collection and metrics are a part of implementation Real-time data access through dashboardsPeriodic reports and reviews to identify areas for improvement

83. Q&A

84. THANK YOU!Ravi ThakurVice President of Services & SupportCoupa Softwareravi.thakur@coupa.comWarren GandaCorporate PurchasingWilliams-SonomaWGanda@wsgc.com