The saying goes, “The only constant is change.” This is all the more true when it comes to sustaining a strategic sourcing program. With rising commodity costs, globalization, and regulatory pressures, procurement teams struggle to sustain savings alongside a plethora of tactical responsibilities. Join this session where industry leaders will share how they navigate and manage their strategic sourcing programs in today’s ever-changing environments. Learn more about Ariba LIVE at http://spr.ly/LIVE2014LV-d

1. "Change" Is the New Normal - Building a
Sustainable Strategic Sourcing Program
Speakers
• Johan Duba – CSC
• Wen Buell – Avon Products
• Craig Fischer – Las Vegas Sands
Moderator:
• Sundar Kamakshisundaram – Ariba, an SAP Company
#AribaLIVE
@ariba

2. Agenda
•
•
•
•
2
Introduction
Panel Discussion
Key Takeaways
Q&A
© 2014 Ariba – an SAP company. All rights reserved.

3. The Panel Team
Speakers:
Johan Duba – CSC
Wen Buell – Avon Products
Craig Fischer – LV Sands
Moderator:
Sundar Kamakshisundaram
3
© 2014 Ariba – an SAP company. All rights reserved.

4. Change Is the “New Normal”
Inevitable
4
Accelerates Innovation
© 2014 Ariba – an SAP company. All rights reserved.
Improves Agility

5. Global Trends Are Driving Change in
Sourcing and Procurement
5

6. Top Challenges for CPOs
61% of you will have
increased cost
savings targets
44% of these targets will
be greater than
5%
Creating procurement
process efficiencies is
the top priority for CFOs
and CPOs
Source: 2012 CPO Agenda, Aberdeen Group
6
© 2014 Ariba – an SAP company. All rights reserved.

7. Key Levers to Maximize Savings
•
•
•
•
7
Increase “Spend Under Management” (SUM)
Accelerate Strategic Sourcing Efforts
Drive Contract Compliance to Prevent Leakage
Practice Continuous Improvement
© 2014 Ariba – an SAP company. All rights reserved.

8. Agenda
•
•
•
•
8
Introduction
Panel Discussion
Key Takeaways
Q&A
© 2014 Ariba – an SAP company. All rights reserved.

9. ARIBA LIVE
Sourcing Breakout session
Johan Duba
@JDuba01
March 18, 2014
CSC Proprietary and Confidential

10. Agenda
• Overview of CSC
• Sourcing Roll-out @ CSC
• Lessons Learned
• Next Steps
CSC Proprietary and Confidential
10

11. Overview of CSC
• CSC is a global IT services powerhouse.
• Solutions for 6 Major Industries:
– Chemical Energy and Natural Resources, Technology & Consumer, Manufacturing/Aerospace &
Defense, Healthcare, Financial Services, Public Sector
• Truly Global:
– 2,500 Enterprise clients, 70 countries, six continents.
• Outer Space
– Fix the Hubble’s Primary Camera
• By the Numbers:
– 96,000 Employees, #162 on the Fortune 500, 100+ Global Alliances, $15.8 Billion in Revenue,
50-Year History
CSC Proprietary and Confidential
11

12. Realizing the Vision of Finance
APPROACH
•
•
•
•
•
Standardize end-to-end processes and modernize systems
Dedicate experienced process specialists from Finance
Leverage Shared Services and Centers of Excellence
Enhance skills sets throughout Finance
Leverage CSC go-to-market offerings
PRIMARY OUTCOME:
SECONDARY OUTCOME:
FINANCE ENABLES THE
BUSINESS
Finance as a valued, trusted
advisor and business partner,
supporting CSC to achieve its
market leadership and profitability
goals with advanced analytics and
decision-support capabilities,
while ensuring strong controls
with redefined roles:
• Strategists
• Operators
• Stewards
CSC Proprietary and Confidential
CSC
GO-TO-MARKET
• Utilizes CSC’s portfolio of
services from initial strategy
through run and maintain
• Enables proactive
anticipation of customer
issues with compelling and
competitive solutions
• Serves as a reference for
transformation market
opportunities
12

13. Ariba Sourcing and Contracting
BEFORE
NOW
Multiple System
Single Global Tool
Contract
Databases
Contract
Redlines
• Centralized system for all sourcing events, (RFP’s, Auction’s) and for the creation,
execution and storage of contracts.
• On-line collaboration platform from business units, Supply Chain and Suppliers.
• Enables consistent business rules, approvals, contract templates, project management
and a single contract repository.
Contract
Approval Tool
Project
Management
Global Supply Chain
• Manual Project Reporting
• Regional processes,
templates tools
• Manual business processes
Project
Management
Executive Sponsors
Mike McCarty, Rahul Shah
CSC Proprietary and Confidential
Sourcing Contract
Supplier
Contract
Events
Templates Collaboration Approvals
Contract Dashboard
Repository Reporting
Program Management
Ken Pierce, James Best
13

14. Source to Settle Business Process
Opportunities in Sourcing
Business Problem
Unleveraged, non-aggregated spend affects CSC cost and pricing
Current State
Future State
Multiple Systems
Global visibility to leverage volume discounts
 Ariba funnels purchasing to negotiated contracts
 Controlled view of spending
 Single, simple, and monitored
 Up to 17 approval steps
 Difficult spend tracking and analysis
 Insufficient use of volume discounts
Source to Settle
Sourcing
Requisition
to PO
Receiving and
Inventory
CSC Proprietary and Confidential
Accounts
Payable
Source to Settle
Master Data
Spend Analysis
Travel and Expense
EEDM
Catalog
14

15. Program Is Moving Aggressively Forward
Realization
May 2013 to Mid-2015
BAA
Fall 2012
• Harmonized
end-to-end
processes
• High-level
architecture
Global
Blueprint
Spring 2013
• Mapped
global
processes and
functional
requirements
to standard
SAP
Detailed
Design
May to Sep 2013
Build
Test
Deploy
Multiple Releases and Deployments
• Localization
• Detailed
design for
releases
• Business
Impact
Assessment
Key Realization Milestones
Successful deployments of:
• Target setting & labor planning (BPC)
• Sourcing & contracting (Ariba)
Remaining activities:
• Complete build and test global solution
• Data cleansing & conversion
• Initial deployment of global solution
• Two large deployments
Project & Change Management
CSC Proprietary and Confidential
15

16. Lessons Learned
Next Steps
• Significant Investment in Training
• Regional / Local Contract Templates
– Partnered with Ariba
– Super users & Project team supported
training
– 2 day required training for all Global
SCM staff
• Spend Information Performance
Management (SIPM)
• User Adoption
• Business Process Improvement
• Reporting Enhancements
• Create “Envy” of success
– Target early adopters
– Create Win’s and Hero’s
CSC Proprietary and Confidential
16

17. Thank You!
CSC Proprietary and Confidential
March 6, 2014
17

19. "Change" is the New Normal:
Building a Sustainable
Strategic Sourcing Program
Wen Buell
Sr. Sourcing Analyst
Global Sourcing Center of Excellence

20. Corporate Overview
Avon, the company for women, is a leading global beauty
company with nearly $11 billion in annual revenue. As one of
the world's largest direct sellers, Avon is sold through more
than 6 million active independent Sales Representatives. Avon
products are available in over 100 countries with a product line
including color cosmetics, skincare, fragrance, fashion and
home products, featuring such well-recognized brand names
as Avon Color, ANEW, Skin-So-Soft, Advance Techniques, Liz
Earle, and Mark

21. Product Portfolio
Beauty
Whether it’s industry-leading cosmetics, age
reversing skin and hair care, or ground
breaking fragrances, Avon has a proven
history of delivering first-to-market beauty
technologies, making the company a perennial
game-changer. Time and again, Avon and its
global team of scientists have led the industry
in giving consumers breakthrough products
that marry beauty and innovation. Lightadjusting makeup, more durable mascara,
revolutionary anti-aging skincare products. The
list goes on and on. Simply put, Avon offers
women around the globe products that help
them look and feel their best…
Fashion & Home
Avon Fashion & Home includes trend-right, must-have
pieces. And they're the perfect way for a woman to
reward herself and bring moments of beauty and delight
to her friends and family. The category includes jewelry,
watches, accessories,
clothing, intimate apparel,
house wares, as well as men's
and children's wear.
Avon jewelry and accessories
add that all-important finishing
touch, allowing a woman to
create a style all her own. It's
accessible glamour that gets
noticed…

22. Our Approach to Build a Sustainable Sourcing Program
People
Establish Global category management and strategy
development approach
Clear identification of global and regional lead roles and
initiatives
Value
Technology
Process
Deliver year over year value (cost savings
and avoidance)
Implement iSource globally
for 100% of applicable
spend
Significant progress toward 100% Spend
Under Management (SUM)
Leverage Ariba Spend
Visibility for spend reporting
and savings tracking
Ariba Contract
management as the
single repository for
contracts
22
Consistent approach to
benefits tracking and
reporting
Promote early engagement with
Sourcing in business planning
and strategies
Manage creation of new
supplier relationships in eSIM

23. Strategic Source-2-Contract Cycle
USE KNOWLEDGE TO ESTABLISH
AND ACHIEVE GOALS
ANALYZE & SYNTHESIZE
DERIVED INFORMATION
Contract Management
Sourcing
GIVE MEANING TO
OBTAINED DATA
Spend Visibility
Procurement
OBTAIN RAW FACTS
23

24. 7 – Step Sourcing Process
1
7-Step Strategic Sourcing Process
4
6
3
5
2
Analyze
category
spend
Determine
business
needs
1
Understand
internal spend
2
Understand
current & future
requirements
Analyze
supply
markets
3
Understand
supply market
Ariba Spend Visibility Helps Answer:
•
•
•
•
24
What products/services am I buying?
Who am I buying products/services from?
What are my spending trends?
Where can I better leverage my spend?
Develop
category
strategy
4
Decide most
appropriate
execution
strategy
Select vendors,
negotiate
agreements
5
Conduct
aggressive
negotiations
and select
suppliers
Plan
transition to
new contract
6
Operationally
supplier
agreements
7
Manage
supplybase &
stakeholders
7
Monitor market
and supplier
performance
Knowing the Answer Enables:
• Opportunity analysis for savings
• Opportunity analysis for supplier
rationalization
• Negotiate strength opportunities

25. Ariba Spend Visibility


Data input from multiple source systems (Enterprise One, Concur
and other legacy financial systems)

25
$2.8B USD global indirect spend
Included markets:
NA: 3 markets (US, Canada, and Puerto Rico)
EMEA: 11 markets (UK, PL, RU, Spain, etc)
LATAM: 1 market ( Brazil)
APAC: 2 markets ( China, India and the Philippines)

26. Ariba Data Sources
Data into Ariba comes from two sources: E1 and P-Card
Data Sources:
• E1: Data from Invoices
(ex: IT Consulting)
• P-Card: Data that coming
from Concur charged
through Citibank (ex:
Travel Expenses)
Data Repository
• Data is uploaded in Ariba
to analyze spend visibility
Ariba and Category Manager
• Data Enrichment to improve and
better utilize data.
• 3x a year. (Supplier Name
Enrichment and Reclassifications)
26

27. Avon Customized Spend Visibility Dashboard
•
•
• Customized list of
fields for users to
choose
• Pivot table functionality
for users to view spend
by different dimensions
27
Customized reports
for regions
Graph of the global
spend by category

28. 7 – Step Sourcing Process
1
7-Step Strategic Sourcing Process
4
6
3
5
2
Analyze
category
spend
Determine
business
needs
1
Understand
internal spend
2
Understand
current & future
requirements
Analyze
supply
markets
3
Understand
supply market
Develop
category
strategy
4
Decide most
appropriate
execution
strategy
Select vendors,
negotiate
agreements
5
Conduct
aggressive
negotiations
and select
suppliers
Plan
transition to
new contract
6
Operationally
supplier
agreements
Knowing the Answers Enables:
• Create competition and drive best pricing
• Obtain information on Alternative sourcing opportunities
• Gather Information on innovative technology
28
7
Manage
Supply base &
stakeholders
7
Monitor market
and supplier
performance

29. eSourcing
Metrics at-a-glance



Run-rate at $1Billion/year
50% indirect and direct spend
through via RFx
2013 Average savings of 20%
Total RFx created in 2013: 1300
Auction
All Region Event by Commodity and Type
N = 670
RFI
RFP
350
# of Events

Events created by Category
306
300
250
202
200
162
150
100
50
78
4050
61
44
4
60
45
23
54
3021
Packaging
Purchased
Finished
Goods
77
60
17
4
2
0
Corporate
Indirect
29
Facilities/
MRO
Raw
Materials
Sales/
Marketing
Grand Total

30. Minimizing Change Management
Leverage Sourcing Library
Sourcing
documents to
be shared in
Library
30
Pre-built contents
by sourcing
categories to be
added into RFx

31. 7 – Step Sourcing Process
7-Step Strategic Sourcing Process
4
6
3
5
2
1
1
Analyze
category
spend
Understand
internal spend
Determine
business
needs
2
Understand
current & future
requirements
Analyze
supply
markets
3
Understand
supply market
Develop
category
strategy
Select vendors,
negotiate
agreements
4
5
Decide most
appropriate
execution
strategy
Conduct
aggressive
negotiations
and select
suppliers
•
•
•
•
31
Plan
transition to
new contract
6
Operationally
supplier
agreements
7
Manage
supplybase &
stakeholders
7
Monitor market
and supplier
performance
Knowing the Answers Enables:
Which contract template should I use?
Who needs to review and approve contracts?
When will our contracts start/expire?
What is the owner of this contract?

32. Contract Management - Global Roll out
and Results
 Global
governance with regional approach
 Contract
Workflow roll out to UK, Poland, Russia, Brazil,
Argentina, and Hong Kong in 2013
 Plan
 2417
to roll out to 10 markets in 2014
contracts were created since the implementation with
total contract amount of $2.6B USD
32

33. Contract Management Lessons Learned
Organization and design process
• Legal team’s full support and involvement is essential
• Clearly define region or country contract policy and “to be process”
• Involve and communicate with all parties in process design
Implementation
• Collect and harmonize business agreement documents
• Roll out by waves with simple and frequent contracts as starting point
• Ensure proper delegation of roles and responsibilities
• Ensure relevant permissions are granted to all relevant users
• Perform testing to cover all use case scenarios
Training
• Conduct training by user role ( Contract Manager and contract approver)
• Contract Manager requires extensive training on clause library management
• Train administrative assistants to help their managers in contract approval tasks
34

34. Implemented Standardized Contract Approval
Option to use Supplier paper
when required
Legal assistants are added to
help attorneys in task
administration
35

35. KPI – Contract Creation – FY – MM / USD
Request Dept.
200.00
250
100.00
50.00
200
193
150.00
151
$66 36
Mkt
$140.00
140
$120.00
$100.00
99
120
115 109
100
150
46
$18
F&MRO
IT
$80.00
80
100
99 $167
$103 $93
Millions
Amount USD and Volume / YTD
Sourcing Category
Millions
Amount USD and Volume / YTD
$60.00
$127
60
60 59 $109
40
43
$72
$58 20
20 3 16
$32
$18 $15
10 0
$0$13$5
50
9 0
$1
$40.00
$20.00
$0.00
Comm
SC
Fin
Manufac Legal
Contract Amount (USD)
Contar de Project Id
36
Contract Amount (USD)
Contar de Project Id
• 424Contract Created – Total USD 448 MM
•195 Contract Created by Legal Team – Old Version
•339 Contract Created by Sourcing Team – New Version
Based on: Ariba Contracts

36. KPI – Contract Creation – FY – Status process
Number Contract Completed / In Process
140
190 - Completed
344 - In process
120
30
7
40
320 - Ariba
85
55 53
Comm
43 41
9
20
50 62 1
36
19 1 7 8
8
2
SC
Draft
Based on: Ariba Contracts
Fin
43
Manufac
Published
Legal
10
7
3
30
27
22 22 24 23
22
19
30
0
37
55
54 162 – Out Ariba
40
47
44
60
20
60
50
100
80
Tool Leakage
14 12
4 5 3
10
8
1
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Out Ariba
Based on : Internal Controls
Ariba

37. Summary and Key Take-away


Change management and training are essential for project success

Clearly articulate the benefits of a technology-enabled process to drive adoption

Policy creation and executive support are important for program success

38
Standardize processes and leverage technology to improve sourcing efficiency
Building collaborative relationships with business partners

38. Thank You

39. "Change" is the New Normal - Building a
Sustainable Strategic Sourcing Program
Craig Fischer
Las Vegas Sands
#AribaLIVE

40. LAS VEGAS SANDS CORPORATION (LVSC)
Las Vegas Sands Corporation (NYSE: LVS)
Leading global developer and operator of destination integrated resorts (IRs)
Properties include Las Vegas, Macao, Singapore, and Bethlehem (PA)
Net Revenue for the past 6 years from LVSC’s 2013 10-K
Year
Net Revenue
2008
2009
2010
2011
2012
2013
$4.38B
$4.56B
$6.85B
$9.41B
$11.13B
$13.77B
Confidential
41

41. EVOLVING FROM TACTICAL TO STRATEGIC
Moving procurement from a Tactical to a Strategic organization allows employees
to focus on value-added work. To become Strategic, Procurement organizations
continuously need to evolve and make improvements to their processes and
solutions.
Strategic
Tactical
•
•
•
•
Reactive
Day-to-day wants
Managing people and work
Manual processes and
paperwork
• One-off/short term solutions
• Doing Non-value work
• Proactive
• Longer-term needs
• Setting direction/developing
people
• Electronic processes and files
• Relationship/long term solutions
• Working on value-added items
Confidential
42

42. IDENTIFYING OPPORTUNITIES
“Unless you have the data, you are only giving me your
opinion!”
• Business need or opportunity is identified
• Reuse or expand an existing solution
• “Borrow with pride” on a good idea used elsewhere
• Consolidate processes into global standards
Confidential
43

43. BUSINESS NEED IS IDENTIFIED
Third Party Due Diligence Forms
Internal Requestor fills out Paper Form #1. Paper Form #2 sent to Third Parties for them to
complete. Upon completion the forms route through three departments for approval
• Inefficient process involving paper and multiple parties
• Follow-up work with Third Parties and internal requestors
• 100% of forms are resent to Third Parties due to incomplete information
• Will become a global process
Deployed a Supplier Information portal as a solution to the Third Party Due Diligence
forms.
• Consolidates multiple forms into one profile
• Guides the Third Party to fill in the required information
• Conditions can request additional information or customize the workflow
• Profile data is reportable
Confidential
44

44. REUSE AN EXISTING SOLUTION
Getting rid of physical signatures
Bid Analysis Worksheet (BAW) is an internal document that is physically signed by
management in procurement and requesting departments
• Many issues makes the signature process cumbersome
Procurement successful deployed an eSignature solution for buy-side
contracts that brought great efficiency and compliance
•
•
Cloud solution that is accessible through many options
Documents stored in one location
Discussion of BAW issues in Procurement staff generated a suggestion of
“why don’t we just eSign BAWs?” eSignature was expanded to additional
procurement items.
Expansion will continue as other departments are asking “why can’t we do this?”
Confidential
45

45. BORROW WITH PRIDE
Innovate with someone’s proven idea
For commoditized items that can be sourced from multiple suppliers, an
eAuction is a strategy option to get pricing
• Need to factor pricing into the overall value of good or service
Find sourcing scenarios in the department with willing coworkers that can go
through an eAuction:
• Success with typical commodities such as MRO and Marketing goods
• Experimented with commodities such as Utilities, Uniforms, Logistic
Services, and Fine Wine
• Experienced some challenges and learned lessons, but understood that it
trial and error is a potential scenario
Confidential
46

46. CONSOLIDATE PROCESSES INTO GLOBAL STANDARDS
Example of developing standards
 100+ commodity managers (CMs) across LVSC Procurement using various
RFP/RFI templates or forms.
•
•
Collected 37 different forms from 19 CMs; scenarios where teammates who sat
next to each other used different RFP forms.
Assuming more forms are in use by others because some of larger spend
commodities did not supply RFP forms.
 Expected to complete initiative to develop global RFP/RFI templates for
specific commodity areas by the end of Q1 ’14
•
•
Areas are IT – Construction – Gaming – Facilities – Food & Beverage
Will be built as available templates in the Sourcing solution
NOTE: 2nd Initiative in progress is Global Contract Templates
Confidential
47

47. Summary - Wrap Up
Align Results to Objectives
Embrace change and not fight it!
Be Flexible
ACCELERATE SAVINGS, IMPROVE COMPLIANCE & MITIGATE RISK!
© 2014 Ariba – an SAP company. All rights reserved.

48. Thank you
Q&
A
Contact information:
Sundar Kamakshisundaram
Sr. Director – Global Solutions Marketing
E: sundar.kamak@sap.com