The document discusses streamlining procurement processes through business process management (BPM). It begins by noting that leading organizations prioritize process effectiveness. It then discusses the need to automate procurement processes like procure-to-pay to gain efficiencies. As an example, it describes how BPM can optimize the vendor onboarding process. The presentation introduces IBM BPM software, highlighting how it allows users to model, monitor, and improve end-to-end business processes in real-time. It asserts IBM's strong position in the BPM market based on customer base, partnerships, and expertise.

1. IBM Business Process and Decision Management
© 2011 IBM CorporationIBM Confidential
Streamlining Business Processes in
the Procurement Value Chain
Impact Comes To You, India, Nov 2012
Logan Vadivelu
BPM Technical Leader - Asia-Pacific
IBM Software Growth Market Unit

2. © 2012 IBM Corporation
IBM Confidential2
Agenda
 Process is top priority to leading organizations
 The need for streamlining and automating procurement
processes
 An example of procurement process management
using BPM
 Introducing IBM BPM
 Questions

3. © 2012 IBM Corporation
IBM Confidential3
Agenda
 Process is top priority to leading organizations
 The need for streamlining and automating procurement
processes
 An example of procurement process management
using BPM
 Introducing IBM BPM
 Questions

4. © 2012 IBM Corporation
IBM Confidential4
Process is a Priority to Clients
McKinsey 2012 Technology Survey of 927 IT and non-IT Executives, December 2011
https://www.mckinseyquarterly.com/High_Tech/Strategy_Analysis/A_rising_role_for_IT_McKinsey_Global_Survey_results_2900
Between actual and ideal priority,
process effectiveness is #1

5. © 2012 IBM Corporation
IBM Confidential5
Agenda
 Process is top priority to leading organizations
 The need for streamlining and automating procurement
processes
 An example of procurement process management
using BPM
 Introducing IBM BPM
 Questions

6. © 2012 IBM Corporation
IBM Confidential6
The need for and benefits in streamlining procurement business
process
 Organizations have renewed focus on “doing more with less”
• and are looking at how the adoption of lean processes can increase efficiency
and help grow their bottom line.
 Lean programs within manufacturing companies are often focused on
the production side of the business.
• Focusing on Procurement can result in significant benefits as well.
Source: APQC (www.apqc.org)
– Organizations without lean
procurement processes need more
than twice as many FTEs (increased
staff cost)
– Streamlining purchasing procedures
can reduce the number of mistakes
giving more time to the staff to devote
to their primary purpose: purchasing
materials

7. © 2012 IBM Corporation
IBM Confidential7
Procure-to-Pay Process and Automation Benefits
 Organizations can no longer afford not to
automate their transactional processes.
 Those who fail to automate simply cannot
match the speed, efficiency, and effectiveness
of those who do.
 As organizations automate their procurement
and payables processes, they can invest the
time freed up by automation in developing
sourcing strategies and maintaining contracts
that are highly valued.
 Process automation is
– the orchestration and integration of processes,
systems, and information to create uniform,
streamlined, and repeatable business processes.
Source: APQC (www.apqc.org)

8. © 2012 IBM Corporation
IBM Confidential8
Procurement impacts every aspect of the Value Chain
Develop
Products
& Service
Perform
Marketing
& Sales
Manage Customer Service
Joint Product
design with
suppliers
Collaborative
production
cycles; Just-
in-Time
deliveries
Quality
assured
supply
Collaborative
planning
Joint Product
design with
suppliers
Flexible
supply
Integrated
business
initiatives
Procurement is the process of managing external spend to create maximum value for
the organization

9. © 2012 IBM Corporation
IBM Confidential9
Six elements of procurement process improvement
Procurement
Transformation
 Procurement Strategy
 Procurement Organisation
Transformation
 Shared Services
Infrastructure &
Technology
 Purchase-to-pay
 E-sourcing
 E-marketplace/ Supply Portal
 Contract Management/ SRM
 Performance Management
Procurement Process
Outsourcing
 Full source-to-pay solution
 Transactional procurement
solution
 Leveraged sourcing solution
People & Skills
Development
 Procurement Capability
Acceleration
Category Management
Services
 Category Management
 Alliance Management
 Low-Cost Country Sourcing
 Co-Sourcing
Procurement Opportunity
Assessment
 Procurement Diagnostic
 Spend Analysis

10. © 2012 IBM Corporation
IBM Confidential10
In the e2e Procurement lifecycle, numerous opportunities exist
for integrating and automating inside and outside the enterprise
PO
Collaboration
PO
Aggregation
PO Tracking/
Status
Order
Integration
Global Inventory
Visibility
Delivery
SchedulingLogistics
Management
Automated
Receiving/
Reconciliation
Exception
Alerting
Supplier
Performance
Tracking/Mgt.
Electronic
Invoicing
Exception
Alerting
Payments
Automation
Automated
Discrepancy
Reconciliation
Collaborative
Forecasting
Real time
Treasury views Automated ASN
Generation
Partner &
customer
Onboarding
Customs
Automation

11. © 2012 IBM Corporation
IBM Confidential11
Agenda
 Process is top priority to leading organizations
 The need for streamlining and automating procurement
processes
 An example of procurement process management
using BPM
 Introducing IBM BPM
 Questions

12. © 2012 IBM Corporation
IBM Confidential12
Optimizing Vendor on Boarding Process with BPM
Pursue Vendor
Vendor Profile Approvals
Integration with
order system,
invoicing / EDI
Update/integrate
with downstream
systems
Vendor
Inquiry
BPM
-Trade funds,
Merchandise Data
Mgmt Warehouse
Mgmt System,

13. © 2012 IBM Corporation
IBM Confidential13
Vendor on-boarding Process in action!
Interaction Services Process Services Contracts / Finance
ESB
Partner Services
Business App
Services
Retailer
Portal
Vendor
Portal
Vendor on-boarding
Process
Order Fulfillment
Apps (ERP/ CRM)
Vendor
Applications
Vendor intiates
registration process
Retailer
reviews
vendor
information
The Vendor on-boarding process
updates several back-office systems
and starts the provisioning of the new
Vendor in the B2B system.
Vendor on-boarding
process starts and routes
vendor information to
different groups in the
retailer’s Orgnaization
MDM
Application
Once the retailer accepts the new
vendor the Vendor On-Boarding
process persists information and
routes an acknowledgment back to
the vendor.
Unstructured
Data
Repository
Structured
Data
Repository

14. © 2012 IBM Corporation
IBM Confidential14
An illustrative Procurement Process

15. © 2012 IBM Corporation
IBM Confidential15
Delivery-to-Pay Process modeled in IBM BPM Process Designer

16. © 2012 IBM Corporation
IBM Confidential16
1. Real-time scoreboards provide visibility into work-in-progress and
the ability to take corrective action when necessary

17. © 2012 IBM Corporation
IBM Confidential17
2. Detects bottlenecks and performance thresholds and
displays them using visual heat map overlays

18. © 2012 IBM Corporation
IBM Confidential18
3. Process “coaches” intelligently guide end users through
unfamiliar tasks

19. © 2012 IBM Corporation
IBM Confidential19
4. Built-in Playback: Validate process requirements and
changes faster

20. © 2012 IBM Corporation
IBM Confidential20
5. Simplified Versioning: single click snapshots and “back in
time” views
Many Assets Many Authors
Many Processes

21. © 2012 IBM Corporation
IBM Confidential21
Agenda
 Process is top priority to leading organizations
 The need for streamlining and automating procurement
processes
 An example of procurement process management
using BPM
 Introducing IBM BPM
 Questions

22. © 2012 IBM Corporation
IBM Confidential22
Executive
Management
Customer
Service
Risk Management
Teams
Finance
and Ops
Account
Administration
PROCESS
RULES
PEOPLE
SYSTEMS
Executive
Management
Customer
Service
Risk Management
Teams
Finance
and Ops
Account
Administration
PROCESS
RULES
PEOPLE
SYSTEMS
IBM BPM Overview
 BPM provides innovative tooling to capture, understand, document, collaborate, and
optimize ANY business process causing the most pain, or needing the most visibility
 BPM projects do not require disruptive multi-year investments
 Create process models that execute the process
 Easily provide business owners with real-time monitoring of any process that has been
implemented with the tooling

23. © 2012 IBM Corporation
IBM Confidential23
IBM Business Process Manager
Governance / Visibility
Deploy
Define Improve
Process Designer /
Optimizer
Integration
Designer
Process Center
Console
Process Center
PortalMobile
Process Server
Core BPM Advanced Integration
BPMN BPEL AdaptorsProcess Rules
Performance
Data Warehouse
ESB
Social
Coaches
Optional
Microsoft
Add-ons
Business Space
Measure
Network Multiple Process Centers
Server RegistryShared Assets
Versioned Assets

24. © 2012 IBM Corporation
IBM Confidential24
You can’t improve what you can’t see
Business Monitor
Real-time, end-to-end business
operations, transactions, and process
monitoring
Business Process Manager
Performance Data Warehouse provides visibility
into work-in-progress & the ability to take
corrective action when necessary
Blueworks Live
 Team up in secure private workspace
 Leverage public expert community

25. © 2012 IBM Corporation
IBM Confidential25
Collaboration Breeds Innovation for Better Business Outcomes
Business Process Manager
Identify and Contact a Subject Matter
Expert in real-time
Blueworks Live
 Team up in secure private workspace
 Leverage public expert community

26. © 2012 IBM Corporation
IBM Confidential26
#1 in BPMS market share for 2011
*Source: IBM Press Release; http://www-03.ibm.com/press/us/en/pressrelease/37376.wss
IBM is the proven leader in all aspects of BPM
IBM was named the number one vendor in BPMS software
with a 27.1 percent share, almost triple that of its closest
competitor*
Largest
Customer Base
Strongest
Ecosystem
Unparalleled
expertise
Over 5000 BPM
customers worldwide and
growing
Over 1000
certified business partners
Over 15years
of industry leadership
The only
enterprise BPM
vendor

27. © 2012 IBM Corporation
IBM Confidential27
Thanks for your time!
Questions