Realizing the Strategic Sourcing Vision through an Ecosystem Approach

#AribaLIVE
@ariba@ariba
Realizing the Strategic Sourcing
Vision through an Ecosystem
Approach
Speakers:
 Matteo Stefani, Director Purchasing Development, UCB Pharma
 Barbara Weiss, UCB Pharma
 Etienne de Vaugiraud, eSourcing Manager, Groupe Auchan
 Knut Olav Irgens Høeg – Head of Procurement, Statoil
Moderator: Sundar Kamak, Ariba, an SAP Company
© 2015 Ariba – an SAP company. All rights reserved.

#AribaLIVE @ariba#AribaLIVE @ariba
Agenda
• Overview and Introductions
• Panel Presentations
• Q&A
© 2015 Ariba – an SAP company. All rights reserved.2
@ksundar1

Global Trends Are Driving Change in
Sourcing and Procurement
Increasing Globalization
• Expansion into new markets
• Global process standardization
• International supply chains
• Increased off/near shoring
Economic Volatility
• Volatility in markets
• Decreased stock valuation
• Slow economic growth
• High expense ratio
More Competition
• Pricing pressures
• New sources of competition
• Decreased budgets and spending
Greater Risk
• Supply chain disruption
• Financial risk and fraud
• Commodity risk
Accelerating Technological Change
• Changing business models
• Faster innovation cycles
• Expanding partnerships and channels
• Leveraging big data for decisions
Regulatory Changes
• Increasing disclosure requirements
• Country-specific regulations
• Industry-specific disclosures
@ksundar1

Creating a Challenge/Opportunity for
Procurement
Top 3 Procurement Drivers
54%
cutting cost
51%
becoming more strategic
44%
quality suppliers
Source: Procurement Leaders
Where is there “great” opportunity for Procurement to
increase its contribution?
Percentage of respondents rating the procurement function’s opportunity to
contribute as a “great opportunity”
14%
25% 29%
36%
44%
57%
64%
73%
Serving an
advisory
role in M&A
deals
Expanding
into new
markets /
business
lines
Managing
financial
risk
Managing
working
capital
Managing
risks to
business
performance
Working
with
suppliers to
enhance
product
offerings
Strengthening
relationships
with suppliers
Finding
opportunities
for cost
savings
Source: CFO Research Services

Approach to Building a Strategic
Sourcing Program
Vision Technology
Metrics
Process
People
Best Business
Outcomes +
Innovation
@ksundar1

#AribaLIVE
@ariba@ariba
Groupe Auchan – Ariba Sourcing
Etienne de Vaugiraud, eSourcing Manager, Groupe Auchan
9-10th June 2015

Strategic Sourcing
• Introduction
• Groupe Auchan – History, international presence, key figures
• Indirects Buying Department – Oxygen program, organization, tools
• Ariba Sourcing – Deployment, buying process, challenges
• Next steps
• Conclusion

50 Years of Steady Growth
• 1961 : Gérard Mulliez opens the 1st store in Roubaix (North of France)
• 1976 : Creation of Immochan
• 1980’s : 1st hypermarkets open in Spain and Italy
• 1983 : Creation of Banque Accord
• 1996 : Acquisition of Docks de France
• 1990’s : 1st hypermarkets open in Poland, Hungary and China
• 2000’s : Partnerships in China, Taiwan, Romania and Ukraine
Supermarkets in Poland and Russia. Development of e-Commerce
• 2010’s : Partnerships in France, Tunisia and Vietnam
Acquisition of Real activities to Metro Group
(Ukraine, Russia, Romania & Poland)

Groupe Auchan in the World

Some Key Figures…
• 11th largest food retailer in the world present in 16 countries
• 330,700 employees
• 89.8 % of the capital held by the Mulliez family
and 10.2 % held by 163,000 employee shareholders
• € 53.5 billion in revenue before tax (+11.2%)
• 2.6 billion till receipts (hypermarkets + supermarkets)
• 5 autonomous and complementary activities
Hypermarket, Supermarket, Bank, Real Estate, E-Commerce
© 2015 Ariba – an SAP company. All rights reserved.10 © 2015 Ariba – an SAP company. All rights reserved.10

Indirect Purchasing
Department
• 2010 : Creation of the DAIG (Indirect Purchasing Office)
and launch of the Program :
 12 countries, €3.7 billion spend under management, 46 buyers worldwide (total staff = 94)
 Selection of one common tool for all our countries and activities : Ariba Buyer & Sourcing
 A single process to unify our procurement/buying practices
 Primary objective : €200M savings 2010-2012
• Light structure at Group level
 Governance, Monitoring, Setting principles/objectives, defining solution and coordination
• At countries level, creation of 9 local offices (to date)

Deployment Timeline
(Buyer / Sourcing)
Creation of DAI
(Indirects
Buying Office)
2011 2012 2013 2014 2015
Ariba
selection
2016
P2O pilot
2010
P2O deployment
Sourcing
pilot
(7 buyers)
P2P pilot
P2P deployment
Sourcing events deployment
On Demand Migration
study
E orders / invoices
Full project v1
Simplified
Full project
SIM
1st wave

Sourcing Events – Evolution 2012-2015
0
20
40
60
80
100
120
140
160
180
Jan. Fév. Mar. Avr. Mai Juin Juil. Août Sept. Oct. Nov. Déc.
2012
2013
2014
2015
320 in 2012 – 514 in 2013 – 1 003 in 2014

The «Méthode d’Achat Oxygen»
(MAO)
• 2012 : Constitution of a workgroup to formalize the DAI Buying Process
 Writing of a detailed Process Handbook
 Building of a Full Project template (incl. documents library) = Exact translation of the process (v1)
 Creation of the training material
 Translation in 7 languages of all material ! Process handbook / presentations / documents & project templates
• 2013 : Training and deployment of the Process + Full project template
 Q2 - Referent buyers were trained, and then trained their teams in local offices / languages
 Q3&4 - All buyers had – at least – to complete one Full Project
 December – Our internal audit interviewed buyers & audited projects.
• 2014 : Audit recommendations
 More “hands-on” training material / best practices is needed
 More flexibility in template or several templates (by domain / country)
 Limit the number of mandatory tasks (12 in our v1)

Buying Process : From Theory…
3.1 Mesurer la satisfaction des clients internes
3.2 Gérer la relation fournisseur
2.1 Consulter formellement les fournisseurs
2.2 Négocier avec les fournisseurs
2.3 Signer le contrat
2.4 Mettre l’offre à disposition des utilisateurs
1.1 Comprendre le besoin
1.2 Analyser le marché
1.3 Définir la stratégie achat
Validation de la stratégie *
Validation de l’engagement *
Evaluation de la performance
* Pour les étapes de validation certains membres pouvant être invités en fonction des enjeux et des
problématiques : le manager de domaine achats indirects, le directeur des achats indirects pays et groupe, le
directeur métier concerné par les dossiers traités, le directeur général, et les synergies métiers.
1
2
3
Fournisseur
Acteurs clés
Acheteur
Prescripteur
Livrables
Définition de la stratégie achat
Contractualiser
Pilotage de la performance
Acheteur
Acheteur
Acheteur
Acheteur
Acheteur
Acheteur
Acheteur
Acheteur
Acheteur
Acheteur Prescripteur
Prescripteur
Appel
d’offres
Contrat
Kit de
déploiement
Cahier des
charges
Stratégie
achat
Enquête
Revue de
performance

Buying Process : To Practice…

Buying Process : To Reality…
• Buyers did create at least one project. Usually one only
• No project could be completed 100%. Too many mandatory tasks
• Users switching back to quick projects. Too complete + too long
• Hard to monitor & report on a great number of tasks.
Our v1 was renamed “Projet complexe” by buyers
(in French, full project = projet complet)

5 steps in the right direction ?
Simplified full project (v2)
Detailed full project (v1)

Full Project v2 : Benefits
• Simple template = Happy buyers
• Easier to update and translate = Happy me
Local versions can be quickly set up to include specific tasks.
• Reporting is more legible = Happy management

Challenges
• Managing templates & documents in an international organization
(8+ Languages) is time consuming, and hard to keep up-to-date
• Some functionalities are difficult to deploy in our organization as it is today
SPM or Contract Management will have to wait
• Constant adaptation to a changing environment : Moving priorities
• Change management has to be adapted to various local contexts
Some mature countries are sometimes more reluctant to change
while ‘newcomers’ are willing to catch up quickly with technologies

Next Steps
• SIM : Deployment to be extended to other countries than France
• Local variants of the RFI / RFP and Full project templates
• Sourcing Library currently being re-organized to become more usable
From a global library to local folders
• Simple “how to” userguides
to cover Buyers FAQ

Conclusion
• Ariba Sourcing is a powerful tool
• First contact is difficult for some users. Ergonomics can be improved.
• Change management and sponsors are key to a successful adoption
• Small victories are better than a big “No” from users
• Some functionalities require a higher maturity of the organization

#AribaLIVE
@ariba@ariba
Approach
UCB Pharma
Matteo Stefani, Director Purchasing Development
Barbara Weiss, Purchasing Development Project Manager
Munich, Germany, 9 June 2015

AGENDA
• UCB
• GLOBAL PURCHASING AT UCB
 Vision, Organization & Focus
• SOURCING PROCESS & TOOLS
• AN EYE BEYOND PURCHASING

UCB
A PATIENT-CENTRIC BIOPHARMA LEADER

UCB
A PATIENT-CENTRIC BIOPHARMA LEADER
• Focus on severe diseases in
Immunology and the Central Nervous
System
• 3 core medicines for patients with
severe diseases
• FY 2014 revenue: € 3.344 billion
• FY 2014 rEBITDA: € 609 million
• More than 8.500 employees
globally
• Operations in close to 40 countries
• R&D Spend: 28% of revenue
• Listed on Euronext
Key Facts & Figures
Rheumatoid arthritis
Crohn’s disease
Epilepsy
adjunctive therapy
Parkinson’s disease & Restless
legs syndrome

UCB GLOBAL PURCHASING
OUR VISION
 Connect UCB needs with solutions coming from
external networks
 Maximize UCB profitability through cost
optimization and working capital improvement
 Capture incremental gains beyond cost by
managing strategic suppliers relationships.
 Drive innovation, flexibility and agility while
focusing in quality, risk mitigation and
sustainability when engaging external
third parties
We, the Purchasing Organization, aspire to be an agile, knowledgeable and trusted contributor
to UCB Patient Value Creation by connecting UCB challenges with solutions coming from
external networks to enable innovation

OUR FOCUS

OUR FOCUS
• Focus on Strategic
Activities
• Transactional activities
(Procurement) are
managed by Global
Business Services
UCB & GENPACT
 Leverage Strategic
Activities
 Optimize
Operational
Activities
 Outsource
Transactional
tasks

OUR ORGANIZATION
• Reporting in to finance
• Organized by category & country
• Account Managers / SPOC per client function (Purchasing Value Lead)
• The management of sourcing projects is led by country or category
manager depending on 3 factors
 Where is our expertise?
 Where are the key stakeholders located?
 How is the market organized?

UCB PURCHASING
CHALLENGES & STRENGTHS before ARIBA implementation
Challenges
 Different tools used for Saving Reporting, e-Sourcing, Contract Management, Spend Analytics
 Lack of knowledge management = no knowledge management
 Need to adapt to company-wide adopted systems such as Xerox Contractshare, SAS VA, SAP
 No internal process / tool for Contract Management & Supplier performance Management
 Lack of visibility of Purchasing Process to internal stakeholders
 Purchasing perceived as cost / process focused rather than on Value creation

UCB PURCHASING
CHALLENGES & STRENGTHS before ARIBA implementation
Strengths
 One single ERP system (SAP) allows integrated view on spend information
 Small Purchasing Organization enable agile changes & fast adoptions
 Robust and adopted Strategic Sourcing Process
 Clear separation between Transactional / Operational / Strategic purchasing activities
 Clear Vision & Focus as a department

UCB PURCHASING
OUR PURCHASING PROCESS – 7-STEP STRATEGIC SOURCING
Assess
Opportunities
Profile
Internally &
Externally
Develop
Sourcing
Strategy
Conduct
Supplier(s)
Selection
Shape &
Negotiate
Agreements
Implement
Agreements
1. 2. 3. 4. 5. 6. 7.Screen
Suppliers &
Create Selection
Criteria
SS1.1
Data Collection
& Analysis
SS1.2
Develop High
Level Business
Case
SS2.1
Validate & Profile
Category
SS2.4
Conduct Market
Analysis
SS2.2
Build Total Cost
of Ownership
Model
SS2.3
Develop
Category Process
Improvements
SS3.1
Develop Sourcing
Strategy
SS4.1
Develop
Supplier
Long List
SS4.2
Build
Supplier
Selection
Dec. Matrix
SS5.1
Complete &
Issue
RFP
SS6.1
Prepare
Negotiation
Strategy
SS6.2
Negotiate
Agreement
SS7.1
Develop Implem
& Comm. Plan
SS5.2
Analyze RFP
Responses &
Select Supplier
Short List

UCB PURCHASING
OUR PURCHASING PROCESS – 7-STEP STRATEGIC SOURCING
Assess
Opportunities
Profile
Internally &
Externally
Develop
Sourcing
Strategy
Conduct
Supplier(s)
Selection
Shape &
Negotiate
Agreements
Implement
Agreements
1. 2. 3. 4. 5. 6. 7.Screen
Suppliers &
Create Selection
Criteria
Ariba
Discovery
Ariba Discovery
Ariba CLM
Ariba SPM
SAS
Beroe / PLN
Ariba Discovery
Ariba e-Sourcing
Ariba CLM
Ariba SPM
Ariba Saving

UCB PURCHASING
AFTER ARIBA IMPLEMENTATION
• Increased e-Sourcing Adoption
 See next slide
• 7-Step Strategic Sourcing Process incorporated in Ariba
 Projects documentation archived & classified in Ariba according to 7 steps
• Contracts Archive
 From Zero to 1.000 contracts archived & encoded in 12 months
• 100% savings reported in Ariba
 Eliminated manual input in Excel
• Supplier Performance Management
 Gradually Elimination of Excel / email surveys (Pilot in 2014)
 Leverage Use of Supplier 360
 Inclusion of Supplier NPS surveys & Strategic Suppliers Accounts plan
From 6 to 1 single tool
to manage Sourcing
Activities
• E-Sourcing
• Knowledge
Management
• Contract Storage
• Saving Reporting
• SPM (depl. On-going)

UCB PURCHASING
INCREASED E-SOURCING ADOPTION
Most Adopted e-Sourcing (projects #)
1. Professional Services
2. Commercial
3. Technical & Investments
4. Travel & Fleet
5. Direct Material
What 2013 2014 2015*
Savings Generated through e-Sourcing <10% 56% 62%
Savings Generated through Dynamic Bidding 0% 25% 35%
E-Sourcing Projects 58 256 122
• Buildings & Facilities
• Commercial
• HR Services
• Institutional
• Insurance
• IT & Telecom
• Professional Fees
• Professional Services
• Raw Materials
• Technical &
Investments
• Travel & Fleet

UCB PURCHASING
• Increased Savings in 2014
 Average E-Sourcing Saving 10% vs. 7% average traditional saving
 41 mio eur EBIT saving Generated in 2014 vs. 35 mio Eur in 2013
• Self Managed e-Sourcing Projects
 From completely outsourced model to 30% of projects self sourced
• Innovation opportunities through Ariba Discovery
 More Suppliers
 More Savings
 More Market knowledge
 Innovative solutions
• Transparency & Full Auditability
 Full visibility of our sourcing process to stakeholder & Internal Audit
 Contract and Project docs available 24/7
Additional Value &
Transparency
Generated
• Additional Saving
• e-RfX self-managed
• Ariba Discovery

UCB PURCHASING
 Saving
 Saving vs. Spend
 E-Sourcing perf.
 Suppliers Dashboard
 Contracts
ARIBA perfectly
integrated with
existing process / tools
Data and information is
monthly extracted and
uploaded in our SAS VA
• Saving
• Contracts
• E-Sourcing adoption
ARIBA SAS VA
SAP
CONTRACTS
(2016)
SPEND
E-SOURCING
SAVING, SPM
CONTRACTS

UCB PURCHASING
2015 TECHNOLOGY LANDSCAPE
• Spend Analysis managed through SAS
Visual Analytics
• Ariba Discovery adoption gradually
increased
• E-Sourcing managed in Self-Service
Model or by our BPO Partner
• Fully UCB Customized Saving Reporting
Module
• CLM deployed partially
(no authoring and approval modules)
• Supplier Performance deployed in 2015
39
Ariba-Based Solution
Non Ariba Solution
Source
Analytics
Discovery
E-Sourcing
Saving
Reporting &
Performance
Mgmt.
Contract
Encoding
and digital
Archiving
Suppliers
Performance

UCB PURCHASING
GENERAL CONSIDERATIONS
• Process or Tool?
 Don’t implement a tool for the sake of doing it
 Start for the burning needs and from existing challenges
e-Sourcing / Saving / basic contracts deployed first at UCB
 We waited 2 years before implementing SPM (first foundations)
• Adoption Challenges
 E-Sourcing: Provide Support to manage projects. Strategic or Operational activity? Role of BPO Partner vs.
Buyers – self service is a gradual learning curve (for some of the buyers)
 Contract Management – Start with preferred suppliers contract & Provide Support
 Savings – an easy one 
 SPM – start with 10 / 15 suppliers by category
• Best in class is not necessary what you need
 Basic CLM module deployed
do you need a full CLM look at existing processes tool in the company
40 © 2015 Ariba – an SAP company. All rights reserved.

UCB PURCHASING
NEXT STEPS
• Increase e-Sourcing Adoption
 80% savings generated through e-Sourcing
 20% savings generated through dynamic bidding
• Ensure Contract Compliance
 100% contracts (managed by purchasing) uploaded & encoded in Ariba
 Increase efficiency of contract encoding process
• Supplier Performance
 NPS with Key Suppliers by Q2 2015
 Performance Management Module fully implemented in 2015
 Enhance supplier including normalization, credit risk information into supplier 360 module
• Spend Analytics
 Explore opportunities to improve our spend accuracy

UCB …out of Purchasing
SAP AND ARIBA AT UCB

#AribaLIVE
@ariba@ariba
Approach
Statoil
Knut Olav Irgens Høeg – Head of Procurement
Munich, Germany, 9 June 2015

Summary - Wrap Up
Establish a clear Vision Standardize Process/Policy
Automate with Business Network Build a Strong Talented team
Drive Business Outcomes© 2015 Ariba – an SAP company. All rights reserved.44

© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Thank you!
• Contact information:
• Sundar Kamak
• Global Vice President – Solutions Marketing
• Email: sundar.kamak@sap.com | Twitter: ksundar1

#AribaLIVE
@ariba@ariba
Approach
Q&A

Realizing the Strategic Sourcing Vision through an Ecosystem Approach

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (20)

Similar to Realizing the Strategic Sourcing Vision through an Ecosystem Approach

Similar to Realizing the Strategic Sourcing Vision through an Ecosystem Approach (20)

More from SAP Ariba

More from SAP Ariba (20)

Recently uploaded

Recently uploaded (20)

Realizing the Strategic Sourcing Vision through an Ecosystem Approach