The document discusses strategic sourcing and e-procurement solutions for purchasing professionals in ASEAN countries. It notes that ASEAN is a rapidly growing region shifting from exports to serving regional consumer demand. Next-generation skills and solutions are needed to adapt products to diverse ASEAN markets and build innovative supply networks. However, current ASEAN purchasing models and technologies are still developing and lag traditional strategic sourcing processes. An ideal future solution would seamlessly integrate spend analysis, sourcing, transactions and insights in a mobile-accessible cloud platform tailored specifically to ASEAN's unique needs and skills.

1. Strategic Sourcing &
E Procurement for ASEAN
Purchasing Professionals
Bill Kohnen
PASIA Conference October 2015

2. ASEAN
 As a region already among the biggest
 Growth rate in total larger than all others
 Shift to consumer of large portion of global GDP
 Exports will remain important but shift to regional demand
 ASEAN regional demand is diverse itself
 ASEAN skill base will need to evolve

3. Transformation From Offshoring Model
Arbitrage labor costs by using lower-wage workers in developing nations
 Liberalization Economic policy
 Capabilities of emerging-market suppliers and workers
 Transfer proven management processes to new locales
 Transportation and Communications economics and capabilities
As wages and purchasing power rise in emerging markets,
their relative importance as centers of demand, not just
supply, grows.

4. Next Shoring
 Proximity to demand
 More than two-thirds of global manufacturing activity takes place in industries
that tend to locate close to demand
 Proximity to innovation
 Adapt products to different regions
 Utilize emerging technologies that could disrupt costs and process
 New supply ecosystems a differentiator
 Network of innovation-oriented partnerships, and a strong focus on
technical skills.

5. Where will skills come from?
 Grasp the productivity potential of a range of new
technologies
 Have enough ground-level knowledge of local markets to
influence product strategies and investment trade-offs.
 The ability to build external relationships to develop vibrant,
sophisticated supply ecosystems—will also be a source of
competitive advantage
US, Europe, China, Japan …..
Existing skill sets focused on export oriented outsource model
M or F

6. ASEAN Purchasing Solution Still
Developing
Strategic
Sourcing
E
Solutions
ASEAN
Purchasing
Model
TRANSFORMATION

7. Strategic Sourcing Basic Process
Spend
Analysis
Sourcing
RF(x)
Nego
Contract
Supplier
Mgmt.

8. Typical Solution
Spend
Analysis
Sourcing Contracts Catalogue Network Transaction Pay
• Cloud Based
• Subscription
• Little Differentiation
• Tactical Modules more defined
• Only Sourcing has delivered any real value

9. Purchasing Sits at a Busy Intersection
 By its nature purchasing deals with virtually all departments
 Purchasing directly touch's 50% of the organizations total revenue
 At each interface point it seems there is a software solution to
interface with that has different characteristics (enterprise,
homegrown, cloud based, proprietary, legacy commercial etc…)
 The 40 or more interfaces create Strategic and Operational
Challenges yet do not necessarily result in improved performance for
purchasing.
CPO FORUM DISCUSSION HMB RITZ CARLTON JUNE 2015

10. “SHORT LIST” OF THE 40+ SOFTWARE SOLUTIONS
PURCHASING PROFESSIONALS USE
 ERP System
 Corporate Data Warehouse
 Corporate Analytic Solution
 Planning System
 MES
 CRM
 Best of Breed Purchasing Solution(s) Spend, Contract Management,
Sourcing, Catalog Management
 E Signature System
 IT Tracking System Service and Hardware
 Inbound Freight Tracking System
 Supplier Punch-out and normal websites
 MS Office
 HR Employee Portal including punch outs for 401 And benefits
 External Work related social media sites (Linked In, Professional Orgs)
 Inventory System
 Internal QA system
 Field Support Systems
 Internal resource website for Marketing Templates, Presentation Info, company
news
 Synchronized Email to personal Mobile device
 Corporate travel booking tool
 On average 3 personal Aps that also are relevant to work ex. Maps, currency,
business news feeds
 Customer Support tracking system for key suppliers
 P Card System
 Travel and Expense Card System
 Accounts Payable System
 Invoice Tracking/Supplier Payment System
 Internal Expense Reporting System
 Share point
 Department Shared Files
 Document Control System
 Purchasing Transaction System
 Key Supplier hosted sites
 Corporate Social Responsibility reporting internal and external
 Purchase Request Systems
 Internal KPI reporting systems
 Video Conference
 Phone Conference
CPO FORUM DISCUSSION HMB RITZ CARLTON JUNE 2015

11. Traditional Purchasing Tech Choices
 Manual
 ERP System
 Enterprise Solutions
 Internal Development
 Hosted
 Cloud Based
 Shared Service / BPO

12. Vision and Solution
Vision
Strategic
Innovation
Integrated
Mobile
Insightful Decision
Making
Solutions
Tactical
Digitizing old practice
Modules
ERP on the web
Excel spread sheet
“Pie in the sky”

13. 0
2
4
6
8
10
12
Spend Analysis Sourcing Catalogue Transactional Pay
Purchasing Professional Value vs. Solutions
Capability
Purchasing Value Solution Maturity Solution Provider Interst

14. SPEND ANALYSIS IS THE TOP TOOL FOR
A CPO
CPO
CHALLENGES
•MORE
•SPEED
•GROWTH
SAVINGS
•2% NOW
•10% MONTHS
•30% POTENTIAL
BENEFITS
•TRANSPARENCY
•BASELINE
•ORGANIZATION
TECHNOLOGY
•HELPS
•CLOUD SaaS
•ROI of 10X
ISM SV Bill Kohnen July 21 2015
IN PRACTICE FEW ORGANIZATIONS HAVE THE CAPABILITY TO
CONDUCT A COMPREHENSIVE SPEND ANALYSIS

15. WHY AFTER OVER 100 YEARS OF CORPORATE
PURCHASING IS SPEND ANALYSIS NOT
WIDESPREAD
• HARD TO GET
• DISPERSED
DATA
• PEOPLE
• TOOLS
RESOURCES
• SHARING DATA
• REVIEWING
COLLABORATION
PROJECT
• NON REPEATABLE EVENT
• STATIC RESULTS

16. SPEND ANALYSIS
Technology Not The Answer So Far
TECHNOLOGY CONSTRAINT
MAINFRAME Access to Data
No User Interface
CLIENT SERVER/NETWORK Data Further Dispersed
ERP Access to Data
Poor Analytics
MS OFFICE SUITE Start to Analyze Data
Driven by Strategic Sourcing
CLOUD SOLUTIONS Security
Process and Capability
ISM SV Bill Kohnen July 21 2015
EVEN WITH IMPERFECT DATA YOU CAN START THE PROCESS AND GET IMMEDIATE VALUE FROM
SPREADSHEETS

17. Spend Analysis Cloud Solution
What Does this Mean:
• You will provide raw spend data in any format to the solution provider who will
transform the data into meaningful views.
• Solution provider delivers the service via an internet connection so no hardware is
needed
• Implementation is measured in weeks
• Complete ROI should be achievable in 6 months or less
• Repeatable Process
ISM SV Bill Kohnen July 21 2015

18. Questions TO ASK
Data
Acquisition
• Formats
• Data Prep
Data Processing
• Automated
• Proprietary
User Experience
• References
• Configurable
Product
• Standalone
• Information
Security
Implementation
• Time
• Professional
Services
• ULTIMATELY USER EXPERIENCE WHICH IS VIEWING MEANINGFUL OUTPUT
IS MOST IMPORTANT
• TO BEST DETERMINE CAPABILITY HAVE PROVIDERS RUN A DEMO USING
A PORTION OF YOUR DATA

19. Solutions Have Challenges
Enterprise “powers” are behind and know it
Really are introducing new products
Newer Solutions providers do not have deep
subject knowledge
Really little differentiation
Adoption is the key metric
Basic things still challenges
Supplier On boarding
Document Output
Auto close of purchase orders
Choice is who do you ant to start journey with

20. What to Look For Ideal
 Social Media
 Real value from IoT
 Real Mobile Access
 Easy Data Analytics
 Effortless Transactions
 Single data sources
 Optimized for you

21. “BEST PRACTICES” DO NOT CREATE
SUSTAINED VALUE
Formula For
Sameness
Risk Averse
Efficiency
Commodity
Best
Practice
Best For
Company
Learning
Innovation
Value
Unique
Practice
WEALTH IS CREATED BY INSIGHT TO DIFFERENTIATE WITH DISTINCTIVE PRODUCTS
Summary of Thoughts Presented by Jules Goddard at Nudgestock2

22. ASEAN Based Purchasing Professionals
 Strategic Sourcing and E Commerce are important and
will be increasingly important because of regional
growth driven by local demand
 Skills needed are unique and not what is being
practiced in BPOs, shared services organizations or
purchasing outside of ASEAN
 Merge high end strategic sourcing, regional knowledge
and e commerce B2B solutions that meet needs in
ASEAN countries not ‘off the shelf” western tool.