Beyond Sourcing: Ensuring Your Negotiated Savings through Compliance

© 2010. Ariba, Inc. All rights reserved.

Beyond Sourcing: Ensuring Your Negotiated Savings through CompliancePanel Members:

MarketSphere Consulting – Brian WietharnFacebook – Ramona Moritz

2 © 2010. Ariba, Inc. All rights reserved.2

Abstract / Speaker Guidance(This slide is not shown)

• Abstract: Sourcing is an important step in reducing costs, but without automated compliance, up to 50 percent of your potential savings can be leaked. Participate in this informativesession to learn how to avoid this leakage and save money, as well as improve your purchasing efficiencies

• Speaker Guidance: The emphasis of this should be around how P2P is key to delivering savings and that it thought leaders arestarting to do this even before pursuing more aggressive sourcing programs. Any data, statistics, or audit results that support this and can be shared would be good.


Possible Panel Questions

• Companies drive cost reduction by strategic sourcing, but how does P2P technology drive incremental ROI?

• How would you suggest a company get started putting compliance processes/systems in place?

• Aren’t executive support and tight policy critical elements of increasing compliance?

• Would you recommend Ariba P2P?• What do you find most difficult about Ariba P2P?• How hard is it to get suppliers onto the Ariba network?

(This slide will not be shown to the audience)


Agenda

• Opening Comments • MarketSphere + First National of Nebraska Case Study • Facebook• Panel Discussion • Wrap up

5 © 2010. Ariba, Inc. All rights reserved.

MarketSphere


Speaker Bio

• Brian Wietharn – MarketSphere Consulting♦ Partner and Spend Management Advisory practice leader

for MarketSphere♦ Provides cost-reducing procure-to-pay automation and

transformation consulting services to large and mid-size companies in multiple industries

♦ Has 20 years’ experience in business consulting♦ Prior to co-founding MarketSphere, spent 13 years in

“Big 5” consulting

© 2010. Ariba, Inc. All rights reserved. 7

Who MarketSphere Is…

• Our focus is on solving complex business challenges and strategic opportunities for Fortune 500 and emerging, high-growth companies

• Services delivered from 11 market locations throughout the United States

• In 2009, engaged by 250+ clients on 600+ projects

MarketSphere is a consulting firm that provides strategic business advisory and technology expertise to clients across finance, procurement, human resources, supply chain, IT, sales and marketing functions.

Atlanta

Chicago

Dallas

Houston

Indianapolis

Kansas C

ity

New

York

Om

aha

Philadelphia

Pittsburgh

St. Louis

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What MarketSphere Does…• Our market-leading practices are designed to help

improve core business functions, by…– Integrated advisory and technology capabilities– Deep business process specialization– Proven transformational experience– ROI-focused mindset– Disciplined project management approach– Comprehensive methodologies

• Ability to deliver complex, integrated business solutions across practices

• Global alliance partnerships with leading enterprise technology vendors


Case Study –First National of Nebraska

• First National of Nebraska (FNN), parent company of First National Bank of Omaha (FNBO), is a “top 50” bank holding company based in Omaha, Nebraska

• 7,000+ employees and $16 billion in managed assets• FNN serves 6.6MM+ customers, with 100+ banking locations across

Nebraska, Iowa, Illinois, Colorado, Kansas, South Dakota, and Texas• FNN also provides non-banking services such as credit card

management and processing, insurance, and technology solutions

Company Profile:


Key Challenges –First National of Nebraska• Executive initiative to significantly reduce costs across all Banks/Departments –

Procurement on hook to deliver largest $ amount• Corporate Procurement was not centrally-led, nor strategically focused –

managed very low % sourceable spend under management• Autonomous Banks/BUs were “managing” various spend categories• Small Procurement team was “transactionally focused” with minimal strategic

sourcing discipline• Limited spend visibility and reporting for fact-based decision-making• Limited use of procure-to-pay technology automation – processes not

standardized across enterprise• Inconsistent and fragmented contract management responsibilities – difficulty

improving contract compliance and reducing contract leakage


Solution –First National of Nebraska

Business Functions and Technologies:• Implemented “closed-loop” sourcing, contracts, requisitioning,

workflow, purchasing, receiving, invoicing, matching, analysis and reporting functions to improve compliance

• Ariba 10s1: Sourcing, Contract Management, P2P, and Spend Visibility

• Integration with Lawson Financials• Single Sign-On authentication


Solution –First National of Nebraska

Project Team Approach:• MarketSphere functional leads aligned with Ariba technical SMEs• MarketSphere change enablement and supplier enablement leads• FNN SMEs from Enterprise Sourcing, IT, Finance/Accounting, Legal,

Marketing, Operations, and cross-enterprise banks/BUs• Steering Committee, Advisory Council and BU Deployment Leads to

build compliance and adoption at all levels• P2P “high-touch” deployments (Pilot, Waves 1 & 2) to 1,000+

requesters/approvers• MarketSphere and FNN IT developed custom app for fiscal approval-

level management


Business Case –First National of Nebraska

• Original Projections:♦ NPV - $8.1MM over three years (6% discount)

• Year 1 Results: $4.7MM Savings


Business Case –First National of Nebraska• Results to Date:

♦ eRFx events faster and less costly♦ Contracting is faster, less costly and with Enterprise

considerations (300+ contracts loaded/managed)♦ One-stop requisitioning, easy UI, less manual effort (225

suppliers enabled for $90MM spend, 14 punchouts, 25 CIF catalogs)

♦ New Enterprise Procurement policy♦ Spend under management (SUM) increasing rapidly♦ Savings since Pilot deployment (JAN): $1.5MM

– Sourcing - $800K (8 events, $24.7MM spend)– Contract compliance via Ariba resulting from increased SUM - $400K– Headcount reallocation - $300K


Key Lessons Learned –First National of Nebraska

1. Strategic sourcing alone does not guarantee realized savings: Sourcing + P2P Technology + Governance + Monitoring = Realized, Sustainable Savings

2. Executive support and governance to help drive compliance, especially in large-spend Depts/BUs

3. Start with “change-ready” deployment groups to build critical mass4. Agree to performance/savings metrics and build scorecard to

monitor/manage regularly5. Continue to drive adoption post-implementation


Facebook


Speaker Bio – Ramona Moritz

• Purchasing lead for the implementations Ariba On-Demand P2P solution, including end user training, supplier enablement, catalogs, and issue resolution

• Facebook went live in Jan 2010 w/ pilot group, entire company by June 2010. Prior to Facebook, worked for Google, and Ziff Davis


Company Overview

• Facebook's mission is to give people the power to share and make the world more open and connected. Millions of people use Facebook everyday to keep up with friends, upload an unlimited number of photos, share links and videos, and learn more about the people they meet.

• Founded in 2004• Employees 1,200+• Offices: U.S. Headquartered in Palo Alto, Calif.


Challenges We Faced

• Facebook had a small implementation team• Vendor Research, Contact Information, and Enablement • Training end-users on basic business practices and

Ariba tool• Management mindset regarding “Outsourced Solutions”


Top “Lessons Learned”

• Larger Pilot: Implemented best business practices, and then had to fine tune based on user feedback

• Go-Live with more vendors enabled• Dedicated IT resources for post Go-Live support and

maintenance and/or budget for Premium Support• Super User Training


Panel Discussion


Closing Comments

Have a “Best Practice” you’d like to share?

Talk to John Lark or Dan Ashton to learn how.


Questions?

23


Contact Information

Ramona Moritz, [email protected]

Brian Wietharn, Partner & Spend Management Practice LeaderMarketSphere [email protected]

John LarkAriba – Sr. Solutions Marketing [email protected]

Beyond Sourcing: Ensuring Your Negotiated Savings through Compliance

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