Procurement nation-v procurecon
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Transcript of Procurement nation-v procurecon
Procurement NationHow procurement has become the backbone of
our savings conscious culture
Today’s Session
• The Evolution of Procurement• Procurement is the Backbone• Let’s Take a Walk: Smarter Spending Success Stories• The Future of Procurement – 2011 and Beyond• Q&A
The Evolution of Spend Management
Paper-based On-Premise On-Demand (aka ASP, SaaS)
The Cloud
The Evolution of Procurement
The Backbone of Our World
Procurement’s Impact is Everywhere
• Look around you – everything has been touched in some way by procurement
• In a typical day you might encounter procurement’s impact a dozen times or more
Let’s take a walk
MAP
Breakfast on the way to the office
$500Mural
Supplier: Local Artist
Purchased by: Store Manager
$3,500Restaurant LeaseSupplier: Leasing Company
Purchased by: Franchise Owner
$7,500Menus
Supplier: Corporate
Purchased by: Corporate$2,500Television
Supplier: Best Buy
Purchased by: Store Manager
PROCUREMENT IMPACT
SAVINGS $40 / PO processedenough for
happy meals per PO for hungry children in the community
10
“We can actually see all the orders in process when they are in someone’s cart as well as when they submit. We can also
see if the order was successfully transmitted immediately.”
– SpendSmart Procurement Team
MAP
Drive by Moscone Center on the way to the office
$15,000Moscone Center Mural Supplier: Printer
Purchased by: Events Manager
$10,000Banners
Supplier: Printer
Purchased by: Events Manager
$60,000HD MonitorSupplier: Custom TV
Purchased by: Moscone Center
$25,000Labor
Supplier: Local Union
Purchased by: Events Manager
$750T&E
$750T&E
$750T&E
$750T&E
PROCUREMENT IMPACT
SAVINGS $18 millionmore than enough to
Cover Bill Clinton’s speaking fee, security detail and travel & entertainment expenses
“We scoured the industry looking at vendors in the e-Procurement space. Quickly we eliminated any of the on-
premise or what you would call private cloud and that type of
opportunity because the value of a multitenant environment, the cost to implement, the maintenance of the product is much better. [Moving to
the cloud] was a no brainer.”
Greg TennysonChief Procurement Officersalesforce.com
MAPStop by to check out new lobby furniture
$45,000
Rent-A-Center Sign
Supplier: Corporate
Purchased by: Corporate
$375Window Washing
Supplier: Local Cleaner
Purchased by: Store Manager
$350Banners
Supplier: Kinkos
Purchased by: Store Manager
$925FurnitureSupplier: ManufacturerPurchased by: Corporate
$125Company T-ShirtsSupplier: Branders
Purchased by: Store Manager
$145,000Employee SalarySupplier: Employees
Purchased by: Store Manager
PROCUREMENT IMPACT
SAVINGS $500,000 in 2 months
enough to
make investments that will lead to greater market share and growth
Mike WildingChief Procurement OfficerRent-A-Center
“We had some adoption problems with prior tools, so we were incredibly pleased by the speed with which we
were able to implement an integrated solution that is both easy to use, and
incredibly robust. We were able to deploy a complete solution to over
3,000 locations in less than four months. Additionally, we have been able to quickly address new features
like the ability to invoice against contract, and define receipt
tolerances and invoice approval workflows, which we will roll out in
the near future.”
MAPArrive at office, pull HR reports for staffing meeting
$30,000Access to the System
Supplier: Taleo
Purchased by: Corporate
$925Monitor RentalSupplier: AV SupplierPurchased by: Marketing
$13,72510’ x 20’ Booth
Supplier: Skyway Exhibits
Purchased by: Marketing
$3,000Team Photos
Supplier: Local Photographer
Purchased by: Office Manager
$8,250Office LeaseSupplier: Leasing Company
Purchased by: Corporate
PROCUREMENT IMPACT
SAVINGS $5 – 7M
enough for
Filled by giving access to 70 more users to help source jobs
382,618 Jobs / Quarter
“The budget is tied to the expenses going through the
system. Budget managers have the ability to understand what
they were spending, when they were spending. And the time spent on the phone, the time spent talking to their finance
partner was diminished.”
Katy MurrayChief Financial OfficerTaleo
MAP
Lunchtime errands, stop by bank to withdraw cash
$23,725
Building Lease
Supplier: Leasing Company
Purchased by: Corporate
$10,250Building SignageSupplier: Leasing Company
Purchased by: Office Manager
$5,730ComputersSupplier: CDWPurchased by: IT
$2,250SignageSupplier: Local Printer
Purchased by: Facilities
$12,000Pamphlets
Supplier: Corporate
Purchased by: Marketing
$2,000Awards
Supplier: Branders
Purchased by: Office Manager
$275,325Employee Salaries
Supplier: Employees
Purchased by: Branch Manager
PROCUREMENT IMPACT
SAVINGS $1 million
enough for
families to keep their homes
303
“Our procurement processes were highly manual.[ Cloud Spend
Management] provides greater visibility into, and control over, our
spending. Now we have full automation from requisition to
invoicing, with tight integration into our back-end financial systems that provides audit trails which track our approvals to ensure that we comply
with regulatory requirements. Additionally, we can identify savings
opportunities by using the tool to effectively analyze our spend.”
Dee HarnishPurchasing Manager Berkshire Bank
MAP
Lunchtime errands, stop to pick up closet shelves
$1,050
Window Signs
Supplier: Marketing
Purchased by: Store Manager
$12,075Store Front Awning
Supplier: Specialty Print
Purchased by: Corporate
$525,000Store Merchandise
Supplier: ManufacturerPurchased by: Corp. Buyer
$1,050 Signs
Supplier: Local Photographer
Purchased by: Office Manager
$750
Employee Aprons
Supplier: Corporate
Purchased by: Store Manager
$3,550Bags
Supplier: CorporatePurchased by: Store Manager
PROCUREMENT IMPACT
SAVINGS 36 hours per week
enough for
part-time employees to spend more time servicing customers on the store floor
2
“[The cloud]’s traction in our industry does not surprise me at
all. The dynamics of the retail business model demand efficient
and cost-effective operations. [Cloud-based e-procurement] fits that need perfectly. We’ve been very successful with the
software.”
Scott JonesPurchasing Agent The Container Store.
MAPBack at the office for afternoon webinar
$4,125
Webinar Hosting
Supplier: ON24
Purchased by: Event Maanager
$7,250
Event Sponsorship
Supplier: ON24
Purchased by: Partners
$250,000Virtual Tradeshow
DevelopmentSupplier: Employees
Purchased by: Corporate
$500,000
Server / Hosting Platform
Supplier: Network
Purchased by: IT
$45,000IT Services
Supplier: EmployeesPurchased by: Corporate
PROCUREMENT IMPACT
SAVINGS $1 – 2 million
enough to eliminate
By investing in solutions that remove the need for travel and all of the environmental damage air travel causes
210 metric tons
“The implementation of our [cloud spend
management solution] was actually the first time ever an implementation
went as planned. We expected it would take two weeks. It took less
than that.”
Eoin O’ConnorChief Financial OfficerON24
MAP
Take junior to get new hockey skates after practice
$30,250Building LeaseSupplier: Leasing Company
Purchased by: Corporate
$125Ladder
Supplier: Home Depot
Purchased by: Maintenance
$375,250MerchandiseSupplier: Manufacturer
Purchased by: Corporate
$6,750
Merchandise Displays
Supplier: Corporate
Purchased by: Store Manager
$5,250SignageSupplier: Manufacturer
Purchased by: Corporate
PROCUREMENT IMPACT
SAVINGS $800,000enough for
Sets of hockey gear for inner city sports programs
3,200
“I like the ease-of-use. The screen looks like a web page and you only see what’s in
your cue, which adds focus. And because the cloud is
subscription based, it doesn’t take a lot of internal
resources [to implement or maintain].”
Dave HowardDirector of Central PurchasingReebok CCM Hockey
MAP
Arrive home, crank up some music and start dinner
$0Streaming RadioSupplier: Pandora
Purchased by: Listener
$10,000Site design / MaintenanceSupplier: Web Consultants
Purchased by: Marketing / IT
PROCUREMENT IMPACT
SAVED $600,000
enough for
songs on iTunes to review and add to the Pandora Genome Project
465,116
“As we remain laser-focused on growing our business it is important to have the right
financial tools in place for to ensure effective management of spend within established
budgets. We’re pleased to use cloud spend management as one of the primary tools to assist us in our ongoing commitment to that
financial goal.”
- Steve Cakebread, CFO at Pandora
MAP
Dinner is served!
$8,000Signage
Supplier: Manufacturer
Purchased by: Corporate
$30,850Mall LeaseSupplier: WestfieldPurchased by: Corporate
$876,200
Merchandise
Supplier: Manufacturer
Purchased by: Buyer
$500
Cooking Demo Supplies
Supplier: Grocery
Purchased by: Chef
$2,500Employee ApronsSupplier: Corporate
Purchased by: Store Manager
PROCUREMENT IMPACT
SAVINGS $500,000 per month
enough for
Healthy, nutritious meals for hungry children
50,000
MAP
Curl up with a down comforter and call it a day
$50Safety Cones
Supplier: Home Depot
Purchased by: Office Manager
$48,250Building SignageSupplier: Display Company
Purchased by: Corporate
$263,000
Merchandise
Supplier: Designer
Purchased by: Buyer
$3,250Electric BillSupplier: PG&EPurchased by: Store Manager
$15,000
Cash Register
Supplier: Manufacturer
Purchased by: IT
$35,000Seasonal EmployeeSupplier: Temp Agency
Purchased by: Store Manager
PROCUREMENT IMPACT
SAVINGS $60 – 69 millionenough for
new retail outlets to remain more competitive with TJX in key geographic areas
30
We All Make It Happen
We All Make It Happen
And It’s All Happening in the Cloud
What is the “cloud”?
• Lots of definitions, lots of “false clouds”• The cloud should not be confused with
– ASP– SaaS– On Demand
• A true cloud solution – Is built on a single line of code– Can be up and running in a matter of days– Does not require extensive set-up, maintenance and
upgrade fees
Road to Success Leads to the Clouds
The Cloud is the Most Cost Effective
Year 1 Year 2 Year 3
• Implementation• Hardware• Database /
Middleware• Software Fees
• Implementation• Hardware• Database /
Middleware• Software Fee
• Implementation• Hardware• Database /
Middleware• Software Fee
• IT Support• Maintenance• Professional
Services• Software Fees
• IT Support• Maintenance• Professional
Services• Software Fees
• IT Support• Maintenance
• Upgrade• Professional
Services• Software Fees
• Software fees • Software fees • Software fees
• Software fees • Software fees
• Software fees
Innovation in the Cloud
Traditional Dev Model
1.Lengthy Independent Upgrades
2.Difficult Independent Implementations
3.Multiple Code Bases
4.Non-viable long-term business model
Cloud Dev Model1.Quick and Simple Upgrades
2.Rapid Implementation
3.One Optimized Code Base
4.Sustainable Business Model
VSCloud Platform
Cloud Spend Management
• One platform to control 100% of indirect spend– e-Procurement– Expense Management– Dashboards & Reporting– Benchmarks
• Easily integrate and extend the value of existing investments– Open APIs– Out of the box connectors
77
5.5% to 16% HARD Savings
Driver Benefit
Competitive Bidding 2-5% Hard Cost Savings
Preferred Supplier Enforcement 1.5-5% Hard Cost Savings
Process Efficiency 1-2% Savings, 55%+ cycle time reductions
Visibility & Control Risk Mitigation
Accurate Invoicing 1-2% Hard Cost Savings
Early Pay Discount 1-4% Hard Cost Savings
Summary
• Procurement has evolved – so must your organization
• Smarter spending is all around us – we all have opportunities to take advantage
• Those who have made the move to smarter spending have reaped tangible results
• Don’t be confused by marketing buzzwords – there is only ONE cloud