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Improve your P2P Performance with Guided Procurement Systems

Improve your P2P Performance with Guided Procurement Systems. Ju ly 30 , 2 0 14 Rich a rd W aug h , V P , C or p or a te D e ve l o p me n t, Z y cus S c ott F i tzger a l d , D i rect o r of Proc u rem e nt, T he Me n tor N e t w ork S p o n sor e d b y :. 1. Presenter Bio – Richard Waugh.

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Improve your P2P Performance with Guided Procurement Systems

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  1. Improve your P2P Performance with Guided Procurement Systems July 30,2014 RichardWaugh, VP, CorporateDevelopment,Zycus ScottFitzgerald,Directorof Procurement,TheMentor Network Sponsoredby: 1

  2. Presenter Bio – Richard Waugh VP Corporate Development Zycus Inc. Richard Waugh, VP Corporate Development at Zycus, has an extensive background in B2B E-Commerce, going back to his early career at GE, where he helped launch GE'S Trading Process Network (TPN), the first on-line Marketplace for Sourcing and Procurement in the mid 1990's. He was Co-Founder of B2eMarkets, one of the first SaaS (Software as a Service) Sourcing Suite providers and later covered the Supply Management market as an Industry Analyst for the Aberdeen Group..

  3. Presenter Bio – Scott Fitzgerald As Director of Procurement for The MENTOR Network, Scott overseas the Procurement organization and all third party supplier relationships for MENTOR’s 27,000 employees and 2,700 locations across 34 states. Since joining the Network in 2012, Scott has been reengineering and reorganizing the Procurement function from a historically transactional based compliance function to a strategic business partner to all of Mentor’s operating units. Scott has over 20 years’ experience as a professional procurement and business leader. His expertise includes strategic sourcing, cost control and containment, supplier management, contract management, process improvements, organizational development, training and technology/best practices. Scott has held Procurement and Strategic Sourcing leadership positions at Bank of America, Leerink-Swann, Houghton-Mifflin, MetLife, Pioneer Investments, Genzyme Corporation and Fidelity Investments. Scott holds a BS in Industrial Management from Georgia Tech, an MBA from Suffolk University and an MS in International Economics from Suffolk University. In addition, Scott is a Lifetime Certified Purchasing Manager (C.P.M.) and holds a Six Sigma Green Belt with Lean certification. Director, Procurement The Mentor Network

  4. Agenda • P2P Goals: A Balancing Act • A GPS (Guided Procurement System) for P2P • HappyPath Detours • The CaseforGuidedBuying • P2PCaseStudyand Interview-The MentorNetwork • Q&A

  5. P2P Goals: A Balancing Act Objectives Requisitioner Supplier GetWhatYou Need • Rightresourcesand operating model • Right items/servicesfromright suppliers From ‘Preferred Supply’ Efficiently (for all) P2P • Right • processes • Righttools ‘Safely’(i.e., withcontrols) Finance,IT Procurement 5

  6. Make P2P More Like a GPS – Guided Procurement System • GPSenablesmobile,social,Internet ofThings(IoT),etc. • AnAmazonexperienceis “necessary,but notsufficient” • So,how to applyto B2B?Some common traits: • Mobile.(Android,iOS,etc…‘App’or browser-based) • Global.Multi-lingual,multi-protocol (e.g.,GSMvs. CDMA) • Intuitive. Simplewalk-upUI, andengaging(maybeevenfun ) • Multi-channel(or‘omnichannel’).Tiedto thephysicalworld • Smart.Keepsgettingsmarter, morerelevant,morepredictive • Knowwhoyouare: Personalization(tracking; third-party content;metadata) • Predictswhat you are lookingfor and/or tryingtodo • Triesto help/guide youwithrelevantrecommendations 6

  7. Applying B2C to a GPS-enabled P2P “MomentofTruth”… SOURCE (strategic or tactical) BUY (Req/PO/Re ceipt) PAY (invoicing& payments) Searchfor Supply Employee Needs Something • Knowswhoyouare: Roles,permissions(items, categories, suppliers,$ limits,functionality,etc.) • Predicts:Starts with auto classifyingyour needand type ofsupply/spend,and then not just pushingyou to catalog, butto suppliers,existingsupply,internal/external resources (e.g.,‘buyingdesk’)…viatheright tool • Triesto help andguide you,withrelevant recommendations. Ifnot relevant,the System (bigS)must learnwhyto improvethe Supplyitself- or the guiding process/technologythattakes you there 7

  8. P2PProcess– TheHappyPath Buy Requisition Transmit AutoWorkflow “Touchless”PO xCML/EDI/Port al Catalog Pay Approve Invoice Receive EFT/P-Card AutoMatch (3or2Way) E-Invoice Goods Receipt

  9. P2PProcess– HappyPath Detours TopPerformers-OnCatalog TheGuidedPath 50% 40% 30% 20% 10% 0% Off-Catalog/On-Contract • 77%Off-CatalogSpendforTop Performers • 94%Off-CatalogSpendforOthers Transaction s 42% 23% TransactionsSpend %NegotiatedCostReductionLost DuetoMaverickBuying The(Buyer)GuidedPath Off-Catalog/Off-Contract Bottom Quartile PeerGroup • SignificantMaverickBuyPotential • 6xMoreLostSavingsforWorst Performers 1.6% TopQuartile World-Class PeerGroup BottomQuartile 0.0% 3.9% 4.6% World-Class 9.6% 8.0%10.0% 2.0%4.0%6.0% TheBreadCrumbPath %Non-POTransactions 38% 40% 30% 20% 10% 0% No POInvoices 21% • HigherNon-POIndicatesLess Control • 1in5areNon-POforEvenTop Performers World-ClassPeerGroup World-Class PeerGroup Source:HackettGroupProcurementBenchmarks

  10. The Case for Guided Buying • Drive CompliantSpendandProcess forTotal Indirect • Spend • SteerUsers toApprovedSuppliersand Buy/Pay Channel • SimplifyUser ExperiencetoIncreaseAdoption • Achieve World-ClassP2PPerformance • LeverageAccurateItem-LevelSpendVisibility

  11. The Mentor Network CaseStudy

  12. BuildingRelationships.EnhancingLives. Foundedin1980,TheMENTORNetworkis a nationalnetworkoflocal health andhumanservices providers. Weproudlyservepeoplewithintellectualanddevelopmentaldisabilities, childrenwithemotionaland behavioralchallenges,peoplewithmedically complex conditions,andindividualswithbrainandspinalcord injury. Our services are designedto helppeoplefacinga rangeof challengesleadfull lives in the communityandinclude:

  13. LocalTouch, NationalReach Withprogramslocatedthroughoutthe country,weareabletoprovide personalizedsupports to individualsinthe communitiesthey callhome. StateswithThe MENTOR Network programs

  14. OurPartners PartnersofThe MENTORNetworkworktogethertoprovidea continuumofcareandinclude:

  15. OurCommitment We arededicatedtohelpingpeopleofall abilitiesreachtheir fullpotential. To learnmoreaboutTheMENTORNetworkand howyoucanmakeadifference,visitusat: www.MakeaDifferenceatHome.com

  16. About • Background • Noassignedcommodities • 30ContractsUnderMgmt • $200M AddressableSpend • $36M SpendUnderManagement (SUM)– 16% • $2.5MSavings • 24,000 PurchaseOrders processed annually • 18,000 Requisitions • 528,818AccountsPayablepayment transactions annually • 6,000P-Cards • Yr1Strategy • Reorganizedstaffbycommodity, LOB • 110 ContractsUnderMgmt • Newcontractdatabase • $200M AddressableSpend • Currently $60MSpendUnder • Management(SUM) –40% • $3MSavingsTarget • – Actual:$7M • Targetincremental45% SUM (25%Catalogand20%off- catalog) • NextPhase:P2PReplacement

  17. FirstGenerationP2PChallenge CURRENT ORACLEIPROCUREMENT ENVIRONMENT • ServerBased-Network accessrequired • LacksEaseofUse- FormalTrainingRequired, Notintuitive • Longleadtimes(2mos.) forcatalogon-boarding- ITResourcesRequired • Licensesbasedon companyrevenue • o Contractorsdonot haveaccesstoOracle • WorkflowchangesrequireformalITSERF Ithasbeenestimated thatabout20%oftotal spendis codedwith incorrectGLaccounting codes,resultingin inaccuratespend categorization. Astructured feedbackloop is not inplacetogenerate valuable inputstothe category strategy reevaluation process. PainPoints Thereareno toolsinplaceto activelymonitor spendtrending overtime. Quarterlybusiness reviews appearto be focusedonareview of statisticalinformation ratherthanmeasuring supplierperformanceand value-addopportunities. Thecurrentspend analysisprocess doesnotinclude vendorname normalizationprior tocategorization.

  18. PollQuestion Whatis the greatestchallenge yourorganizationhas faced withP2P? Low useradoption Inability togaincomplianceonmajority of spend Lack visibilityto accuratespendtransactions Long leadtimes forsupplieronboarding P2Pmodelnot scalable

  19. GuidedBuying– Search WhatUsers Want? Search View Item detailswithrich product images One Stop Shop MultipleSearch Options (Category, Keyword, Supplier,Part#) Auto-classifiessearch termandsuggests relevantcategoryto ensureproper categorizationand relevantsearchresults

  20. GuidedBuying– Selection WhatUsers Want? Selection Compareproducts side-by-sidewith longdescriptions, attachmentsand specifications, ratingsand reviewsor certifications Filterresults byprice, supplier, manufacturer, etc. Steersuserstopreferred, approved vendorsand highlightsdiverse,orgreen vendors &products.

  21. GuidedBuying– Navigation WhatUsers Want? Navigation Guidancetofindand orderservicesornon- standardproductsnot availableincatalogs Menu ofguidede-Formsforoff-catalog requisitionsinsteadofblank, free-form requisitions

  22. GuidedBuying– Specification WhatUsers Want? Specification Remove guesswork andeliminate keystrokes forcatalog AND“free form” requisitions Eliminateback andforthwith buyerwhich delaysprocess forgettingthe required serviceor product Guidedform,wizardinterfacetopromptforrequiredattributesand specificationsif“off- catalog”serviceorconfigurableproduct

  23. GuidedBuying– ExpressCheckout WhatUsers Want? Express Checkout Defaultaccounting,category, shipping/billingfromuserprofile Alloweditingatlineitemleveltoupdate defaultvaluesonexceptionbasisorsplit accountingordelivery Auto-classifytocorrectcategory code,invokecategory-specific workflow,maptoGLaccountand defaultshipto/billtofromprofile

  24. GuidedBuying– Visibility Budget*: Splitacrossbudgets Acme Aviation > Microchips WhatUsers Want? $606,000 Overall $371K(61%) consumption: Yourconsumption: $1,500 Details $950 Visibility Previewworkflow approval process Budget utilization feedback Displaygraphical workflow process anddynamically updateif cartchangestriggerspendor category-specificapproval thresholds In-process approval statusupdates

  25. GuidedBuying– Mobility WhatUsers Want? Mobility Review,approveor rejectrequisitionsfrom e-mailonsmart phone device withoutlogging intoe-Procurement application Provide feedbackif rejectedor commentsif moreinformationis needed forapproval

  26. CurrentStatus • PhaseI: “SoftLaunch” • 90Users/ApproversfromallLOB’s • 40Suppliers–3punch-outcatalogsoPaymentMethods:Check,EFT,CardoOracleIntegration • Payment feed toOracle • Cost CenterfeedfromOracle • Fullworkflow • CustomReporting • FullRollout Q42014

  27. Q&A/Contact Info Formoreinformation,pleasecontact: Scott FitzgeraldDirectorofProcurement TheMENTORNetwork scott.fitzgerald@thementornetwork.com RichardWaugh, VP CorporateDevelopment ZycusInc. Richard.Waugh@zycus.com ThankYoufor attendingthisWeb Seminar!

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