Saving Through Procurement Modernization

1. Saving Through Procurement Modernization BDO Canada LLP

2. Saving through Procurement Modernization • Procurement Modernization generates positive bottom-line impact through cost savings, productivity gains, and process efficiencies. • Plus, businesses that undergo Procurement Modernization experience competitive advantages by generating closer, more strategic relationships with suppliers and fostering higher employee satisfaction.

3. Procurement Modernization • BDO’s Approach • STEP 1: Do you have a Spend Management Strategy? • STEP 2: What does your Spend Management Strategy look like? • STEP 3: What elements does your Spend Management Strategy address? • STEP 4: How do you apply your Spend Management Strategy? • STEP 5: How are you buying – using 20thor 21stcentury tools?

4. STEP 1: DO YOU HAVE A SPEND MANAGEMENT STRATEGY? • A Spend Management Strategy addresses all indirect, non-payroll spend. • Studies show that organizations without a Spend Management Strategy are typically paying as much as 10% more on indirect, non-payroll spendthan they should. • Even organizations that have a Spend Management Strategy in place can benefit from reviewing regularly and updating.

5. STEP 2: WHAT DOES YOUR Spend management STRATEGY LOOK LIKE?

6. STEP 3: What elements does your Spend Management Strategy address?

7. Step 4: How do you Apply your Spend Management Strategy? • Take action: • Negotiate better prices • Get more spend under contract • Improve your supplier relationships • Synchronize your spend with your business cycles

8. STEP 5: How are you buying – Using 20th or 21st Century tools? • Organizations that use labour and paper intensive processes find that, on average, each purchase transaction costs between $80 and $150 end-to-end. • Implementing end-to-end procurement technologies has the potential to realize significant productivity gains with substantial savings. • Procurement technologies reduce transaction costs and time in the procure-to-pay cycle. This is illustrated in the following metrics from a recent Materials Management Magazine study.

9. Materials Management Magazine Metrics

10. Application of Metrics to Client Case Study

11. How were the case study savings achieved? • Replacing manual, paper-based Purchase Orders and supplier Invoices with electronic documents • Automating administrative tasks, such as PO / Invoice / Receipt reconciliations (2- and 3-way match) • Eliminating redundant tasks • Creating user profiles to ensure control and visibility • Automating workflow for approvals

12. Additional Benefits • Early payment discounts (include in contract negotiations) • Also likely to receive discounts for ordering and paying electronically • Better supplier relationships • Higher quality of services – you get their best staff / team • Increased flexibility when things are tough • Priority over other clients • Reduces your suppliers’ order processing costs • You become your suppliers’ best customer • Benefits related to eProcurement technologies are experienced on both the buy and sell sides

13. Additional Benefits • Reliable and efficient procurement tracking • See trends and flag issues quickly (all the information is in one place) • Adjust your spend with speed and precision • Include compliance measures to enforce procurement policies effectively and to reduce the potential for rogue buying and inappropriate or fraudulent activity

14. Procurement Technologies • More Accessible and Affordable Than Ever!

15. BDO Canada BDO is the world's fifth largest full-service assurance, accounting, tax, and advisory network. For over 90 years, BDO has provided 50,000 clients with business, accounting, and tax advisory services, building a reputation for being one of the leading professional service providers in Canada.

16. BDO Canada BDO’s Advisory Services Practice has a national business line dedicated to Procurement Advisory Services, which we began providing in 1989. Our Procurement Centre of Excellence, located in Toronto, is the forefront of Procurement Modernization with a demonstrated track record for positive contributions to strategic sourcing and procurement. Our Procurement Advisory Services team is among the most mature in Canada with: over 100 years of experience in planning, orchestrating, and provisioning procurement initiatives; and over 1,400 successfully completed procurement assignments, representing a consolidated contract value in excess of $35 billion.

17. BDO Procurement Advisory Services Ian Brennan, CSCMP Diane Horvath, J.D. Vice President Manager Diane provides expert advice and services to the public, broader public, provincially funded, not-for-profit and private sectors. As a versatile lawyer and senior procurement professional, she brings 30 years of experience in Canada and the U.S. to her consulting practice. Prior to launching her consulting career, Diane worked in the legislative, executive, and judicial branches of government at the local, provincial/state, and federal levels, as well as in higher education. Diane’s broad commercial expertise includes policy and strategy development, drafting procurement documents and contracts, vendor management, negotiation and compliance. Ian Brennan is the Vice President of Procurement Advisory Services and the National Procurement Practice Lead for BDO. Ian, along with his team of professional procurement practitioners, strives to deliver procurement projects within a proven process that delivers the business outcomes the organization is seeking. Ian has over 24 years of procurement and supply chain experience. Ian has worked in the retail, services, manufacturing sectors and has been providing procurement consulting services for over 10 years.

18. BDO Procurement Advisory Services Stephen Whittaker, P. Log. Sean Owen, CSCMP Manager Manager Stephen Whittaker focuses on Procurement Modernization, P2P/S2P (eProcurement) system evaluation, selection, and project management in addition to leading client RFx initiatives. Prior to joining BDO Stephen spent over 10-years as Director of Procurement Services with the University of Toronto where he was responsible for leading procurement transformational initiatives including the implementation of SAP supply chain modules; P2P; pCard; project management for complex RFPs; policy development & compliance monitoring. Sean Owen is responsible for managing and delivering the procurement, fairness and management consulting engagements with the federal, provincial, municipal and broader public sector within the province and private sector clients. Sean has over 22 years of progressive experience in strategic sourcing, procurement, contract management and supply chain management in the public sector.

19. Thank you