cost cutting conundrum final

Confidential - Do Not Disclose or Distribute

Greg TennysonChief Procurement Officer

Dave StephensCo-founder & Chief Evangelist


Welcome to “The Cost Cutting Conundrum”

Moderator: Jason Hekl, VP Marketing, Coupa

• Today’s presentation ~45 minutes

• Q&A at the end of session

• Feel free to submit your questions throughout today’s presentation

• We will also have a couple of polls

• Any unanswered questions will be responded to via email after today’s session


It’s nasty out there!


It’s nasty out there!

Do not fear the winds of adversity. Remember: A kite rises against the wind

rather than with it.- English proverb


Not that there aren’t challenges…

My budget and headcount have

been slashed!



I can’t believe

they raised my

savings targets!



Six months?!? How am I going to reach that budget level in 6 months



How hard can I really push my suppliers?

What’s our risk?


“A smooth sea never made a skilled mariner”


My budget and headcount have

been slashed!

I can’t believe

they raised my

savings targets!

Six months?!? How am I going to reach that budget level in 6 months

How hard can I really push my suppliers?

What’s our risk?


The Cost Cutting Conundrum…and what Procurement can do about it.

Greg TennysonChief Procurement OfficerSalesforce.com

• 25 plus years of progressive sourcing/commodity management and commercial contracts

• Subject matter expert around the use of eBusiness/ERP applications and process optimization in driving operational excellence

• Bachelor's degree and M.S. from St. Mary’s College, Moraga CA

• Professional certification credentials National Contract Management Association (Certified Professional Contracts Manager) and Institute of Supply Management (Certified Purchasing Manager)

Dave StephensCo-founder & Chief EvangelistCoupa Software

•12 plus years helping organizations cut costs through e-procurement

•Co-founded Coupa to bring the first SaaS e-procurement solution to market dedicated to small and midsized businesses

•Built and led the development of Oracle’s Procurement Applications

•Introduced Oracle’s first Apache and Java-based applications and delivered Oracle’s first multi-tenant SaaS offering

•Bachelor of Science in Chemical Engineering from UC Berkeley


BUSINESS VALUE AND DRIVERS

Business Reasons for undertaking the project


✔ Improves PO accrual process

✔ Adopt best-in-class R2P process

✔ Enhances SOX practices by redefining segregation of responsibilities

✔ Provides for punchouts and catalog content, which drives on-contract spending

✔ Reduces the R2P transaction expense by automating process steps

✔ More advanced GUI and user friendly than the Oracle screens

Business Drivers & Value Finance manually accounts for open PO expenses

R2P process exists within separate silos without regard to up/downstream impacts

Buyer role resides within the line of business

Oracle PO module does not allow content to be hosted or punchouts to be enabled

AP prompts the business to receiveOracle AP provides for a single tolerancePO is printed, signed and sent to the supplier

Managers have to log into Oracle to approve


Considerations

Adopt self-service model

•Represents cultural shift

•Revised segregation of duties

•Budget accountability

Adopt organizational hierarchical approvals

•Today approvals follow reference table resulting in manual maintenance

•Proposing organizational hierarchical approvals based on Workday feed

Move to a SSC model

•Bifurcate, aggregate roles/responsibilities

Incorporate Purchasing Policy into Coupa’s Buying Policy

•Enhanced governance

•Ease of use

Sarbanes-Oxley

•Revised segregation of duties

•Adoption of BIC practices


Requisition-to-Pay Process Flows

Future State


Purchase Requisition to Purchase Order Process

• PRs auto generated based on content

• Non-catalog PRs routed to Buyer for action

• Provides mechanism to route PRs based on org hierarchy

• POs sent via email or fax to supplier


Invoice to Payment

• Provides for electronic invoice as well as supplier invoicing online against the PO

• Automates the receipt process

• Reduces invoice/receipt transaction expense


SCOPE AND ARCHITECTURE

What is involved to achieve business value


Phased Rollout Scope

Phase 1Americas

• 223 US buyers and approvers

• Minimum 1 automated integration for go live: Invoices

• Additional 5 integrations: Suppliers, GL Accts, PO Hierarchy, Users, Fx Rates

• Release plan will reflect rolling scope of integrations

Phase 2Global Buyers &

Approvers

• Additional Fx integration and localization as required

FutureSelf-Service & BI

Integration

• Potential Workday Users & Hierarchy integration to support SS

• Potential integrations to data warehouse for analytical reporting

PilotIT commodity only

• No integrations, manual configuration in Coupa

February 2, 2009 July 1, 2009 August 1, 2009 TBD


Technical Architecture Overview diagram


The Road Ahead

• Coupa technology roadmap

• eSourcing

• Business Intelligence

• Aligning procurement with the Business

• Doing more with less


www.coupa.com


Next Steps


Build a Solid “Home” for Procurement!

• Salesforce.com is aggressively establishing a solid “home” for procurement. How about you?

• Is your procurement infrastructure sound enough to sustain multi-year cost reduction efforts?

• Do you know what your company is spending on non-payroll

• If you negotiated great prices from your top 10 suppliers, are you confident that employees would consistently use them?

• Have you eliminated negative spending surprises that eat away at your bottom line?

Homegrown and paper-based

On-premise and antiquated

Solid, on-demand foundation


Seek Continuous ImprovementT

oo

ls &

Sy

ste

ms

People & Processes

A Field of Opportunities

• Discover your true non payroll spending• Estimate what % of purchases are pre-approved• Prioritize process areas to streamline• Prioritize spend categories to control• Evaluate your internal tools

Just Beginning? Here’s What You Can Do Today!

Content adapted from Coupa Proprietary Insight and Aberdeen Group “The CPO’s Agenda for 2008”

SWAT team on procurement process

Adopt S2S automation solution

START!

Spend analysis

Automate invoice and payment txns

Boost supplier accuracy thru self-service

Expand supplier enablement programs

Set S2S Standards

Measure and capture savings

Developpipelineof categories to tackle

Category-specific executive sponsor

Measure savings as implemented

Maximize collaboration with business

Then Start Sustainable Cost Reduction Efforts

KPI %Selected

Identified cost reduction savings 72%

% of total spend under management 64%

Cost avoidance 58%

Implemented / realized cost reduction savings 55%

Procurement ROI (savings / operating costs) 52%

% of suppliers – 80% of spend 51%

Supplier performance (price, delivery, quality, service, etc.)

49%

Procurement spend as % of revenue dollars 46%

Requisition, PO or invoice transaction volume 34%

Procurement spend per procurement employee 33%


Reduce cycle time by ~30%Best in class procurement groups achieve 75% lower requisition-to-order cycle times (Aberdeen)

Reduce cycle time by ~30%Best in class procurement groups achieve 75% lower requisition-to-order cycle times (Aberdeen)

Reduce costs spent on purchasing by ~20%World-class procurement organizations spend about 23% less on labor, outsourcing, and related costs (The Hackett Group)

Reduce costs spent on purchasing by ~20%World-class procurement organizations spend about 23% less on labor, outsourcing, and related costs (The Hackett Group)

Lower average order costs from by ~50%Best in class procurement groups achieve up to 20% cost savings for each new dollar of spend brought under management (Aberdeen)

Lower average order costs from by ~50%Best in class procurement groups achieve up to 20% cost savings for each new dollar of spend brought under management (Aberdeen)

Reduce maverick spending by ~33%Best in class procurement groups experience 31% lower “maverick” (off-contract) spend (Aberdeen)

Reduce maverick spending by ~33%Best in class procurement groups experience 31% lower “maverick” (off-contract) spend (Aberdeen)

Increase spend under management by ~20%Best in class procurement groups place 88% of their spend under management – twice the average (Aberdeen)

Increase spend under management by ~20%Best in class procurement groups place 88% of their spend under management – twice the average (Aberdeen)

Improve Spend Predictability

Improve Spend Predictability

Reduce Operating Costs

Reduce Operating Costs

Reduce Cycle TimeReduce Cycle Time

Pay LessPay Less

Spend Less Spend Less

Measure Success 5-Ways


AAQQ

&&


Get on the Coupa Bus!

Group Tour of Coupa e-ProcurementThursday, March 5th

11AM PT / 2PM ETwww.coupa.com

Tel +1.650.585.6306

cost cutting conundrum final

Business

arent challenges sixmonths

po accrual process

process optimization

process steps

class r2p process

eprocurement cofounded

business value

budget level