Kevin Dioquino, Procurement Manager, Lowe’sRajesh Rajagopalan, Lead Consultant, InfosysSeptember 25,2013

Advanced Procurement Solutions at Lowe’s A Success Story

Table of Contents2

Introduction

Lowe’s Overview

Program Scope & Challenges

Advanced Procurement Benefits

Advanced Procurement Needs

Implementation Approach

Hidden Gems

Advanced Procurement Solutions

Business benefits realized

Key Take Away

Conclusion & Discussions

Introduction3

Speakers introduction

4

Lowe’s - Overview

Heritage

• Founded in North Wilkesboro, NC

• Helping customers improve the places they call home since 1946.

• Headquarters in Mooresville, NC

Retailing

• 16th Largest retailer in the World

• Over 245,000 employees

• Serves more than 15 million customers a week

• Operates 1,750+ stores in the United States, Canada, Mexico

5

Lowe’s – Overview

Financial 2012

• 2012 Revenue $50.5 Billion

• 2012 Net Earnings of $2.0 Billion

• Ranked #20 on 2012 Global Powers of Retail List

Awards

• 4th Consecutive Energy Star Partner of the Year – Sustained Excellence Award

• Lowe’s Corporate Leadership Award from NABEF

• #1 in J.D. Power Appliance Retail Customer Satisfaction

6

Program Scope

• Standardize business process by embracing industry

best practices

• Instigate control and compliance across business

processes to reduce duty violation and risk

• Align business process and rollout new process for

Canada operations

• Re-Implement PeopleSoft 9.1 to instigate automation

and utilize new features across P2P business process

7

Program Challenges

• Opportunities to reduce Procure to Pay life cycle time

• Non Standard business process

• “Maverick” spend and exception handling

• Increased business opportunities for supplier enablement

• Opaque procure to pay process forcing business critical resource’s time

• Disparate procurement systems

8

Lowe’s Procure to Pay

Identify Needs

Source Vendors

Negotiate Contracts

Upload Catalogs

Create Req

Create PO

Receive POA

Receive ASN

Receive

Electronic Invoicing

Make Payments

Indirect P2P

Sourcing Supplier Contracts

Catalog Management

eProcurement Purchasing eSupplier

eSettlements Payables Workflow

Supplier Relationship Management (SRM)

Indirect Goods and Services

9

Advanced Procurement Benefits

Supplier Enablement

Supplier Competition

Contracts to Control

Spending

Self Service and Workbench

Audit Trail

360 Degree view of P2P

Managing Rebates

Spend Analytics and Dashboards

• Collaboration with supplier

• Source more from spend

• Drive contract compliance

• Ensure traceability

• Track full life cycle

• Proactive control

• Free cash flow

• Focus on strategic activities

Analyze

Evaluate

Benefits

10Advanced Procurement Needs

• Non standard processes

• Unapproved spend

• Prolonged P2P lead times

• Manual communication and status updates

• Enhanced spend control, reduce cost

• More automation, improved productivity, efficiency

• Improved compliance and simplified auditing structure

• Improved transparency and reduced lead time

11Re-Implementation Approach

Non Standard business process

Benchmarking assessment, best practice usage

“Persona” based business requirements

Prolonged P2P lead time, automate business process

Value based governance framework

“Maverick” Spend and Exception control

Preventive vs. Reactive Control

Dashboard analytics, Auto provisioning

Opaque P2P Process

Employee empowered, transparency built in processes

Disparate Systems

Re-Implement P2P business process

12

Hidden Gems at Lowe’s

Enhance Collaboration & Automation

Extend & Enhance Sourcing

Drive Contract Compliance

End to End Life Cycle Visibility

Improve Compliance & Reduce Risk

Better Cash Flow Management

Analyze

Identify

GEM’s

Improve

Best Practices

13

Advanced Procurement Solutions – Powered by Technology

• Enhance Collaboration & Automation

• Implementation of Advance Shipment Notifications

• Purchase Order Acknowledgements driven change

orders

• Electronic Data Interchange solution for driving

business growth

• Right order from the right vendor

14

Advanced Procurement Solutions – Powered by Technology

• Extend & Enhance Sourcing

• Identified opportunities for sourcing across the

different Lines of Business (LOB)

• Empowered LOB to use and utilize sourcing

• Driving optimal results by re-using best practices

• Sourcing templates

• Bidder groups

• Sourcing workflow

• Bid factors

• Notifications

• Source of truth for all transactional contracts

• Automatic enforcement of contract compliance on

Requisitions and Purchase Orders

• Contract expiry date and spend threshold

notifications

• Agreement notification to automate work trigger

• Automation of recurring payment vouchers

15

Advanced Procurement Solutions – Powered by Technology

• Drive Contract Compliance

16

Advanced Procurement Solutions – Powered by Technology

• End to End Life Cycle Visibility

• Leverage delivered dashboard to develop pagelets

• 360 degree view of the transaction enabling timely

decisions

• Mass requisitions by end users with advanced

notifications reducing lead time

• Streamline transfer of requestor information across

P2P process

17

Advanced Procurement Solutions – Powered by Technology

• Improve Control & Reduce Risk

• Preventive Control • AWE workflow for spend control & exception

• Pre-check commitments

• Proactive vendor based matching control

• Auto provisioning

• Detective Control• Spend analytics

• Performance evaluation

• Commitments tracking

• Legal entity accounting

18

Advanced Procurement Solutions – Powered by Technology

• Better Cash Flow Management

• No Po, No Payment

• Improved automation to reduce payment lifecycle

• Dynamic discounting framework

• Automatic spend threshold control

19

Business Values Derived

Enhanced Collaboration & Automation

• 15 % of EDI transactions increased • 200 vendors moved to EDI enabled• P2P Lead time reduced by 48 hrs

Extend &

Enhance Sourcing• # of Sourcing events created in PS tripled

Drive Contract Compliance

• 32 % increase in Supplier Contracts Volume• Proactive notifications for all Voucher Contracts

End to End Visibility

• 60 % of time savings for Buyer• 25% P2P lead time saved

Improved Control & Reduced Risk

• 30 % reduction in Reconciliation Effort• 70% of time savings for Buyer & AP Clerk

Better Cash Flow Management

• 30 % savings on P2P lead time

Customization Governance: 52% customizations reduced

20

Key Take Aways

Business Requirements

• Infosys “Persona” based requirements

Workshop & CRP • CRP0 – Product exploration

• CRP1 - Lowes business process

• CRP2 - Day in Life View – Train the Trainer

Customization Decision

• Infosys Value based Governance Framework

Stakeholder engagement

• Proactive communication to end users

• User Communities – Lowe’s Connections

Deployment

• Fool Proof Go-Live rehearsals

21 Conclusion & Discussions

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Thank YouKevin Dioquino - Kevin.L.Dioquino@lowes.com

Rajesh Rajagopalan - rajesh_rajagopalan@infosys.com

Sudharsan Srinivasaraghavan - sudharsan_s@infosys.com