procure to pay – imtiaz ali
TRANSCRIPT
© 2013 SAP AG. All rights reserved. 2 Customer
Agenda – 20 May 2015
09:00 – 09:30 Registration
09:30 – 09:50 EC&O Industry Trends
09:50 – 10:00 Visual Design and Construction
10:00 – 10:30 Commercial Project Management
10:30 – 11:00 Feildglass – Resource Procurement for EC&O
11:00 – 11:40 Networking Break
11:40 – 12:00 Procure to Pay
12:00 – 12:30 Mobile Solutions for EC&O
12:30 onwards Lunch and Networking
SAP Ariba : Cut Costs & Drive Compliance
Imtiaz Ali
Solution Sales Manager
Procurement & Business Networks
SAP MENA
© 2013 SAP AG. All rights reserved. 4 Customer
Topics
• SAP Strategy for Procurement Line of Business
• Introduction – SAP Ariba
• Strategic Issues facing procurement
• How ECO companies are using technology to …..
– Improve Spend Visibility / Reduce Costs
– Identify new suppliers and manage the registration / prequalification process
– Improve Supplier Collaboration using Business network
– Manage Contracts to improve compliance
– Introduce Self Service Procurement for Indirect Materials using Catalogs
Customer Case Studies
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 5
The Digital Economy Ariba Network Why SAP? Next Steps
SAP can address all major spend categories for consumer products
companies
Global capital and operational spending for
the Global 2000 is distributed across
different categories for consumer products.
SAP Business Networks can help
companies address all of the spend
categories
Source: Spend Categories for Global Top2000 (Consumer Products)
COLLABORATIVE PROCUREMENT SUCCESS
DEPENDS ON :
Real time seamless collaboration
with any business partner
Comprehensive end to end process
automation by spend category, with
consumer great UX
Compliance with external and
internal regulation (GRC, data
security, integration with system of
record)
1
2
3
35% Direct &
Supply Chain
8% Travel
29% Indirect
& MRO
28% Labor &
Services
© 2013 SAP AG. All rights reserved. 6 Customer
SAP Ariba - Introduction
6 6
Global Locations
25 locations in 21 countries
on 5 continents including
UAE
2,400+ employees
Technology Coverage
$340B+ passed last FY
4M+ desktops using Ariba applications
500+ categories sourced through Ariba
Top companies plugging leakages
Multiple Languages
Speak over 35 languages
Global support centers in US
Europe and India
Largest Suppliers Database
1M + registered suppliers covering
over 120 countries
One of every three projects involves
global supply base
400 billion USD PO on ASN
210 billion USD Invoices on ASN
Dubai
© 2012 Ariba, Inc. All rights reserved.
© 2013 SAP AG. All rights reserved. 7
Retail
Electronics Technology
Life Sciences
Software
Consumer Goods
Financial Services
Manufacturing
Energy
Telecom/ Infrastructure
Global Companies leverage SAP - Ariba to achieve Sustainable savings
© 2013 SAP AG. All rights reserved. 8
SAP – Ariba- Customers in Projects, Real Estate & EPC
© 2013 SAP AG. All rights reserved. 10
Strategic issues facing procurement / Construction
Industry
Growing volatility of prices
Greater Competition ( Suicide Bidding ) : Prices are driven down as companies bid lower in an attempt to secure the work
Erosion of margins
Cash flow is becoming more problematic as companies hold on to cash for as long as possible before making payment
Growing importance of supplier Management
Declining budgets
Greater global and regional regulatory pressures
© 2013 SAP AG. All rights reserved. 11
Typical CPO Challenges in the construction Industry
How do we most effectively reduce costs & drive compliance ?
How to we identify and source from the right suppliers ?
How to we ensure that suppliers deliver on time and as per the
project deadlines ?
How do we ensure that contractors / suppliers maintain the required
health and safety standards ?
How do we respond to increasingly rapid demand changes?
How do we manage suppliers performance and risk?
How do we improve our procurement processes?
How do we increase transparency in our procurement process ?
How do we measure compliance – regulatory and savings?
“Costs Savings, Efficiencies, and Impact”
© 2013 SAP AG. All rights reserved. 12 Customer
Ineffective & Inflexible Source to Pay Process
Result in Inability to Deliver Cost Savings
None to Limited Spend
Visibility Inability to extract and aggregate spend data
Difficulty to measure and manage spend data
Lack of insight into savings opportunities, trends
Poor Ability to Deliver
Negotiated Cost Savings Lack of formalized sourcing practices
Limited sourcing tools or analysis capabilities
Long, poorly managed cycle times
Ineffective Strategic
Supplier Management Distributed supplier
information across multiple systems
Limited supplier performance and
management process
Lack of ability to identify or manage risk
High Transaction Costs,
Inability to Deliver Savings Many disparate systems that generate spend
Non-standardized processes, compliance to rules
and policies
Poor user adoption
Ineffective Contract
Management Lack of centralized management
leads to savings leakage
Difficult to ensure contract
compliance
No single process for contract
management
CPO
LegalLegal
Sourcing
Professionals
Sourcing
Professionals
Key Category
Stakeholders
Procurement
Management
© 2013 SAP AG. All rights reserved. 13 Customer
Effective and Flexible Source to Pay Process
Results in Maximum Cost Savings
CPO
AB
C
AB
C
Sourcing
Professionals
Sourcing
Professionals
Procurement
Management
LegalLegal
Key Category
Stakeholders
CPO
Deliver Insightful Spend
Performance Management Enables spend data extraction & aggregation from back-ends
Provides Spend data normalization and classification
Quickly identifies savings opportunities
Ensures Sustainable
Sourcing Processes Delivers maximized negotiable savings
Manages the strategic and operating sourcing processes
Provides analysis, project management, RFx, auction
Effective Strategic
Supplier Management Enables the centralization of supplier
information
Provides supplier end to end lifecycle
management
Minimizes supplier risk
Efficient, Streamlined
Operational Procurement Reduces operational costs and maximize realizable savings
Automates the entire procure to pay process
Delivers compliance, supplier collaboration, and adoption
Optimize Contract Lifecycle
Management Delivers efficiency, visibility & control
of contracts
Automates the contract creation and
management cycles
Enables full contract compliance
© 2013 SAP AG. All rights reserved. 14 Customer 14
• A UK based leading commercial organization was tendering
its requirements for property contractors for various ad-hoc
projects to be conducted in a two-year time frame.
• The total estimated value was 60 million GBP spread over
two years and over some 120 projects varying in size
• Client goals were to achieve cost savings and consolidate
supply base by selecting a panel of preferred contractors.
• Long term goals included improvement and standardization
of service.
• 45 pre-qualified suppliers were invited to bid.
Strategy
• Aggregate bidding
• Event was structured in nine lots; the first 8 split by region
and by project size. Lot 9 was an aggregate lot
Result
• 407 bids submitted
• 20% savings ( GBP 12 M )
Case Study : Property Contractors
© 2013 SAP AG. All rights reserved. 15
• Transparency into the
negotiation process
• Focus on laying out
comparative criteria
clearly before bidding /
negotiations / responses
are received
• Category management
to define sourcing
process
• Over 48 auctioning
formats
SAP Ariba streamlines Source-to-Pay Process
Electronic
Invoicing
Visibility
Procurement Sourcing
• Monitor Performance &
Compliance
• Transparency into
‘buyer’ performance
• Visibility by Commodity
• Strategic decision
making information by
Purchasing Behavior
• Identify opportunities
and prioritize spend
• Can work on top of
existing ERP or Ariba
system
• Enable Catalog and non
catalog based buying
• Ensure purchasing of
Punchout, Dynamic,
rate card and contract
catalogs
• Ensure contract
compliance
• Reduce Maverick
buying
• Leakages plugged on
volume discounts
• Drive policy compliance
and consumption
control
• Reduce invoicing errors
• Reduce cycle time for
invoice processing
• Compliance against
contracts for non-PO
spend
• Ensure Transparent
approval and payment
process
Supplier Network Supplier Discovery
Contracts
• Clause Library
• Electronic Work
flow for approvals
• Electronic
Repository
• Seamless transfer
and communication
with outside parties
• Achieve global
contract visibility
• All Types of
contracts
© 2013 SAP AG. All rights reserved. 16 Customer
SAP Ariba - Overview Spend Management Applications and Business Network
Procurement
Procure to Order
Request Approve Catalog and Contract
PO Collaborate
Network
Catalog
Network PO
Automation
Finance
Network Invoice
Automation
Receive Invoice
Exceptions & Approve
Schedules and
Discounts
Pay
Invoice
Workflow Discounts and WCM
Data
Connection
Web
Interface
Paper
Collaborate
Manage Supplier
Supplier Info and Performance
Mgmt
Profiles and Risk
Track/Improve Performance
Contract
Ariba Contract Management
Negotiate and Sign
Manage and Renew
Analyze Spend
Spend Visibility Ariba Sourcing & Discovery/Savings Pipeline &
Tracking
Analyze Discover Plan RFX/
Negotiate
Source
Identify Opportunity
Order
Confirmation
eInvoices
Invoice Status
Purchase Orders
Shipping Notices
Payment Status
Early Payments
© 2013 SAP AG. All rights reserved. 20 Customer
Spend Visibility Three Key Components
Identify Opportunity
Develop Strategy
Source & Negotiate
Implement Contract & Execute
Monitor & Manage
Invoice & Pay
Spend Visibility
1 Process Visibility
2 Performance Visibility
3
WHAT is our spend?
by whom
which suppliers
Which categories
Which projects ?
HOW do we spend?
which processes
are they efficient WHO is performing?
what are the goals
are they being met?
© 2013 SAP AG. All rights reserved. 21 Customer
Executive Dashboard
Supplier
Performance
Sourcing
Activity
Purchasing
Activity
Productivity
Measures
Contracting
Activity
© 2013 SAP AG. All rights reserved. 22 Customer
Using the technology to generate Executive Insight Automated , quality data to drive performance ( on mobile devices )
© 2013 SAP AG. All rights reserved. 25 Customer
Search, Report,
And Analyze -Graphical Role Based Dashboards
-All Fields are Searchable & Reportable
-Ad-Hoc & Scheduling Features
RFx Events
(Sealed Bid, Reverse Auction, RFP/RFQ, Negotiation) - Gathering Bids from Simple to Complex
-Bid console, audit, messaging
-Scoring, Grading, Total Cost Modeling
- Bid Protection and Market Feedback rules
Supplier Qualification
And Identification
(Supplier Search) - Identify Acceptable Suppliers
- Determine Supplier Capabilities
- Supplier Profile Analysis
- Ariba Network Discovery
Project
Creation -Identify Key Stakeholders
-Setup Project Milestones
-Create Timelines
Decision Analysis (Optimization and Award)
-Constraint-based Optimization
-Evaluate Price and Performance
-Explore Potential Award Scenarios
-Generate Award & Create Contract
Sourcing Overview
© 2013 SAP AG. All rights reserved. 26
Customers use SAP - Ariba in managing the key
construction related categories
0 1000 2000 3000 4000 5000 6000
In Mn USD
Site Services
Demolition
Waste Disposal
Design Services
Equipments
DG Sets
M echanical Sub contracts
Electrical Sub Contracts
Equipment Installation
Steel
P iping
Scaffolding
HVAC Contracts
Category Experience- Construction Related
Asia
Global
© 2013 SAP AG. All rights reserved. 27 Customer
Delivering significant benefits across categories
Savings are shown in brackets
Illustrative Categories
© 2013 SAP AG. All rights reserved. 28 Customer
Savings Potential across various Indirect Categories using
How does SAP – Ariba Business
Network help to …
Find new and capable suppliers /
Supplier Collaboration
© 2013 SAP AG. All rights reserved. 30 Customer
“Other”
Buyers Suppliers
The SAP - Ariba Business Network is the leading Business Network
Nearly 1 Million partners use the Ariba Network for ~$400 billion spend
Partner and
Ecosystem Solutions
An SAP Company
Ariba Network ~1 million trading partners across all industries
40+ million Purchase Orders
60+ million Invoices
~$400 billion in spend
142 countries
72 currencies
40 Invoice compliant countries
EDI
HTML
cXML
AS2
Paper
Smart
CSV
xCBL
© 2013 SAP AG. All rights reserved. 31 Customer
Create a summary of
your need
Publish on Ariba
Discovery
Relevant suppliers will
be notified
Review & Select new
suppliers
Invite them to your
SOURCING project
Find new Suppliers and Post & Search to the ENTIRE
network – Welcome to SAP Ariba Discovery !
12k lightbulbs
for week 56
Ariba
Sourcing
Check it out!
http://discovery.ariba.com
SAP Ariba
Discovery
HOT
© 2013 SAP AG. All rights reserved. 33 Customer
Unified Best-in-Class Solution for ALL Aspects of
Supplier and Customer Management
Partner
Partner Partner
Partner
Buyer
Buyer
Buyer
Buyer
Supplier
Customer
Supplier
Customer
Information Management • Profile/Certificate Mgmt • On-Boarding • Vendor Master Mgmt • Supplier Discovery
Performance Management • Scorecards • Data collection • Analytical Reporting • Process and Program Mgmt
Risk Management • Risk Assessment • Information Enrichment • Analytical Reporting • Diversity • CSR / Sustainability
According to the Analysts:
• “Remarkable demonstration of market understanding and marketing execution in 2009 for this suite [Supply Base Management]”
• - Gartner Research, Sourcing MQ, Feb. 2010
Supplier Info
Org hierarchy
UCC filings
Liens
Lawsuits
Financials
Diversity
CSR / Green
Risk
Regulatory Info
OFAC / SDN Denied Party Lists EPA / OSHA Lawsuits Business events
© 2013 SAP AG. All rights reserved. 34 Customer
Supplier Lifecycle
Supplier Registration
Supplier Qualification
Supplier Evaluation
Supplier Portfolio & Risk
Supplier Order Collaboration (UI
Integration)
Supplier Development
Supplier Phase-out
Continuous innovation
Registration/Qualification
(e.g. additional question
types)
Supplier Evaluation (event
triggered and scheduled)
© 2013 SAP AG. All rights reserved. 36 Customer
SAP Contract Lifecycle Management Supports the Entire Contract Lifecycle
© 2013 SAP AG. All rights reserved. 37 Customer
Contract Performance Dashboard – Agreements Overview
Contract Visibility
Intuitive contract dashboard
with powerful search
functionality.
Delivered with preconfigured
reports like ‘Top 10 Agreements
by Agreement Value’ and ‘Top
10 Product Categories’
Search Result with header and
line item information
© 2013 SAP AG. All rights reserved. 39 Customer 39
• Germany Based parking garage turn key construction
project
• The budget was a round 11 million Euros.
• 10 pre-qualified German based suppliers were invited to
bid. Supplier qualification was based on them being
general contractors with garage construction
experience.
• Key project objectives:
• Reduce negotiation time
• Reduce Costs
• Technical Advisory via an independent planning office of
consulting engineers
• The buyer awarded the tender 72h following closure of
the Competitive Online Event
Strategy
• Face-to-Face clarification meetings were held with
every participating supplier prior to the Competitive
Online Event
• Rank only transformation feedback
Result
• 204 bids placed into the market
• 10% savings against the lowest offline quote
Case Study : Car Park in Germany
© 2013 SAP AG. All rights reserved. 40 Customer
Indentified Savings of over 10% Infrastructure Contract
15 participating suppliers placed 231 bids in the event