DaveHowardDirector,CentralPurchasingReebok‐CCMHockey

JasonHeklVicePresident,Marke<ngCoupaSo?ware

UrgentPurchasingHowOneProcurementProfessionalTookMa=ersIntoHis

OwnHandstoGetSpendUnderControl

Wednesday,December16,2009

Poll1:

Howhaveyoupersonallyhelpedyourcompanysave?

Introducing David Howard

David Howard, Director, Central Purchasing Reebok-CCM Hockey With more than 20 years of supply chain and project management experience, David is responsible for the management of resources, processes and key financial and service objectives of purchasing of raw materials for domestic factories, and for non-product supplies and services for the Reebok-CCM Hockey Global Head Office, including 2 large distribution centers. Among his many achievements, David has been able to deliver 10-15% cost reduction in many areas of non-product spend through SKU and supplier consolidation.

Prior to joining Reebok-CCM Hockey, David was a subcontracts and project manager at Lockheed Martin Canada, Cost Manager at ASTEC APS, a division of Emerson Electric, and Purchasing Supervisor at Bombardier Aerospace. He holds a Bachelor of Business Administration from St. Francis Xavier University, NS.

Reebok-CCM Hockey

•  Headquartered in Montreal, Canada

•  Provider of hockey gear and apparel

•  Among others, Official sponsor of

A history of challenging conventions to create products that tap into athletes unlimited potential

and empower new, innovative ways to solve problems and address issues.

Reebok-CCM Hockey Non-Product Purchasing

Raw Materials Sourcing

•  4 manufacturing facilities in Canada •  $35M in annual spend

Non-product Purchasing

•  Reebok-CCM Hockey Global Headquarters •  $15M in annual spend

In Need of a Process •  The extent of the process

–  No formal written processes, other than Finance Spend Approval Matrix by department

–  All departments managed their spend independently and differently, some using manual POs, but most making verbal or e-mail commitments

FacilityOperaNons&Maintenance DistribuNon MISOperaNons

OfficeAdministraNon

No Visibility = No Control

•  Monthly reports from Finance •  Includes supplier payments only •  Little visibility on commitments or

accruals •  Spend history only payment by

account

Problems Beyond Purchasing

•  Money being spent without proper approval –  No delays in getting business done –  But spend under-managed and local to functions

•  “Monthly” invoice approval exercise –  AP chasing approvals for payment –  Missing most discounts –  Late payments resulting in late fees –  Duplicate payments / no proof of receipt / fraud potential

•  Inefficient, multiple ordering and payment systems –  Finished Goods, factory Raw Materials and all non-product

invoices, all purchased in separate systems –  Invoice payments are made using a 4th system

An Even Greater Challenge

Senior management wasn’t bought into the need for purchasing

automation.

Believed tighter manual controls would be sufficient to control and manage spend.

Leading the Charge

•  Becoming “The Champion” for change –  Would not take NO for an

answer –  Did the homework, created a

full business case for the requirement

–  Publically committed to savings in non-product purchasing

Gaining Momentum

•  Internal Audit – Mandated purchasing processes to manage non-

product spend –  Ensure segregation of duties

•  Economic Pressures – Down-sized company resources – New ways of doing more with less

A Plan to Get Management to Say “YES”

•  Conduct a vendor evaluation –  Find a low risk solution

•  Perform an ROI analysis – Determine its potential

impact

•  Phased roll out –  Identify points of failures,

repeat successes

Sí Oui

Ja Ndiyo

Áno

Hai Na'am

是

YES

Conducting the Vendor Evaluation Evaluation Options

Factory MRP Tools

Add-on Modules to

Existing A/P Tool

Parent-Company Tools

Purchase 3rd Party Tools

Conducting the Vendor Evaluation Evaluation Checklist

  Ease of Entry   Annual Operating Cost   Functionality / Best Practice Alignment   Ease-of-use / Process Automation w/ Workflow   Segregation of Duties / Audit Trail   Scalability   IT Independence   Real-time Dashboard Reporting   Create Self-Enforcing Process / Controls

Conducting the Vendor Evaluation Why Coupa?

  Ease of Entry No CAPEX to push through corporate approvals

  Annual Operating Cost Annual cost vs. anticipated “easy” savings

  Functionality / Best Practice Alignment Automation, speed of spend

  Ease-of-use / Process Automation w/ Workflow

Simple Google, Amazon type experience

  Segregation of Duties / Audit Trail Segregated duties with password approvals for audit

  Scalability Easily add users, business groups

  IT Independence No hardware or software to support

  Real-time Dashboard Reporting Alerts, immediate action

  Create Self-Enforcing Process / Controls Dynamic, flexible controls

✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

Determining Potential Impact ROI Analysis

•  Analysis on short-list vendors –  2 license purchases w/ on-site

implementation & support requirements

–  2 SaaS (software-as-a-service) systems, including Coupa

•  Demo each system •  Priority based “qualitative”

scoring

Determining Potential Impact ROI Checklist

  Improve Control & Accuracy Over Non-Payroll Expenditures   Improve Use of Contract Pricing   Improve Purchase Leverage through Spend Data   Reduce Waste, Duplication, Fraud & Overpayments   Reduce Overhead on Source-to-Settle Process   Expand Purchasing Spend Under Management   Improve Usage of Automated PO Creation and Transmission   Improve Ability to Manage Early Payment Discounts   All with the goal of supporting company re-alignment of

cost-structure to invest in value-creating activities

Phased Roll Out

•  Slow and calculated, targeting one department at a time –  Purchasing resources as a constraint –  High-volume departments with biggest need and fastest

“payback” –  Users who could easily adapt their processes –  Users who wanted the independence of using the

system to order with only the approvals of their own organization

–  Grass roots; creating a “I want it next” situation

Implementation To Date

•  Implemented in 6 of 10 departments –  represents roughly 70% of

our non-product spend volume.

•  100% planned by mid-2010

Hockey Distribution Center Footwear & ApparelDistribution Center

Facility Operations &Maintenance

OfficeAdministration

MIS Applications MIS Operations

Marketing & Advertising R&D

Product & Design Sales Management

Setting The Example with Coupa e-Procurement

•  The right solution for all users –  Easy-to-use and efficient –  Automated and Controlled –  Quick and cost-effective

•  Requestors and approvers actually use the system! –  Users love being independent –  Managers love being knowledgeable –  Improved budget forecasting from detailed historical data

•  The entire organization benefits –  Significant reduction in errors –  Defaults ensure accurate information –  Improved supplier invoicing, better cash flow and finance visibility

Real Process, Real Results

Coupa e-Procurement

Issue PO

Disposition Request

(approve / reject)

Purchasing

Management

Supplier Fulfillment Invoice Payment

Facility Operations & Maintenance

MIS Applications

MIS Operations

Office Administration

Hockey Distribution

Center

Footwear & Apparel

Distribution Center

Review / Manage Contracts

Identifying New Opportunities

•  Real-time Insight –  KPI tracking –  Performance tracking –  Market benchmarks

•  Identify areas to –  Improve efficiencies –  Streamline suppliers –  Negotiate better prices –  Educate buyers

•  10-15% cost reduction through SKU & supplier consolidation

•  20% reduction in suppliers through consolidation

•  30% reduction in invoice payment transactions

•  High compliance to use of contract pricing

•  Process savings estimated at $50/PO, primarily from invoice approval process

•  Payment discounts now available in 100% of invoice opportunities

•  Accruals changed from guessing to firm numbers

A Plan for Success

•  Implement e-Procurement to remaining departments, where spend is high, volumes are low and have unique requirements

•  Product & Design / R&D •  Marketing & Advertising •  Sales Management •  Finance / HR / Traffic

•  Extend online workflows to receipt and invoicing •  Integrate processes with accounting •  Further automate paper-based processes

•  Continue to set the example •  Showcase the power and benefits of a SaaS solution •  Educate users and reinforce industry best practices •  Paint a vision for the future that includes a completely integrated end-to-end

procure-to-pay solution •  Influence outside the boundaries of our division

Poll#2

Whatfactorsarepreven<ngyoufromachievingyoure‐procurementandspendmanagementgoals(checkallthatapply)?

Introducing Jason Hekl

Jason Hekl Vice President of Marketing Coupa Software

Jason Hekl is responsible for all of Coupa’s marketing initiatives, including demand generation, messaging, and marketing communications. Prior to joining Coupa, Jason was with InQuira, where helped grow revenues nearly ten-fold over a four year period. Jason earned a Master of Business Administration degree from the Ross School of Business at the University of Michigan, and a Bachelor of Arts degree in International Relations and Economics from the University of Delaware.

Part of the Problem is Inertia

The Best Intentions

“In theory, our ERP system could do what we wanted it to do, but in practicality it would never happen, because the

cost of doing that would have been astronomical.”

The Best Intentions

"Like tectonic plates adrift on a sea of magma, ERP instances and the businesses they serve are bound to

drift apart over time or dramatically collide with earthquake-like consequences.”

The Question for 2010

How do you save more

with

resources in

10% FEWER

½ as much time?

Lowest TCO with SaaS

Year 3

IT Support Maintenance

Upgrade Costs Professional Services

Software Subscription Year 3

Year 2

IT Support Maintenance

Professional Services

Software Subscription Year 2

Year 1

Implementation

Hardware Database / Middleware

Software Licenses

Software Subscription Year 1

Lowest TCO with SaaS

Year 3

IT Support Maintenance

Upgrade Costs Professional Services

Software Subscription Year 3

Year 2

IT Support Maintenance

Professional Services

Software Subscription Year 2

Year 1

Implementation

Hardware Database / Middleware

Software Licenses

Software Subscription Year 1

SaaS Eliminates Hidden Costs

IT Support Maintenance

Upgrade Costs Professional Services

Software Subscription

IT Support Maintenance

Professional Services

Software Subscription

Implementation

Hardware Database / Middleware

Software Licenses

Software Subscription

Over 3X Cost!

Customer takes on all Risk!

Broken Model!

DivisionalAccounNng

DivisionalAccounNng

DivisionalAccounNng

Unified&SimpleCrossCompanyRequisiNoning

Smarter Spending Across the Enterprise

RequisiNons

PurchaseOrders

Invoices

GeneralLedger

CrowdSourcing

PredicNveSpend

Benchmarks

Strategic&FrontOffice

AdministraNve&BackOffice

Immediate Impact with Requisition to PO

Compliance

You and the CFO are more tightly aligned than you think

Performance

Visibility

5 Strategies to Cut Costs 2010 with Coupa

1.  Spend Under Management Attract more spend at the top of the funnel

2.  Compliance With purchasing guidelines and negotiated contracts

3.  Better Deals Crowd source savings on one-off purchases

4.  Control Prevent wasteful spending before it happens

5.  Efficiency Increase velocity through the funnel, and save as a result

2

3

4

5

1

If only it were this easy…

It is.

Provide a requestor experience that is faster and easier,

than every alternative,

and you will be amazed by what

happens.

Addressing the adoption problem with a compelling requestor experience

1. Know what’s allowed, and what’s not.

SUM

Addressing the adoption problem with a compelling requestor experience

1. Know what’s allowed, and what’s not.

2. Guide requestors to preferred suppliers and contract pricing, greatly

reducing “maverick” spend

SUM

Compliance

Addressing the adoption problem with a compelling requestor experience

1. Know what’s allowed, and what’s not.

2. Guide requestors to preferred suppliers and contract pricing, greatly

reducing “maverick” spend

3. And for those ad-hoc items not covered by

existing contracts, find deals online

SUM

Compliance

Best Pricing

A flexible approval workflow engine that you can change without help

Control

A flexible approval workflow process that works for busy managers

Control

Proactive alerts and spend dashboards to prevent mistakes before they occur

Control

Achieve greater efficiencies in the req to PO process

Avoidance 5% Self Approval 29%

Efficiency

Achieve greater efficiencies in the req to PO process

Avoidance 5% Self Approval 29%

Cycle Time 23 Hours Savings 9.5% of

Spend

Efficiency

5 Strategies to Cut Costs with Coupa in 2010

1.  Spend Under Management Attract more spend at the top of the funnel

2.  Compliance With purchasing guidelines and negotiated contracts

3.  Better Deals Crowd source savings on one-off purchases

4.  Control Prevent wasteful spending before it happens

5.  Efficiency Increase velocity through the funnel, and save as a result

2

3

4

5

1

They’re not making hay of pennies.

Spend Under Mgmt

+ 20% Savings

9.5% of Spend

Our best spokespeople are our customers…

Satisfying the Skeptical CFO

What If You Had Visibility Into ALL Non-Payroll Spend?

What if you could use the same APPROVAL workflow across purchases and expenses?

What if you could BENCHMARK your expense management practices against the market?

What if you could effectively AUDIT the expense process to reduce fraud and save even more?

Spend Under Management

Expenses?

Baseline

41% Spend Under Management

With Coupa + 20% Spend Under Management

100%

New Year’s Resolutions

DaveHowardDirector,CentralPurchasingReebok‐CCMHockeydavid.howard@reebokccm.com

JasonHeklVicePresident,Marke<ngCoupaSo?warejason.hekl@coupa.com

THANKYOU