Panel Discussion Avalon Healthcare, Dell, Paystream Advisors

How Good Is Your Math? Estimating Investment For eProcurement

Direct $2824b

Payroll $1797b

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The Spending Tree – Fortune 1000

Facilities Consulting IT Spending

Legal Services Temp Labor Marketing MRO

Travel and Expenses Office Supplies

Business Case

TCO ROI

Our Panelists

Mark Colwell Vice President

Paystream Advisors

Kevin Turner Global eCommerce Director

Dell

Hyrum Kirton Vice President – Procurement

Avalon Healthcare

Avalon Healthcare

PayStream Advisors is a provider of independent research and automation

assessments for financial automation technology to business leaders in finance and procurement.

Advisory Services PayStream Research

The ‘New’ Dell

Scoping The Task

Business models

Key stakeholders

Which Of The Following Business Models Have Been Adopted By eProcurement Vendors ?

1. Only buyer pays

2. Only supplier pays

3. Both buyer and supplier pay

4. No one pays

5. 1, 2 and 3

eProcurement Business Models

Buyer Funded (example Coupa)

Supplier Funded (example GHX)

Network (example Ariba)

Buyer Pays Buyer Pays Cost Plus Buyer Pays

No Supplier Fees Supplier Fees Supplier Fees (typically)

No Supplier Transaction Fees = Increased Adoption When implementing a successful eProcurement or

E-invoicing initiative it is recommenced that suppliers have No Supplier Transaction Fees

A no charge supplier policy will help to increase your Supplier Adoption Rate

Success initiative (regardless of the technology partner) requires supplier adoption

Avalon’s eProcurement Journey Go ahead approval took 2 years from start to finish

led and pushed by procurement

Built committee of department heads to create new processes and vendors for company fit

Vetted 6 E-procurement vendors over process

Estimating investment: • Cost at or below current vendor pay model

• Value adds to support platform robust while keeping supplier pay model

Doing The Math

Hard vs. soft costs

Hidden costs, gotchas

Opportunity costs

PayStream tool

Hard vs. Soft Costs Focus on hard dollar

• Success of companies is measured in hard dollars

• Upper management wants to see hard dollar saving

Don’t ignore soft costs • Focus on the soft dollar costs that can be turned into

hard dollar saving

– Example: Reallocation of personnel. Retaining those people, reusing them, freeing up their capacity, can allow a company to grow “outward” rather than inward

What is Perceived as the # 1 Barrier to eProcurement?

1. IT Resources

2. No budget

3. Lack of executive support

4. Hard to justify

5. All of the above

Top Barriers – Paystream Survey

Hidden Costs, Gotchas IT required changes… reliance on ERP vendor and

outside firms

Process Exceptions… ePO without catalog; eInvoice without ePO

Many procurement solutions… adaptability to various technologies and solutions

Vendor Fees… Pay to Play

Integration Knowledge & Support

The PayStream TCO Tool

Vendor and technology agnostic

Simple, straightforward yet comprehensive

Helps asking right questions

Steps to Calculate Your TCO

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Evaluate the features and functionality of competitive products – Cloud versus On-Premise/Network business application solutions.

Initial Costs

1. Evaluation and Selection

Recurring Costs

2.Evaluation and Selection:

Prior to making the decision to go with a

Cloud or On-Premise/Network

solution, a buyer must first identify all the

necessary cost components associated

with each option.

Keys to Control Costs

Agreed-upon goals, objectives… and schedule

An executive commitment

Dedicated appropriate contacts for project duration

A commitment to utilization to achieve full return on investment

Presenting The TCO

Avoiding sticker shock

Getting buy-in

Where To Get The TCO Calculator?

www.paystreamadvisors.com

www.coupa.com/purchasing-procurement-resources/ resources/

Your Coupa Contact