Procurement Intelligence
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Transcript of Procurement Intelligence
Procurement Intelligence the fuel that accelerates ROI and
savings
Defining Procurement Intelligence
“The skills, tools and
help a business acquire an enhanced
understanding of its commercial context
to support better buying and sourcing
decisionmaking.”
2
Defining Procurement Intelligence
and practices used to
help a business acquire an enhanced
understanding of its commercial context
better buying and sourcing
3
Agenda
§ Defining “Procurement Intelligence” § Why is procurement intelligence so important § Using it to your advantage
§ Building procurement intelligence framework & adding intelligent plug
Defining “Procurement Intelligence” Why is procurement intelligence so
Using it to your advantage Building procurement intelligence framework & adding intelligent plugins
Neil Deverill Chairman of the Procurement Leaders Advisory Board Chairman of the Procurement Leaders Advisory Board
The Headlines
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Introduction
§ Without correct data & information procurement is no more than a lottery
§ Missed sourcing opportunities & miscalculated sourcing risks lead to: § Excessive operating & overhead costs § Exchange rate penalties & unseen derivative exposure § Technology lag § Loss of critical supply chain capacity
§ Procurement intelligence is too important to overlook
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Without correct data & information procurement is no
Missed sourcing opportunities & miscalculated
Excessive operating & overhead costs Exchange rate penalties & unseen derivative exposure
Loss of critical supply chain capacity
Procurement intelligence is too important to overlook
Spend Analysis: Who, how much & with whom for what?
§ Spend analysis is fundamental and a starting point if you’re spending too much § Improve leverage for price & other benefit advantages § Control offcontract spend § Remove duplicate specifications § Optimise payment terms –
§ Consolidate spend to increase your customer ranking § Use improved transparency to build internal relations
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Spend Analysis: Who, how much & with
Spend analysis is fundamental and a starting point if you’re spending too much
Improve leverage for price & other benefit advantages contract spend – uninformed and maverick
Remove duplicate specifications – save cost & inventory synchronise to cash flow needs
Consolidate spend to increase your customer ranking Use improved transparency to build internal relations
Supplier Intelligence
§ Is your supplier financially sound? § Ensure clarity of your future requirements to assist supplier
planning § Are your suppliers and their supply chains structurally stable? § Ask suppliers about their marketing strategies & where you fit into
them § Are your suppliers’ business strategies compatible with yours? § Senior management can flush out important facts during supplier
visits
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Is your supplier financially sound? Ensure clarity of your future requirements to assist supplier
Are your suppliers and their supply chains structurally stable? Ask suppliers about their marketing strategies & where you fit into
Are your suppliers’ business strategies compatible with yours? Senior management can flush out important facts during supplier
Supplier Market Intelligence
§ Are your suppliers’ operations/sourcing strategies cost competitive?
§ How will economic changes impact demand for your key commodities?
§ Have your competitors recently recruited commodity traders? § How will regional political developments impact your business? § What is your foreign exchange exposure? § Can regional development plans assist your suppliers/ create new
suppliers?
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Supplier Market Intelligence
Are your suppliers’ operations/sourcing strategies cost
How will economic changes impact demand for your key
Have your competitors recently recruited commodity traders? How will regional political developments impact your business? What is your foreign exchange exposure? Can regional development plans assist your suppliers/ create new
Using Intelligence to Your Advantage
§ Ensure that you create intelligent business processes § Create nodes for information collation & systematic dissemination § Use good supplier relations for ‘me too’ solutions
recreation § Use intelligence crossfunctionally § Ensure collective actions arise from intelligence § Plan how to use intelligence to motivate your suppliers
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Using Intelligence to Your Advantage
Ensure that you create intelligent business processes Create nodes for information collation & systematic dissemination Use good supplier relations for ‘me too’ solutions – avoid
functionally Ensure collective actions arise from intelligence Plan how to use intelligence to motivate your suppliers
Executive Summary
§ Timely use of Procurement Intelligence turns amateurs into serious players
§ Economic and geopolitical events continually create new opportunities that can provide competitive advantage
§ It is probable that some competitors know more than you do § Internal intelligence will provide control and lower costs § Market intelligence identifies financial risk, exposure, but also
opportunities § Supplier intelligence ensures your supply chains work optimally
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Timely use of Procurement Intelligence turns amateurs into
Economic and geopolitical events continually create new opportunities that can provide competitive advantage It is probable that some competitors know more than you do Internal intelligence will provide control and lower costs Market intelligence identifies financial risk, exposure, but also
Supplier intelligence ensures your supply chains work optimally
Building procurement intelligence framework & adding intelligent plug‐ins
© 2009 Zycus Inc. All rights reserved
Building procurement intelligence framework &
Presented by
AGENDA
© 2009 Zycus Inc. All rights reserved
ü Zycus Overview ü Building Procurement Intelligence Framework ü Adding Intelligent Plug‐ins ü Implementation Approach ü Intelligent investment decisions
Presented by
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Building Procurement Intelligence Framework ins
Intelligent investment decisions
Zycus – Continued Success Story
A worldwide leader in Spend Management Software solutions
14 © 2009 Zycus Inc. All rights reserved
“ out from a leadership position in the data cleansing and classification market to offer a wide array of sourcing, contract management and analytics capabilities, all of which are quite novel in their approach to the market
§ Recognized as one of the Spend Management Domain by leading analysts and Industry observers
. § More than
verticals .
§ One of the most rate of 50%
. § Receives
Cited as one of the most promising private tech firms with Asian origin
. § Profitable, Global organization with
Europe and Asia
© 2009 Zycus Inc. All rights reserved
“ Zycus, the Spend Management provider has quietly branched out from a leadership position in the data cleansing and classification market to offer a wide array of sourcing, contract management and analytics capabilities, all of which are quite novel in their approach to the market.”
Jason Busch, Spend Matters
Recognized as one of the Top 3 Global Market Leaders in Spend Management Domain by leading analysts and Industry observers
More than 150 customers in 15 countries across industry verticals
One of the most rapidly growing customer base with a growth rate of 50% ‐ 70% year on year
Receives Red Herring 100 Asia & Global 200 2008 Award ‐ Cited as one of the most promising private tech firms with Asian origin
Profitable, Global organization with multiple offices in US, Europe and Asia
Why Zycus?
Easy to use SaaS based software solutions that accelerate ROI ü Flexible deployment options based on immediate priorities and goals
ü Creative pricing models linked to ROI
Faster user adoption ü Web 2.0 software that requires minimal training
ü Entire suite built on a single frame work that facilitates integration
ü Efficient International support: UI and support in multiple languages
15 © 2009 Zycus Inc. All rights reserved
“Zycus is a strong alternative to pricier ERP products. In
this economy, best of breed continues to advance, which
begs the question, what will the ERP vendors do to counter
and stop the movement to best.”
Mickey North Rizza
Research Director, AMR Research
Easy to use SaaS based software solutions that accelerate ROI Flexible deployment options based on immediate priorities and goals
Creative pricing models linked to ROI
Web 2.0 software that requires minimal training
Entire suite built on a single frame work that facilitates integration
Efficient International support: UI and support in multiple languages
© 2009 Zycus Inc. All rights reserved
Zycus is a strong alternative to pricier ERP products. In
this economy, best of breed continues to advance, which
begs the question, what will the ERP vendors do to counter
and stop the movement to best.”
Mickey North Rizza‐
Research Director, AMR Research.
Why Zycus?
ü Dedicated customer success manager § Regularly track and measure customer ROI and user adoption
§ Share and help implement best practices that enhance user adoption
ü Agile product management methodology § 45 product upgrades delivered seamlessly in a year eliminating wait time of 6 feature in the product
§ Strong process to include customer voice in the Product road map
ü Dedicated and responsive delivery and customer support team § Rated 9 or 10 on the scale of 10 in customer satisfaction surveys every quarter
§ Support through phone, email and unique tools like chat, follow
16 © 2009 Zycus Inc. All rights reserved
“We consider Zycus to be an excellent provider of Spend Management technology. They are very responsive; it's an effective pr
and technology solution.” ‐Miguel Miciano, Director of procurement, Amgen.
Dedicated customer success manager Regularly track and measure customer ROI and user adoption
Share and help implement best practices that enhance user adoption
Agile product management methodology 5 product upgrades delivered seamlessly in a year eliminating wait time of 612 months to get a critical
Strong process to include customer voice in the Product road map
Dedicated and responsive delivery and customer support team Rated 9 or 10 on the scale of 10 in customer satisfaction surveys every quarter
Support through phone, email and unique tools like chat, follow me browsing etc
© 2009 Zycus Inc. All rights reserved
“We consider Zycus to be an excellent provider of Spend Management technology. They are very responsive; it's an effective product
Director of procurement, Amgen.
Zycus Spend Management Solutions
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Source and Implement savings
Strategic Sourcing
Analyze Spend & identify savings opportunities
Spend Analysis
> Auctoclass
> iAnalyze
> Opportunity Identification
services
> AI based classification
engine
> Opportunity tracker
> iSource
> Category Sourcing services
> Event Management services
> End to End services
> Powerful and easy event
modeling
> Exhaustive & easy analysis
> Powerful and easy
collaboration
Prod
ucts
Services
Differen
tiators
© 2009 Zycus Inc. All rights reserved
Zycus Spend Management Solutions
Manage Savings & contract compliance
Contract Management
Source and Implement
Category Sourcing services
Event Management services
Exhaustive & easy analysis
> iContract
> Contract Audit Services
> Contract Digitization &
Migration
> Contract compliance
> Contract to market
indices linkages
> Guided & free text search
© 2009 Zycus Inc. All rights reserved
Building Procurement Intelligence Framework
SPEND ANALYSIS § Consolidate spend data § Classify & analyze the data leveraging
software § Refresh periodically
§ Spend by supplier/commodity/ BU & other dimensions § Eliminate maverick spend § Identify leakages, e.g. PPV §Manage opportunity pipeline
Recommendation
© 2009 Zycus Inc. All rights reserved
Building Procurement Intelligence Framework
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Spend by supplier/commodity/ BU & other dimensions Eliminate maverick spend Identify leakages, e.g. PPV Manage opportunity pipeline
Benefits
Adding intelligent plug‐ins
SPEND ANALYSIS § Consolidate spend data § Classify & analyze the data leveraging
software § Refresh periodically
§ Spend by supplier/commodity/ BU & other dimensions § Eliminate maverick spend § Identify leakages, e.g. PPV §Manage opportunity pipeline Opportunity
Identification & Assessment
Recommendation
© 2009 Zycus Inc. All rights reserved
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§More spend under management § Increased sourcing
efficiency
Spend by supplier/commodity/ BU & other dimensions Eliminate maverick spend Identify leakages, e.g. PPV Manage opportunity pipeline
Benefits Benefits+
Building Procurement Intelligence Framework
§ Create a web‐based platform § Automate sourcing process § Plan adoption
SOURCING
SPEND ANALYSIS § Consolidate spend data § Classify & analyze the data leveraging
software § Refresh periodically
§ Competitive negotiations § Easily 5% § Reduction in sourcing cycle time
by over 25%
§ Spend by supplier/commodity/ BU & other dimensions § Eliminate maverick spend § Identify leakages, e.g. PPV §Manage opportunity pipeline Opportunity
Identification & Assessment
Recommendation
© 2009 Zycus Inc. All rights reserved
Building Procurement Intelligence Framework
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§More spend under management § Increased sourcing
efficiency
Competitive negotiations Easily 5%‐25% more savings Reduction in sourcing cycle time by over 25%
Spend by supplier/commodity/ BU & other dimensions Eliminate maverick spend Identify leakages, e.g. PPV Manage opportunity pipeline
Benefits Benefits+
Adding intelligent plug‐ins
§ Create a web‐based platform § Automate sourcing process § Plan adoption
SOURCING
SPEND ANALYSIS § Consolidate spend data § Classify & analyze the data leveraging
software § Refresh periodically
§ Competitive negotiations § Easily 5% § Reduction in sourcing cycle time
by over 25%
§ Spend by supplier/commodity/ BU & other dimensions § Eliminate maverick spend § Identify leakages, e.g. PPV §Manage opportunity pipeline Opportunity
Identification & Assessment
Sourcing Strategy
Recommendation
© 2009 Zycus Inc. All rights reserved
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§More spend under management § Increased sourcing
efficiency
Competitive negotiations Easily 5%‐25% more savings Reduction in sourcing cycle time by over 25%
§ 10%‐35% increased savings § Right price,
suppliers to source
Spend by supplier/commodity/ BU & other dimensions Eliminate maverick spend Identify leakages, e.g. PPV Manage opportunity pipeline
Benefits Benefits+
Building Procurement Intelligence Framework
CONTRACT MANAGEMENT § Create dynamic contract repository § Consolidating contracts across BU’s § Upload contracts
§ Create a web‐based platform § Automate sourcing process § Plan adoption
SOURCING
SPEND ANALYSIS § Consolidate spend data § Classify & analyze the data leveraging
software § Refresh periodically
§ Competitive negotiations § Easily 5% § Reduction in sourcing cycle time
by over 25%
§ Spend by supplier/commodity/ BU & other dimensions § Eliminate maverick spend § Identify leakages, e.g. PPV §Manage opportunity pipeline Opportunity
Identification & Assessment
Sourcing Strategy
§ Enhanced contract Visibility § Auto alerts & reminders § Reduction in maverick spend
Recommendation
© 2009 Zycus Inc. All rights reserved
Building Procurement Intelligence Framework
22
§More spend under management § Increased sourcing
efficiency
Competitive negotiations Easily 5%‐25% more savings Reduction in sourcing cycle time by over 25%
§ 10%‐35% increased savings § Right price,
suppliers to source
Spend by supplier/commodity/ BU & other dimensions Eliminate maverick spend Identify leakages, e.g. PPV Manage opportunity pipeline
Enhanced contract Visibility Auto alerts & reminders Reduction in maverick spend
Benefits Benefits+
Adding intelligent plug‐ins
CONTRACT MANAGEMENT § Create dynamic contract repository § Consolidating contracts across BU’s § Upload contracts
§ Create a web‐based platform § Automate sourcing process § Plan adoption
SOURCING
SPEND ANALYSIS § Consolidate spend data § Classify & analyze the data leveraging
software § Refresh periodically
§ Competitive negotiations § Easily 5% § Reduction in sourcing cycle time
by over 25%
§ Spend by supplier/commodity/ BU & other dimensions § Eliminate maverick spend § Identify leakages, e.g. PPV §Manage opportunity pipeline Opportunity
Identification & Assessment
Sourcing Strategy
Spend to Contract match
§ Enhanced contract Visibility § Auto alerts & reminders § Reduction in maverick spend
Recommendation
© 2009 Zycus Inc. All rights reserved
23
§More spend under management § Increased sourcing
efficiency
Competitive negotiations Easily 5%‐25% more savings Reduction in sourcing cycle time by over 25%
§ 10%‐35% increased savings § Right price,
suppliers to source
Spend by supplier/commodity/ BU & other dimensions Eliminate maverick spend Identify leakages, e.g. PPV Manage opportunity pipeline
Enhanced contract Visibility Auto alerts & reminders Reduction in maverick spend
§ Higher contract compliance § Plug saving
leakages
Benefits Benefits+
Implementation Approach
§ Understand the primary pain area } Spend Invisibility } Cumbersome manual sourcing process } Lack contract compliance
§ Start where it hurts you most
§ Complete the process in a phased manner
© 2009 Zycus Inc. All rights reserved
Understand the primary pain area
Cumbersome manual sourcing process
Complete the process in a phased manner
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Intelligent investment decisions
§ When your primary driver is Spend Analysis } Couple with eSourcing } Follow it up with contract management
§ When your primary driver is eSourcing } Couple with Contract management } Follow it up with Spend analysis
§ When your primary driver is Contract Management } Couple with Spend Analysis } Follow it up with eSourcing
§ You can implement all three at one go
© 2009 Zycus Inc. All rights reserved
Intelligent investment decisions
Spend Analysis
Follow it up with contract management
eSourcing
Contract Management
You can implement all three at one go
25
© 2009 Zycus Inc. All rights reserved 26
Profile
Business Challenges
§ Savings of over $6 million in a project that lasted 6‐8 weeks resulted in a cost reduction of 30
§ Total volume of spend sourced during pilot approx $18M across 40+ unique items
§ Managed entire event (event authoring, event scheduling, event scoring and ranking, event analysis and awarding) on behalf
of the suppliers
§ Manual processes were automated
§ Accelerate ROI – Enable global organization to easily and quickly use the solution with minimal training
§ Increased savings by enabling sourcing managers to implement lean analysis with ease
§ Large med‐tech company and a global leader in its field
§Operates in 32 countries and generates annual sales of $3.4B
Solution – Zycus iSource
Results
§ Critical analysis of suppliers to ensure they source the best medical equipment in a highly
controlled industry
§ Expensive process to be able to meet critical quality parameters due to manual
sourcing process
§ Tremendous time pressure from hospitals to meet their scheduled and urgent requirements
World Leader in Medical devices accelerates savings of over 6 Million US dollars within 68 weeks with Zycus' iSource.
© 2009 Zycus Inc. All rights reserved
8 weeks resulted in a cost reduction of 30‐35%
Total volume of spend sourced during pilot approx $18M across 40+ unique items
Managed entire event (event authoring, event scheduling, event scoring and ranking, event analysis and awarding) on behalf
Enable global organization to easily and quickly use the solution with minimal training
Increased savings by enabling sourcing managers to implement lean analysis with ease
Critical analysis of suppliers to ensure they source the best medical equipment in a highly
Expensive process to be able to meet critical quality parameters due to manual
Tremendous time pressure from hospitals to meet their scheduled and urgent requirements
“The intuitive UI and the
guided navigation of Zycus
iSource further facilitated the
ease of use and continues to
accelerate global adoption””
World Leader in Medical devices accelerates savings of over 6 Million US 8 weeks with Zycus' iSource.
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Profile
Business Challenges
§ The initiative provided spend transparency across 40+ ERP platforms and systems in less than six months
§ A customized taxonomy structure that reflects supplier market was developed to gain visibility and valuable supplier sight.
§ The solution was implemented under extreme time pressures to meet overall plan of reducing spend by approximately 850 M NOK
(approximately 100 M USD) by 2008
§ The company continues to realize savings with Zycus spend analysis solution, setting even higher ambitions going forward
§ Spend Visibility
§ Solution Efficiency
§ Sustainability and spend control
§ A 350‐year‐old conglomerate & one of the largest listed company
on the Norwegian stock exchange
§ Turnover exceeding NOK 70 billion (10 billion USD)
§ Rapidly expanding into new business areas though mergers & acquisitions
Spend Success
Results
§ With operations in countries as dispersed and linguistically diverse, the company
predicted severe challenges to the profitability of its businesses
§ Upward strain on raw material prices
§ Pressure on the company’s bottom lines
© 2009 Zycus Inc. All rights reserved
Zycus’ Spend Management Solution enables Norwegian giant to save 100 Mn USD
The initiative provided spend transparency across 40+ ERP platforms and systems in less than six months
A customized taxonomy structure that reflects supplier market was developed to gain visibility and valuable supplier sight.
The solution was implemented under extreme time pressures to meet overall plan of reducing spend by approximately 850 M NOK
The company continues to realize savings with Zycus spend analysis solution, setting even higher ambitions going forward
Rapidly expanding into new business areas though mergers & acquisitions
With operations in countries as dispersed and linguistically diverse, the company
“The Zycus solution enables us to
capture the inter‐company synergies in
purchasing, thus creating substantial
value and revolutionizing the
possibilities for collaboration.”
Sr. Project Manager
© 2009 Zycus Inc. All rights reserved
Zycus’ Spend Management Solution enables Norwegian giant to save 100 Mn USD
THANK YOU !
© 2009 Zycus Inc. All rights reserved
Anurag Dixit
Vice President, Marketing, Zycus Inc.
+1 888 451 0145
www. zycus.com
Presented by
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