Procurement Operations – Best in Class
Marcus Fischer, Director Professional Services Industry, SAP Asia Pacific & JapanS...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
2
Public
CPO and CFO objectives…
Improve Complianceand ...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
3
Public
…and challenges
Improve Complianceand Control ...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
4
Public
CPO and CFO objectives and challenges
Improve ...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
5
Public
How to become best-in class
Improve Compliance...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
6
Public
Spend Analytics -The Situation
Multiple Procur...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
7
Public
New solutions leveraging new big data technolog...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
8
Public
Supplier Consolidation Opportunities
Significa...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
9
Public
Big Impact Sourcing Opportunities
Identify whi...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
10
Public
Benefits
Leading SecuritySystems Company
$1B...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
11
Public
How to become best-in class
Improve Complianc...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
12
Public
Relevance of Service Spend
30-60% of total sp...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
13
Public
The challenge
where
who
what
how much
HRI...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
14
Public
The solution –a VMS designed for the specifics...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
15
Public
VMS for the contingent workforceCost savings, ...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
16
Public
Single View Across the Enterprise for All Exte...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
17
Public
Proven Value of a VMS for the contingent workf...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
18
Public
How to become best-in class
Improve Complianc...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
19
Public
The challenges and limitations
>60% manual, p...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
20
Public
The opportunity –convergence of networks, enab...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
21
Public
Benefits of the networked economy for procurem...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
22
Public
Measurable benefits realized by networked comp...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
23
Public
Summary
Leverage Solutions and Services based...
©2014 SAP SE or an SAP affiliate company. All rights reserved.
Thank you
Contact information:
Marcus Fischer
Director ...
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BMP summit 2014: Master Class: Best-in class procurement operations - Marcus Fischer, SAP Pte Ltd.

Presentation by Marcus Fischer, SAP Asia Pte Ltd. at NASSCOM BPM Summit 2014
Published on: Mar 3, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - BMP summit 2014: Master Class: Best-in class procurement operations - Marcus Fischer, SAP Pte Ltd.

  • 1. Procurement Operations – Best in Class Marcus Fischer, Director Professional Services Industry, SAP Asia Pacific & JapanSeptember, 2014
  • 2. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 2 Public CPO and CFO objectives… Improve Complianceand Control Drive process efficiency Optimize Working Capital Deliver added Valueto the business(Risk Mgt., Innovation, Time2Market,…) Constantly changing economical environment, business dynamics and technology innovations
  • 3. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 3 Public …and challenges Improve Complianceand Control Drive process efficiency Optimize Working Capital Deliver added Valueto the business(Risk Mgt., Innovation, Time2Market,…) “15% of invoices have exceptions adding 6.6 days to the cycle.” “On average companies have 66% of spend under management.” “50% of pre- negotiated discounts are never captured.” “Nearly 77% of all incoming invoices are still paper based.”
  • 4. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 4 Public CPO and CFO objectives and challenges Improve Compliance and Control Drive process efficiency Optimize Working Capital % Spend under Management 89% 66% Incremental revenue from supplier innovations 8,3% 3% Average cost to process an invoice from receipt to settlement: 7,78$ 10$ % POs compliant with contracts 85% 41% Best in class % of invoices paid early enough to secure early payment discounts 60% 10% Deliver added Valueto the business(Risk Mgt., Innovation, Time2Market,…) Average
  • 5. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 5 Public How to become best-in class Improve Compliance and Control Drive process efficiency Optimize Working Capital Deliver added Valueto the business(Risk Mgt., Innovation, Time2Market,…) Better understand your spend
  • 6. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 6 Public Spend Analytics -The Situation Multiple Procurement Systems Inconsistent Data Sources Poor Data Quality Manual, Effort Intensive Processes Limited Access to Market Information What are we buying? From whom? How often? How much? At what cost? Could we negotiate better to safe money? With whom? Where would we have the biggest impact? Are we compliant with our policies and contracts? Are we facing supplier risk? Many questions A lot of challengesin getting the answer
  • 7. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 7 Public New solutions leveraging new big data technologies: Spend Visibility Enrich Supplier data from D&B Business Insights Database Intelligent mapping & classification using Big Data Technologies Blend of automation and a manual QA process validate, map, classify, refine Flexible, role based analytics leveraging the power of Big Data Technologies Benchmark datafrom other buyers(opt-in model) Complement
  • 8. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 8 Public Supplier Consolidation Opportunities Significant spend with three different companies based on enterprise resource planning (ERP) data
  • 9. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 9 Public Big Impact Sourcing Opportunities Identify which commodities in your supply base account for a relatively large percentage of invoice spend with varying prices across multiple suppliers. Make an impact on spend by creating competitive sourcing projects for a relatively small number of parts.
  • 10. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 10 Public Benefits Leading SecuritySystems Company $1B savings within 2 years by integrating spend data from 200+ sources Over $100Min new savings opportunities attributable to improved spend visibility 97%of the annual spend classified and enriched over 98% of the supplier base thus resulting 20% supplier reduction $27.3Msavings in 2.5year period and 18% average savings across all spend categories $30M in sourcing savings achieved year- on-year Consolidated view of data –single source of truth Increased savings and improved service Ability to focus on analysis and planning, not gathering and processing data Supplier visibility for risk, diversity, and other supplier enrichment attributes Reduced maverick spending Best practices spend analysis
  • 11. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 11 Public How to become best-in class Improve Compliance and Control Drive process efficiency Optimize Working Capital Put more spend under management – manage more categories Deliver added Valueto the business(Risk Mgt., Innovation, Time2Market,…)
  • 12. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 12 Public Relevance of Service Spend 30-60% of total spend 20-50% of total workforce Direct & IndirectMaterialSpend Contractors Outsourced SOW Temps ServiceSpend ExternalWorkforce InternalWorkforce
  • 13. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 13 Public The challenge where who what how much HRIS Internal full-time + part-time on the payroll External contractors outsourced SoW temps many suppliers inefficient quality? compliance? 1-5% of revenue!
  • 14. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 14 Public The solution –a VMS designed for the specifics of service procurement From a mess… … to a VMS! hiring mgrs suppliers hiring mgrs VMS suppliers fewer no visibility inefficiencies too high rates + costs quality Issues compliance issues
  • 15. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 15 Public VMS for the contingent workforceCost savings, efficiency, consistency and compliance 1 Create RFx 2 Collaborate & Approve 3Distribute RFx 4 Submit Responses 5Evaluate & Select Vendor 6 Create & Negotiate SOW On-board Workers 7 Complete Deliverables 8Submit T&E Approve 9 Off-board Workers 10 Prepare Invoice 11 Evaluate Supplier 12
  • 16. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 16 Public Single View Across the Enterprise for All External Workers / Service Providers
  • 17. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 17 Public Proven Value of a VMS for the contingent workforce visibility ↑ efficiency ↑ time2market ↓ costs ↓ quality ↑ compliance ↑ 100% visibility! -$33M in 1st yr! quality ↑ retention ↑ health + safety incidents ↓ approvals 2wks → 2days! -9.9% in 1st yr! competitive bidding ↑ compliant w/ TARP etc. time-to-fill -20% contractor conversion ↑
  • 18. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 18 Public How to become best-in class Improve Compliance and Control Drive process efficiency Optimize Working Capital Deliver added Valueto the business(Risk Mgt., Innovation, Time2Market,…) (Fully) Leverage the Potential of Networks
  • 19. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 19 Public The challenges and limitations >60% manual, paper-based communication/transactions or Point to Point EDI, Portals & Single Process Solutions Manual or semi-automated data entry => Error prone Insufficient information for effective reconciliation => slow, inefficient Process status intransparent Limited market transparency Buyers Suppliers Focus of optimization so far
  • 20. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 20 Public The opportunity –convergence of networks, enabling the networked economy Mobile Networks SocialNetworks BusinessNetworks CorporateNetworks Automation Acceleration Efficiency Transparency Collaboration Compliance Knowledge Innovation New business models ConsumerNetworks Buyers Suppliers
  • 21. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 21 Public Benefits of the networked economy for procurement Buyers Suppliers Efficiency & Acceleration Easy Catalog management RFx& Bid Collaboration PO & Invoice Automation Business Growth Global reach Time2Market Innovation Compliance Contract Collaboration Process & document transparency & traceability Complete Audit trail Knowledge & Decision support Supplier matching, discovery & information Supplier performance & risk management Peer benchmarking
  • 22. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 22 Public Measurable benefits realized by networked companies >4,500 global suppliers networked enabled 98%+ touchless invoicing -- integratedwith 8 SAP systems worldwide 96%+ on-time payments – and enhanceddiscount capture 75%reduction in AP costs >4,000 suppliers network enabled >500,000 electronic invoices/yr. –integrated with 7 SAP systems globally 70% global invoice volumes moved from paper to electronic –incl. non- PO >30% reduction in BPO costs
  • 23. ©2014 SAP SE or an SAP affiliate company. All rights reserved. 23 Public Summary Leverage Solutions and Services based on big data technologies Saving potential identification Leverage VMS designed for contingent workforce management Cost and risk Efficiency and quality Connect to Business/Supplier Networks Efficiency Compliance Risk Value added services for the business (Fully) Leverage the Potential of Networks Put more spend under management – manage more categories Better understand your spend + free up time and effort from managing transactions to focus on high value activities
  • 24. ©2014 SAP SE or an SAP affiliate company. All rights reserved. Thank you Contact information: Marcus Fischer Director Professional Services IndustryIndustryBusiness Solutions APJ30 PasirPanjangRoad, #03-32 MapletreeBusiness CitySingapore 117440 +65 9751 4816 marcus.fischer@sap.com

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