SunTrust Bank implemented a spend management strategy using Ariba solutions to gain spend visibility, ensure contract compliance, and realize savings. Prior to the strategy, SunTrust lacked spend visibility, a contract repository, and place to store sourcing documents. The strategy included identifying commodities, enabling electronic transactions with suppliers, and continuous improvements. SunTrust deployed Ariba solutions for sourcing, contract management, procurement, accounts payable, and the Ariba Network. The strategy increased internal and external collaboration and improved supplier experiences. SunTrust measures value through savings and compliance metrics.
6. Strategic Supply Management Overview
STRATEGIC SOURCING
Strategic
Sourcing
Relationship
Management
PROCUREMENT
Procurement
Sourcing
Procurement
Operations
OPTIMIZATION
Sourcing
Transformation
Sourcing
Analytics
Focused on bringing alignment of
supply strategy to business partners
Focused on efficient delivery, risk
management & controls
Focused on supporting, enabling, and
sustaining the transformation
Category Management:
Apply deep market and category knowledge to lead
strategic sourcing strategies for products and services
owned by the LOB’s & Functions.
Partner with the business to maximize performance,
delivery, and value realized in spend clusters
Identify and support global outsourcing & offshoring
needs of the enterprise
Relationship Management:
Serve as single point of contact to provide clarity &
transparency on SSM deliverables to specific RMsupported LOB’s & Functions
Partner with Sourcing, Procurement, & SSM
Optimization to ensure LOB & Function business goals
are achieved
Supplier Diversity:
Promote & enable opportunities for SunTrust to do
business with minority and woman owned suppliers
Provides Outsourcing Transition Management:
Provide guidance to LOBs/Functions on various
Outsourcing projects
Sourcing & Contract Management:
Concentrates on the routine sourcing and
contracting activities in support of
Strategic Sourcing
Leads sourcing strategies for products &
services owned by SSM (supplies, travel,
etc)
Focused on efficient delivery, flexible
processes, cycle time reduction, contract
risk management
Procurement Operations:
Provides back-office operations/support
across the sourcing organization
Responsible for Source-to-Pay process
optimization
Contract Administration:
Provides administration of third party
contract repository
Sourcing Transformation:
Provides program management for deploying the
organization engagement model & ensuring
sustainability & change management support
Supports development of governance councils for
effective spend management
Sourcing Analytics:
Provides analytics & decision support across teams
(i.e. spend visibility, category analyses, supplier
financial viability, data analytics)
Develops & monitors KPI’s, metrics, and dashboards
(i.e. process & organization performance at the
category level, LOB level, and executive level)
Process, Policy & Audit:
• Maintains SSM Policies & ensures processes are
established with proper governance & audit
Financial Management:
• Performance measurement & reporting
• Budget and planning for SSM
Systems & Tools Administration:
• Provide systems & tool support & administration
Retail & CommercialSunTrust FootprintMore than 1,600 Branches2,900 ATMs800+ Relationship ManagersCorporate & Investment BankingNationalFull line of investment banking products and servicesHousehold LendingNationalResidential mortgages, commercial lendingMortgage servicing portfolio of $163BWealth & Investment ManagementNationalFull array of private wealth management and institutional solutions including personal and institutional investment management
Financial Services Organizations have a completely different spend profile from a Retail Organization for exampleAround 80% of our spend is a simple or complex service20% of our spend is a traditional purchase order transaction
Procurable Spend Under Management Implementation 2009: Achieved 20%Implemented Catalogs and PO solutions (low hanging fruit)Set Up Procurement team2010: Achieved 45%Deeper Integration of New Sourcing Projects into Procurement to ensure Ariba Set Up for all New DealsDeeper Integration of Finance and having shared goals for the Spend Management strategyGreater buy-in from LOB on Commodity Implementations and timelinesStronger Compliance Reporting & User/Supplier Adoption Processes2011: Achieved 80%Procurement Processes Improved – greater understanding of methods of procurementDeeper Awareness & Campaigning of the Ariba tool being the Financial System of Record for Spend ManagementAP Processes Enhanced to Standardize all Suppliers on Ariba processes2012: Achieved 87%Implemented Services ProcurementBegan to implement different phases of PO Contract Release ContractsFurther improvements in Sourcing, Contracting and Procurement ProcessesIncreased leverage of different types of P2P solutions to capture unique spend opportunities2013: Achieved 87.4%Continued to implement Services ProcurementAdded additional types of Contract ComplianceMigrated more spend to PO by using Contract Releases to increase cycle times
The ultimate goal of enabling a spend management tool is to strengthen the position of the organization through the process of:Reducing Maverick SpendLeveraging Spend DataOptimizing Cash FlowHowever, depending on an organizations culture and where they are in the spend management maturity lifecycle, the organization may face several challenges to this goalBELOW IS A LIST OF WHAT WE HAVE COME UP WITH AS BEST PRACTICES AND KEY LEARNINGS IN OUR SPEND MANAGEMENT JOURNEYHave Senior Leadership involved and supportive of a spend management strategyNo ensure no one thinks there is an opt-out optionEnsure you have Executive Buy-in to your company’s P2P policyCreate a No PO or C, No Pay policy to let suppliers know you will not pay them without a PO# or C# in advanceCreate a Category onboarding planTo create direction with a plan with milestones and results oriented. Review often. Set achievable spend optimization target (companies that have no direction randomly enable spend)Cease accepting paper invoices for suppliers where you have an Ariba relationshipCreate a stop gap for suppliers you know are set up to process invoices in Ariba to prevent them from circumventing the system and your processUnderstand what commodities work best with each Procurement solution (Catalog, Non-Catalog, Contract Compliance, Services Procurement)Important to create a strong connection/line of communication between sourcing, procurement, APIntegrate P2P solutions into contract strategies Establish an exception handling process for times invoices don’t match contractsDeeper integration of new sourcing projects into procurement to ensure Ariba set up for all new deals (in RFxs and Contract language)Realize P2P strategies for services likely requires a phased approach with a solution that matures in cycles of process improvement Realize…the VIEW IS WORTH THE CLIMB! It may not feel like it while you are climbing