Ariba Commerce Summit New York
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Slides from the Ariba Commerce Summit in Manhattan, New York
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Ariba Commerce Summit New York
- 1. New York October 12, 2011 ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 1
- 2. ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 2
- 3. Success in the Networked Economy Paul Melchiorre, Ariba Global Vice President
- 4. Your World is Being Shaped by Macro-TrendsCloud, Communities, Mobile CloudComputing Social Media/Communities The Networked Economy Enterprise Apps 4 © 2011 Ariba, Inc. All rights reserved.
- 5. You’re Seeing This in Your Personal Lives…Networks Have Changed Your Personal Life Shopping Entertainment Communication & Collaboration Research 5 © 2011 Ariba, Inc. All rights reserved.
- 6. …And Businesses Want It TooInter-Enterprise Collaboration is the New Competitive Competency “Increasingly companies are embracing collaboration as part of their strategy to grow.” “Tighter collaboration with customers, suppliers, and partners, achieved by having a tech-savvy supply chain is key to steering through unpredictable economic environment.” “The underlying benefit of cloud computing is improved collaboration, both within the organization and externally… trading partners benefit from being able to collaborate using a common platform.” 6 © 2011 Ariba, Inc. All rights reserved.
- 7. And For Good ReasonBenefits of the Networked Enterprise Ariba, Inc. 2011 All rights reserved. 7 77% increased access to knowledge 63% increased marketing effectiveness 55% better information sharing 43% greater market share 41% improved collaboration across silos 24% increased revenue 8% higher margins “Networked enterprises were 50% more likely than their peers to have increased sales, higher profit margins, gain market share, and be a market leader.” Source: McKinsey & Company, “The rise of the networked enterprise, Web 2.0 finds it’s payday.” Survey of 4,394 executives. December 2010
- 8. Community Technology Capabilities 1990’s-2000’sBackoffice OS“Enterprise Productivity” 1980’sDesktop OS“Employee Productivity” TodayInter-Enterprise OS“Value Chain Productivity” Our Vision: The Next Wave of Productivity:Efficient Collaboration Between Enterprises 8 © 2011 Ariba, Inc. All rights reserved.
- 9. The Impact of Poor Collaboration is Big Wanted: Better Business Commerce 9 © 2011 Ariba, Inc. All rights reserved.
- 10. Collaborative Business Commerce:There is a better way 10 © 2011 Ariba, Inc. All rights reserved.
- 12. Average DSO reduction of 5.6 days
- 13. Increase sales by 15%
- 14. 98% customer retention rate
- 15. New biz opps with largestbuyer community
- 16. Buyers
- 17. Reduce operating costs 70% or more
- 18. 12%-15% savings from sourcing
- 19. $2M discount savings/$B in spend
- 20. Cut $9M of contract leakage/$B in spend 11 © 2011 Ariba, Inc. All rights reserved.
- 22. Today, 15% of our total revenues come to us via the Ariba Network.
- 23. 50% of suppliers were already in the Ariba Network
- 24. 20% reduction in staffing costs just from PO-Flip™
- 25. $3 Million in savings in the first year
- 26. Daily visibility into global MRO Spend
- 27. Increased Leverage with Suppliers
- 28. 65% of new customer relationships are sourced via our participation in the Ariba Network
- 29. 10-15% of our new account revenues are directly a result of Ariba Network membership
- 30. 25% of total order volume is transacted via the Ariba Network
- 31. 100% spend process compliance
- 32. 75% supplier record reduction
- 33. 2 day effort to connect SAP to Ariba 12 © 2011 Ariba, Inc. All rights reserved.
- 34. 13 © 2011 Ariba, Inc. All rights reserved.
- 35. New York October 12, 2011 ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 14
- 36. © 2010 Ariba, Inc. All rights reserved. Best Practices in Buyer-Seller Collaboration A Panel Discussion
- 38. 30% of buyers are tasked to reduce costs in the source to pay process
- 39. Electronic sourcing, ordering and invoicing has become the preferred means of buyer-seller communicationLess EDI 60% 40% % of Respondents 20% 0% Supplier networks XML EDI Email Phone Fax *SOURCE: Aberdeen Group N=1,400
- 43. Gain 32% increase in existing accounts
- 44. Increase retention rates by 33% Best-in-Class All Others N=166
- 45. © 2010 Ariba, Inc. All rights reserved. 19 Introductions Mary Finaldi eEnablement Services Manager Simeon Chiger Director of eProcurement Jason Kurtz Vice President, Network and Financial Solutions
- 46. BREAK ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 20
- 47. ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 21
- 48. ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 22 DEMO
- 49. © 2011 Ariba, Inc. All rights reserved. Collaborative SourcingKeys to Unlocking Greater Value October 12, 2011 NYC
- 50. Why CEOs Are Talking About Sourcing Revenue Needed to Earn $1 Million in Profit 24 © 2011 Ariba, Inc. All rights reserved.
- 51. There’s Savings…and Everything Else Top 2 CPO Pressures Source: Ardent Partners, 2011 25 © 2011 Ariba, Inc. All rights reserved.
- 52. Collaboration Is King Top 2 CPO Strategies Source: Ardent Partners, 2011 26 © 2011 Ariba, Inc. All rights reserved.
- 53. © 2011 Ariba, Inc. All rights reserved. 27 How We Collaborate Has Changed Source: Comscore, June 2011
- 54. Evolution of Sourcing Community Technology Capabilities Collaborative Sourcing Business Value Strategic Sourcing eSourcing Manual Sourcing Time frame 28 © 2011 Ariba, Inc. All rights reserved.
- 55. © 2011 Ariba, Inc. All rights reserved. 29 Collaborative Sourcing Framework Sourcing Spend Analysis Technology Contract Management SIPM
- 59. Networked Community of Suppliers
- 63. Collect company and category specific supplier information
- 64. Syndicate suppliers to enterprise systems
- 65. Improve quality and reduce costs
- 70. © 2011 Ariba, Inc. All rights reserved. 37 Taking the Conversation Online
- 71. © 2011 Ariba, Inc. All rights reserved. 38 Ariba Exchange:Join the Conversation
- 73. Go to ariba.com and search “collaborative sourcing”
- 74. Register for a live demo on our ariba.com solution pages
- 76. Automate All Spend and Collaborate with All SuppliersCollaborative Commerce and e-Invoicing Ariba Commerce Summit James Tucker Director Product Marketing Ariba Network & Finance Solutions (650) 390-1702 jtucker@ariba.com Dan Ashton Sr. Solutions Marketing Manager Cloud Commerce Solutions (650) 390-1732 dashton@ariba.com
- 77. What to Expect… Combining Collaboration and e-Invoicing sessions Participation is key Business issues How addressed them Success, metrics and best-practices Break Ariba, Inc. 2011 All rights reserved. 42
- 79. Procure-to-Pay
- 81. Limited time and resources
- 82. Unclear business benefits“We see companies shifting a whole range of business functions to the cloud.” Edge Zarrella Performance & Technology Partner, KPMG
- 83. BrainstormingParticipation key to success Issues preventing you from getting more commerce under management? Solutions to business challenges? Best-practices and benchmarks? Ariba, Inc. 2011 All rights reserved. 44
- 86. Order Management
- 87. Invoice & Payment Management
- 89. Administration
- 91. Catalogs
- 92. Discounts
- 95. 40M+ annual PO’s & Invoices
- 99. Eliminate exception with smart invoicing
- 100. Increased revenue from new customer discovery
- 102. $2M discount savings on every Billion in spend
- 103. $9M in contract leakage savings per Billion in spend
- 104. $3M in working capital impact per Billion in spend
- 105. Rapid success from buyer/supplier matching
- 106. Single connection to existing back office systems46 © 2011 Ariba, Inc. All rights reserved.
- 108. Gain Market Share
- 110. Increase salesCustomers Partners Source: “The Rise of the Networked Enterprise”, December 2010, McKinsey Jacques Bughin and Michael Chui
- 112. Transaction and ramp assessment
- 113. Savings estimate
- 114. Business case and ROI
- 115. Nov 15th– Invoicing Insights
- 119. Large volume of non PO invoices
- 120. Lack of global spend visibility
- 121. Risk over ability to conform to VAT requirements
- 122. Lost discounts
- 123. 75% reduction in A/P headcount
- 124. 90% global spend Networked
- 125. Improved price, vendor, and VAT compliance
- 127. Reduced vendor management costs
- 128. Enabled 4K suppliers onto Network
- 129. Reduced BPO costs by 35%
- 130. Now processing ~ 500k invoices/year electronically
- 131. Went from 100% paper to nearly 60% e-invoicing with goal of 80% electronic
- 132. Drive 70% of invoice transactions off POs
- 133. High cost of paper-based, manual invoice processing
- 134. Difficulty in managing orders generated by SAP
- 136. 5% lost POs
- 137. 7 FTEs just to track orders
- 138. Order/Invoice process delays revenue
- 139. Invoice exceptions cause raw materials or equipment delays
- 140. Reduced Days Sales Outstanding (DSO) by 5 days
- 141. Improved PO and contract matching to invoice
- 143. Eliminated vendor credit holds since all POs and invoices now visible and managed
- 144. Expanding solution deployment to Europe
- 145. 970 supplier relationships established in < 1 year
- 146. Handling 12K POs and 15K invoices per month
- 147. Self-service Supplier Portal reduces costs
- 148. PO-Flip® option virtually eliminating invoice exceptions
- 150. “much better option than build solution ourselves in SAP”
- 151. Paper invoice costs too high
- 152. Unable to deliver and monitor PO’s through SAP
- 153. Too many missed discounts due to long invoice process times
- 154. Poor on-time payment statistics
- 156. NEED 4:00-4:30 presentation Ariba, Inc. 2011 All rights reserved. 52
- 157. © 2010 Ariba, Inc. All rights reserved. Accelerating Sales Online:A Panel of Leading Sellers SHI and B&H Photo Video Pro-Audio
- 158. © 2010 Ariba, Inc. All rights reserved. 54 Business Commerce Is an Evolutionary Process… Innovative Expand Collaborative Channel and Poise for Growth Proactive Create Processes, Infrastructure and Resources Collaborative Commerce Business Value Responsive AddressAdditional One-offRequests Reactive Comply with First Customer Request Transformation Enablement Phases of Seller Evolution
- 159. © 2010 Ariba, Inc. All rights reserved. 55 The Current State of Supplier Engagement Other 10% 10% Proactively engaged in collaborative business commerce 18% 18% Have at least 1 collaborative business commerce initiative 51% 51% 21% 21% Collaborative business commerce is a strategic initiative Note: Sample size = 350; Only one response allowed; 95% confidence level, with 5.25% margin of error.
- 160. © 2010 Ariba, Inc. All rights reserved. 56 Introductions SHI John DAquila, E-Commerce Operations Manager B&H Photo, Video & Pro Audio Jerry Zorek, Manager of Business Development
- 161. The Growth of SHI Global provider of IT Products, Services and Solutions 22-Year Anniversary in 2011! 1989 – regional software-only reseller 100% Organic Growth since 1989 Financially strong, stable and consistently profitable Every quarter, every year $ 3.8 Billion Revenue ($5B Imputed) in 2011 Over 30% growth vs 2010 revenue 1,700+ employees as of 7/2011 Most Experienced & Stable Support Field rep: 8+ years, average tenure Management team: 12+ years, tenure Same Ownership, past 22 years Largest Woman & Minority owned Business in N. America Our customers Initial focus on strategic and enterprise accounts in the US Expansion to public sector, international, midmarket SHI Confidential 57 © 2010 Ariba, Inc. All rights reserved.
- 162. Solutions, Hardware, and IT Services 58 © 2010 Ariba, Inc. All rights reserved.
- 163. SHI’s eCommerce Evolution SHI engaged early in PunchOut activity with Ariba SHI Owners are visionaries Developed eCommerce Website 15+ years ago Developing new tools and features 59 © 2010 Ariba, Inc. All rights reserved.
- 165. Integrated with B2B platforms
- 166. Supports both cXML PunchOut & OCI RoundtripLevel II PunchOut and Static CIF Catalogs supported 60 © 2010 Ariba, Inc. All rights reserved.
- 167. SHI’s Ariba Experience First PO from Ariba in 1999 Ariba for 2010 467998 transactions 59 Buying Organizations $441,563,207.86 in Rev #4 supplier overall 2011 11 new deployments/testing Transactions/Revenue up 20% 61 © 2010 Ariba, Inc. All rights reserved.
- 168. What I Preach Standardization Treat all customers like they are a Fortune 10 Say “Yes” and make it happen Work the details behind the scenes Ensure the catalog is priced and leveled correctly 62 © 2010 Ariba, Inc. All rights reserved.
- 169. Suggestions to Buyers Don’t be afraid Start with connectivity Take advantage of supplier investments Customized sites Website search capabilities New features Leave CIF for suppliers without sites 63 © 2010 Ariba, Inc. All rights reserved.
- 171. Poor coordination with suppliers © 2010 Ariba, Inc. All rights reserved. 64
- 172. © 2010 Ariba, Inc. All rights reserved. 65 Introductions SHI John DAquila, E-Commerce Operations Manager B&H Photo, Video & Pro Audio Jerry Zorek, Manager of Business Development
- 173. © 2010 Ariba, Inc. All rights reserved. 66 Who is B&H Photo, Video, & Pro Audio Our company World-class provider of creative technology and AV products Professional and consumer photo, audio and video as well as audio/visual presentation, computers, surveillance, binoculars & scopes, film & media, lighting & studio, portable & home entertainment, underwater equipment and much more. Serving professional, corporate, education and government sectors World-class customer service Founded 1973 Our business Creative technology An unfamiliar category for many corporate, education, and government buyers Price volatility Large % of electronic content can lead to significant decreases in MSRP Visit: www.bhphotovideo.com
- 175. Internet’s largest independent retailer of photography, video and audio equipment (Alexa ranking in top 1,000)
- 176. Ariba a core aspect of our E-Commerce strategy 67 © 2010 Ariba, Inc. All rights reserved.
- 177. © 2010 Ariba, Inc. All rights reserved. 68 Why E-Commerce? Adapt to changing buying habits Capture additional share in accounts Provide accurate pricing Drive $40K+ online sales per day
- 178. © 2010 Ariba, Inc. All rights reserved. 69 Our E-Commerce Evolution in Corporate/ Government/ EDU Segments E-Commerce journey began with a request from a large corporate customer 500-item CIF catalog Static pricing Strategic investment beginning in 2008 Move from IT ownership to marketing initiative Strategic cataloging From static catalog to dynamic PunchOut with full catalog From fax orders to electronic
- 179. © 2010 Ariba, Inc. All rights reserved. 70 Our E-Commerce Capabilities Ariba Ready validated Platinum seller More than 10 years’ experience with Ariba Network Over 25 customers supported via Ariba today Member of Ariba Seller Steering Committee $10M+ in annual transactions 25%+ annual growth in Ariba channel 300,000 + items offered via PunchOut
- 180. © 2010 Ariba, Inc. All rights reserved. 71 Our Ariba Strategy: Enabling PunchOut Why PunchOut? Accurate pricing Full catalog Expedient shopping experience What should you expect from your vendor? 300,000+ item catalog, 1600+ brands, most in stock and ready to ship Pricing updated every 30 minutes Customer enablement in 3 weeks or less Win-Win success story Large buyer initially managed catalog with a 500-item CIF catalog updated annually Pricing became outdated usually resulting in higher prices Discontinued items were in catalog and new items were not Update to 40,000-item CIF catalog resent monthly which saved the buyer hundreds of thousands of dollars Now we provide a 300K+ item catalog via PunchOut, updated multiple times daily
- 181. © 2010 Ariba, Inc. All rights reserved. 72 Our Ariba Strategy: Helping Buyers Address Rogue Spend The problem: spend occurring outside of preferred channels Lack of awareness Non-compliance Need it fast Typical customer approach Categorizing creative technology Who owns this category of spend – audio visual? IT? Push an existing vendor to provide Efficiency/economies of scale issues Do nothing Our approach Identify an owner Drive visibility through e-Procurement Get what you need fast and easy Rogue Spend – Most Categories Rogue Spend – Creative Technology
- 183. Expand lines in your category
- 186. © 2010 Ariba, Inc. All rights reserved. 75 Additional Resources Webinar Series: Business Commerce Experts Kevin Govin, MarkMaster Chip Graham, EBSCO Cara Balint, Insight Robert Calvert, Hewlett Packard Brady Seiberlich, National Business Furniture Upcoming event: RockTenn, OfficeMax, Insight November 17, 2011` For more information, please contact us at programs_info@ariba.com
- 187. Thank You ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 76
Hinweis der Redaktion
- Move to this new, inter-enterprise operating system enabled and accelerated by the convergence of 3 mega-trends: Shift to cloud-based delivery models. Blurring of the lines between Enterprise Apps and Social Media Channels and Communities – Enabling the new networked economy requires three things: Cloud-based TECHNOLOGY COMMUNITY CAPABILITIES
- The networks we use to run our daily lives share these three components of TECHNOLOGY, COMMUNITY AND CAPABILITIES.
- enterprises see the benefits that the combination of cloud computing, enterprise apps, and community can bring to their business……and they want to take part in the Networked Economy.CFO Magazine study of 200 global finance executives: View using technologies – like the cloud and business networks – to better discover, connect, and collaborate with their customers, suppliers, banks, and other trading partners was a top priority for agility and growth.CIO Magazine study found IT executives prioritizing investments to improve external collaboration.Research series from Harvard Business School points to inter-enterprise collaboration as THE key competitive competence going forward.
- And for good reasonHaving a Networked Business drives top and bottomline benefits.McKinsey and Co. did a study last year on the impact of the Networked EnterpriseFinding: Networked Businesses outpaced their less Networked peers in nearly every category of business performance…by a wide margin.
- There’s lots of room to grow in the Networked Economy.Companies have spent billions of dollars in personnel, reengineering, and systems over the past two decades to improve their internal process and information flows.These Islands of Efficiency are disconnected from the outside world and fall down where it matters most – when buying, selling, or exchanging cash with other businesses. >80% of POs, Invoices, and other transactions still take place offline…Lots of paper…lots of people…and lots of inefficiency.All this inefficiency costs business $650 billions per year in missed sales opportunities, higher operating and supply chain costs, and slower cash flow cycles.
- In the Networked Economy…businesses and their supply chains operate much differently and much more efficiently.Connected to customers, suppliers, and other partners. Efficient by using cloud-based applications.Informed thanks to community intelligence,market insights, and best practices.Benefits of the Networked Economy are available to all members of the community – from the world’s largest multi-nationals…to small suppliers.
- Welcome and introductionOpen to other ideas here, but I planned to open by polling the audience, for the buyers in the audience, by a show of hands…“How many sellers in the audience use linkedin in some fashion to identify or network with potential buyers”?“Now the same question to the buyers in the group…how many of you use linkedin in your buying efforts in some way”?In looking at the strategic sourcing and “what’s next”, we at Ariba have worked extensively with Ardent Partners, a fast growing independent research and consulting group. Ardent points to 3 key requirements for any company interested in better managing their sourcing function: 1) You must have broad and deep visibility into your spend with the ability to take action on the information this spend provides to build sourcing pipelines, better monitor compliance, and so on.2) Processes must be reviewed and improved for greater efficiency and effectiveness in the sourcing process, and3) Improved collaboration is a must. The rate of innovation in business today is unrivaled in any time in history. The reality is that innovation is taking place outside of your company’s four walls – in within your supply base. You must be able to harness this innovation to build and maintain competitive advantages. It isn’t just about savings anymore. CPOs are realizing this…we’ll talk about that in a few minutes…
- But in discussing collaboration, we have to understand that social media users have surpassed email users and by a growing margin. It’s not that people are communicating less and that is why email usage is declining - they are actually communicating more but just through an increasing amount of channels. So the era of email isn’t over per se, it’s just evolving as all communication channels have throughout history. The digital landscape just makes those changes happen a lot more quickly, and distinct communication channels will become blurred.We must keep this in mind in our daily jobs especially with younger workers coming into the workforce. The opportunities to consume information are growing which is good and bad. We must consider the best ways to find the useful information.
- So let’s talk more about collaborative sourcing and the collaborative sourcing framework. As we discussed earlier, it is important to remember that while technology can absolutely enable collaboration (think facebook, twitter, google+, etc.), although we’ll start with technology, a collaborative sourcing framework goes far beyond software.That said, collaborative – or strategic – sourcing usually include some version of four distinct areas:Spend analysis to aggegrate, classify, and enrich, and analyze spend for strategic sourcing decision-makingSourcing ranging from simple rfx’s to auction tools to potentially complex configuration and optimization toolsContract management to assure the terms agreed to during the sourcing process are recorded and observed in requisitioning and invoicing,and Supplier management encompassing both information management – gathering info on the supply bases – as well as performance management – to monitor and track how your suppliers are performing and take resulting and/or corrective action.
- Spend analysis success requires looking beyond the tip of the iceberg. Spend analysis or spend visibility programs have been around for over 10 years now. PPG was at the forefront of the discipline having reduced their supply based by 90% and taking out 10% of their overall costs, remains an Ariba Spend Visibility customer today. However, companies looking to invest in spend analysis program today need to look beyond the traditional scope limited to commodity classifications – or “what” you are buying from “whom”. While always important, spend analysis today offers much more.Supplier Enrichment: (cite Reed Elsevier)Negotiation leverage Financial health & risk ratings Diversity & sustainability Market IntelligencePrice & industry indices Online communities Peer benchmarkingSpend Management integration (Nalco and others)Additional source dataBudget & forecast data Balance of trade Additional invoicing details
- Sourcing extends beyond just automating RFQ’s and quotes. eSourcing has been in existence for more than 15 years and companies like Tata Motors, British Airways, have executed thousands of sourcing projects addressing billions of dollars in spend driving more than $200M in negotiated savings to the bottom line with reduction in transaction costs by 40%.However companies looking to tackle “Complex categories” beyond the “low hanging fruits” need to incorporate a Category management approach using collaborative tools paired with ready access to a networked community, decision support tools, knowledge management/ best practices and real-time market intelligence to drive optimal decisions pivoted against Price, Performance and Risk. In addition many organizations likeAs such an effective Sourcing solution offers: Achieve Sustainable Savings – Results and Enablement (Tata Motors, BA, Emerson) Seamless access to global suppliers to help drive savings (Winn-Dixie, Tupperware and OSU Medical center) Total Information Visibility (HP, BP) Performance Measurement (Sonoco, Pentair) Improved Collaboration and Risk Mitigation (BP, GD)
- Effective contract management is obviously a need for both the buy and sell-sides. For procurement, after sourcing more effectively, the next logical place to examine to assure the negotiated savings hit the bottom line is effective contract management. Sales meanwhile, needs to focus on any area of the sales cycle that can be more efficient to speed deal closure. For sales people, only bad things can happen during contract negotiation. Increasing collaboration and transparency in the cycle helps make sure the right people are engaged at the right time.Regardless of whether procurement or sales though, when viewing the business case and potential value for automating the contracting process, the process must be viewed holistically. While it is true, contract management automation delivers value through reduced administrative costs, improved visibility and other benefits, the real value in procurement contracting comes from an integrated process that considers and enforces contract terms during requisitioning and invoicing. One the sales side, Ariba and salesforce.com recently enlisted the help of IACCM – the leading contract management trade association for contracting professionals – to research the challenges of sales contracting and potential value of automation. The results were astounding. The results of a survey showed that those who had integrated their sales contracting process with their sales automation tools showed across the board improvement in areas like opportunity management, process management, fulfillment and renewals. Ariba customer Community Health Systems reduced their sales contracting times by 43%. Others have improved their renewal management by 25%. And IACCM research shows a potential revenue impact ranging from 5% to 7%.
- Supplier Management:1) In today’s economy, it isn’t a question of if your suppliers may be at risk of failing. It’s a matter of which suppliers will fail and when? 2) According to industry reports, business bankruptcies were up 75% in 2008. And they are expected to increase another 35% this year. 3) This creates risk for the CPO, the CFO and even the CEO. If a key supplier fails, a major link in the supply chain is broken which could lead to delayed shipments or total production shut downs. This obviously impacts costs and revenues.4) Having information on supplier financial viability and operational performance is critical to assessing exposure to risk, but it won’t give you a full picture of supply chain risk and isn’t enough to help companies mitigate potentially negative effects on their business.5) What’s needed is a 360° view of a supplier’s health, details on underlying supply market risks, and an efficient process for acting upon this intelligence and monitoring and managing performance and risk on an ongoing basis. 6) In order to effectively manage supply risk, companies must have tools to: • Analyze the financial health and stability of suppliers using detailed financial information and third-party risk profiles (Pentair)• Create detailed supplier scorecards and risk profiles to determine category and industry threats (HP, Sonoco Products)• Examine commodity and underlying supply market trends to discern potential impact of supply constraints and price fluctuations across your top- and sub-tier supply chains (BP)• Investigate the stability of raw material supply and possible effects of trends such as market consolidation and capacity constraints• Quickly discover, assess, and on board new supply partners, ensure their information is accurate and up-to-date, and continually measure and improve their performance.And none of this can be done with software alone. It takes a combination of technology, category knowledge, market expertise and services. And that’s exactly what many companies like HP, Pentair and Sonoco Products have done to continuously monitor and mitigate supplier risk.
- After technology, the second pillar of the collaborative sourcing framework that we want to discuss is capabilities. I think we would all agree that none of our organizations have ALL they knowledge need across all disciplines of the organization. Where needed, this in-house expertise must be augmented.
- When considering how you can better manage your sourcing – or any other commerce strategy – think about the areas where you may require this assistance to be successful. These capabilities can range from:Business Commerce Enablement Services to help you determine where your existing areas for opportunity lie as well as how to build an optimal business case that sets you up for success. Best Practices can range from everything from deployment, to change management, to ongoing usage. Learn from the experts and, most important, do so with the flexibility you need. After all, the degree to which you may need these capabilities varies over time. An “always on, on-demand” model gives you the piece of mind to know help is a phone call away. And lots of other opportunities exist as well. Training and support for example assure you get your team trained and question answered in a timely fashion.Technology won’t solve all your problems. The people in your organization will.
- Finally, let’s briefly discuss the role that a larger ‘community’ plays in the collaborative sourcing framework.Going back to our discussion about social, the outlets that exist to learn from and share with others is unrivaled at this point in time. Some of these outlets – like Ariba Exchange – exist within the Ariba community. We manage others like many of the LinkedIn groups you may subscribe to. And many others are outside of the Ariba ecosystem. The point is, knowledge is power and to collaborate more effectively, you need this knowledge at your fingertips.“The love you give is equal to the love you take”
- We at Ariba, attempt to share this information we have in many outlets – twitter, facebook, and Ariba Exchange
- Ariba Exchange being our online community…
- Dan/John do introduction pass to James on slide 4 or 5 for brainstorming and wrap up.
- This sense of urgency was also shared by delegates at a recent KPMG event in Hong Kong, where KPMG shared results of recent research, most notably, the process challenges CFO’s have regarding compliance and tax. Complying with global tax regulations like VAT tax in Europe, is very difficult and mistakes can be very costly. And the business process challenges highlighted point to an increasing need to connect their procure-to-pay functions with their suppliers order-to-cash functions. Both processes focus on cost take out and improved cash flow control.
- So we have a collaboration imperative that is key for both process cost containment, cash flow control, as well as growth. In fact, a recent McKinsey study revealed that organizations using collaborative technology to connect internal efforts to customers, suppliers, and trading partners are 50% more likely to lead their market segments and achieve higher margins. These networked enterprises are enjoying a competitive advantage through inter-enterprise collaboration while those organizations relying on internal process automation alone are falling behind. Let me share a few quick examples…
- OK. So we had three key take aways for today’s eLearning session:Remember that the CFO and finance organizations are inundated with proposals for improving their business. So it’s essential to quickly establish a sense of urgency with your finance contacts.We’ll look at three collaboration imperatives for finance: cash flow, productivity, and supply chain risk mitigationWe’ll learn how to map Ariba solutions to these imperatives for financeResearch tells us that Companies must become more closely linked in a volatile business environment because of supply chain disruptions (i.e. Japan) , financially weak trading partners and changing market demand all of which require immediate responses to questions like: Q: where are revenues coming from, and when can i expect them? Q: how can I spot problems that will affect my cash position? Q: How can I reduce the chance of cash flow problems occurring in the first place? Q: how long before cash goes out or comes in? Q: Am i paying too quickly? Am I paying too slowly? What can I do to optimize working capital? And of course as managing cash performance gains greater scrutiny, how is my performance perceived by investors and Wall Street?
- [walk through samples quickly]So how does your organization measure up?To help answer this, our guest speaker, Kurt Albertson,a senior advisor in The Hackett Group’s Procurement practice where he advises executives on strategic business decisions and promotes thought leadership through research and speaking on topics in the Procure-to-Pay and broader Supply Chain space, will provide the latest benchmarks across the procure-to-pay function to help your organization establish a business case for procure-to-pay automation and working capital optimization.