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DaveHowardDirector,CentralPurchasingReebok‐CCMHockey
JasonHeklVicePresident,Marke<ngCoupaSo?ware
UrgentPurchasingHowOneProcurementProfessionalTookMa=ersIntoHis
OwnHandstoGetSpendUnderControl
Wednesday,December16,2009
Poll1:
Howhaveyoupersonallyhelpedyourcompanysave?
Introducing David Howard
David Howard, Director, Central Purchasing Reebok-CCM Hockey With more than 20 years of supply chain and project management experience, David is responsible for the management of resources, processes and key financial and service objectives of purchasing of raw materials for domestic factories, and for non-product supplies and services for the Reebok-CCM Hockey Global Head Office, including 2 large distribution centers. Among his many achievements, David has been able to deliver 10-15% cost reduction in many areas of non-product spend through SKU and supplier consolidation.
Prior to joining Reebok-CCM Hockey, David was a subcontracts and project manager at Lockheed Martin Canada, Cost Manager at ASTEC APS, a division of Emerson Electric, and Purchasing Supervisor at Bombardier Aerospace. He holds a Bachelor of Business Administration from St. Francis Xavier University, NS.
Reebok-CCM Hockey
• Headquartered in Montreal, Canada
• Provider of hockey gear and apparel
• Among others, Official sponsor of
A history of challenging conventions to create products that tap into athletes unlimited potential
and empower new, innovative ways to solve problems and address issues.
Reebok-CCM Hockey Non-Product Purchasing
Raw Materials Sourcing
• 4 manufacturing facilities in Canada • $35M in annual spend
Non-product Purchasing
• Reebok-CCM Hockey Global Headquarters • $15M in annual spend
In Need of a Process • The extent of the process
– No formal written processes, other than Finance Spend Approval Matrix by department
– All departments managed their spend independently and differently, some using manual POs, but most making verbal or e-mail commitments
FacilityOperaNons&Maintenance DistribuNon MISOperaNons
OfficeAdministraNon
No Visibility = No Control
• Monthly reports from Finance • Includes supplier payments only • Little visibility on commitments or
accruals • Spend history only payment by
account
Problems Beyond Purchasing
• Money being spent without proper approval – No delays in getting business done – But spend under-managed and local to functions
• “Monthly” invoice approval exercise – AP chasing approvals for payment – Missing most discounts – Late payments resulting in late fees – Duplicate payments / no proof of receipt / fraud potential
• Inefficient, multiple ordering and payment systems – Finished Goods, factory Raw Materials and all non-product
invoices, all purchased in separate systems – Invoice payments are made using a 4th system
An Even Greater Challenge
Senior management wasn’t bought into the need for purchasing
automation.
Believed tighter manual controls would be sufficient to control and manage spend.
Leading the Charge
• Becoming “The Champion” for change – Would not take NO for an
answer – Did the homework, created a
full business case for the requirement
– Publically committed to savings in non-product purchasing
Gaining Momentum
• Internal Audit – Mandated purchasing processes to manage non-
product spend – Ensure segregation of duties
• Economic Pressures – Down-sized company resources – New ways of doing more with less
A Plan to Get Management to Say “YES”
• Conduct a vendor evaluation – Find a low risk solution
• Perform an ROI analysis – Determine its potential
impact
• Phased roll out – Identify points of failures,
repeat successes
Sí Oui
Ja Ndiyo
Áno
Hai Na'am
是
YES
Conducting the Vendor Evaluation Evaluation Options
Factory MRP Tools
Add-on Modules to
Existing A/P Tool
Parent-Company Tools
Purchase 3rd Party Tools
Conducting the Vendor Evaluation Evaluation Checklist
Ease of Entry Annual Operating Cost Functionality / Best Practice Alignment Ease-of-use / Process Automation w/ Workflow Segregation of Duties / Audit Trail Scalability IT Independence Real-time Dashboard Reporting Create Self-Enforcing Process / Controls
Conducting the Vendor Evaluation Why Coupa?
Ease of Entry No CAPEX to push through corporate approvals
Annual Operating Cost Annual cost vs. anticipated “easy” savings
Functionality / Best Practice Alignment Automation, speed of spend
Ease-of-use / Process Automation w/ Workflow
Simple Google, Amazon type experience
Segregation of Duties / Audit Trail Segregated duties with password approvals for audit
Scalability Easily add users, business groups
IT Independence No hardware or software to support
Real-time Dashboard Reporting Alerts, immediate action
Create Self-Enforcing Process / Controls Dynamic, flexible controls
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
Determining Potential Impact ROI Analysis
• Analysis on short-list vendors – 2 license purchases w/ on-site
implementation & support requirements
– 2 SaaS (software-as-a-service) systems, including Coupa
• Demo each system • Priority based “qualitative”
scoring
Determining Potential Impact ROI Checklist
Improve Control & Accuracy Over Non-Payroll Expenditures Improve Use of Contract Pricing Improve Purchase Leverage through Spend Data Reduce Waste, Duplication, Fraud & Overpayments Reduce Overhead on Source-to-Settle Process Expand Purchasing Spend Under Management Improve Usage of Automated PO Creation and Transmission Improve Ability to Manage Early Payment Discounts All with the goal of supporting company re-alignment of
cost-structure to invest in value-creating activities
Phased Roll Out
• Slow and calculated, targeting one department at a time – Purchasing resources as a constraint – High-volume departments with biggest need and fastest
“payback” – Users who could easily adapt their processes – Users who wanted the independence of using the
system to order with only the approvals of their own organization
– Grass roots; creating a “I want it next” situation
Implementation To Date
• Implemented in 6 of 10 departments – represents roughly 70% of
our non-product spend volume.
• 100% planned by mid-2010
Hockey Distribution Center Footwear & ApparelDistribution Center
Facility Operations &Maintenance
OfficeAdministration
MIS Applications MIS Operations
Marketing & Advertising R&D
Product & Design Sales Management
Setting The Example with Coupa e-Procurement
• The right solution for all users – Easy-to-use and efficient – Automated and Controlled – Quick and cost-effective
• Requestors and approvers actually use the system! – Users love being independent – Managers love being knowledgeable – Improved budget forecasting from detailed historical data
• The entire organization benefits – Significant reduction in errors – Defaults ensure accurate information – Improved supplier invoicing, better cash flow and finance visibility
Real Process, Real Results
Coupa e-Procurement
Issue PO
Disposition Request
(approve / reject)
Purchasing
Management
Supplier Fulfillment Invoice Payment
Facility Operations & Maintenance
MIS Applications
MIS Operations
Office Administration
Hockey Distribution
Center
Footwear & Apparel
Distribution Center
Review / Manage Contracts
Identifying New Opportunities
• Real-time Insight – KPI tracking – Performance tracking – Market benchmarks
• Identify areas to – Improve efficiencies – Streamline suppliers – Negotiate better prices – Educate buyers
• 10-15% cost reduction through SKU & supplier consolidation
• 20% reduction in suppliers through consolidation
• 30% reduction in invoice payment transactions
• High compliance to use of contract pricing
• Process savings estimated at $50/PO, primarily from invoice approval process
• Payment discounts now available in 100% of invoice opportunities
• Accruals changed from guessing to firm numbers
A Plan for Success
• Implement e-Procurement to remaining departments, where spend is high, volumes are low and have unique requirements
• Product & Design / R&D • Marketing & Advertising • Sales Management • Finance / HR / Traffic
• Extend online workflows to receipt and invoicing • Integrate processes with accounting • Further automate paper-based processes
• Continue to set the example • Showcase the power and benefits of a SaaS solution • Educate users and reinforce industry best practices • Paint a vision for the future that includes a completely integrated end-to-end
procure-to-pay solution • Influence outside the boundaries of our division
Poll#2
Whatfactorsarepreven<ngyoufromachievingyoure‐procurementandspendmanagementgoals(checkallthatapply)?
Introducing Jason Hekl
Jason Hekl Vice President of Marketing Coupa Software
Jason Hekl is responsible for all of Coupa’s marketing initiatives, including demand generation, messaging, and marketing communications. Prior to joining Coupa, Jason was with InQuira, where helped grow revenues nearly ten-fold over a four year period. Jason earned a Master of Business Administration degree from the Ross School of Business at the University of Michigan, and a Bachelor of Arts degree in International Relations and Economics from the University of Delaware.
Part of the Problem is Inertia
The Best Intentions
“In theory, our ERP system could do what we wanted it to do, but in practicality it would never happen, because the
cost of doing that would have been astronomical.”
The Best Intentions
"Like tectonic plates adrift on a sea of magma, ERP instances and the businesses they serve are bound to
drift apart over time or dramatically collide with earthquake-like consequences.”
The Question for 2010
How do you save more
with
resources in
10% FEWER
½ as much time?
Lowest TCO with SaaS
Year 3
IT Support Maintenance
Upgrade Costs Professional Services
Software Subscription Year 3
Year 2
IT Support Maintenance
Professional Services
Software Subscription Year 2
Year 1
Implementation
Hardware Database / Middleware
Software Licenses
Software Subscription Year 1
Lowest TCO with SaaS
Year 3
IT Support Maintenance
Upgrade Costs Professional Services
Software Subscription Year 3
Year 2
IT Support Maintenance
Professional Services
Software Subscription Year 2
Year 1
Implementation
Hardware Database / Middleware
Software Licenses
Software Subscription Year 1
SaaS Eliminates Hidden Costs
IT Support Maintenance
Upgrade Costs Professional Services
Software Subscription
IT Support Maintenance
Professional Services
Software Subscription
Implementation
Hardware Database / Middleware
Software Licenses
Software Subscription
Over 3X Cost!
Customer takes on all Risk!
Broken Model!
DivisionalAccounNng
DivisionalAccounNng
DivisionalAccounNng
Unified&SimpleCrossCompanyRequisiNoning
Smarter Spending Across the Enterprise
RequisiNons
PurchaseOrders
Invoices
GeneralLedger
CrowdSourcing
PredicNveSpend
Benchmarks
Strategic&FrontOffice
AdministraNve&BackOffice
Immediate Impact with Requisition to PO
Compliance
You and the CFO are more tightly aligned than you think
Performance
Visibility
5 Strategies to Cut Costs 2010 with Coupa
1. Spend Under Management Attract more spend at the top of the funnel
2. Compliance With purchasing guidelines and negotiated contracts
3. Better Deals Crowd source savings on one-off purchases
4. Control Prevent wasteful spending before it happens
5. Efficiency Increase velocity through the funnel, and save as a result
2
3
4
5
1
If only it were this easy…
It is.
Provide a requestor experience that is faster and easier,
than every alternative,
and you will be amazed by what
happens.
Addressing the adoption problem with a compelling requestor experience
1. Know what’s allowed, and what’s not.
SUM
Addressing the adoption problem with a compelling requestor experience
1. Know what’s allowed, and what’s not.
2. Guide requestors to preferred suppliers and contract pricing, greatly
reducing “maverick” spend
SUM
Compliance
Addressing the adoption problem with a compelling requestor experience
1. Know what’s allowed, and what’s not.
2. Guide requestors to preferred suppliers and contract pricing, greatly
reducing “maverick” spend
3. And for those ad-hoc items not covered by
existing contracts, find deals online
SUM
Compliance
Best Pricing
A flexible approval workflow engine that you can change without help
Control
A flexible approval workflow process that works for busy managers
Control
Proactive alerts and spend dashboards to prevent mistakes before they occur
Control
Achieve greater efficiencies in the req to PO process
Avoidance 5% Self Approval 29%
Efficiency
Achieve greater efficiencies in the req to PO process
Avoidance 5% Self Approval 29%
Cycle Time 23 Hours Savings 9.5% of
Spend
Efficiency
5 Strategies to Cut Costs with Coupa in 2010
1. Spend Under Management Attract more spend at the top of the funnel
2. Compliance With purchasing guidelines and negotiated contracts
3. Better Deals Crowd source savings on one-off purchases
4. Control Prevent wasteful spending before it happens
5. Efficiency Increase velocity through the funnel, and save as a result
2
3
4
5
1
They’re not making hay of pennies.
Spend Under Mgmt
+ 20% Savings
9.5% of Spend
Our best spokespeople are our customers…
Satisfying the Skeptical CFO
What If You Had Visibility Into ALL Non-Payroll Spend?
What if you could use the same APPROVAL workflow across purchases and expenses?
What if you could BENCHMARK your expense management practices against the market?
What if you could effectively AUDIT the expense process to reduce fraud and save even more?
Spend Under Management
Expenses?
Baseline
41% Spend Under Management
With Coupa + 20% Spend Under Management
100%
New Year’s Resolutions
DaveHowardDirector,CentralPurchasingReebok‐[email protected]
JasonHeklVicePresident,Marke<[email protected]
THANKYOU