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Alex Saric – Global Vice President, Business Networks – SAP SE Kory Manley - Director, Sourcing Upstream Systems & Spend Compliance – Caesers Entertainment
Smarter Procurement through Effective Collaboration
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 2 Public
Business commerce is becoming increasingly complex
(1) PwC 17th Annual global CEO Survey
More Risk • Supply chain disruption / scandals • Financial risk and fraud • Geopolitics
Increased Globalization • Expansion into new markets • International supply chains • Increased off/near shoring
Greater Interdependencies • Increased outsourcing • Supplier-driven innovation • Business partnerships
Faster Innovation Cycles • New capabilities • New business models • New channels
New Sources of Competition • Need for profitable growth • Manage cost drivers • Better asset/capital management
Regulatory Changes • Increasing disclosure requirements • Country-specific regulations • Industry-specific disclosures
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 3 Public
Top 3 Procurement Drivers
Creating a challenge / opportunity for procurement
54% cutting cost
51% becoming more strategic
44% quality suppliers
Source: Procurement Leaders
Where is there “great” opportunity for procurement to increase its contribution
Percentage of respondents rating the procurement function’s opportunity to contribute as a “great opportunity”
14% 25% 29%
36% 44%
57% 64%
73%
Serving an advisory role
in M&A deals
Expanding into new markets / business
lines
Managing financial risk
Managing working capital
Managing risks to
business performance
Working with suppliers to
enhance product offerings
Strengthening relationships with suppliers
Finding opportunities
for cost savings
Source: CFO Research Services
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 4 Public
Collaboration empowers procurement to drive greater value
Product Innovation
Market Expansion
Working Capital Mgmt
CSR / Regulatory Compliance
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 5 Public
No need to balance against cost / risk objectives
Product Innovation
Market Expansion
Working Capital Mgmt
CSR / Regulatory
Compliance
Risk Mitigation
Cost Control
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 6 Public
Automation Connections
The key to effective collaboration
People
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 7 Public
People A new mindset
Traditional Thinking
How do I Bring category X under management?
Squeeze an extra Y% in price reductions from my suppliers?
Improve procurement efficiency?
Impose standard payment terms on suppliers?
Innovative Thinking
How do I Control ALL non-contracted spend?
Maximize value via my supply chain?
Align with finance/AP to ensure my P2P process maximizes company value?
Optimize our payment approach to mitigate supply risk and align with our WCM strategy?
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 8 Public
Automation End-to-end processes, all spend
INDIRECT – (source and non source)
Source & Contract
Collaborate & Transact
Invoice & Pay
COMPLEX SERVICES
TRAVEL & EXPENSES
INTEGRATION TO BACK END SYSTEMS
CONTINGENT WORKFORCE & SERVICES
DIRECT MATERIAL - LOGISTICS
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 9 Public
Connections Business networks: Simplifying business collaboration
Your Trading Partners
Your Company
Your Company
Your Systems
Risk & Sustainability
Workforce Management
Sales & Marketing
Finance
Supply Chain Management
Sourcing and Procurement"
Travel & Expenses
Business Network
Discover
Connect Collaborate
Gain Insights
10 © 2014 SAP AG or an SAP affiliate company. All rights reserved. 10 © 2013 Ariba, Inc . All rights reserved.
Business networks enable a broad range of benefits for all parties
REDUCE costs 1% - 8% in spend savings 60% reduction in operating costs
MANAGE compliance & risk 60% improvements in order accuracy Reduced stockout risk / need for excess inventory
INCREASE Revenues by 5-30% Find new customers Increasing business with existing customers through improved compliance and higher satisfaction
IMPROVE operational efficiency 50% - 75% faster transaction cycles >90% fully automated (“touchless”) transaction processing
OPTIMIZE cash flow 50% improvements in discount capture with suppliers 20% faster payment cycles with customers
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 11 Public
Caesars Entertainment Overview
Quick Facts 52 Casinos
14 States 5 Countries
3,000,000 sq ft gaming space 42,000 hotel rooms 70,000 employees World Series of Poker (WSOP) Caesars Interactive
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 12 Public
Procurement Evolution at Caesars Entertainment
People • Regional/Local Buyers Supporting Departments not Categories (Decentralized Transactional Purchasing) • Limited Strategic Sourcing Category Teams •Minimal Technology/Process/Compliance Support
Process • Fragmented Source-to-Settle Involvement • Strategic Sourcing Involvement Optional, Engaged only in Large Projects • Little to No Involvement in Capital Process
Technology • Paper PO’s • Purchasing System only for Inventoried Items & Food and Beverage • Limited Budget Tracking and No Procurement Policy Measurement Tools
Policy/Compliance • 2005 “Policy” – Bloated Mix of Policy & Procedure, No Technology to Support Compliance •No Policy Communication or Reporting
Before 3-year transformation process
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 13 Public
Procurement Evolution at Caesars Entertainment
People •Data Driven Strategic Sourcing Category/Commodity Teams • Centralized Process & Technology Driven Tactical Purchasing Organization • Communication to the Business: Frequent, In-Person, Customer Service & Compliance Oriented
Process
• Consistent, Streamlined Sourcing and Purchasing Process that Supports Rapid Turnaround SLA’s • Complete Source-to-Settle Involvement (incl. Capital) & All New Process Development Contains Customer Service Bias • Elimination of Perceived “Bureaucracy and Red Tape”
Technology • Complete Suit of Sourcing, Contracting & Purchasing Tools • Automated Spend via Catalogs, Collaborative Requisitioning, Contract Terms • Easy to Use, Relevant Reporting Tools (Budget Tracking & Compliance)
Policy/Compliance • Short, Concise Policy that Defines What all Parties Must Do • Simple, Transparent, Universally Accessible Compliance Reporting • Frequent Communication to Budget Owners Regarding Compliance Performance
After 3-year transformation process
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 14 Public
Procurement Supporting Rapid Expansion
Plug & Play Procurement
• Regulatory Requirements
• Involvement In Construction
• Transition to Operations • Centralized Procurement • Standard Process • Financial Controls • Budget Reporting • Policy Compliance
Local Regulatory Requirements
• Vendor State Registration
• Local Vendors
• Diverse Vendors • Minority Owned • Woman Owned • Veteran Owned • Disadvantaged • Hub Zone
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 15 Public
Business Network Enablement
Local Vendors
LCC Manufacturers
Diverse Vendors
Improving Our Vendors’ Book of Business
Operational Efficiency
Sourcing
Meet Local Requirements Cost Savings over National Providers
Direct-to-Manufacturer Opportunities Tremendous Cost Savings Potential
Education During Local Supplier Outreach Improved Sales Opportunities
Spend Automation Sourcing Cycle Time Reduction Low Value Add Offshoring Touchless Transactions
P2P
Faster Identification & Easier Compliance Greater Number of Vendors to Select From
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 16 Public
Receiving 5+ supplier responses on average Reduced cycle time for supplier discovery by 50% and sourcing projects by 90%, lowered costs by up to 10%
Streamlined supplier enablement for P2P as suppliers are already transacting on Ariba Network Quickly adds new suppliers to vendor master due to full integration with Ariba Sourcing
Supplier Discovery through the Ariba Network
Enables meeting CSR, regulatory, and other non-cost objectives simply and without sacrificing cost
Local Suppliers
Used Ariba to easily find and vet local, large beverage distributors already supplying other casinos
Received multiple responses despite very targeted search criteria, saved time by eliminating unqualified suppliers
Without Ariba, it would have been very challenging to find this supplier
Low-Cost Country
Discovered highly competitive supplier
Cut time it took to find low-cost country suppliers of banquet chairs by 50%
Received large number of high-quality bids for pens from all over the world
Already had extensive supplier database, but not always the right or the best suppliers
Diversity & Green
Discovered woman-owned, local CO2 supplier, also most competitive offer
Found minority-owned baked goods supplier, lowered lead turnaround time by 97%, closed multi-million dollar deal within 30 days, saved 10% in total cost
Now an essential piece of regional supplier diversity outreach program
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 17 Public
P2P through the Ariba Network
Touchless Rate 0% 55%
Before After
Spend through the System $300M $1.7B
Spend Compliance 30% 80%
Control • Visibility • Risk Mitigation • Speed • Performance • Savings
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 18 Public
Q&A
© 2014 SAP AG or an SAP affiliate company. All rights reserved.
Thank You!
Alex Saric Global Vice President, Business Networks SAP SE [email protected]
Kory Manley Director, Sourcing Upstream Systems & Spend Compliance Caesers Entertainment [email protected]