Managing Services Spend
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Oracle’s BPO Program
Definition: Business Process Outsourcing (BPO) is the outsourcing of a related set of business processes to an organization other than your own.
Not just IT or apps management services
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BPO Powered by Oracle
“BPO Powered by Oracle” places Oracle applications, technology and ancillary services “under the hood” of BPO Provider service offerings
Strategy
To help BPO providers reduce risk, lower cost and improve flexibility in the services offered to their customers and provide “BPO Powered by Oracle” choices to our customers.
Objective
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Service Provider Software Matters
Look for a service provider that delivers BPO Powered by Oracle:– Protect your investment – now and future– Reduce process transition risk– Improve time-to-deployment – Mitigate change management disruption– Improve process continuity – Increase end-user adoption
Oracle solutions deliver:– Lower operational TCO– Tools/templates enable standardized deployments– Proven upgrade track record
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e-Procurement and Services ProcurementPowerful Combo to Manage Goods and Services Spend
Capability Goods Services
Powerful, easy to use self service capability X X
Configurable, flexible approval workflow X X
Simple services requisition management X X
Integration with Enterprise ERP suite X X
Easy to use catalogs for purchasing indirect goods X
Integration with Resource Management X
Competency based requisitions X
Integrated strategic sourcing module and bidding ability for Services X
Services specific workflow items like interviews and on-boarding/off-boarding X
VMS capability X
Integrated, rules based time reporting, progress reporting and expense reporting feeds back to projects and financials X
Integrated pro-forma invoicing X
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Specific Benefits
Driver Benefit Best Practices
Competitive Bidding
2-5% Hard Cost Savings
Enforce contract rates & require minimum number supplier bids/resumesEnforce “market-driven” rate bands (not-to-exceed) Monitor rates by position/supplier
Preferred Supplier Enforcement
1.5-5% Hard Cost Savings
Enforce supplier selection logic and manage exceptionsCapture qualitative and quantitative metrics to feed performance scorecardsIncrease buying leverage buying using less suppliers
Process Efficiency
1-2% Savings, 55%+ cycle time
reductions
Close loop procure to pay processEnforce no-PO no-Buy policyAutomate PO/CO/Invoice processes
Visibility & Control
Risk Mitigation Eliminated/Control co-employment riskIncrease supplier quality – drive more spend to the best suppliersAuditable process tracking
Accurate Invoicing
1-2% Hard Cost Savings
Auto-generated invoicing from timesheets and deliverablesAutomated rate sheet complianceAutomated budget compliance
Early Pay Discount
1-4% Hard Cost Savings
Negotiate and enforce discountsDon’t negotiate discounts that can’t be enforcedEvaluated Receipt Settlement (ERS)Automated invoice generation
•** Not illustrated – headcount optimization / increased capacity
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About Provade
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Sample Customers
Mission: To enable companies to gain the maximize spend under management while leveraging current investments in Oracle Technology & Infrastructure
HQ in Silicon Valley with global presence (Sydney, Singapore, UK, Hong Kong, India)
Oracle Tier 1 Procurement SaaS Partner
Largest sPro customer for Oracle
MASSIVE spend volume• No single instance under $100M in annual
spend under management (throughput)• Over $1.6 billion in spend in 2007 alone
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Provade delivery model
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ProcurementProcurement
Strategic Sourcing
Benchmarking
Category Management
Content Management
Supplier Management
Contract Management
Candidate SourcingCandidate Sourcing
Requisition Management
Candidate Management
On-Boarding / Off-Boarding
Non-Panel Sourcing
Compliance Management
Timesheet / Approvals
AnalyticsAnalytics
Benefits Tracking
Compliance Reporting
Time to Recruit and
Fulfilment ratio
Candidate and Supplier
Performance
Spend Analytics
Implementation Help Desk Change Management
• Support Services
•Technology Foundation
• Infrastructure Services
Oracle/PeopleSoft Service Procurement Provade Enhanced (Provade CSM)
SAS70 Level II Certified (24/7 Availability, Security, Integrity)
PaymentPayment
Invoice Management
Exceptions Management
Payroll (Direct)
Compliance Reporting
Global Managed Services Provider
Global Managed Services Provider
Global Managed Services Provider
&
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Case Study: Regional Subsidiary of a Global Financial Services Firm
Project Scope• Drive spend for contingent labor, professional recruitment,
legal and consulting towards preferred suppliers with renegotiated rates
• Automate the procure-to-pay process to facilitate compliance and increase visibility
Approach• Phased program to address contingent labor and professional
recruitment spend first, with legal and consulting spend thereafter• Utilize Provade Managed Services to manage these categories of
spend– Strategic Sourcing to select preferred suppliers, as well as
negotiate rates and contract terms– Ongoing Category Management services to monitor and
report on program status, savings and supplier performance• Implementation and rollout of Provade Category Spend
Manager™ (Provade CSM), an on-demand procure-to-pay system based on Oracle/PeopleSoft procurement applications
Results-to-Date• Renegotiated and standardized bill rates for each service that
resulted in a 16% rate reduction• Savings of 10-15% in each category• Eliminated the manual entry of 10,000+ invoices/year• 75%+ reduction in supply base• Increased quality of contractors and services provided
•Profile
• Regional division of a large global financial institution
• 9,000+ employees
•Background
• Division growing rapidly
• Lack of visibility into
— Services spend
— Contractors onsite
— Management of intellectual property by contractors
• Inconsistent process to request and manage services across operating units
• Increasing number of exceptions from invoicing errors
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Services Case Study: Global Enterprise Solutions Company
• Project Scope– $250M in spend for North America and Asia-Pacific– Address other global areas in following phases
• Approach– Complete Managed Services
• On-site resources to manage procure-to-pay process• Supplier management, including contracting, monitoring
and management• Consolidated invoicing to simplify settlement• Program management to help organization drive ongoing
savings and additional opportunities– Provade Category Spend Manager
• Self-service online requisitioning• Transactional sourcing• Timesheet and Expenses• Integration with Oracle iProcurement and Financials
• Results-to-Date– Mitigation of risk from co-employment– Consolidation of supplier contracting terms into a
standardized MSA– Improved compliance to procurement policies– Process efficiencies from consolidated invoicing– Improved visibility for department managers
Profile
• 60,000+ employees
• 7,000+ contractors
• 250+ suppliers
Background
• $250M+ in annual contingent labor and subcontracted services spend in the US, Europe and Asia-Pac
• Lacking full visibility into global contingent labor spend
• Centralized procurement with resource constraints
• Oracle eBusiness Suite for Procure-to-Pay
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Migration Case Study: Fortune 500 Financial Institution
• Project Scope– Transition of niche provider solution to Provade– Go-live with $400M of contingent labor and
professional services spend in first phase– Second phase to integrate with on-boarding/off-
boarding systems and have Provade be the system-of-record for all contingent workers
• Approach– Provade Category Spend Manager™ to manage
contingent labor and professional services spend• Conversion of all contractor and supplier data over
to new system• Full integration with PeopleSoft Financials• Training• Level 2 Technical Support and Data Maintenance
Services
Profile• 38,000 employees
• 30,000+ contractors
• 90+ suppliers
• 600 active users
BackgroundCurrently doing $700M+ in annual
contingent labor and professional services spend, which is growing rapidly due to M&A
Issues with their second point solution to manage services spend
Lacked the promised integration
Viability concerns – owner of solution has changed twice
Support and stability issues
PeopleSoft Enterprise ERP
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• Obtain highest value of spend under management– Provide enterprise procure to pay solution for all categories possible on a
single stack– Obtain highest throughput possible
• Achieve best-in-class savings on total spend– Conservatively recognizing cost savings of 6% with no assistance and up to
15% within months of “go-live” with Provade’s Managed Services offering
• Drive compliance, reduce overhead– Provade’s “same technology stack” solution provides full transactional audit
trail while integrating to Oracle
• Improve ‘effectiveness’ of spend management– By providing req-to-check processing and tying into Oracle, spend is now
clear and actionable
• Deploy a ‘storefront’ model to enable easy, self-service spend management processes
– Provade solution seamlessly directs users through e-procurement technology and leverages future Oracle investments
Summary
Questions