Achieving the Value of EProcurement in Services Purchasing

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Achieving the Value of E-Procurement in Services
Purchasing
Diana Jovin, CEO CascadeWorks
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Can You Answer Questions Like These?

• What are your quarterly accruals for services
  spend?
• Are your vendor discounts actually being
  leveraged?
• What is the average response time of your
  vendors?
• Which vendors provide the highest quality?
• What is the average markup per vendor?
• Which vendors are under-utilized?

E-Procurement Systems Can!
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Services E-Procurement The Next Frontier
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Services Spend is Strategic to Business

• More than half of F1000 purchasing dollars are
  spent on services (CAPS/NAPM)

Raw Materials Capital Equipment
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54
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Operating Goods

• MRO
• Computer Equipment
• Fuel
• Office Supplies

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Extends Across the Enterprise
C-level
Account Manager
Procurement
Finance Manager
Finance
Accounts Payable
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Services Requires Unique Approach
Purchasing Lifecycle
Services
Product
Unique
Catalog
Definition Request Tracking Payment
Negotiation
Transaction
Measured Approved
Received
Multiple Invoicing Cycles
On receipt
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Delivers Hard Cost Savings
10-20 of Spend
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The Keys to Achieving These Savings

• Inter-enterprise applications delivering
• Vendor management
• Process management
• Spend management
• Configurable across the enterprise for different
  business units service categories

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Managing the Vendor Network

• Drive more spend through preferred vendors
• Tools to identify, invite, register, classify,
  rank and evaluate vendors for each business unit
  and office location
• Systems must benefit both the enterprise and
  vendors
• Time savings for both from process efficiency
• Dollar savings for both from payment efficiencies
  
• Hosted systems provide easy access from both
  sides of firewall

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Vendor Management Tools

• Vendor Classification
• By locale, specialty, performance results in
  faster fulfillment
• Flexible, reusable requisition templates
• Speeds process for both buyers and vendors
• Negotiation and response tools
• Easy to send single or multiple responses to each
  request online
• Terms negotiated in online discussion groups
• Discussion threads captured and tracked
• Inter-enterprise collaboration
• Mutual visibility into where timecards are in the
  approval process
• Performance metrics
• Direct spend to vendors providing the highest
  value

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Managing the Process

• People cant be cataloged!
• Each req requires unique definition
• Agreement terms
• Activity tracking
• Payment over multiple invoicing cycles
• Change orders common over duration of agreement
• Must be configurable across business
  units/locations and multiple enterprise roles

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Process Management Tools

• Point-and-click agreement creation and editing
• Supports a variety of service requisition types
• Drag-and-drop approval workflow
• Configurable by service type, business unit or
  work group
• Ensures efficiency and documented accountability
• Change order management
• More than half of all service agreements have one
  or more changes over lifetime of agreement!
• Proactive notifications
• Example Facility notifications so that security
  badges, system logins and workstations are set up
  for new contractorsand terminated on agreement
  end date

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Managing the Spend

• Automatic enforcement of back-end financial
  controls
• Closes the process loop, drives the greatest
  savings
• Capturing all activity lowers the costs of
  administering, reconciling services purchases
• Real-time reporting enables more accurate
  allocation of costs and accruals

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Spend Management Tools

• Configurable billing terms
• Supports variable payment cycles (weekly,
  bi-weekly, monthly)
• Cost code tracking
• Contractors can track time by project, task,
  department, etc.
• Timesheets simultaneously routed to various
  managers for approval, re-aggregated and
  submitted as whole to AP
• Optional automatically generated invoices
• Upon final approval, invoice automatically
  generated
• Real-time reporting for strategic planning and
  budgeting
• Visibility into dollars spent per vendor,
  discounts leveraged, demand across business
  units, etc.

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Make it Work Across the Enterprise
C-level

• For the Executive
• Closed-loop financial reconciliation
• Configurable across different business units
• Configurable for all service types
• Integration with existing core applications
• For the End-User
• Usability is key!
• Configurable across multiple processes
• Fine-grained group management
• Inter- and intra-enterprise workflow supports
  buyers, vendors and contractors

Procurement
Finance
Vendor Acct. Mgr.
Vendor Finance
Contractors, Consultants
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Results from the Real World

• Elaine Taylor, Principal, Contingency Workforce
  Management Solutions
• Specializes in solutions, esp. IT
  staffing-related initiatives, for Fortune 500
  companies
• Most recently designed and implemented IT
  contractor Preferred Vendor Program for Charles
  Schwab Co., Inc.