SirionLabs Webinar Featuring Forrester - Plugging Value Leakage in IT Outsourcing Engagements - Presentation Slides - 05 Oct 2016

1© 2012-16 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
The Challenges and Opportunities for the CIO
Webinar
Plugging Value Leakage in
IT Outsourcing Engagements

Agenda
Plugging Value Leakage in IT Outsourcing
Engagements
• Growing importance of services providers
• Issue of ineffective governance and value leakage in
complex services engagements
• Role of back-end vendor management processes in
determining success
• Filling the gaps between CLM, SRPM, and e-Invoicing
How Sirion addresses the issue of ineffective
governance and value leakage?
Andrew Bartels, VP
and Principal Analyst,
Forrester
Ajay Agrawal, CEO,
SirionLabs
Q & A

Today’s Speakers
Andrew Bartels, VP and Principal Analyst, Forrester
Andrew Bartels primarily contributes to Forrester's offerings for the CIO. As an analyst,
he is a leading expert on tech market trends and sizing, cloud and smart computing
technologies, tech budget benchmarks and processes, and tech's impact on business
operations. He also researches the growing customization of tech systems for industry-
specific solutions for utilities, energy, government, education, and professional
services sectors. He is a thought leader in buy-side technologies and business
networks. Andrew has been with Forrester for 15 years, starting with Giga Information
Group which Forrester acquired in 2003.
Ajay Agrawal, CEO, SirionLabs
Ajay has been a product visionary in the strategic legal technology space for more than
20 years. He founded UnitedLex Corporation in 2006 – a global leader in legal process
outsourcing and strategic legal technology – leading the company through a period of
profitable growth creating over $100mn in enterprise value in 4 years. Ajay has worked
as a securities law expert in some of the world's leading firms and investment banks.
He serves as an entrepreneur-in-residence at CodeX, the Center for Legal Informatics
at Stanford University. Ajay holds an LL.M. from Columbia University, LL.B. from Trinity
College, Cambridge and a B.A. in Semiotics from Brown University.

Plugging Value Leakage in IT
Outsourcing Engagements: The
Challenges and Opportunities for
the CIO
Andrew H. Bartels, VP and Principal Analyst
October 5, 2016

CIOs buy lots of consulting and
outsourcing services

© 2016 Forrester Research, Inc. Reproduction Prohibited 6
Source: Forrester Research, Inc.
CIOs and their firms in 2016 will spend over $1 trillion
on tech services
Computer equipment,
$354 , 12%
Communications
equipment, $334
, 12%
Software, $585 , 20%
Tech consulting and
systems integration
services, $536 , 19%
Tech outsourcing and
hardware
maintenance, $484 ,
17%
Telecommunications,
$590 , 20%
2016 global tech spending by category
(US$ billion, percentage of total)

Source: Forrester Research, based on data from US Bureau of Economic Analysis
Tech consulting and outsourcing is just a quarter of all
firm spending on professional services
Legal services
13%
Custom computer
programming
services
9%
Computer systems
design services
7%
Other computer
related services,
including facilities
management
5%
Accounting, tax
preparation,
bookkeeping, and
payroll services
8%
Architectural,
engineering, and
related services
15%
Specialized design
services
2%
Management
consulting
services
11%
Environmental and
other technical
consulting services
3%
Scientific research
and development
services
13%
Advertising, public
relations, and related
services
9%
Marketing research and
all other miscellaneous
professional, scientific,
and technical services
5%
US professional services spend by category,
percentage of total 2015

Source: US Bureau of Economic Analysis, US Gross Output By Industry
In fact, firms in most industries spend more on
professional and other services than they do on goods
13%
16%
17%
17%
28%
36%
40%
38%
53%
54%
60%
62%
72%
81%
83%
91%
Wholesale trade
Manufacturing
Retail trade
Construction
Agriculture, forestry, fishing, and hunting
Utilities
Oil and gas extraction
Mining
Transportation and warehousing
All industries
Arts, entertainment, accommodation, restaurants
Government
Education, health care, and social assistance
Information
Professional and business services
Finance, insurance, real estate, rental, and leasing
Purchased services as a percentage of purchased inputs, 2012

Getting value from a services provider is a
complex process
Define services
to be provided
Choose vendor
and scope, price
and timing of
services to be
provided
Engage with
services provider
to initiate work
Manage services
provider’s
performance
during
engagement
Process invoice
and pay vendor
Repeat process
for next services
engagement

Many firms manage this process with manual
tools
Define services
to be provided
Choose vendor
and scope, price
and timing of
services to be
provided
Engage with
services provider
to initiate work
Manage services
provider’s
performance
during
engagement
Process invoice
and pay vendor
E-mail,
MS Word
E-mail,
MS Word,
conference calls
E-mail,
conference calls
E-mail,
MS Excel,
conference calls
E-mail,
MS Excel,
AP system

But today there are specialized software
products for each stage
Define services
to be provided
Choose vendor
and scope, price
and timing of
services to be
provided
Engage with
services provider
to initiate work
Manage services
provider’s
performance
during
engagement
Process invoice
and pay vendor
CLM,
Services
procurement
Supplier risk and
performance
management (SRPM)
Spend analysis,
eSourcing,
services procurement
eSourcing,
contract
lifecycle
management
(CLM)
SRPM,
CLM,
eInvoicing

Most CIOs focus on the front end processes
for services engagements
Define services
to be provided
Choose vendor
and scope, price
and timing of
services to be
provided
Engage with
services provider
to initiate work
Manage services
provider’s
performance
during
engagement
Process invoice
and pay vendor
Spend analysis,
eSourcing,
eSourcing,
contract
lifecycle
management
(CLM)
CLM,
Services
procurement
Supplier risk and
performance
management (SRPM)
SRPM,
CLM,
eInvoicing

But the back-end processes of vendor
management and payment determine success
Define services
to be provided
Choose vendor
and scope, price
and timing of
services to be
provided
Engage with
services provider
to initiate work
Manage services
provider’s
performance
during
engagement
Process invoice
and pay vendor
CLM,
Services
procurement
Supplier risk and
performance
management
(SRPM)
Invoice doesn’t
agree with contract
Work performance
is poor
Work doesn’t agree
with contract
Spend analysis,
eSourcing,
eSourcing,
contract
lifecycle
management
(CLM)
SRPM,
CLM,
eInvoicing

Contract lifecycle management is software to
manage all stages of a contract’s lifecycle
2
1
3
4
5
6
Contract
optimization
Contract renewal
Contract
storing and
repository
Contract
importing
Contract
drafting and
negotiation Contract
compliance and
administration

What are best practices in CLM?
Function What should be in the
application
What’s involved in
implementation
Contract
repository
Electronic repository for all contracts, with
all attachments and related documents;
easy-to-use tools for tagging key terms
and conditions
Importing of existing or third-party
contracts; tagging of key terms and
conditions in imported contracts
Contract terms
and conditions
library
A library of approved terms and conditions
should be included in different kinds of
contracts
Legal department needs to define
what terms and conditions are
needed when and where
Reporting and
analysis tools
Easy-to-use tools for analyzing contracts
in terms of linkages, consistency, and
common elements
Development of right reports;
employee training, process re-design
Contract
creation
wizards and
templates
Easy-to-use tools for end employees to
determine what contract they should use,
and to assemble the right contract for their
needs
Legal needs to define the rules for
what terms and conditions are
needed in a given contract and who
can approve changes
Integration of
CLM to
transaction
systems
Contract terms and conditions can be
linked to buy-side or sell-side transactions
systems for checking during a transaction
Identification of integration points
and set up of the right data
integration
Contract
optimization
Contract managers can see all aspects of
a contract throughout its lifecycle
Defining information contract
managers need to see

Supplier
lifecycle
management
What is supplier risk and performance
management?
› Supplier risk and performance
management is convergence
of four domains
1. Supplier information
management
2. Supplier risk
management
3. Supplier
performance
management
4. Supplier
qualification
management
› New function of supplier
lifecycle management
Supplier
information
management
Supplier
risk and compliance
management
Supplier
performance
management
Supplier
qualification
management

What are best practices in SRPM?
Function What should be in the
application
What’s involved in
implementation
Supplier
information
management
Single source of truth on supplier data;
Supplier self-service portal to update
information;
Linkage to external data sources on
supplier information like D&B;
Easy access to master supplier data
Identify all systems that have or use
supplier data;
Map data needed by different
systems;
Aggregate data in SIM, with
integration to other system
Supplier
performance
management
Collection of internal data on supplier
performance (e.g., order accuracy, order
timeliness, invoice accuracy);
Surveys of employees on their satisfaction
with supplier;
Supplier dashboards with data
Identify key performance indicators
for suppliers;
Create dashboards with relevant
data for SVM professionals;
Share rankings with suppliers and
help them improve performance
Supplier risk
management
Source of data on supplier financials,
licenses, social responsibility ratings,
diversity ratings, supply chain
vulnerabilities, and other information
Supplier dashboards with risk ratings
Identify key risk variables you want
to track;
Design dashboards with the relevant
risk ratings;
Train employees on how to use!
Supplier
qualification
management
Directory of qualified vendors organized by
category, with ratings and rankings of
qualifications and performance
Integrate into your sourcing and
vendor management processes and
practices

Filling the gaps between CLM, SRPM, and
eInvoicing
› CLM and SRPM provide great value in helping firms
maximize the value from their services providers
› But they leave a gap between what the contract says the
price for the services should be, and what should be paid
based on the performance of the supplier
› So, you need to make sure there’s a way to get the
information on supplier performance into the invoice
system to make sure you pay for what you actually get

Conclusion
› Spending on tech consulting and outsourcing services
specifically, and for professional and business services in
general, is too big and too important to be left
unmanaged
› eSourcing, CLM, SRPM, and eInvoicing solutions can
help firms better manage their services contracts and
relationships
› But make sure you are closing all the gaps between
these applications, so you only pay for the value you
actually get

Thank you
forrester.com
Andrew H. Bartels
+1 516 869-0128
abartels@forrester.com

How are Services Suppliers Managed Today? | Largely Manual, Performed in Silos
PRE-SIGNATURE
PROCUREMENT
PROCESSES
Enterprise
Silos
Technology
&Tools
FINANCIAL
MANAGEMENT
Financial
Management
PERFORMANCE
MANAGEMENT
Service
Delivery
RISK
MANAGEMENT
Corporate
Risk
CONTRACT
MANAGEMENT
Legal /
Contracts
RELATIONSHIP
MANAGEMENT
Relationship
Management
Pre-contract
(6-12 months)
STRATEGIC SUPPLIER LIFECYCLE Post-contract
(3-5 years)
Procurement
What was
promised?
What actually happened?
What was
invoiced?
Integration through REST API Layer
Sirion – Integrated Enterprise Platform for Supplier Governance
FINANCIAL
MANAGEMENT
PERFORMANCE
MANAGEMENT
RISK
MANAGEMENT
CONTRACT
MANAGEMENT
RELATIONSHIP
MANAGEMENT
Corporate
Risk

Sirion Performance
Sep ’15 to Aug ‘16
Why Supplier Governance Matters | The Bottom Line Impact
Common Forms of Leakage
• Computational errors
• Incorrect scope
• Missed service level credits
• Delivery and quality failures
• Missed entitlements
Pre-contract award
(procurement)
Post-contract award
(supplier governance)
Time
What is delivered
“Value Realized”
The business case
“Value Expected”
Value captured
during procurement
“Value Promised”
Value
12%
Hard Leakage
8%
Soft Leakage
20%
Total Invoices
Processed
$650M
Hard Savings
Achieved
$44M
Ineffective supplier governance drives huge value leakage in services engagements.
Sirion has driven 6.8% of hard savings (invoice reductions) in just the past 12 months !

Strategic Supplier Governance | Sirion Overview
Invoice Auditing
Spend Pool Management
Financial Analysis and
Planning
Value Assurance
Regulatory Compliance
Policy Compliance
Supplier Audits
Governance Forums
Issue/Action Item
Management
Governance Process Health
Survey Management
Document Repository
Obligation Capture
Document Change
Management
Contract Interpretations
Service Level Management
Obligation Compliance
SOW/WO/PO Management
Credits & Earnbacks

Sirion Impact
Total Suppliers Managed
10,143
Total Suppliers Audited
59
Invoice Discrepancies
Total Invoices
Processed
$ 650 M
Hard Savings
$44.2 M (6.8%)
TCV Under Management
$2.68 B
Sirion has delivered hard savings of over $44.2 M for its clients
through identification of discrepancies in supplier invoices.

$200 BN of value is lost annually due to lack
of effective governance of services suppliers!
SirionLabs Overview
PORTFOLIO COMPANY
USA
INDIA
GERMANY
DENMARK
UK
SINGAPORE
UK Government
G-Cloud Supplier
Sirion is transforming the way buyers and
services suppliers engage with each other

SirionLabs’ cloud-based solution gave Western Union
what it was looking for: an integrated supplier
management system-of-record for our key IT managed
service providers.
Testimonials and Endorsement
Tim Langley-Hawthorne
SVP, Technology Governance and Global Customer Care
Operations
“
We recovered our investment in Sirion within the first
few months as it enabled us to identify discrepancies in
our supplier invoices which would otherwise go
unnoticed.
Henrik Krarup Stefansen
Senior Director, Global IT Sourcing
“

Case Study | Supplier Governance Automation to Support IT Expansion
Background
The client adopted a multi-vendor IT sourcing
strategy to support expansion of IT infrastructure
and customer support capability. Supplier
governance capability was needed to effectively
manage its complex IT services agreements in a
precise and proactive manner.
Sirion Modules Deployed
Contract Management, Performance Management,
Financial Management and Relationship
Management.
Consistency and efficiency in governance
through end-to-end automation of supplier
governance processes resulting in reduction of
manual effort involved
Improved supplier performance
through real-time monitoring of performance
against contractual service levels and obligations
Fortune 500
Financial
Services Client
Significant cost savings
through validation of invoices against underlying
performance and contract data
4000+ 95%
Strategic
suppliers
managed
Obligations under
management
Reduction in time
to produce SL
reports
8

Sirion | Customers and Type of Strategic Services Managed
17 FORTUNE 500 AND GLOBAL
2000 CLIENTS
Banking and
Financial Services
Oil and Gas
Healthcare Wind Energy
Insurance Telecommunications
Information
Technology
Aerospace and
Defence
Airport Operations Information and
Media
TYPES OF IT SERVICES
MANAGED
ADM
Infrastructure
management
IT Helpdesk
Asset Management
Network Management
Data Center Management
Telecommunications
Services
OTHER COMPLEX
SERVICES MANAGED
BPO
Facilities Management
Third Party Logistics
Complex Manufacturing
Construction Projects
Contingent Workforce
Healthcare Services

Summary and Key Takeaways
CIOs and their IT departments often struggle to achieve the value of IT Outsourcing
and other complex services engagements due to ineffective governance and lack of
performance alignment between the enterprise and its suppliers.
Key Takeaways
• The growing importance of service providers to firms (both for IT
and for business overall)
• Traditional tools and technologies are not adequate to manage
today’s complex supplier management challenges
• CIOs can take the lead in embracing specialized software tools to
enable not just the IT organization but the entire enterprise to
get the most value from their service providers

QnA

31© 2012-16 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.© 2012-16 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Thank You
marketing@sirionlabs.comwww.sirionlabs.com

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