This document discusses key findings from the 2018 Hackett Group's procurement key issues study. It identifies improving agility, enabling digital transformation, and elevating the role of procurement as top priorities for procurement organizations. It also notes that measuring value delivered to the business and obtaining more value from existing suppliers are critical development areas. The presentation examines challenges around financial savings management and the need for integrated contract management and procure-to-pay systems.
2. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
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3. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
TODAY’S PRESENTERS
Richard Waugh
VP of Corporate Development
Zycus
Chris Sawchuk
Principal & Global Procurement Advisory Practice Leader,
The Hackett Group
4. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
ABOUT ZYCUS – COMPREHENSIVE SOURCE-TO-PAY SUITE
Zycus is among the only 3 Leaders in the Gartner’s
2017 MQ for Strategic Sourcing Application Suites
5. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
ABOUT THE HACKETT 2018 KEY ISSUES STUDY
For the 2018 edition of The Hackett Group’s annual Key Issues Study, executive management and leaders of
finance, human resources, information technology and procurement organizations at a global set of midsized and
large enterprises were asked in late 2017 about their strategic priorities and initiatives for the coming year.
The study results, which are analyzed in separate reports for each function, also guided the creation of our 2018
research agenda. Issues cited by participants as top priorities or challenges will be addressed in Hackett research
and webcasts through 2018.
Digital transformation is referred to several times in these study results. The Hackett Group definition for this term is
the creation of business value by improving customer experiences, operational efficiency and agility by fundamentally
changing the way organizations innovate, operate, deliver products and services, engage with stakeholders and
execute work, using digital technologies as the enabler of holistic transformation.
17. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
Financial Savings Management Challenges/Solutions
Challenges
• Most organizations tracking with spreadsheets/home-grown
tools
• Existing tools lack Finance collaboration and approval
workflow
• No standard definition of savings calculation and allocation
methods exists, and lifecycle tracking visibility is missing
Solution
Align:
• Import baseline spend from
Spend Analytics
• Establish Finance-approved
spend baseline and savings
calculation formulae on
common, enterprise platform
Validate:
• Employ workflow to obtain
validation from stakeholders
• Map savings projects to
stakeholders and approvers
Analyze:
• Segregate savings by type,
e.g. cost reduction vs.
avoidance, and accounting
period
• Identify savings by
project/sourcing strategy
• Map savings impact to P&L,
Balance Sheet, Cash Flow
Source: Gartner/Rutgers Survey
18. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
Case Study – Financial Savings Management
Need
Inconsistent Spend baselines skew savings opportunities:
Old Method: Spend = PO – overstates actual spend in some cases and
understates others by excluding non-PO categories
New method: Spend = Paid Invoice (PO/Non-PO), P-Card, Expense
Report
Excel, E-Mail based savings tracking methods inefficient and
inconsistent – lacks approvals, version control, agreed upon spend
baseline and consistent calculation and allocation methodology
Little collaboration across Business Units and geographies due to lack of
enterprise-wide visibility and accessibility
Finance does not acknowledge Procurement-claimed savings due to
lack of standardized savings calculation and tracking methodology
Business Objective:
To align Procurement
and Finance and
establish Procurement
credibility with C-Suite
by deploying
Enterprise-wide savings
tracking platform and
methodology
19. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
Case Study – Financial Savings Management
CFO sponsorship ensured Finance alignment
Financial Analysts engaged up-front to establish spend baseline and
methodology – e.g. accounting treatment for CapEx vs. Opex, Cost
Reduction vs. Cost Avoidance
Global platform rolled out as “Single Version of Truth” with:
Full audit trail and version control
Secure user access by BU/Div/Dept/Cat
Fx conversion and multi-lingual UI
Flexible/multiple savings types/definitions
Approval workflow sign-off by budget owner and Finance
Dashboard analytics tracking and reporting
CFO views platform as “tool that saves me money” – increased # savings
projects, global spend leverage, and higher savings rate
Extending procurement’s sphere of influence – savings tracking platform
applied to non-procurement savings projects (e.g. Reorg, ERP
Consolidation, M&A), Budgeting/S&OP, Cash Flow Forecasting
Solution
Results
600+
Savings Projects Initiated
$40-50M
Annual Incremental Savings
Realized To Date
000’s of Users
40 Power Users Create Savings
Projects and Collaborate with
000’s of Stakeholders (600
Financial Analysts Alone)
25% Productivity Gain
Category Managers Save 2
Hours per Day from Data
Gathering Tasks
22. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
How It Works: P2P/Contracts Integration for Non-Catalog
PURCHASE ITEMS
DIRECTLY
FROM CONTRACTS
(Non-catalog Purchases)
“Contract Lock”: P2P/Contracts Process Integration
TAG THE CONTRACT
NUMBER IN ALL
PURCHASE
REQUESTS
VIEW TIERED
BASED
PRICING FROM
CONTRACTS
REVIEW TERMS
AND CONDITIONS
IN CONTRACT
ATTACHMENTS
WHILE ORDERING
LINK NON-PO
INVOICES
WITH EXISTING
CONTRACTS
VIEW PAST AND
EXISTING
REQUISITIONS
@On-boarding to flip contract-to-catalog
@Requisition for non-catalog pricing/terms
@PO for contract reference/utilization
@Invoice for non-PO invoice resolution
P2P/Contracts Integration Touch Points:
34. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
Connecting the Dots….for a Single Version of S2P Truth
Request
Management
Project
Management
Spend Analytics Sourcing Contracts
Supplier
Management
Supplier
Performance
eProcurement eInvoicing
Request and track
Contract creation
Create events
from requests
Create, track and
manage sourcing
projects
Review past
performance before
inviting suppliers
Create sourcing
projects
Convert PRs to
RFP and award
POs
Validate contract terms for
catalogs, PO to contract
matching
Update preferred
vendor lists
Refer master
data for creating
invoices
Review supplier
history
Create, track
and manage
contracts
Transfer
Attachments, T&Cs,
Pricelist for Contract
creation
Create and invite
potential suppliers
Control Layer
Strategic Layer
Operational Layer
Refer
supplier data
Review supplier scores
before ordering
40. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay
Speaker Contact Information
Richard Waugh
VP of Corporate Development
Zycus
Email: richard.waugh@zycus.com
Chris Sawchuk
Principal & Global Procurement Advisory Practice Leader,
The Hackett Group
Email: csawchuck@thehackettgroup.com
41. +1 866 563 9219
info@zycus.com
www.zycus.com
Thank You