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Beyond Sourcing: Ensuring Your Negotiated Savings through Compliance
- 2. Abstract / Speaker Guidance
(This slide is not shown)
• Abstract: Sourcing is an important step in reducing costs, but
without automated compliance, up to 50 percent of your
potential savings can be leaked. Participate in this informative
session to learn how to avoid this leakage and save money, as
well as improve your purchasing efficiencies
• Speaker Guidance: The emphasis of this should be around how
P2P is key to delivering savings and that it thought leaders are
starting to do this even before pursuing more aggressive
sourcing programs. Any data, statistics, or audit results that
support this and can be shared would be good.
2 © 2010. Ariba, Inc. All rights reserved.
- 3. Possible Panel Questions
(This slide will not be shown to the audience)
• Companies drive cost reduction by strategic sourcing, but
how does P2P technology drive incremental ROI?
• How would you suggest a company get started putting
compliance processes/systems in place?
• Aren’t executive support and tight policy critical elements of
increasing compliance?
• Would you recommend Ariba P2P?
• What do you find most difficult about Ariba P2P?
• How hard is it to get suppliers onto the Ariba network?
3 © 2010. Ariba, Inc. All rights reserved.
- 4. Agenda
• Opening Comments
• MarketSphere + First National of Nebraska Case Study
• Facebook
• Panel Discussion
• Wrap up
4 © 2010. Ariba, Inc. All rights reserved.
- 6. Speaker Bio
• Brian Wietharn – MarketSphere Consulting
♦ Partner and Spend Management Advisory practice leader
for MarketSphere
♦ Provides cost-reducing procure-to-pay automation and
transformation consulting services to large and mid-size
companies in multiple industries
♦ Has 20 years’ experience in business consulting
♦ Prior to co-founding MarketSphere, spent 13 years in
“Big 5” consulting
6 © 2010. Ariba, Inc. All rights reserved.
- 7. Philadelphia
Indianapolis
Kansas City
Pittsburgh
New York
St. Louis
Houston
Chicago
Atlanta
Omaha
Dallas
Who MarketSphere Is…
MarketSphere is a consulting firm that provides strategic business advisory and technology expertise to
clients across finance, procurement, human resources, supply chain, IT, sales and marketing functions.
• Our focus is on solving complex business challenges and strategic opportunities
for Fortune 500 and emerging, high-growth companies
• Services delivered from 11 market locations throughout the United States
• In 2009, engaged by 250+ clients on 600+ projects
7 © 2010. Ariba, Inc. All rights reserved. 7
- 8. What MarketSphere Does…
• Our market-leading practices are designed to help
improve core business functions, by…
– Integrated advisory and technology capabilities
– Deep business process specialization
– Proven transformational experience
– ROI-focused mindset
– Disciplined project management approach
– Comprehensive methodologies
• Ability to deliver complex, integrated business
solutions across practices
• Global alliance partnerships with leading enterprise
technology vendors
8 © 2010. Ariba, Inc. All rights reserved.
- 9. Case Study –
First National of Nebraska
Company Profile:
• First National of Nebraska (FNN), parent company of First National
Bank of Omaha (FNBO), is a “top 50” bank holding company based
in Omaha, Nebraska
• 7,000+ employees and $16 billion in managed assets
• FNN serves 6.6MM+ customers, with 100+ banking locations across
Nebraska, Iowa, Illinois, Colorado, Kansas, South Dakota, and Texas
• FNN also provides non-banking services such as credit card
management and processing, insurance, and technology solutions
9 © 2010. Ariba, Inc. All rights reserved.
- 10. Key Challenges –
First National of Nebraska
• Executive initiative to significantly reduce costs across all Banks/Departments –
Procurement on hook to deliver largest $ amount
• Corporate Procurement was not centrally-led, nor strategically focused –
managed very low % sourceable spend under management
• Autonomous Banks/BUs were “managing” various spend categories
• Small Procurement team was “transactionally focused” with minimal strategic
sourcing discipline
• Limited spend visibility and reporting for fact-based decision-making
• Limited use of procure-to-pay technology automation – processes not
standardized across enterprise
• Inconsistent and fragmented contract management responsibilities – difficulty
improving contract compliance and reducing contract leakage
10 © 2010. Ariba, Inc. All rights reserved.
- 11. Solution –
First National of Nebraska
Business Functions and Technologies:
• Implemented “closed-loop” sourcing, contracts, requisitioning,
workflow, purchasing, receiving, invoicing, matching, analysis and
reporting functions to improve compliance
• Ariba 10s1: Sourcing, Contract Management, P2P, and
Spend Visibility
• Integration with Lawson Financials
• Single Sign-On authentication
11 © 2010. Ariba, Inc. All rights reserved.
- 12. Solution –
First National of Nebraska
Project Team Approach:
• MarketSphere functional leads aligned with Ariba technical SMEs
• MarketSphere change enablement and supplier enablement leads
• FNN SMEs from Enterprise Sourcing, IT, Finance/Accounting, Legal,
Marketing, Operations, and cross-enterprise banks/BUs
• Steering Committee, Advisory Council and BU Deployment Leads to
build compliance and adoption at all levels
• P2P “high-touch” deployments (Pilot, Waves 1 & 2) to 1,000+
requesters/approvers
• MarketSphere and FNN IT developed custom app for fiscal approval-
level management
12 © 2010. Ariba, Inc. All rights reserved.
- 13. Business Case –
First National of Nebraska
• Original Projections:
♦ NPV - $8.1MM over three years (6% discount)
• Year 1 Results: $4.7MM Savings
13 © 2010. Ariba, Inc. All rights reserved.
- 14. Business Case –
First National of Nebraska
• Results to Date:
♦ eRFx events faster and less costly
♦ Contracting is faster, less costly and with Enterprise
considerations (300+ contracts loaded/managed)
♦ One-stop requisitioning, easy UI, less manual effort (225
suppliers enabled for $90MM spend, 14 punchouts, 25
CIF catalogs)
♦ New Enterprise Procurement policy
♦ Spend under management (SUM) increasing rapidly
♦ Savings since Pilot deployment (JAN): $1.5MM
– Sourcing - $800K (8 events, $24.7MM spend)
– Contract compliance via Ariba resulting from increased SUM - $400K
– Headcount reallocation - $300K
14 © 2010. Ariba, Inc. All rights reserved.
- 15. Key Lessons Learned –
First National of Nebraska
1. Strategic sourcing alone does not guarantee realized savings:
Sourcing + P2P Technology + Governance + Monitoring = Realized, Sustainable Savings
2. Executive support and governance to help drive compliance,
especially in large-spend Depts/BUs
3. Start with “change-ready” deployment groups to build critical mass
4. Agree to performance/savings metrics and build scorecard to
monitor/manage regularly
5. Continue to drive adoption post-implementation
15 © 2010. Ariba, Inc. All rights reserved.
- 16. Facebook
16 © 2010. Ariba, Inc. All rights reserved.
- 17. Speaker Bio – Ramona Moritz
• Purchasing lead for the implementations Ariba
On-Demand P2P solution, including end user training,
supplier enablement, catalogs, and issue resolution
• Facebook went live in Jan 2010 w/ pilot group, entire
company by June 2010. Prior to Facebook, worked for
Google, and Ziff Davis
17 © 2010. Ariba, Inc. All rights reserved.
- 18. Company Overview
• Facebook's mission is to give people the power to share and
make the world more open and connected. Millions of people
use Facebook everyday to keep up with friends, upload an
unlimited number of photos, share links and videos, and learn
more about the people they meet.
• Founded in 2004
• Employees 1,200+
• Offices: U.S. Headquartered in Palo Alto, Calif.
18 © 2010. Ariba, Inc. All rights reserved.
- 19. Challenges We Faced
• Facebook had a small implementation team
• Vendor Research, Contact Information, and Enablement
• Training end-users on basic business practices and
Ariba tool
• Management mindset regarding “Outsourced Solutions”
19 © 2010. Ariba, Inc. All rights reserved.
- 20. Top “Lessons Learned”
• Larger Pilot: Implemented best business practices, and
then had to fine tune based on user feedback
• Go-Live with more vendors enabled
• Dedicated IT resources for post Go-Live support and
maintenance and/or budget for Premium Support
• Super User Training
20 © 2010. Ariba, Inc. All rights reserved.
- 22. Closing Comments
Have a “Best Practice” you’d like to share?
Talk to John Lark or Dan Ashton to learn how.
22 © 2010. Ariba, Inc. All rights reserved.
- 24. Contact Information
Brian Wietharn, Partner & Spend Management Practice Leader
MarketSphere Consulting
816.559.0626
brian.wietharn@marketsphere.com
Ramona Moritz, Purchasing
Facebook
650.543.5307
ramona@facebook.com
John Lark
Ariba – Sr. Solutions Marketing Mgr
650.390.1903
jlark@ariba.com
24 © 2010. Ariba, Inc. All rights reserved.
- 25. 25 © 2010. Ariba, Inc. All rights reserved.