Procurement Excellence

for top and bottom line value

Barry Manning, Head, Procurement LoB APJ
June 19 – Hong Kong
World Class Procurement Excellence
…is essential to be competitive

Are you World Class? 88% Spend Under Management

7% Annual Recurring Savings
78% Compliant Spend
Source: Ardent Partners CPO Rising 2011

© 2012 SAP AG. All rights reserved. 2

 Global Trends are Driving Change in Procurement

Economic
Volatility Cost Savings Pressure

Sustainability Risks of Natural Disaster

Focus

© 2012 SAP AG. All rights reserved. 3

New environment creates both
opportunities and challenges

Coca-Cola keeps Italian orange

suppliers after protests

Japan disaster a wake-up call for tech

After Thai floods magnify disruption, sources added to supply chain

GM, Peugeot Deal Aims for Cost Savings

© 2012 SAP AG. All rights reserved. 4

Transformation
 The Business Case for Procurement Excellence

Spend Optimization Reliability Productivity Innovation

 Improve spend  Identify and  Increase  Focus on revenue

visibility mitigate supply operational generation
risk effectiveness
 Increase internal  Use supplier know-
collaboration  Drive supplier  Integrate the how and reward
responsiveness procurement innovation
 Source more and
process
better  Improve quality  Promote
and consistency  Leverage team sustainability
knowledge

© 2012 SAP AG. All rights reserved. 6

 Inefficient source-to-pay processes result in high costs

 Inconsistent, Incomplete,
and Unclassified Data Corporate
buyers

Spend Analysis
 Limited Cost Savings
Strategic Contract
Sourcing Mgmt

 Poor Contract Procure-to-Pay

Management
Suppliers Supplier Management Chief
Category managers
procurement
officer
 High Procure-to-Pay
Process Costs Product
Supply Chain
Development

Cost
 Lack of Supplier Finance
Accounting
Management

Production
Contract
managers

© 2012 SAP AG. All rights reserved. 7

Efficient source-to-pay processes ensure cost savings

 Achieve Consistent,
Complete, and Classified
Corporate buyers
Data
Spend Analysis

 Ensure Sustainable Cost Strategic Contract

Savings Sourcing Mgmt

Procure-to-Pay

 Achieve Comprehensive Suppliers Supplier Management Chief

Category managers
Contract Management procurement
officer

Product
 Reduce Procure-to-Pay Supply Chain
Development
Processing Costs
Cost
Finance
Accounting
 Manage Suppliers
Effectively
Production
Contract
managers

© 2012 SAP AG. All rights reserved. 8

Solution
 Disconnected procurement
processes

39% of companies are not connecting their

key procurement processes to one another

© 2012
Source: SAP
Ardent AG. All rights
Partners reserved.
Research 2011 10
SAP delivers a comprehensive, integrated procurement
solution for all categories of spend

Spend Analysis  Find savings opportunities

 Source more and better

Strategic Contract
Sourcing Management  Reduce contractual risk

 Drive compliant spending

Procure-to-Pay
 Lower operating costs
Supplier Management and
Business Network  Develop the best suppliers

Mobile Solutions  Work on the go

© 2012 SAP AG. All rights reserved. 11

 86% of companies
say spend visibility
is very important…

But only 40% of

companies have
good visibility into
their spending
© 2012
Source: SAP SAP AG. All rights
/ Procurement reserved.
Leaders Survey 2011 12
Accurate spend analysis drives savings opportunities

Aggregate Data
Spend Analysis
 Simple, automated, scheduled
extraction from source systems

Classify and Enrich

Aggregate Data
 Propriety compendiums to drive
accurate and useful data
Classify and Enrich
Analyze, Share, Act

 Hundreds of out of box reports, slice

Analyze, Share, Act and dice, collaboration tools

 Ability to kick off pre-populated

sourcing activities
Enabled by SAP Spend Performance Management,
SAP Data Enrichment and Classification OnDemand

© 2012 SAP AG. All rights reserved. 13

SAP Spend Performance Management (SPM)
Accelerate savings by empowering self-service opportunity identification

© 2012 SAP AG. All rights reserved. 14

SAP Spend Performance Management 3.0
What’s New

New Landing Page

Global
Variables Advanced Charting
Total Landed Costs Simulation
New Data Enrichment Tools
Local
Variables Advanced Graphical Analyses and
iPad integration

Enabled for HANA in June 2012

© 2012 SAP AG. All rights reserved. 15

SAP Data Enrichment and Classification OnDemand
Ensure standardized and accurate spending data across source systems

© 2012 SAP AG. All rights reserved. 16

Increase Cost Savings
Procurement’s #1 Priority

Top Procurement Priorities 2011-2014

60%
54%

50% 46%

40%
35%
30%
30%

20%

10%

0%
Savings Process People Suppliers

Source: CPO Rising 2011, Ardent Partners LLC

© 2012 SAP AG. All rights reserved. 17

 think BIG
& Start Small
Consider
 Rapid Deployment Solutions
 On Demand Solutions

Software

Service Content

Enablement
On Ramps!

Procurement Excellence

1. Find what’s not 6. Source passion internally

managed 7. Benchmark
2. Control the process 8. Leverage tools to instantiate
3. Question demand best practices
4. Build business plans 9. Connect to realize wins
5. Engage champions 10. Market everything you do
What’s Next?

Subscribe Experience Ask Initiate

to our Procurement it yourself at the your account team the benchmarking
Thought Leadership next SAPPHIRE or to schedule an process with a free
newsletter or find us at: World Tour Executive Briefing Value Assessment
valuemanagement.
sap.com/sapglobal

© 2012 SAP AG. All rights reserved. 20

Thank You