View
122
Download
0
Category
Preview:
Citation preview
This document contains information that is proprietary, privileged, and confidential. 1
Reasons to deploy an integrated Supplier Management Solution
This document contains information that is proprietary, privileged, and confidential.
Supplier Management : Numbers you must know
40-70%SUPPLIER COSTSOf company’s total cost are contributed to by the Supplier Costs
$585 -$1,000
SPENDPer supplier annually in supplier management costs - AMR Research
>85%INACCURATE DATACompanies identify significant costs from poor data -Gartner Research
67%POOR DATA Of CPOs identify poor data quality as a key barrier to implementing their systems -Deloitte
95%DATA QUALITYImportant in achieving procurement objective by procurement professionals -Procurement Leaders
50%IT SystemsCompanies have delayed/ cancelled new IT systems due to poor data -Gartner Research
This document contains information that is proprietary, privileged, and confidential. 3
Pain-points of Supplier Data: Challenges faced by Organizations
Inaccurate Data
Multiple Source Systems
Lack of Standardized Processes
Legacy systems
Multiple Users
No Data Validation
Manual processes
Roles not clearly defined
Outdated technology
This document contains information that is proprietary, privileged, and confidential. 4
The impact of poor supplier data across the P2P process takes many forms and each is costly
Peop
le • Companies suffer from a limited ability to centralize & enforce governance
• Employees working outside the system increase the threat of loss and fraud
• The ACFE estimates that fraud costs organizations about 7% of annual revenues
Proc
ess • Material monetary losses
occur due to contract leakage & maverick spend
• Multiple personnel across many departments waste time searching for data
• Duplicate supplier records lead to millions of dollars in duplicate payments
Syst
ems • Risk increases significantly
without proper oversights put into place
• Downstream Software systems and initiatives lose value potential
• Manual Supplier on-boarding can cost up to $1MM per year
This document contains information that is proprietary, privileged, and confidential. 5
Supplier data is the lifeblood of procurement technology but is often lacking in quality which undermines value
Supplier Information
Management
Identify Business Requirements and Assess Suppliers
Select suppliers and manage contract and catalogue
Manage Supplier Performance and Innovation
Analyze Market and Demand
Spend
Performance
Assessment
Contract
This document contains information that is proprietary, privileged, and confidential.
The Way forward: Deploying integrated Supplier Management Solution
Better insight and visibility into all aspects of supplier management
Visibility
Gap prevention – consistently stay compliant with changing requirements
Compliance
Accuracy and efficiency – search and leverage accurate data quickly
Efficiency
Supplier Information Management (SIM)
Low Cost Per supplierHigher ComplianceMinimize reputational cost
As-Is State High Supplier Costs Lack of CompliancePoor Supply Data
Auditability of any aspect of supplier information and supplier management processes
Audit
This document contains information that is proprietary, privileged, and confidential. 7
Add value to your organization with a digital Supplier Management platform
Value addressed to organizationsProcess
On-Boarding Collect, manage, and ensure the accuracy of core supplier information
RiskProactively monitor and rollup a variety of
risks: market specific, product specific, geo/political, financial
Compliance Compliance to Industry specific and generic compliance requirements
PerformanceGet the full picture from all internal
sources of supplier information and track progress toward business goals
MDM Single point within the organization for duplicate free and validated information
Reduce internal overhead by automating supplier onboarding function
Supplier Risk Alerting helps devise a risk strategy and uncover additional business value from suppliers
Global visibility, aggregation and discovery of supplier information within the organization to reduce reputational costs
KPI’s and Supplier Segmentation help identify Strategic Suppliers and lead to Supplier Collaboration for a more sustainable and profitable business
Enriched and validated high quality data to minimize poor supplier data costs
This document contains information that is proprietary, privileged, and confidential. 8
Step 1: Identify potential areas of benefit, savings, and ROIAccounts Payable
• Time savings• Capture early payment discounts
Compliance• Time• Fines/Penalties/Costs
Diversity/Small• Missed revenue for lack of compliance (small business)• Time
General• Elimination of paper/scanned documents• Other error reconciliation• Time
Legal• Time spent searching for contracts• Standardized contracts• Decreased cost of liability
Procurement IT
• Time• Product Displacement
Risk/Performance• Reputational/brand risk• Costs attributed to delays upon supply chain disruption reaction• Cost increase due to Tier-n insolvency• Loss of revenue due to supply chain disruption• Missed opportunities to scorecard supplier• Time
Sourcing• Capture of Rebates• Minimize off-contract spend• Limit increase/cost in suppliers onboarded• Elimination of 3rd Party Data Enrichment (e.g., parent/child,
commodities, etc.)• Time
Supplier Master• Loss of revenue due to cycle time of onboarding• Time
This document contains information that is proprietary, privileged, and confidential. 9
Step 2: attribute a value to create a data driven value proposition
AVERAGE GROSS SAVINGS = $8,477,801
Function AreaLow High What Low High What Low Avg. High
Accounts PayableTime savings
Time spent collecting W8/W9 Number of People: 6.0 Average Cost (fully burdened): $80,000 Average Time Spent: 8.0% $38,400 -80% -95% reduction in time spent -70% -85% reduction in time spent $26,880 $29,760 $32,640Time spent reissuing returned checks Number of People: 1.0 Average Cost (fully burdened): $150,000 Average Time Spent: 10.0% $15,000 -50% -80% reduction in time spent -50% -70% reduction in time spent $7,500 $9,000 $10,500Time spent finding/Identifying proper supplier/bank for payment Number of People: 8.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $32,000 -50% -80% reduction in time spent -40% -80% reduction in time spent $12,800 $19,200 $25,600Time spent communicating with suppliers to extend payment terms Number of People: 1.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $4,000 -50% -80% reduction in time spent 0% 0% reduction in time spent $0 $0 $0Time spent on AP helpdesk (e.g., invoice collection, status, etc.) Number of People: 8.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $64,000 -50% -80% reduction in time spent 0% 0% reduction in time spent $0 $0 $0
Capture early payment discounts Percent of Missed Opportunities: 20.0% Total Spend: $10,000,000 Average Discount: 2.0% $40,000 75% 90% newly captured (of missed) 75% 90% newly captured (of missed) $30,000 $33,000 $36,000
LegalTime
Time spent searching for contracts Number of People: 2.0 Average Cost (fully burdened): $175,000 Average Time Spent: 10.0% $35,000 -75% -90% reduction in time spent -50% -75% reduction in time spent $17,500 $21,875 $26,250Standardized contracts Annual Cost of Non-Compliance: $100,000 $100,000 50% 100% increase in compliance 25% 75% increase in compliance $25,000 $50,000 $75,000Decreased cost of liability Annual Cost Due to Lack of Insurance Coverage: $1,500,000 $1,500,000 95% 100% increase in coverage 70% 90% increase in coverage $1,050,000 $1,200,000 $1,350,000
SourcingCapture of Rebates Percent of Missed Rebates: 50.0% Outstanding Rebates: $10,000,000 $5,000,000 15% 55% newly captured (of missed) 5% 25% newly captured (of missed) $250,000 $750,000 $1,250,000Minimize off-contract spend Percent of Off-Contract Spend: 6.0% Total Spend in Commodities Sourced: $1,700,000,000 Average Sourcing Savings: 7.0% $7,140,000 60% 85% reduction in off-contract 40% 50% reduction in off-contract $2,856,000 $3,213,000 $3,570,000Limit increase/cost in suppliers onboarded Number of Suppliers: 17,500.0 Average Cost to Onboard Supplier: $250 Average Growth Rate: 1.0% $43,750 60% 85% reduction in growth 40% 50% reduction in growth $17,500 $19,688 $21,875Elimination of 3rd Party Data Enrichment (e.g., parent/child, commodities, etc.) Spend on Data Enrichment: $80,000 $80,000 50% 100% reduction in enrichment needs 25% 100% reduction in enrichment services $20,000 $50,000 $80,000Time
Time spent on existing supplier research Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $23,750 -50% -80% reduction in time spent -20% -40% reduction in time spent $4,750 $7,125 $9,500Time spent on identify new suppliers Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 10.0% $47,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $9,500 $14,250 $19,000Time wasted on walk-up suppliers Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $23,750 -50% -80% reduction in time spent -20% -40% reduction in time spent $4,750 $7,125 $9,500Time spent on ad-hoc spend analysis (aggregation, cleanse, etc.) Number of People: 2.0 Average Cost (fully burdened): $60,000 Average Time Spent: 5.0% $6,000 -25% -75% reduction in time spent -20% -40% reduction in time spent $1,200 $1,800 $2,400Time spent on contract research Number of People: 2.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $9,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $1,900 $2,850 $3,800Time spent on market-making research Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 10.0% $47,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $9,500 $14,250 $19,000
Diversity/SmallMissed revenue for lack of compliance (small business) Number of Incidents: 1.0 Average Revenue Lost: $500,000 Probability of Incident: 2.0% $10,000 -30% -70% reduction in probability -20% -50% reduction in probability $2,000 $3,500 $5,000Time
Identifying and collecting small/diverse information Number of People: 3.0 Average Cost (fully burdened): $65,000 Average Time Spent: 40.0% $78,000 -40% -90% reduction in time spent -75% -100% reduction in time spent $58,500 $68,250 $78,000
Risk/PerformanceReputational/brand risk Number of Incidents: 1.0 Average Impact: $20,000,000 Probability of Incident: 0.3% $60,000 -50% -80% reduction in probability -35% -75% reduction in probability $21,000 $33,000 $45,000Costs attributed to delays upon supply chain disruption reaction Number of Incidents: 8.0 Average Disruption Cost per Day: $15,000 Number of Days to React/Replace: 11.0 $1,320,000 -20% -80% reduction in probability -10% -60% reduction in probability $132,000 $462,000 $792,000Cost increase due to Tier-n insolvency Percent of Spend Affected: 0.5% Total Spend: $6,350,000,000 Assumed Affected Increase: 3.0% $952,500.0 -10% -25% reduction in probability -5% -10% reduction in probability $47,625 $71,438 $95,250Loss of revenue due to supply chain disruption Number of Incidents: 8.0 Average Loss of Revenue per Incident: $100,000 Probability of Incident: 100.0% $800,000 -30% -70% reduction in incidents -20% -50% reduction in incidents $160,000 $280,000 $400,000Missed opportunities to scorecard supplier Number of Scorecards: 50.0 Loss of Supplier Productivity Improvement: $10,000 $500,000 -40% -80% reduction of oversights -30% -70% reduction of oversights $150,000 $250,000 $350,000Time
Time spent to collect risk metrics Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 10.0% $310,500 -40% -80% reduction in time spent -25% -70% reduction in time spent $77,625 $147,488 $217,350Time spent managing scorecarding process Number of People: 7.0 Average Cost (fully burdened): $95,000 Average Time Spent: 7.0% $46,550 -60% -85% reduction in time spent -40% -75% reduction in time spent $18,620 $26,766 $34,913Time spent researching for Business Continuity Planning Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 3.0% $93,150 -10% -40% reduction in time spent -5% -25% reduction in time spent $4,658 $13,973 $23,288Time spent to enforcing/communicating mitigation plans Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 1.0% $31,050 -60% -90% reduction in time spent -50% -75% reduction in time spent $15,525 $19,406 $23,288
ComplianceTime
SOX Number of People: 1.0 Average Cost (fully burdened): $65,000 Average Time Spent: 2.0% $1,300 -10% -20% reduction in time spent 0% -15% reduction in time spent $0 $98 $195FCPA Number of People: 1.0 Average Cost (fully burdened): $125,000 Average Time Spent: 30.0% $37,500 -50% -85% reduction in time spent -25% -55% reduction in time spent $9,375 $15,000 $20,625Information Security Number of People: 3.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $54,000 -50% -85% reduction in time spent -25% -55% reduction in time spent $13,500 $21,600 $29,700ISO20001 Number of People: 1.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $18,000 -50% -85% reduction in time spent -25% -55% reduction in time spent $4,500 $7,200 $9,900SAS70 Number of People: 1.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $18,000 -85% -95% reduction in time spent -60% -75% reduction in time spent $10,800 $12,150 $13,500NDA Number of People: 5.0 Average Cost (fully burdened): $75,000 Average Time Spent: 10.0% $37,500 -85% -95% reduction in time spent -70% -80% reduction in time spent $26,250 $28,125 $30,000CMR Number of People: - Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $021 CFR Number of People: Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $0CSR Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $40,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $28,000 $30,000 $32,000OFAC/debarment checks Number of People: 6.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $28,500 -95% -100% reduction in time spent -70% -80% reduction in time spent $19,950 $21,375 $22,800COI coverage Number of People: 5.0 Average Cost (fully burdened): $55,000 Average Time Spent: 20.0% $55,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $38,500 $41,250 $44,000HSE Number of People: 1.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $8,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $5,600 $6,000 $6,400Audit Number of People: 2.0 Average Cost (fully burdened): $90,000 Average Time Spent: 35.0% $63,000 -30% -60% reduction in time spent -10% -35% reduction in time spent $6,300 $14,175 $22,050RoHS/REECH Number of People: - Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $0Other Number of People: 6.0 Average Cost (fully burdened): $85,000 Average Time Spent: 5.0% $25,500 0% -100% reduction in time spent -15% -35% reduction in time spent $3,825 $6,375 $8,925
Fines/Penalties/CostsSOX Number of Incidents: 1.0 Average Incident Cost: $1,700,000 Probability of Incident: 1.0% $17,000 -20% -50% reduction in probability -10% -25% reduction in probability $1,700 $2,975 $4,250FCPA Number of Incidents: 1.0 Average Incident Cost: $3,500,000 Probability of Incident: 1.0% $35,000 -40% -80% reduction in probability -30% -60% reduction in probability $10,500 $15,750 $21,000Information Security Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability 0% 0% reduction in probability $0 $0 $0ISO20001 Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability 0% 0% reduction in probability $0 $0 $0SAS70 Number of Incidents: 2.0 Average Incident Cost: $200,000 Probability of Incident: 4.0% $16,000 -40% -80% reduction in probability -30% -60% reduction in probability $4,800 $7,200 $9,600NDA Number of Incidents: 4.0 Average Incident Cost: $350,000 Probability of Incident: 10.0% $140,000 -40% -80% reduction in probability -30% -60% reduction in probability $42,000 $63,000 $84,000CMR Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability -30% -60% reduction in probability $0 $0 $021 CFR Number of Incidents: Average Incident Cost: $0 Probability of Incident: 0.0% $0 0% 0% reduction in probability 0% 0% reduction in probability $0 $0 $0CSR Number of Incidents: 1.0 Average Incident Cost: $5,000,000 Probability of Incident: 0.2% $10,000 -40% -80% reduction in probability -30% -60% reduction in probability $3,000 $4,500 $6,000OFAC/debarment checks Number of Incidents: 3.0 Average Incident Cost: $1,000,000 Probability of Incident: 2.0% $60,000 -90% -100% reduction in probability -80% -90% reduction in probability $48,000 $51,000 $54,000HSE Number of Incidents: 2.0 Average Incident Cost: $1,500,000 Probability of Incident: 0.5% $15,000 -40% -80% reduction in probability -30% -60% reduction in probability $4,500 $6,750 $9,000RoHS/REECH Number of Incidents: 60.0 Average Incident Cost: $2,500 Probability of Incident: 5.0% $7,500 -30% -50% reduction in probability -15% -30% reduction in probability $1,125 $1,688 $2,250W8/W9 Number of Incidents: 5,000.0 Average Incident Cost: $100 Probability of Incident: 20.0% $100,000 -95% -100% reduction in probability -80% -100% reduction in probability $80,000 $90,000 $100,000Other Number of Incidents: 1.0 Average Incident Cost: $1,000,000 Probability of Incident: 10.0% $100,000 0% 0% reduction in probability -20% -40% reduction in probability $20,000 $30,000 $40,000
Supplier MasterLoss of revenue due to cycle time of onboarding Cycle Time on Direct Spend (days): 21.0 Total New Product Revenue: $15,000,000 $863,014 -50 -80 reduction in cycle time -30% -70% reduction in cycle time $258,904 $431,507 $604,110Time
Time spent on supplier onboarding helpdesk Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 15.0% $60,000 -50% -80% reduction in time spent -40% -80% reduction in time spent $24,000 $36,000 $48,000Time identifying and syndicating proper enrollment forms (e.g., by country, etc.) Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $20,000 -80% -100% reduction in time spent -50% -85% reduction in time spent $10,000 $13,500 $17,000Time spent on data Reentry Number of People: 2.0 Average Cost (fully burdened): $45,000 Average Time Spent: 75.0% $67,500 -80% -100% reduction in time spent -50% -85% reduction in time spent $33,750 $45,563 $57,375
Procurement ITTime
Time on aggregation efforts (e.g., reports across downstream systems) Number of People: 2.0 Average Cost (fully burdened): $110,000 Average Time Spent: 12.0% $26,400 -60% -80% reduction in time spent -40% -70% reduction in time spent $10,560 $14,520 $18,480Product Displacement
Contract Management Systems: 1.0 Average Annual Cost $80,000 $80,000 100% 100% reduction in system cost 100% 100% reduction in system cost $80,000 $80,000 $80,000Spend Analysis Systems: 1.0 Average Annual Cost $225,000 $225,000 100% 100% reduction in system cost 0% 0% reduction in system cost $0 $0 $0Proprietary system (includes: maintenance, servers, etc.) Systems: 2.0 Average Annual Cost $115,000 $230,000 100% 100% reduction in system cost 100% 100% reduction in system cost $230,000 $230,000 $230,000
GeneralElimination of paper/scanned documents Number of Documents: 50,000.0 Cost per conversion: $0.50 $25,000.0 75% 95% reduction in conversions 50% 85% reduction in conversions $12,500 $16,875 $21,250Other error reconciliation Number of Errors: 3,000.0 Cost per error: $100 $300,000.0 30% 60% reduction in errors 10% 30% reduction in errors $30,000 $60,000 $90,000Time
Time spent finding missing information Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 2.0% $61,200 -60% -80% reduction in time spent -20% -50% reduction in time spent $12,240 $21,420 $30,600Time spent on duplicate efforts (30%) Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 5.0% $153,000 -25% -35% reduction in time spent -25% -35% reduction in time spent $38,250 $45,900 $53,550Time calling suppliers due to missing email addresses Number of People: 6.0 Average Cost (fully burdened): $60,000 Average Time Spent: 2.0% $7,200 -60% -80% reduction in time spent -30% -60% reduction in time spent $2,160 $3,240 $4,320Time spent on general supplier communication Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 7.5% $229,500 -25% -35% reduction in time spent -15% -20% reduction in time spent $34,425 $40,163 $45,900Time spend on approval processes Number of People: 73.0 Average Cost (fully burdened): $165,000 Average Time Spent: 1.0% $120,450 -60% -80% reduction in time spent -40% -75% reduction in time spent $48,180 $69,259 $90,338Time spent coordinating supplier performance reviews Number of People: 14.0 Average Cost (fully burdened): $85,000 Average Time Spent: 15.0% $178,500 -25% -35% reduction in time spent -25% -35% reduction in time spent $44,625 $53,550 $62,475Other time spent on onboarding supplier Number of People: 73.0 Average Cost (fully burdened): $130,000 Average Time Spent: 0.5% $47,450 -40% -80% reduction in time spent -30% -60% reduction in time spent $14,235 $21,353 $28,470
$6,298,387 $8,477,801 $10,657,215
Low Avg. High$3,136,000 $3,996,000 $4,856,000$1,311,625 $1,555,863 $1,800,100
$710,233 $970,931 $1,231,630$420,904 $715,007 $1,009,110$330,000 $360,000 $390,000$329,625 $783,438 $1,237,250
$60,000 $96,563 $133,125
$285 $396 $506
Current Expected Change (range) Conservative Change (range) Savings
AVERAGE GROSS SAVINGS = $8,477,801
Function AreaLow High What Low High What Low Avg. High
Accounts PayableTime savings
Time spent collecting W8/W9 Number of People: 6.0 Average Cost (fully burdened): $80,000 Average Time Spent: 8.0% $38,400 -80% -95% reduction in time spent -70% -85% reduction in time spent $26,880 $29,760 $32,640Time spent reissuing returned checks Number of People: 1.0 Average Cost (fully burdened): $150,000 Average Time Spent: 10.0% $15,000 -50% -80% reduction in time spent -50% -70% reduction in time spent $7,500 $9,000 $10,500Time spent finding/Identifying proper supplier/bank for payment Number of People: 8.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $32,000 -50% -80% reduction in time spent -40% -80% reduction in time spent $12,800 $19,200 $25,600Time spent communicating with suppliers to extend payment terms Number of People: 1.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $4,000 -50% -80% reduction in time spent 0% 0% reduction in time spent $0 $0 $0Time spent on AP helpdesk (e.g., invoice collection, status, etc.) Number of People: 8.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $64,000 -50% -80% reduction in time spent 0% 0% reduction in time spent $0 $0 $0
Capture early payment discounts Percent of Missed Opportunities: 20.0% Total Spend: $10,000,000 Average Discount: 2.0% $40,000 75% 90% newly captured (of missed) 75% 90% newly captured (of missed) $30,000 $33,000 $36,000
LegalTime
Time spent searching for contracts Number of People: 2.0 Average Cost (fully burdened): $175,000 Average Time Spent: 10.0% $35,000 -75% -90% reduction in time spent -50% -75% reduction in time spent $17,500 $21,875 $26,250Standardized contracts Annual Cost of Non-Compliance: $100,000 $100,000 50% 100% increase in compliance 25% 75% increase in compliance $25,000 $50,000 $75,000Decreased cost of liability Annual Cost Due to Lack of Insurance Coverage: $1,500,000 $1,500,000 95% 100% increase in coverage 70% 90% increase in coverage $1,050,000 $1,200,000 $1,350,000
SourcingCapture of Rebates Percent of Missed Rebates: 50.0% Outstanding Rebates: $10,000,000 $5,000,000 15% 55% newly captured (of missed) 5% 25% newly captured (of missed) $250,000 $750,000 $1,250,000Minimize off-contract spend Percent of Off-Contract Spend: 6.0% Total Spend in Commodities Sourced: $1,700,000,000 Average Sourcing Savings: 7.0% $7,140,000 60% 85% reduction in off-contract 40% 50% reduction in off-contract $2,856,000 $3,213,000 $3,570,000Limit increase/cost in suppliers onboarded Number of Suppliers: 17,500.0 Average Cost to Onboard Supplier: $250 Average Growth Rate: 1.0% $43,750 60% 85% reduction in growth 40% 50% reduction in growth $17,500 $19,688 $21,875Elimination of 3rd Party Data Enrichment (e.g., parent/child, commodities, etc.) Spend on Data Enrichment: $80,000 $80,000 50% 100% reduction in enrichment needs 25% 100% reduction in enrichment services $20,000 $50,000 $80,000Time
Time spent on existing supplier research Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $23,750 -50% -80% reduction in time spent -20% -40% reduction in time spent $4,750 $7,125 $9,500Time spent on identify new suppliers Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 10.0% $47,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $9,500 $14,250 $19,000Time wasted on walk-up suppliers Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $23,750 -50% -80% reduction in time spent -20% -40% reduction in time spent $4,750 $7,125 $9,500Time spent on ad-hoc spend analysis (aggregation, cleanse, etc.) Number of People: 2.0 Average Cost (fully burdened): $60,000 Average Time Spent: 5.0% $6,000 -25% -75% reduction in time spent -20% -40% reduction in time spent $1,200 $1,800 $2,400Time spent on contract research Number of People: 2.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $9,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $1,900 $2,850 $3,800Time spent on market-making research Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 10.0% $47,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $9,500 $14,250 $19,000
Diversity/SmallMissed revenue for lack of compliance (small business) Number of Incidents: 1.0 Average Revenue Lost: $500,000 Probability of Incident: 2.0% $10,000 -30% -70% reduction in probability -20% -50% reduction in probability $2,000 $3,500 $5,000Time
Identifying and collecting small/diverse information Number of People: 3.0 Average Cost (fully burdened): $65,000 Average Time Spent: 40.0% $78,000 -40% -90% reduction in time spent -75% -100% reduction in time spent $58,500 $68,250 $78,000
Risk/PerformanceReputational/brand risk Number of Incidents: 1.0 Average Impact: $20,000,000 Probability of Incident: 0.3% $60,000 -50% -80% reduction in probability -35% -75% reduction in probability $21,000 $33,000 $45,000Costs attributed to delays upon supply chain disruption reaction Number of Incidents: 8.0 Average Disruption Cost per Day: $15,000 Number of Days to React/Replace: 11.0 $1,320,000 -20% -80% reduction in probability -10% -60% reduction in probability $132,000 $462,000 $792,000Cost increase due to Tier-n insolvency Percent of Spend Affected: 0.5% Total Spend: $6,350,000,000 Assumed Affected Increase: 3.0% $952,500.0 -10% -25% reduction in probability -5% -10% reduction in probability $47,625 $71,438 $95,250Loss of revenue due to supply chain disruption Number of Incidents: 8.0 Average Loss of Revenue per Incident: $100,000 Probability of Incident: 100.0% $800,000 -30% -70% reduction in incidents -20% -50% reduction in incidents $160,000 $280,000 $400,000Missed opportunities to scorecard supplier Number of Scorecards: 50.0 Loss of Supplier Productivity Improvement: $10,000 $500,000 -40% -80% reduction of oversights -30% -70% reduction of oversights $150,000 $250,000 $350,000Time
Time spent to collect risk metrics Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 10.0% $310,500 -40% -80% reduction in time spent -25% -70% reduction in time spent $77,625 $147,488 $217,350Time spent managing scorecarding process Number of People: 7.0 Average Cost (fully burdened): $95,000 Average Time Spent: 7.0% $46,550 -60% -85% reduction in time spent -40% -75% reduction in time spent $18,620 $26,766 $34,913Time spent researching for Business Continuity Planning Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 3.0% $93,150 -10% -40% reduction in time spent -5% -25% reduction in time spent $4,658 $13,973 $23,288Time spent to enforcing/communicating mitigation plans Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 1.0% $31,050 -60% -90% reduction in time spent -50% -75% reduction in time spent $15,525 $19,406 $23,288
ComplianceTime
SOX Number of People: 1.0 Average Cost (fully burdened): $65,000 Average Time Spent: 2.0% $1,300 -10% -20% reduction in time spent 0% -15% reduction in time spent $0 $98 $195FCPA Number of People: 1.0 Average Cost (fully burdened): $125,000 Average Time Spent: 30.0% $37,500 -50% -85% reduction in time spent -25% -55% reduction in time spent $9,375 $15,000 $20,625Information Security Number of People: 3.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $54,000 -50% -85% reduction in time spent -25% -55% reduction in time spent $13,500 $21,600 $29,700ISO20001 Number of People: 1.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $18,000 -50% -85% reduction in time spent -25% -55% reduction in time spent $4,500 $7,200 $9,900SAS70 Number of People: 1.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $18,000 -85% -95% reduction in time spent -60% -75% reduction in time spent $10,800 $12,150 $13,500NDA Number of People: 5.0 Average Cost (fully burdened): $75,000 Average Time Spent: 10.0% $37,500 -85% -95% reduction in time spent -70% -80% reduction in time spent $26,250 $28,125 $30,000CMR Number of People: - Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $021 CFR Number of People: Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $0CSR Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $40,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $28,000 $30,000 $32,000OFAC/debarment checks Number of People: 6.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $28,500 -95% -100% reduction in time spent -70% -80% reduction in time spent $19,950 $21,375 $22,800COI coverage Number of People: 5.0 Average Cost (fully burdened): $55,000 Average Time Spent: 20.0% $55,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $38,500 $41,250 $44,000HSE Number of People: 1.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $8,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $5,600 $6,000 $6,400Audit Number of People: 2.0 Average Cost (fully burdened): $90,000 Average Time Spent: 35.0% $63,000 -30% -60% reduction in time spent -10% -35% reduction in time spent $6,300 $14,175 $22,050RoHS/REECH Number of People: - Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $0Other Number of People: 6.0 Average Cost (fully burdened): $85,000 Average Time Spent: 5.0% $25,500 0% -100% reduction in time spent -15% -35% reduction in time spent $3,825 $6,375 $8,925
Fines/Penalties/CostsSOX Number of Incidents: 1.0 Average Incident Cost: $1,700,000 Probability of Incident: 1.0% $17,000 -20% -50% reduction in probability -10% -25% reduction in probability $1,700 $2,975 $4,250FCPA Number of Incidents: 1.0 Average Incident Cost: $3,500,000 Probability of Incident: 1.0% $35,000 -40% -80% reduction in probability -30% -60% reduction in probability $10,500 $15,750 $21,000Information Security Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability 0% 0% reduction in probability $0 $0 $0ISO20001 Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability 0% 0% reduction in probability $0 $0 $0SAS70 Number of Incidents: 2.0 Average Incident Cost: $200,000 Probability of Incident: 4.0% $16,000 -40% -80% reduction in probability -30% -60% reduction in probability $4,800 $7,200 $9,600NDA Number of Incidents: 4.0 Average Incident Cost: $350,000 Probability of Incident: 10.0% $140,000 -40% -80% reduction in probability -30% -60% reduction in probability $42,000 $63,000 $84,000CMR Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability -30% -60% reduction in probability $0 $0 $021 CFR Number of Incidents: Average Incident Cost: $0 Probability of Incident: 0.0% $0 0% 0% reduction in probability 0% 0% reduction in probability $0 $0 $0CSR Number of Incidents: 1.0 Average Incident Cost: $5,000,000 Probability of Incident: 0.2% $10,000 -40% -80% reduction in probability -30% -60% reduction in probability $3,000 $4,500 $6,000OFAC/debarment checks Number of Incidents: 3.0 Average Incident Cost: $1,000,000 Probability of Incident: 2.0% $60,000 -90% -100% reduction in probability -80% -90% reduction in probability $48,000 $51,000 $54,000HSE Number of Incidents: 2.0 Average Incident Cost: $1,500,000 Probability of Incident: 0.5% $15,000 -40% -80% reduction in probability -30% -60% reduction in probability $4,500 $6,750 $9,000RoHS/REECH Number of Incidents: 60.0 Average Incident Cost: $2,500 Probability of Incident: 5.0% $7,500 -30% -50% reduction in probability -15% -30% reduction in probability $1,125 $1,688 $2,250W8/W9 Number of Incidents: 5,000.0 Average Incident Cost: $100 Probability of Incident: 20.0% $100,000 -95% -100% reduction in probability -80% -100% reduction in probability $80,000 $90,000 $100,000Other Number of Incidents: 1.0 Average Incident Cost: $1,000,000 Probability of Incident: 10.0% $100,000 0% 0% reduction in probability -20% -40% reduction in probability $20,000 $30,000 $40,000
Supplier MasterLoss of revenue due to cycle time of onboarding Cycle Time on Direct Spend (days): 21.0 Total New Product Revenue: $15,000,000 $863,014 -50 -80 reduction in cycle time -30% -70% reduction in cycle time $258,904 $431,507 $604,110Time
Time spent on supplier onboarding helpdesk Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 15.0% $60,000 -50% -80% reduction in time spent -40% -80% reduction in time spent $24,000 $36,000 $48,000Time identifying and syndicating proper enrollment forms (e.g., by country, etc.) Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $20,000 -80% -100% reduction in time spent -50% -85% reduction in time spent $10,000 $13,500 $17,000Time spent on data Reentry Number of People: 2.0 Average Cost (fully burdened): $45,000 Average Time Spent: 75.0% $67,500 -80% -100% reduction in time spent -50% -85% reduction in time spent $33,750 $45,563 $57,375
Procurement ITTime
Time on aggregation efforts (e.g., reports across downstream systems) Number of People: 2.0 Average Cost (fully burdened): $110,000 Average Time Spent: 12.0% $26,400 -60% -80% reduction in time spent -40% -70% reduction in time spent $10,560 $14,520 $18,480Product Displacement
Contract Management Systems: 1.0 Average Annual Cost $80,000 $80,000 100% 100% reduction in system cost 100% 100% reduction in system cost $80,000 $80,000 $80,000Spend Analysis Systems: 1.0 Average Annual Cost $225,000 $225,000 100% 100% reduction in system cost 0% 0% reduction in system cost $0 $0 $0Proprietary system (includes: maintenance, servers, etc.) Systems: 2.0 Average Annual Cost $115,000 $230,000 100% 100% reduction in system cost 100% 100% reduction in system cost $230,000 $230,000 $230,000
GeneralElimination of paper/scanned documents Number of Documents: 50,000.0 Cost per conversion: $0.50 $25,000.0 75% 95% reduction in conversions 50% 85% reduction in conversions $12,500 $16,875 $21,250Other error reconciliation Number of Errors: 3,000.0 Cost per error: $100 $300,000.0 30% 60% reduction in errors 10% 30% reduction in errors $30,000 $60,000 $90,000Time
Time spent finding missing information Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 2.0% $61,200 -60% -80% reduction in time spent -20% -50% reduction in time spent $12,240 $21,420 $30,600Time spent on duplicate efforts (30%) Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 5.0% $153,000 -25% -35% reduction in time spent -25% -35% reduction in time spent $38,250 $45,900 $53,550Time calling suppliers due to missing email addresses Number of People: 6.0 Average Cost (fully burdened): $60,000 Average Time Spent: 2.0% $7,200 -60% -80% reduction in time spent -30% -60% reduction in time spent $2,160 $3,240 $4,320Time spent on general supplier communication Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 7.5% $229,500 -25% -35% reduction in time spent -15% -20% reduction in time spent $34,425 $40,163 $45,900Time spend on approval processes Number of People: 73.0 Average Cost (fully burdened): $165,000 Average Time Spent: 1.0% $120,450 -60% -80% reduction in time spent -40% -75% reduction in time spent $48,180 $69,259 $90,338Time spent coordinating supplier performance reviews Number of People: 14.0 Average Cost (fully burdened): $85,000 Average Time Spent: 15.0% $178,500 -25% -35% reduction in time spent -25% -35% reduction in time spent $44,625 $53,550 $62,475Other time spent on onboarding supplier Number of People: 73.0 Average Cost (fully burdened): $130,000 Average Time Spent: 0.5% $47,450 -40% -80% reduction in time spent -30% -60% reduction in time spent $14,235 $21,353 $28,470
$6,298,387 $8,477,801 $10,657,215
Low Avg. High$3,136,000 $3,996,000 $4,856,000$1,311,625 $1,555,863 $1,800,100
$710,233 $970,931 $1,231,630$420,904 $715,007 $1,009,110$330,000 $360,000 $390,000$329,625 $783,438 $1,237,250
$60,000 $96,563 $133,125
$285 $396 $506
AVERAGE GROSS SAVINGS = $8,477,801
Function AreaLow High What Low High What Low Avg. High
Accounts PayableTime savings
Time spent collecting W8/W9 Number of People: 6.0 Average Cost (fully burdened): $80,000 Average Time Spent: 8.0% $38,400 -80% -95% reduction in time spent -70% -85% reduction in time spent $26,880 $29,760 $32,640Time spent reissuing returned checks Number of People: 1.0 Average Cost (fully burdened): $150,000 Average Time Spent: 10.0% $15,000 -50% -80% reduction in time spent -50% -70% reduction in time spent $7,500 $9,000 $10,500Time spent finding/Identifying proper supplier/bank for payment Number of People: 8.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $32,000 -50% -80% reduction in time spent -40% -80% reduction in time spent $12,800 $19,200 $25,600Time spent communicating with suppliers to extend payment terms Number of People: 1.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $4,000 -50% -80% reduction in time spent 0% 0% reduction in time spent $0 $0 $0Time spent on AP helpdesk (e.g., invoice collection, status, etc.) Number of People: 8.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $64,000 -50% -80% reduction in time spent 0% 0% reduction in time spent $0 $0 $0
Capture early payment discounts Percent of Missed Opportunities: 20.0% Total Spend: $10,000,000 Average Discount: 2.0% $40,000 75% 90% newly captured (of missed) 75% 90% newly captured (of missed) $30,000 $33,000 $36,000
LegalTime
Time spent searching for contracts Number of People: 2.0 Average Cost (fully burdened): $175,000 Average Time Spent: 10.0% $35,000 -75% -90% reduction in time spent -50% -75% reduction in time spent $17,500 $21,875 $26,250Standardized contracts Annual Cost of Non-Compliance: $100,000 $100,000 50% 100% increase in compliance 25% 75% increase in compliance $25,000 $50,000 $75,000Decreased cost of liability Annual Cost Due to Lack of Insurance Coverage: $1,500,000 $1,500,000 95% 100% increase in coverage 70% 90% increase in coverage $1,050,000 $1,200,000 $1,350,000
SourcingCapture of Rebates Percent of Missed Rebates: 50.0% Outstanding Rebates: $10,000,000 $5,000,000 15% 55% newly captured (of missed) 5% 25% newly captured (of missed) $250,000 $750,000 $1,250,000Minimize off-contract spend Percent of Off-Contract Spend: 6.0% Total Spend in Commodities Sourced: $1,700,000,000 Average Sourcing Savings: 7.0% $7,140,000 60% 85% reduction in off-contract 40% 50% reduction in off-contract $2,856,000 $3,213,000 $3,570,000Limit increase/cost in suppliers onboarded Number of Suppliers: 17,500.0 Average Cost to Onboard Supplier: $250 Average Growth Rate: 1.0% $43,750 60% 85% reduction in growth 40% 50% reduction in growth $17,500 $19,688 $21,875Elimination of 3rd Party Data Enrichment (e.g., parent/child, commodities, etc.) Spend on Data Enrichment: $80,000 $80,000 50% 100% reduction in enrichment needs 25% 100% reduction in enrichment services $20,000 $50,000 $80,000Time
Time spent on existing supplier research Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $23,750 -50% -80% reduction in time spent -20% -40% reduction in time spent $4,750 $7,125 $9,500Time spent on identify new suppliers Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 10.0% $47,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $9,500 $14,250 $19,000Time wasted on walk-up suppliers Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $23,750 -50% -80% reduction in time spent -20% -40% reduction in time spent $4,750 $7,125 $9,500Time spent on ad-hoc spend analysis (aggregation, cleanse, etc.) Number of People: 2.0 Average Cost (fully burdened): $60,000 Average Time Spent: 5.0% $6,000 -25% -75% reduction in time spent -20% -40% reduction in time spent $1,200 $1,800 $2,400Time spent on contract research Number of People: 2.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $9,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $1,900 $2,850 $3,800Time spent on market-making research Number of People: 5.0 Average Cost (fully burdened): $95,000 Average Time Spent: 10.0% $47,500 -50% -80% reduction in time spent -20% -40% reduction in time spent $9,500 $14,250 $19,000
Diversity/SmallMissed revenue for lack of compliance (small business) Number of Incidents: 1.0 Average Revenue Lost: $500,000 Probability of Incident: 2.0% $10,000 -30% -70% reduction in probability -20% -50% reduction in probability $2,000 $3,500 $5,000Time
Identifying and collecting small/diverse information Number of People: 3.0 Average Cost (fully burdened): $65,000 Average Time Spent: 40.0% $78,000 -40% -90% reduction in time spent -75% -100% reduction in time spent $58,500 $68,250 $78,000
Risk/PerformanceReputational/brand risk Number of Incidents: 1.0 Average Impact: $20,000,000 Probability of Incident: 0.3% $60,000 -50% -80% reduction in probability -35% -75% reduction in probability $21,000 $33,000 $45,000Costs attributed to delays upon supply chain disruption reaction Number of Incidents: 8.0 Average Disruption Cost per Day: $15,000 Number of Days to React/Replace: 11.0 $1,320,000 -20% -80% reduction in probability -10% -60% reduction in probability $132,000 $462,000 $792,000Cost increase due to Tier-n insolvency Percent of Spend Affected: 0.5% Total Spend: $6,350,000,000 Assumed Affected Increase: 3.0% $952,500.0 -10% -25% reduction in probability -5% -10% reduction in probability $47,625 $71,438 $95,250Loss of revenue due to supply chain disruption Number of Incidents: 8.0 Average Loss of Revenue per Incident: $100,000 Probability of Incident: 100.0% $800,000 -30% -70% reduction in incidents -20% -50% reduction in incidents $160,000 $280,000 $400,000Missed opportunities to scorecard supplier Number of Scorecards: 50.0 Loss of Supplier Productivity Improvement: $10,000 $500,000 -40% -80% reduction of oversights -30% -70% reduction of oversights $150,000 $250,000 $350,000Time
Time spent to collect risk metrics Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 10.0% $310,500 -40% -80% reduction in time spent -25% -70% reduction in time spent $77,625 $147,488 $217,350Time spent managing scorecarding process Number of People: 7.0 Average Cost (fully burdened): $95,000 Average Time Spent: 7.0% $46,550 -60% -85% reduction in time spent -40% -75% reduction in time spent $18,620 $26,766 $34,913Time spent researching for Business Continuity Planning Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 3.0% $93,150 -10% -40% reduction in time spent -5% -25% reduction in time spent $4,658 $13,973 $23,288Time spent to enforcing/communicating mitigation plans Number of People: 27.0 Average Cost (fully burdened): $115,000 Average Time Spent: 1.0% $31,050 -60% -90% reduction in time spent -50% -75% reduction in time spent $15,525 $19,406 $23,288
ComplianceTime
SOX Number of People: 1.0 Average Cost (fully burdened): $65,000 Average Time Spent: 2.0% $1,300 -10% -20% reduction in time spent 0% -15% reduction in time spent $0 $98 $195FCPA Number of People: 1.0 Average Cost (fully burdened): $125,000 Average Time Spent: 30.0% $37,500 -50% -85% reduction in time spent -25% -55% reduction in time spent $9,375 $15,000 $20,625Information Security Number of People: 3.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $54,000 -50% -85% reduction in time spent -25% -55% reduction in time spent $13,500 $21,600 $29,700ISO20001 Number of People: 1.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $18,000 -50% -85% reduction in time spent -25% -55% reduction in time spent $4,500 $7,200 $9,900SAS70 Number of People: 1.0 Average Cost (fully burdened): $90,000 Average Time Spent: 20.0% $18,000 -85% -95% reduction in time spent -60% -75% reduction in time spent $10,800 $12,150 $13,500NDA Number of People: 5.0 Average Cost (fully burdened): $75,000 Average Time Spent: 10.0% $37,500 -85% -95% reduction in time spent -70% -80% reduction in time spent $26,250 $28,125 $30,000CMR Number of People: - Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $021 CFR Number of People: Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $0CSR Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $40,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $28,000 $30,000 $32,000OFAC/debarment checks Number of People: 6.0 Average Cost (fully burdened): $95,000 Average Time Spent: 5.0% $28,500 -95% -100% reduction in time spent -70% -80% reduction in time spent $19,950 $21,375 $22,800COI coverage Number of People: 5.0 Average Cost (fully burdened): $55,000 Average Time Spent: 20.0% $55,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $38,500 $41,250 $44,000HSE Number of People: 1.0 Average Cost (fully burdened): $80,000 Average Time Spent: 10.0% $8,000 -85% -95% reduction in time spent -70% -80% reduction in time spent $5,600 $6,000 $6,400Audit Number of People: 2.0 Average Cost (fully burdened): $90,000 Average Time Spent: 35.0% $63,000 -30% -60% reduction in time spent -10% -35% reduction in time spent $6,300 $14,175 $22,050RoHS/REECH Number of People: - Average Cost (fully burdened): $0 Average Time Spent: 0.0% $0 0% 0% reduction in time spent 0% 0% reduction in time spent $0 $0 $0Other Number of People: 6.0 Average Cost (fully burdened): $85,000 Average Time Spent: 5.0% $25,500 0% -100% reduction in time spent -15% -35% reduction in time spent $3,825 $6,375 $8,925
Fines/Penalties/CostsSOX Number of Incidents: 1.0 Average Incident Cost: $1,700,000 Probability of Incident: 1.0% $17,000 -20% -50% reduction in probability -10% -25% reduction in probability $1,700 $2,975 $4,250FCPA Number of Incidents: 1.0 Average Incident Cost: $3,500,000 Probability of Incident: 1.0% $35,000 -40% -80% reduction in probability -30% -60% reduction in probability $10,500 $15,750 $21,000Information Security Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability 0% 0% reduction in probability $0 $0 $0ISO20001 Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability 0% 0% reduction in probability $0 $0 $0SAS70 Number of Incidents: 2.0 Average Incident Cost: $200,000 Probability of Incident: 4.0% $16,000 -40% -80% reduction in probability -30% -60% reduction in probability $4,800 $7,200 $9,600NDA Number of Incidents: 4.0 Average Incident Cost: $350,000 Probability of Incident: 10.0% $140,000 -40% -80% reduction in probability -30% -60% reduction in probability $42,000 $63,000 $84,000CMR Number of Incidents: - Average Incident Cost: $0 Probability of Incident: 0.0% $0 -40% -80% reduction in probability -30% -60% reduction in probability $0 $0 $021 CFR Number of Incidents: Average Incident Cost: $0 Probability of Incident: 0.0% $0 0% 0% reduction in probability 0% 0% reduction in probability $0 $0 $0CSR Number of Incidents: 1.0 Average Incident Cost: $5,000,000 Probability of Incident: 0.2% $10,000 -40% -80% reduction in probability -30% -60% reduction in probability $3,000 $4,500 $6,000OFAC/debarment checks Number of Incidents: 3.0 Average Incident Cost: $1,000,000 Probability of Incident: 2.0% $60,000 -90% -100% reduction in probability -80% -90% reduction in probability $48,000 $51,000 $54,000HSE Number of Incidents: 2.0 Average Incident Cost: $1,500,000 Probability of Incident: 0.5% $15,000 -40% -80% reduction in probability -30% -60% reduction in probability $4,500 $6,750 $9,000RoHS/REECH Number of Incidents: 60.0 Average Incident Cost: $2,500 Probability of Incident: 5.0% $7,500 -30% -50% reduction in probability -15% -30% reduction in probability $1,125 $1,688 $2,250W8/W9 Number of Incidents: 5,000.0 Average Incident Cost: $100 Probability of Incident: 20.0% $100,000 -95% -100% reduction in probability -80% -100% reduction in probability $80,000 $90,000 $100,000Other Number of Incidents: 1.0 Average Incident Cost: $1,000,000 Probability of Incident: 10.0% $100,000 0% 0% reduction in probability -20% -40% reduction in probability $20,000 $30,000 $40,000
Supplier MasterLoss of revenue due to cycle time of onboarding Cycle Time on Direct Spend (days): 21.0 Total New Product Revenue: $15,000,000 $863,014 -50 -80 reduction in cycle time -30% -70% reduction in cycle time $258,904 $431,507 $604,110Time
Time spent on supplier onboarding helpdesk Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 15.0% $60,000 -50% -80% reduction in time spent -40% -80% reduction in time spent $24,000 $36,000 $48,000Time identifying and syndicating proper enrollment forms (e.g., by country, etc.) Number of People: 5.0 Average Cost (fully burdened): $80,000 Average Time Spent: 5.0% $20,000 -80% -100% reduction in time spent -50% -85% reduction in time spent $10,000 $13,500 $17,000Time spent on data Reentry Number of People: 2.0 Average Cost (fully burdened): $45,000 Average Time Spent: 75.0% $67,500 -80% -100% reduction in time spent -50% -85% reduction in time spent $33,750 $45,563 $57,375
Procurement ITTime
Time on aggregation efforts (e.g., reports across downstream systems) Number of People: 2.0 Average Cost (fully burdened): $110,000 Average Time Spent: 12.0% $26,400 -60% -80% reduction in time spent -40% -70% reduction in time spent $10,560 $14,520 $18,480Product Displacement
Contract Management Systems: 1.0 Average Annual Cost $80,000 $80,000 100% 100% reduction in system cost 100% 100% reduction in system cost $80,000 $80,000 $80,000Spend Analysis Systems: 1.0 Average Annual Cost $225,000 $225,000 100% 100% reduction in system cost 0% 0% reduction in system cost $0 $0 $0Proprietary system (includes: maintenance, servers, etc.) Systems: 2.0 Average Annual Cost $115,000 $230,000 100% 100% reduction in system cost 100% 100% reduction in system cost $230,000 $230,000 $230,000
GeneralElimination of paper/scanned documents Number of Documents: 50,000.0 Cost per conversion: $0.50 $25,000.0 75% 95% reduction in conversions 50% 85% reduction in conversions $12,500 $16,875 $21,250Other error reconciliation Number of Errors: 3,000.0 Cost per error: $100 $300,000.0 30% 60% reduction in errors 10% 30% reduction in errors $30,000 $60,000 $90,000Time
Time spent finding missing information Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 2.0% $61,200 -60% -80% reduction in time spent -20% -50% reduction in time spent $12,240 $21,420 $30,600Time spent on duplicate efforts (30%) Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 5.0% $153,000 -25% -35% reduction in time spent -25% -35% reduction in time spent $38,250 $45,900 $53,550Time calling suppliers due to missing email addresses Number of People: 6.0 Average Cost (fully burdened): $60,000 Average Time Spent: 2.0% $7,200 -60% -80% reduction in time spent -30% -60% reduction in time spent $2,160 $3,240 $4,320Time spent on general supplier communication Number of People: 36.0 Average Cost (fully burdened): $85,000 Average Time Spent: 7.5% $229,500 -25% -35% reduction in time spent -15% -20% reduction in time spent $34,425 $40,163 $45,900Time spend on approval processes Number of People: 73.0 Average Cost (fully burdened): $165,000 Average Time Spent: 1.0% $120,450 -60% -80% reduction in time spent -40% -75% reduction in time spent $48,180 $69,259 $90,338Time spent coordinating supplier performance reviews Number of People: 14.0 Average Cost (fully burdened): $85,000 Average Time Spent: 15.0% $178,500 -25% -35% reduction in time spent -25% -35% reduction in time spent $44,625 $53,550 $62,475Other time spent on onboarding supplier Number of People: 73.0 Average Cost (fully burdened): $130,000 Average Time Spent: 0.5% $47,450 -40% -80% reduction in time spent -30% -60% reduction in time spent $14,235 $21,353 $28,470
$6,298,387 $8,477,801 $10,657,215
Low Avg. High$3,136,000 $3,996,000 $4,856,000$1,311,625 $1,555,863 $1,800,100
$710,233 $970,931 $1,231,630$420,904 $715,007 $1,009,110$330,000 $360,000 $390,000$329,625 $783,438 $1,237,250
$60,000 $96,563 $133,125
$285 $396 $506Savings per Supplier (exempt liabilities/penalties):
Reduction of Liability/Penalties:Time Savings:
Recovered Revenue:System/Service Displacement:
Other Risk/Performance Related Opportunities:Other Operational Efficiencies:
Summary
Direct Financial Capture:
Example
This document contains information that is proprietary, privileged, and confidential. 10
Step 3: speak with HICX to experience best in class
North American Headquarters (Oak Brook, IL, USA)One Tower Lane
Suite 1700,Oakbrook Terrace, IL 60181 USA
MEAA Headquarters (Dubai, UAE)Unit 3206, X2 Tower
Jumeirah Lake TowersJumeirah Bay, DubaiUnited Arab Emirates
Global Headquarters (London, England)2nd Floor
145-157 St. Johns StreetLondon EC1V 4PYUnited Kingdom
www.hicxsolutions.com
Recommended