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Strategic Sourcing & E Procurement for ASEAN Purchasing Professionals Bill Kohnen PASIA Conference October 2015

Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

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Page 1: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Strategic Sourcing &E Procurement for ASEAN Purchasing ProfessionalsBill KohnenPASIA Conference October 2015

Page 2: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

ASEAN As a region already among the biggest

Growth rate in total larger than all others

Shift to consumer of large portion of global GDP

Exports will remain important but shift to regional demand

ASEAN regional demand is diverse itself

ASEAN skill base will need to evolve

Page 3: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Transformation From Offshoring ModelArbitrage labor costs by using lower-wage workers in developing nations

Liberalization Economic policy

Capabilities of emerging-market suppliers and workers

Transfer proven management processes to new locales

Transportation and Communications economics and capabilities

As wages and purchasing power rise in emerging markets, their relative importance as centers of demand, not just supply, grows.

Page 4: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Next Shoring Proximity to demand

More than two-thirds of global manufacturing activity takes place in industries that tend to locate close to demand

Proximity to innovation

Adapt products to different regions

Utilize emerging technologies that could disrupt costs and process

New supply ecosystems a differentiator

Network of innovation-oriented partnerships, and a strong focus on technical skills.

Page 5: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Where will skills come from? Grasp the productivity potential of a range of new

technologies

Have enough ground-level knowledge of local markets to influence product strategies and investment trade-offs.

The ability to build external relationships to develop vibrant, sophisticated supply ecosystems—will also be a source of competitive advantage

US, Europe, China, Japan …..Existing skill sets focused on export oriented outsource modelM or F

Page 6: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

ASEAN Purchasing Solution Still Developing

Strategic Sourcing

E Solutions

ASEAN Purchasing Model

TRAN

SFOR

MAT

ION

Page 7: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Strategic Sourcing Basic Process

Spend Analysis

SourcingRF(x)

NegoContract

Supplier Mgmt.

Page 8: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Typical Solution

Spend Analysis Sourcing Contracts Catalogue Network Transaction Pay

• Cloud Based• Subscription• Little Differentiation• Tactical Modules more defined• Only Sourcing has delivered any real value

Page 9: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

CPO FORUM DISCUSSION HMB RITZ CARLTON JUNE 2015

Purchasing Sits at a Busy Intersection By its nature purchasing deals with virtually all departments

Purchasing directly touch's 50% of the organizations total revenue

At each interface point it seems there is a software solution to interface with that has different characteristics (enterprise, homegrown, cloud based, proprietary, legacy commercial etc…)

The 40 or more interfaces create Strategic and Operational Challenges yet do not necessarily result in improved performance for purchasing.

Page 10: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

CPO FORUM DISCUSSION HMB RITZ CARLTON JUNE 2015

“SHORT LIST” OF THE 40+ SOFTWARE SOLUTIONS PURCHASING PROFESSIONALS USE

ERP System Corporate Data Warehouse Corporate Analytic Solution Planning System MES CRM Best of Breed Purchasing Solution(s) Spend, Contract Management,

Sourcing, Catalog Management E Signature System IT Tracking System Service and Hardware Inbound Freight Tracking System Supplier Punch-out and normal websites MS Office HR Employee Portal including punch outs for 401 And benefits External Work related social media sites (Linked In, Professional Orgs) Inventory System Internal QA system Field Support Systems

Internal resource website for Marketing Templates, Presentation Info, company news

Synchronized Email to personal Mobile device Corporate travel booking tool On average 3 personal Aps that also are relevant to work ex.

Maps, currency, business news feeds Customer Support tracking system for key suppliers P Card System Travel and Expense Card System Accounts Payable System Invoice Tracking/Supplier Payment System Internal Expense Reporting System Share point Department Shared Files Document Control System Purchasing Transaction System Key Supplier hosted sites Corporate Social Responsibility reporting internal and external Purchase Request Systems Internal KPI reporting systems Video Conference Phone Conference

Page 11: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Traditional Purchasing Tech Choices

Manual ERP System Enterprise Solutions Internal Development Hosted Cloud Based Shared Service / BPO

Page 12: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Vision and Solution

Vision Strategic Innovation Integrated Mobile Insightful Decision

Making

Solutions Tactical Digitizing old practice Modules ERP on the web Excel spread sheet

“Pie in the sky”

Page 13: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Spend Analysis Sourcing Catalogue Transactional Pay0

2

4

6

8

10

12

Purchasing Professional Value vs. Solutions Capability

Purchasing Value Solution MaturitySolution Provider Interst

Page 14: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

ISM SV Bill Kohnen July 21 2015

SPEND ANALYSIS IS THE TOP TOOL FOR A CPO

CPO CHALLENGES

• MORE

• SPEED

• GROWTH

SAVINGS

• 2% NOW

• 10% MONTHS

• 30% POTENTIAL

BENEFITS

• TRANSPARENCY

• BASELINE

• ORGANIZATION

TECHNOLOGY

• HELPS

• CLOUD SaaS

• ROI of 10X

IN PRACTICE FEW ORGANIZATIONS HAVE THE CAPABILITY TO CONDUCT A COMPREHENSIVE SPEND ANALYSIS

Page 15: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

WHY AFTER OVER 100 YEARS OF CORPORATE PURCHASING IS SPEND ANALYSIS NOT WIDESPREAD

• HARD TO GET• DISPERSEDDATA

• PEOPLE• TOOLSRESOURCES

• SHARING DATA• REVIEWINGCOLLABORATION

PROJECT • NON REPEATABLE EVENT • STATIC RESULTS

Page 16: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

ISM SV Bill Kohnen July 21 2015

SPEND ANALYSIS Technology Not The Answer So Far

TECHNOLOGY CONSTRAINTMAINFRAME Access to Data

No User InterfaceCLIENT SERVER/NETWORK Data Further DispersedERP Access to Data

Poor AnalyticsMS OFFICE SUITE Start to Analyze Data

Driven by Strategic SourcingCLOUD SOLUTIONS Security

Process and Capability

EVEN WITH IMPERFECT DATA YOU CAN START THE PROCESS AND GET IMMEDIATE VALUE FROM SPREADSHEETS

Page 17: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

ISM SV Bill Kohnen July 21 2015

Spend Analysis Cloud Solution

What Does this Mean:

• You will provide raw spend data in any format to the solution provider who will transform the data into meaningful views.

• Solution provider delivers the service via an internet connection so no hardware is needed

• Implementation is measured in weeks

• Complete ROI should be achievable in 6 months or less

• Repeatable Process

Page 18: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Questions TO ASK

Data Acquisition

• Formats• Data Prep

Data Processing

• Automated• Proprietary

User Experience

• References• Configurable

Product

• Standalone• Information

Security

Implementation

• Time• Professional

Services

• ULTIMATELY USER EXPERIENCE WHICH IS VIEWING MEANINGFUL OUTPUT IS MOST IMPORTANT

• TO BEST DETERMINE CAPABILITY HAVE PROVIDERS RUN A DEMO USING A PORTION OF YOUR DATA

Page 19: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

Solutions Have Challenges Enterprise “powers” are behind and know it

Really are introducing new products Newer Solutions providers do not have deep

subject knowledge Really little differentiation Adoption is the key metric Basic things still challenges

Supplier On boarding Document Output Auto close of purchase orders

Choice is who do you ant to start journey with

Page 20: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

What to Look For Ideal Social Media Real value from IoT Real Mobile Access Easy Data Analytics Effortless Transactions Single data sources Optimized for you

Page 21: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

“BEST PRACTICES” DO NOT CREATE SUSTAINED VALUE

Formula For Sameness

Risk Averse

Efficiency

Commodity

Best Practice

Best For Company

Learning

Innovation

Value

Unique Practice

WEALTH IS CREATED BY INSIGHT TO DIFFERENTIATE WITH DISTINCTIVE PRODUCTSSummary of Thoughts Presented by Jules Goddard at Nudgestock2

Page 22: Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professional

ASEAN Based Purchasing Professionals Strategic Sourcing and E Commerce are important and

will be increasingly important because of regional growth driven by local demand

Skills needed are unique and not what is being practiced in BPOs, shared services organizations or purchasing outside of ASEAN

Merge high end strategic sourcing, regional knowledge and e commerce B2B solutions that meet needs in ASEAN countries not ‘off the shelf” western tool.