Procurement Intelligence

Procurement Intelligence the fuel that accelerates ROI and

savings

Defining Procurement Intelligence

“The skills, tools and

help a business acquire an enhanced

understanding of its commercial context

to support better buying and sourcing

decisionmaking.”

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Defining Procurement Intelligence

and practices used to

help a business acquire an enhanced

understanding of its commercial context

better buying and sourcing

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Agenda

§ Defining “Procurement Intelligence” § Why is procurement intelligence so important § Using it to your advantage

§ Building procurement intelligence framework & adding intelligent plug

Defining “Procurement Intelligence” Why is procurement intelligence so

Using it to your advantage Building procurement intelligence framework & adding intelligent plugins

Neil Deverill Chairman of the Procurement Leaders Advisory Board Chairman of the Procurement Leaders Advisory Board

The Headlines

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Introduction

§ Without correct data & information procurement is no more than a lottery

§ Missed sourcing opportunities & miscalculated sourcing risks lead to: § Excessive operating & overhead costs § Exchange rate penalties & unseen derivative exposure § Technology lag § Loss of critical supply chain capacity

§ Procurement intelligence is too important to overlook

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Without correct data & information procurement is no

Missed sourcing opportunities & miscalculated

Excessive operating & overhead costs Exchange rate penalties & unseen derivative exposure

Loss of critical supply chain capacity

Procurement intelligence is too important to overlook

Spend Analysis: Who, how much & with whom for what?

§ Spend analysis is fundamental and a starting point if you’re spending too much § Improve leverage for price & other benefit advantages § Control offcontract spend § Remove duplicate specifications § Optimise payment terms –

§ Consolidate spend to increase your customer ranking § Use improved transparency to build internal relations

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Spend Analysis: Who, how much & with

Spend analysis is fundamental and a starting point if you’re spending too much

Improve leverage for price & other benefit advantages contract spend – uninformed and maverick

Remove duplicate specifications – save cost & inventory synchronise to cash flow needs

Consolidate spend to increase your customer ranking Use improved transparency to build internal relations

Supplier Intelligence

§ Is your supplier financially sound? § Ensure clarity of your future requirements to assist supplier

planning § Are your suppliers and their supply chains structurally stable? § Ask suppliers about their marketing strategies & where you fit into

them § Are your suppliers’ business strategies compatible with yours? § Senior management can flush out important facts during supplier

visits

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Is your supplier financially sound? Ensure clarity of your future requirements to assist supplier

Are your suppliers and their supply chains structurally stable? Ask suppliers about their marketing strategies & where you fit into

Are your suppliers’ business strategies compatible with yours? Senior management can flush out important facts during supplier

Supplier Market Intelligence

§ Are your suppliers’ operations/sourcing strategies cost competitive?

§ How will economic changes impact demand for your key commodities?

§ Have your competitors recently recruited commodity traders? § How will regional political developments impact your business? § What is your foreign exchange exposure? § Can regional development plans assist your suppliers/ create new

suppliers?

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Supplier Market Intelligence

Are your suppliers’ operations/sourcing strategies cost

How will economic changes impact demand for your key

Have your competitors recently recruited commodity traders? How will regional political developments impact your business? What is your foreign exchange exposure? Can regional development plans assist your suppliers/ create new

Using Intelligence to Your Advantage

§ Ensure that you create intelligent business processes § Create nodes for information collation & systematic dissemination § Use good supplier relations for ‘me too’ solutions

recreation § Use intelligence crossfunctionally § Ensure collective actions arise from intelligence § Plan how to use intelligence to motivate your suppliers

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Using Intelligence to Your Advantage

Ensure that you create intelligent business processes Create nodes for information collation & systematic dissemination Use good supplier relations for ‘me too’ solutions – avoid

functionally Ensure collective actions arise from intelligence Plan how to use intelligence to motivate your suppliers

Executive Summary

§ Timely use of Procurement Intelligence turns amateurs into serious players

§ Economic and geopolitical events continually create new opportunities that can provide competitive advantage

§ It is probable that some competitors know more than you do § Internal intelligence will provide control and lower costs § Market intelligence identifies financial risk, exposure, but also

opportunities § Supplier intelligence ensures your supply chains work optimally

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Timely use of Procurement Intelligence turns amateurs into

Economic and geopolitical events continually create new opportunities that can provide competitive advantage It is probable that some competitors know more than you do Internal intelligence will provide control and lower costs Market intelligence identifies financial risk, exposure, but also

Supplier intelligence ensures your supply chains work optimally

Building procurement intelligence framework & adding intelligent plug‐ins

© 2009 Zycus Inc. All rights reserved

Building procurement intelligence framework &

Presented by

AGENDA


ü Zycus Overview ü Building Procurement Intelligence Framework ü Adding Intelligent Plug‐ins ü Implementation Approach ü Intelligent investment decisions

Presented by

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Building Procurement Intelligence Framework ins

Intelligent investment decisions

Zycus – Continued Success Story

A worldwide leader in Spend Management Software solutions

14 © 2009 Zycus Inc. All rights reserved

“ out from a leadership position in the data cleansing and classification market to offer a wide array of sourcing, contract management and analytics capabilities, all of which are quite novel in their approach to the market

§ Recognized as one of the Spend Management Domain by leading analysts and Industry observers

. § More than

verticals .

§ One of the most rate of 50%

. § Receives

Cited as one of the most promising private tech firms with Asian origin

. § Profitable, Global organization with

Europe and Asia


“ Zycus, the Spend Management provider has quietly branched out from a leadership position in the data cleansing and classification market to offer a wide array of sourcing, contract management and analytics capabilities, all of which are quite novel in their approach to the market.”

Jason Busch, Spend Matters

Recognized as one of the Top 3 Global Market Leaders in Spend Management Domain by leading analysts and Industry observers

More than 150 customers in 15 countries across industry verticals

One of the most rapidly growing customer base with a growth rate of 50% ‐ 70% year on year

Receives Red Herring 100 Asia & Global 200 2008 Award ‐ Cited as one of the most promising private tech firms with Asian origin

Profitable, Global organization with multiple offices in US, Europe and Asia

Why Zycus?

Easy to use SaaS based software solutions that accelerate ROI ü Flexible deployment options based on immediate priorities and goals

ü Creative pricing models linked to ROI

Faster user adoption ü Web 2.0 software that requires minimal training

ü Entire suite built on a single frame work that facilitates integration

ü Efficient International support: UI and support in multiple languages


“Zycus is a strong alternative to pricier ERP products. In

this economy, best of breed continues to advance, which

begs the question, what will the ERP vendors do to counter

and stop the movement to best.”

Mickey North Rizza

Research Director, AMR Research

Easy to use SaaS based software solutions that accelerate ROI Flexible deployment options based on immediate priorities and goals

Creative pricing models linked to ROI

Web 2.0 software that requires minimal training

Entire suite built on a single frame work that facilitates integration

Efficient International support: UI and support in multiple languages


Zycus is a strong alternative to pricier ERP products. In

this economy, best of breed continues to advance, which

begs the question, what will the ERP vendors do to counter

and stop the movement to best.”

Mickey North Rizza‐

Research Director, AMR Research.

Why Zycus?

ü Dedicated customer success manager § Regularly track and measure customer ROI and user adoption

§ Share and help implement best practices that enhance user adoption

ü Agile product management methodology § 45 product upgrades delivered seamlessly in a year eliminating wait time of 6 feature in the product

§ Strong process to include customer voice in the Product road map

ü Dedicated and responsive delivery and customer support team § Rated 9 or 10 on the scale of 10 in customer satisfaction surveys every quarter

§ Support through phone, email and unique tools like chat, follow


“We consider Zycus to be an excellent provider of Spend Management technology. They are very responsive; it's an effective pr

and technology solution.” ‐Miguel Miciano, Director of procurement, Amgen.

Dedicated customer success manager Regularly track and measure customer ROI and user adoption

Share and help implement best practices that enhance user adoption

Agile product management methodology 5 product upgrades delivered seamlessly in a year eliminating wait time of 612 months to get a critical

Strong process to include customer voice in the Product road map

Dedicated and responsive delivery and customer support team Rated 9 or 10 on the scale of 10 in customer satisfaction surveys every quarter

Support through phone, email and unique tools like chat, follow me browsing etc


“We consider Zycus to be an excellent provider of Spend Management technology. They are very responsive; it's an effective product

Director of procurement, Amgen.

Zycus Spend Management Solutions

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Source and Implement savings

Strategic Sourcing

Analyze Spend & identify savings opportunities

Spend Analysis

> Auctoclass

> iAnalyze

> Opportunity Identification

services

> AI based classification

engine

> Opportunity tracker

> iSource

> Category Sourcing services

> Event Management services

> End to End services

> Powerful and easy event

modeling

> Exhaustive & easy analysis

> Powerful and easy

collaboration

Prod

ucts

Services

Differen

tiators


Zycus Spend Management Solutions

Manage Savings & contract compliance

Contract Management

Source and Implement

Category Sourcing services

Event Management services

Exhaustive & easy analysis

> iContract

> Contract Audit Services

> Contract Digitization &

Migration

> Contract compliance

> Contract to market

indices linkages

> Guided & free text search


Building Procurement Intelligence Framework

SPEND ANALYSIS § Consolidate spend data § Classify & analyze the data leveraging

software § Refresh periodically

§ Spend by supplier/commodity/ BU & other dimensions § Eliminate maverick spend § Identify leakages, e.g. PPV §Manage opportunity pipeline

Recommendation



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Spend by supplier/commodity/ BU & other dimensions Eliminate maverick spend Identify leakages, e.g. PPV Manage opportunity pipeline

Benefits

Adding intelligent plug‐ins



§ Spend by supplier/commodity/ BU & other dimensions § Eliminate maverick spend § Identify leakages, e.g. PPV §Manage opportunity pipeline Opportunity

Identification & Assessment

Recommendation


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§More spend under management § Increased sourcing

efficiency


Benefits Benefits+


§ Create a web‐based platform § Automate sourcing process § Plan adoption

SOURCING



§ Competitive negotiations § Easily 5% § Reduction in sourcing cycle time

by over 25%



Recommendation



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efficiency

Competitive negotiations Easily 5%‐25% more savings Reduction in sourcing cycle time by over 25%


Benefits Benefits+



SOURCING




by over 25%



Sourcing Strategy

Recommendation


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efficiency


§ 10%‐35% increased savings § Right price,

suppliers to source


Benefits Benefits+


CONTRACT MANAGEMENT § Create dynamic contract repository § Consolidating contracts across BU’s § Upload contracts


SOURCING




by over 25%



Sourcing Strategy

§ Enhanced contract Visibility § Auto alerts & reminders § Reduction in maverick spend

Recommendation



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efficiency



suppliers to source


Enhanced contract Visibility Auto alerts & reminders Reduction in maverick spend

Benefits Benefits+


CONTRACT MANAGEMENT § Create dynamic contract repository § Consolidating contracts across BU’s § Upload contracts


SOURCING




by over 25%



Sourcing Strategy

Spend to Contract match

§ Enhanced contract Visibility § Auto alerts & reminders § Reduction in maverick spend

Recommendation


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efficiency



suppliers to source


Enhanced contract Visibility Auto alerts & reminders Reduction in maverick spend

§ Higher contract compliance § Plug saving

leakages

Benefits Benefits+

Implementation Approach

§ Understand the primary pain area } Spend Invisibility } Cumbersome manual sourcing process } Lack contract compliance

§ Start where it hurts you most

§ Complete the process in a phased manner


Understand the primary pain area

Cumbersome manual sourcing process

Complete the process in a phased manner

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§ When your primary driver is Spend Analysis } Couple with eSourcing } Follow it up with contract management

§ When your primary driver is eSourcing } Couple with Contract management } Follow it up with Spend analysis

§ When your primary driver is Contract Management } Couple with Spend Analysis } Follow it up with eSourcing

§ You can implement all three at one go



Spend Analysis

Follow it up with contract management

eSourcing

Contract Management

You can implement all three at one go

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© 2009 Zycus Inc. All rights reserved 26

Profile

Business Challenges

§ Savings of over $6 million in a project that lasted 6‐8 weeks resulted in a cost reduction of 30

§ Total volume of spend sourced during pilot approx $18M across 40+ unique items

§ Managed entire event (event authoring, event scheduling, event scoring and ranking, event analysis and awarding) on behalf

of the suppliers

§ Manual processes were automated

§ Accelerate ROI – Enable global organization to easily and quickly use the solution with minimal training

§ Increased savings by enabling sourcing managers to implement lean analysis with ease

§ Large med‐tech company and a global leader in its field

§Operates in 32 countries and generates annual sales of $3.4B

Solution – Zycus iSource

Results

§ Critical analysis of suppliers to ensure they source the best medical equipment in a highly

controlled industry

§ Expensive process to be able to meet critical quality parameters due to manual

sourcing process

§ Tremendous time pressure from hospitals to meet their scheduled and urgent requirements

World Leader in Medical devices accelerates savings of over 6 Million US dollars within 68 weeks with Zycus' iSource.


8 weeks resulted in a cost reduction of 30‐35%

Total volume of spend sourced during pilot approx $18M across 40+ unique items

Managed entire event (event authoring, event scheduling, event scoring and ranking, event analysis and awarding) on behalf

Enable global organization to easily and quickly use the solution with minimal training

Increased savings by enabling sourcing managers to implement lean analysis with ease

Critical analysis of suppliers to ensure they source the best medical equipment in a highly

Expensive process to be able to meet critical quality parameters due to manual

Tremendous time pressure from hospitals to meet their scheduled and urgent requirements

“The intuitive UI and the

guided navigation of Zycus

iSource further facilitated the

ease of use and continues to

accelerate global adoption””

World Leader in Medical devices accelerates savings of over 6 Million US 8 weeks with Zycus' iSource.

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Profile

Business Challenges

§ The initiative provided spend transparency across 40+ ERP platforms and systems in less than six months

§ A customized taxonomy structure that reflects supplier market was developed to gain visibility and valuable supplier sight.

§ The solution was implemented under extreme time pressures to meet overall plan of reducing spend by approximately 850 M NOK

(approximately 100 M USD) by 2008

§ The company continues to realize savings with Zycus spend analysis solution, setting even higher ambitions going forward

§ Spend Visibility

§ Solution Efficiency

§ Sustainability and spend control

§ A 350‐year‐old conglomerate & one of the largest listed company

on the Norwegian stock exchange

§ Turnover exceeding NOK 70 billion (10 billion USD)

§ Rapidly expanding into new business areas though mergers & acquisitions

Spend Success

Results

§ With operations in countries as dispersed and linguistically diverse, the company

predicted severe challenges to the profitability of its businesses

§ Upward strain on raw material prices

§ Pressure on the company’s bottom lines


Zycus’ Spend Management Solution enables Norwegian giant to save 100 Mn USD

The initiative provided spend transparency across 40+ ERP platforms and systems in less than six months

A customized taxonomy structure that reflects supplier market was developed to gain visibility and valuable supplier sight.

The solution was implemented under extreme time pressures to meet overall plan of reducing spend by approximately 850 M NOK

The company continues to realize savings with Zycus spend analysis solution, setting even higher ambitions going forward

Rapidly expanding into new business areas though mergers & acquisitions

With operations in countries as dispersed and linguistically diverse, the company

“The Zycus solution enables us to

capture the inter‐company synergies in

purchasing, thus creating substantial

value and revolutionizing the

possibilities for collaboration.”

Sr. Project Manager


Zycus’ Spend Management Solution enables Norwegian giant to save 100 Mn USD

THANK YOU !


Anurag Dixit

Vice President, Marketing, Zycus Inc.

+1 888 451 0145

[email protected]

www. zycus.com

Presented by

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Procurement Intelligence