Reasons Why Source-to-Pay Automation is Good for your Company9

Fine tuning the procurement symphony

2020

Establish savings foundation

Visibility and awareness

First wave savings

Strategic sourcing

Compliance tracking

Become a services provider and value integrator

Global capability Finance alignment Source to pay integration Commodity and volatility

management Risk programs

Build sustainable transformation

Category leadership Advanced sourcing Procurement systems Talent infusion Performance tracking

Today

Yesterday

A radical rethink about procurement

Arbiter of risk, reward and creativity

At the nexus of finance, operations and supply chain

Talent-rich

Risk forecasters

Global supply and demand perspective

Idea generators and innovators

Source: Charting the course - Why procurement must transform itself by 2020 by Deloitte.

Reasons Why Source-to-Pay Automation is Good for your Company9

The procurement landscape is constantly evolving due to the volatile environment businesses operate in, changing political

and economic conditions, legal regulations, natural calamities, etc. As highlighted in the Deloitte report, (refer to the above

diagram) the role of procurement has changed over the years – from being primarily associated with savings to being a

catalyst in bringing sustainable transformations and adding value to the organization.

The report further goes on to say,

“Technology can help make procurement the organizational nexus of shared information to drive both administrative and

forward-looking activities”.

Other interesting facts:

As per the Gartner report, Magic Quadrant for Strategic Sourcing Application Suites 2013, there is an increased interest

in solution suites as opposed to single point solutions.

As per the recent Pulse of Procurement 2013 study, 70% of European procurement organizations are deploying solution

combinations or integrated solution suites.

So how is source-to-pay automation a good thing for your organization? How can it help fine-tune the procurement symphony (process)? The remainder of the e-book explores the reasons why your organization management should consider it.

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Single supplier

Spendingflow

Supplierperformance

Contracts

Smart data

One of the key issues highlighted in the Enterprise Key Issues Study 2013 by The Hackett Group is “Obtaining insights,

intelligence and actionable strategies from data generated by procurement activities.” Procurement activities generate a

lot of data, be it about suppliers, categories, buyers, organization-wide spend, etc. This data cannot be used for

strategic purposes unless it is turned into “smart” data.

Therefore, it is important to have a source-to-pay solution suite that processes data at every

level, be it supplier selection, sourcing activity, or the overall spend classification, and

analyzes and presents it in ways that help procurement executives make critical

decisions.

For instance, management wants to review the relationship with an

incumbent supplier who contributes to the majority of spend in the

automobile parts category. An automated source-to-pay system enables

tracking the various aspects of your relationship with the supplier as

shown below. This information would help the management decide if

the new contract should be awarded to the same supplier or if there

is a need to find a new one.

1

SpendAnalysis

StrategicSourcing

SupplierMgt

FinancialSavings

MgtProcure To Pay

ContractMgt

DASH BOARDS

COMMON MASTER DATA

ERP

VI WE

ONE

2Seamless flow of information

Modern source-to-pay technology integrates smoothly with the

other technology platforms/ERP, facilitating a structured process.

Procurement solutions can leverage existing web service

technology or other available options to manage integration with

ERP systems.

Having an integrated source-to-pay automation ensures seamless

flow of information at various stages in the procurement process,

as highlighted in the graphic. It's a key to view information from

different phases of procurement at a single place..

Better visibility

The CPO / procurement executives have better visibility into the organization's spend patterns and the utilization of contract terms, or track the performance of incumbent suppliers – all just a few clicks away.

3

Standardizing and streamlining the procurement process

More often than not, procurement processes are fragmented. This is eliminated by deploying source-to-pay technology

which standardizes and streamlines the entire procurement process. The procurement execs can conveniently get all the

required information, be it about a particular supplier's performance, or the updated contract with the incumbent

supplier, or spend in the MRO category.

For instance, contracts define the SLAs that suppliers need to meet. These SLAs can be linked

to the supplier performance solution, which is used to track and manage supplier

performance. This would help procurement executives track if an SLA is honored, and

at the same time judge supplier performance with SLA.

4

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Higher savings

With higher visibility and control over different facets of the procurement process, like sourcing activity, supplier evaluation

and selection, contract terms compliance, overall spend etc., the organization can easily identify the bottlenecks and take

prompt measures to resolve them. This helps in cutting costs and leads to higher savings.

Here is an example of how it works: A contract with JKL supplier states that if purchase value is

within 0.5 – 1 million, the supplier would offer a 2% discount, and if it exceeds 1 million, the

discount would increase to 5%. In order for the procurement executives to track if these

terms are met or not, the contract management solution can be linked to e-

procurement. In such a scenario, every time a PO is raised for JKL suppliers, which

doesn't include the discount, an alert is sent to highlight this.

In the absence of such automation, the procurement executives are more

likely to miss out on the savings due.

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6

Reduction of cycle time

Technology helps reduce efforts in terms of time and resources. A well defined and streamlined procurement process is

easy to manage and provides output in a shorter time frame.

For instance,

An organization analyzes spend for automobile parts and identifies the spend pattern

and the suppliers involved,

Conducts an online sourcing event, inviting suppliers from around the globe and

selects the most competitive supplier

Authors the contract, using already available templates and gets them

approved from the internal and external stakeholders

In collaboration with supplier, determines the KPIs and tracks the

supplier's performance

When every aspect of procurement is automated, it helps reduce the

overall time and effort.

Enhanced data security

Fragmented data is vulnerable. Automating the procurement process ensures data security through user-based access defined at different levels of the process and can protect certain documents/folders containing sensitive information.

7

Improved compliance

A process that is easy and well defined has a higher compliance rate than a processthat is scattered and unclear. As mentioned earlier, automation helps streamline the procurement process and thus improves the compliance rate.

8

Risk Management

If the contracts are not well tracked, it adds to the organization's risk if legal regulations are not met. If supplier background is not thoroughly checked, it adds to the organization's risk. If the overall spend is not analyzed, it adds to the organization's risk, and if a paper- based invoice is misplaced, it adds to the organization's risk.

When all these facets of the procurement process are closely tracked, the risk factor plummets.

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AboutZycus

NORTHAMERICA

Princeton: 103 Carnegie Center, Suite 201 Princeton, NJ 08540 Ph: 609-799-5664

Chicago: 5600 N River Road, Suite 800 Rosemont, IL 60018 Ph: 847-993-3180

Atlanta: 555 North Point Center East; 4th Floor, Alpharetta, GA 30022 Ph: 678-366-5000

EUROPE London: Office No 335,400 Thames Valley Park Drive, Thames Valley Park,

Reading, Berkshire, RG6 1PT Ph: +44 (0) 1189 637 493

Mumbai: Plot No. GJ – 07, Seepz++, Seepz SEZ, Andheri (East), Mumbai - 400 096 Ph: +91-22-66407676ASIA

Zycus is dedicated to positioning procurement at the heart of business performance. With our spirit of innovation

and a passion to help procurement create even greater business advantages, we have evolved our portfolio

to a complete Source-to-Pay suite of procurement performance solutions which includes - Spend

Analysis, eSourcing, Contract Management, Supplier Management, Financial Savings Management,

and Procure-to-Pay.

Behind every Zycus solution stands an organization that possesses deep, detailed

procurement expertise and a sharp focus on being responsive to customers. We are a large

— 600+ and growing — company with a physical presence in virtually every major region of

the globe. We see each customer as a partner in innovation and no client is too small to

deserve our attention.

With more than 200 solution deployments among Global 1000 clients, we search the

world continually for procurement practices proven to drive competitive business

performance. We incorporate these practices into easy-to-use solutions that give

procurement teams the power to get moving quickly — from any point of departure — and to

continue innovating and pushing business and procurement performance to new heights.

FINANCIAL SAVINGS

MANAGEMENT

SUPPLIERMANAGEMENT

CONTRACTMANAGEMENT

SPENDANALYSIS

E-SOURCING

PROCURE-TO-PAY

ZYCUSSOURCE-TO-PAY

SUITE