Procure to Pay – Imtiaz Ali

SAP EC&O Executive Roundtable

Build a concrete future with Innovation

© 2013 SAP AG. All rights reserved. 2 Customer

Agenda – 20 May 2015

09:00 – 09:30 Registration

09:30 – 09:50 EC&O Industry Trends

09:50 – 10:00 Visual Design and Construction

10:00 – 10:30 Commercial Project Management

10:30 – 11:00 Feildglass – Resource Procurement for EC&O

11:00 – 11:40 Networking Break

11:40 – 12:00 Procure to Pay

12:00 – 12:30 Mobile Solutions for EC&O

12:30 onwards Lunch and Networking

SAP Ariba : Cut Costs & Drive Compliance

Imtiaz Ali

Solution Sales Manager

Procurement & Business Networks

SAP MENA


Topics

• SAP Strategy for Procurement Line of Business

• Introduction – SAP Ariba

• Strategic Issues facing procurement

• How ECO companies are using technology to …..

– Improve Spend Visibility / Reduce Costs

– Identify new suppliers and manage the registration / prequalification process

– Improve Supplier Collaboration using Business network

– Manage Contracts to improve compliance

– Introduce Self Service Procurement for Indirect Materials using Catalogs

Customer Case Studies

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 5

The Digital Economy Ariba Network Why SAP? Next Steps

SAP can address all major spend categories for consumer products

companies

Global capital and operational spending for

the Global 2000 is distributed across

different categories for consumer products.

SAP Business Networks can help

companies address all of the spend

categories

Source: Spend Categories for Global Top2000 (Consumer Products)

COLLABORATIVE PROCUREMENT SUCCESS

DEPENDS ON :

Real time seamless collaboration

with any business partner

Comprehensive end to end process

automation by spend category, with

consumer great UX

Compliance with external and

internal regulation (GRC, data

security, integration with system of

record)

1

2

3

35% Direct &

Supply Chain

8% Travel

29% Indirect

& MRO

28% Labor &

Services


SAP Ariba - Introduction

6 6

Global Locations

25 locations in 21 countries

on 5 continents including

UAE

2,400+ employees

Technology Coverage

$340B+ passed last FY

4M+ desktops using Ariba applications

500+ categories sourced through Ariba

Top companies plugging leakages

Multiple Languages

Speak over 35 languages

Global support centers in US

Europe and India

Largest Suppliers Database

1M + registered suppliers covering

over 120 countries

One of every three projects involves

global supply base

400 billion USD PO on ASN

210 billion USD Invoices on ASN

Dubai

© 2012 Ariba, Inc. All rights reserved.

© 2013 SAP AG. All rights reserved. 7

Retail

Electronics Technology

Life Sciences

Software

Consumer Goods

Financial Services

Manufacturing

Energy

Telecom/ Infrastructure

Global Companies leverage SAP - Ariba to achieve Sustainable savings

http://www.limitedbrands.com/index.jsp?refresh=yes

http://www.vw.com/index.htm

http://www.lexmark.com/US/us_home.html

http://www.sunocoinc.com/

http://www2.shell.com/home/ExitPage?URL=http://www.shell.com

http://www.total.com/en/home_page/


SAP – Ariba- Customers in Projects, Real Estate & EPC

http://images.google.co.in/imgres?imgurl=http://w10.naukri.com/gpw/lodha/images/nav_logo.gif&imgrefurl=http://www.naukri.com/gpw/lodha/contact.htm&usg=__tWYmh5z1bRuZB5CTiFgg3fX1BuE=&h=71&w=216&sz=4&hl=en&start=1&um=1&tbnid=PUO04FooEE_CxM:&tbnh=35&tbnw=107&prev=/images?q=lodha+logo&hl=en&safe=off&rlz=1W1ADFA_en&sa=N&um=1

http://images.google.co.in/imgres?imgurl=http://www.underconsideration.com/brandnew/archives/essar_logo.gif&imgrefurl=http://www.underconsideration.com/brandnew/archives/corporate/index.php?page=2&usg=__UPJ1lkaloIoSh68o0GsYGzqnMCQ=&h=200&w=470&sz=12&hl=en&start=1&um=1&tbnid=q6o-p4vkGoEFaM:&tbnh=55&tbnw=129&prev=/images?q=Essar+Constructions+logo&hl=en&safe=off&rlz=1R2ADFA_enIN342&um=1

http://www.supremeinfra.com/index.html

Strategic Issues facing procurement

departments in the Construction Industry

in MENA


Strategic issues facing procurement / Construction

Industry

Growing volatility of prices

Greater Competition ( Suicide Bidding ) : Prices are driven down as companies bid lower in an attempt to secure the work

Erosion of margins

Cash flow is becoming more problematic as companies hold on to cash for as long as possible before making payment

Growing importance of supplier Management

Declining budgets

Greater global and regional regulatory pressures


Typical CPO Challenges in the construction Industry

How do we most effectively reduce costs & drive compliance ?

How to we identify and source from the right suppliers ?

How to we ensure that suppliers deliver on time and as per the

project deadlines ?

How do we ensure that contractors / suppliers maintain the required

health and safety standards ?

How do we respond to increasingly rapid demand changes?

How do we manage suppliers performance and risk?

How do we improve our procurement processes?

How do we increase transparency in our procurement process ?

How do we measure compliance – regulatory and savings?

“Costs Savings, Efficiencies, and Impact”


Ineffective & Inflexible Source to Pay Process

Result in Inability to Deliver Cost Savings

None to Limited Spend

Visibility Inability to extract and aggregate spend data

Difficulty to measure and manage spend data

Lack of insight into savings opportunities, trends

Poor Ability to Deliver

Negotiated Cost Savings Lack of formalized sourcing practices

Limited sourcing tools or analysis capabilities

Long, poorly managed cycle times

Ineffective Strategic

Supplier Management Distributed supplier

information across multiple systems

Limited supplier performance and

management process

Lack of ability to identify or manage risk

High Transaction Costs,

Inability to Deliver Savings Many disparate systems that generate spend

Non-standardized processes, compliance to rules

and policies

Poor user adoption

Ineffective Contract

Management Lack of centralized management

leads to savings leakage

Difficult to ensure contract

compliance

No single process for contract

management

CPO

LegalLegal

Sourcing

Professionals

Sourcing

Professionals

Key Category

Stakeholders

Procurement

Management


Effective and Flexible Source to Pay Process

Results in Maximum Cost Savings

CPO

AB

C

AB

C

Sourcing

Professionals

Sourcing

Professionals

Procurement

Management

LegalLegal

Key Category

Stakeholders

CPO

Deliver Insightful Spend

Performance Management Enables spend data extraction & aggregation from back-ends

Provides Spend data normalization and classification

Quickly identifies savings opportunities

Ensures Sustainable

Sourcing Processes Delivers maximized negotiable savings

Manages the strategic and operating sourcing processes

Provides analysis, project management, RFx, auction

Effective Strategic

Supplier Management Enables the centralization of supplier

information

Provides supplier end to end lifecycle

management

Minimizes supplier risk

Efficient, Streamlined

Operational Procurement Reduces operational costs and maximize realizable savings

Automates the entire procure to pay process

Delivers compliance, supplier collaboration, and adoption

Optimize Contract Lifecycle

Management Delivers efficiency, visibility & control

of contracts

Automates the contract creation and

management cycles

Enables full contract compliance

© 2013 SAP AG. All rights reserved. 14 Customer 14

• A UK based leading commercial organization was tendering

its requirements for property contractors for various ad-hoc

projects to be conducted in a two-year time frame.

• The total estimated value was 60 million GBP spread over

two years and over some 120 projects varying in size

• Client goals were to achieve cost savings and consolidate

supply base by selecting a panel of preferred contractors.

• Long term goals included improvement and standardization

of service.

• 45 pre-qualified suppliers were invited to bid.

Strategy

• Aggregate bidding

• Event was structured in nine lots; the first 8 split by region

and by project size. Lot 9 was an aggregate lot

Result

• 407 bids submitted

• 20% savings ( GBP 12 M )

Case Study : Property Contractors


• Transparency into the

negotiation process

• Focus on laying out

comparative criteria

clearly before bidding /

negotiations / responses

are received

• Category management

to define sourcing

process

• Over 48 auctioning

formats

SAP Ariba streamlines Source-to-Pay Process

Electronic

Invoicing

Visibility

Procurement Sourcing

• Monitor Performance &

Compliance

• Transparency into

‘buyer’ performance

• Visibility by Commodity

• Strategic decision

making information by

Purchasing Behavior

• Identify opportunities

and prioritize spend

• Can work on top of

existing ERP or Ariba

system

• Enable Catalog and non

catalog based buying

• Ensure purchasing of

Punchout, Dynamic,

rate card and contract

catalogs

• Ensure contract

compliance

• Reduce Maverick

buying

• Leakages plugged on

volume discounts

• Drive policy compliance

and consumption

control

• Reduce invoicing errors

• Reduce cycle time for

invoice processing

• Compliance against

contracts for non-PO

spend

• Ensure Transparent

approval and payment

process

Supplier Network Supplier Discovery

Contracts

• Clause Library

• Electronic Work

flow for approvals

• Electronic

Repository

• Seamless transfer

and communication

with outside parties

• Achieve global

contract visibility

• All Types of

contracts


SAP Ariba - Overview Spend Management Applications and Business Network

Procurement

Procure to Order

Request Approve Catalog and Contract

PO Collaborate

Network

Catalog

Network PO

Automation

Finance

Network Invoice

Automation

Receive Invoice

Exceptions & Approve

Schedules and

Discounts

Pay

Invoice

Workflow Discounts and WCM

Data

Connection

Web

Interface

Paper

Collaborate

Manage Supplier

Supplier Info and Performance

Mgmt

Profiles and Risk

Track/Improve Performance

Contract

Ariba Contract Management

Negotiate and Sign

Manage and Renew

Analyze Spend

Spend Visibility Ariba Sourcing & Discovery/Savings Pipeline &

Tracking

Analyze Discover Plan RFX/

Negotiate

Source

Identify Opportunity

Order

Confirmation

eInvoices

Invoice Status

Purchase Orders

Shipping Notices

Payment Status

Early Payments


Buyer Dashboards


Supplier Dashboards - Via Ariba Network

How does technology help to …

Improve Spend Visibility


Spend Visibility Three Key Components

Identify Opportunity

Develop Strategy

Source & Negotiate

Implement Contract & Execute

Monitor & Manage

Invoice & Pay

Spend Visibility

1 Process Visibility

2 Performance Visibility

3

WHAT is our spend?

by whom

which suppliers

Which categories

Which projects ?

HOW do we spend?

which processes

are they efficient WHO is performing?

what are the goals

are they being met?


Executive Dashboard

Supplier

Performance

Sourcing

Activity

Purchasing

Activity

Productivity

Measures

Contracting

Activity


Using the technology to generate Executive Insight Automated , quality data to drive performance ( on mobile devices )


Cost reduction


Recorded Event of an Online Negotiation


Search, Report,

And Analyze -Graphical Role Based Dashboards

-All Fields are Searchable & Reportable

-Ad-Hoc & Scheduling Features

RFx Events

(Sealed Bid, Reverse Auction, RFP/RFQ, Negotiation) - Gathering Bids from Simple to Complex

-Bid console, audit, messaging

-Scoring, Grading, Total Cost Modeling

- Bid Protection and Market Feedback rules

Supplier Qualification

And Identification

(Supplier Search) - Identify Acceptable Suppliers

- Determine Supplier Capabilities

- Supplier Profile Analysis

- Ariba Network Discovery

Project

Creation -Identify Key Stakeholders

-Setup Project Milestones

-Create Timelines

Decision Analysis (Optimization and Award)

-Constraint-based Optimization

-Evaluate Price and Performance

-Explore Potential Award Scenarios

-Generate Award & Create Contract

Sourcing Overview


Customers use SAP - Ariba in managing the key

construction related categories

0 1000 2000 3000 4000 5000 6000

In Mn USD

Site Services

Demolition

Waste Disposal

Design Services

Equipments

DG Sets

M echanical Sub contracts

Electrical Sub Contracts

Equipment Installation

Steel

P iping

Scaffolding

HVAC Contracts

Category Experience- Construction Related

Asia

Global


Delivering significant benefits across categories

Savings are shown in brackets

Illustrative Categories


Savings Potential across various Indirect Categories using

How does SAP – Ariba Business

Network help to …

Find new and capable suppliers /

Supplier Collaboration


“Other”

Buyers Suppliers

The SAP - Ariba Business Network is the leading Business Network

Nearly 1 Million partners use the Ariba Network for ~$400 billion spend

Partner and

Ecosystem Solutions

An SAP Company

Ariba Network ~1 million trading partners across all industries

40+ million Purchase Orders

60+ million Invoices

~$400 billion in spend

142 countries

72 currencies

40 Invoice compliant countries

EDI

Email

HTML

cXML

AS2

Paper

Smart

PDF

CSV

xCBL


Create a summary of

your need

Publish on Ariba

Discovery

Relevant suppliers will

be notified

Review & Select new

suppliers

Invite them to your

SOURCING project

Find new Suppliers and Post & Search to the ENTIRE

network – Welcome to SAP Ariba Discovery !

12k lightbulbs

for week 56

Ariba

Sourcing

Check it out!

http://discovery.ariba.com

SAP Ariba

Discovery

HOT


Supplier Information and Performance

Management


Unified Best-in-Class Solution for ALL Aspects of

Supplier and Customer Management

Partner

Partner Partner

Partner

Buyer

Buyer

Buyer

Buyer

Supplier

Customer

Supplier

Customer

Information Management • Profile/Certificate Mgmt • On-Boarding • Vendor Master Mgmt • Supplier Discovery

Performance Management • Scorecards • Data collection • Analytical Reporting • Process and Program Mgmt

Risk Management • Risk Assessment • Information Enrichment • Analytical Reporting • Diversity • CSR / Sustainability

According to the Analysts:

• “Remarkable demonstration of market understanding and marketing execution in 2009 for this suite [Supply Base Management]”

• - Gartner Research, Sourcing MQ, Feb. 2010

Supplier Info

Org hierarchy

UCC filings

Liens

Lawsuits

Financials

Diversity

CSR / Green

Risk

Regulatory Info

OFAC / SDN Denied Party Lists EPA / OSHA Lawsuits Business events


Supplier Lifecycle

Supplier Registration

Supplier Qualification

Supplier Evaluation

Supplier Portfolio & Risk

Supplier Order Collaboration (UI

Integration)

Supplier Development

Supplier Phase-out

Continuous innovation

Registration/Qualification

(e.g. additional question

types)

Supplier Evaluation (event

triggered and scheduled)


Contract Management


SAP Contract Lifecycle Management Supports the Entire Contract Lifecycle


Contract Performance Dashboard – Agreements Overview

Contract Visibility

Intuitive contract dashboard

with powerful search

functionality.

Delivered with preconfigured

reports like ‘Top 10 Agreements

by Agreement Value’ and ‘Top

10 Product Categories’

Search Result with header and

line item information

Case Studies

© 2013 SAP AG. All rights reserved. 39 Customer 39

• Germany Based parking garage turn key construction

project

• The budget was a round 11 million Euros.

• 10 pre-qualified German based suppliers were invited to

bid. Supplier qualification was based on them being

general contractors with garage construction

experience.

• Key project objectives:

• Reduce negotiation time

• Reduce Costs

• Technical Advisory via an independent planning office of

consulting engineers

• The buyer awarded the tender 72h following closure of

the Competitive Online Event

Strategy

• Face-to-Face clarification meetings were held with

every participating supplier prior to the Competitive

Online Event

• Rank only transformation feedback

Result

• 204 bids placed into the market

• 10% savings against the lowest offline quote

Case Study : Car Park in Germany


Indentified Savings of over 10% Infrastructure Contract

15 participating suppliers placed 231 bids in the event

Thank you