The Impact of the cloud on

procurement:

A Breakfast briefing on how new technologies are

changing the way companies do business

30th May at the ITC Livery Hall London

Agenda

• Welcome Dom O’Riley Andomise

• Views from the bridge Andy Mathieson Andomise

• Sourcing in the cloud Nick Drewe/Alun Rafique Market Dojo

• P2P Trends Tony Dawson Coupa

• Q and A Panel

The Cloud: A disruptive technology? Some figures…

• Gerhard Gschwandtner: publisher of Selling Power, predicted that the number of sales people in the US would fall from 18m to 4m by 2020

– “Death of a Salesman: Bob Apollo 2012”

• A Recent Gartner report projected that 85% of interactions between businesses will be automated, without any need for human interaction

• 70% of the buying process takes place before the buyer and salesperson meet

Roles and functions are changing and how we adapt will determine how successful we are as individuals as well as companies

A View from the Bridge

Andy Mathieson

Chairman

Andomise

What is it?

Cloud computing refers to the delivery of computing and storage capacity as

a service to a heterogeneous community of end-recipients. ……….. wikipedia

What Changes for (ICT) Vendors?

• Planned subscription revenue vs system/licence sale + annual maintenance

• Salesforce engage later in the sales cycle with you (if at all).

• Marketing must inform the buyer at all points of research & need

• Cost of sale driven lower

• “Zero touch” sales & service

Contract Suggestions

1. Get a wet-ink contract:

2. If you can, negotiate:

3. Termination: Protect & Safeguard

4. SLA:

5. Be sure you can get out easily:

Extracts from The Cloud | April 30, 2012 | CFO.com | US

Contracts

6. Make sure you can’t be bullied:

7. Demand full disclosure:

8. Guard against mergers and acquisitions:

9. Maintain your right to audit:

10. Know who you’re dealing with:

The Cloud | April 30, 2012 | CFO.com | US

Sourcing in the cloud

30th May 2012 Nick Drewe, Alun Rafique

• Who are we?

• Cloud Software

o Adoption

o E-Sourcing

Who?

• New UK company based in the South West, focusing on

procurement “software-as-a-service”

• Founded by Bristol graduates with experience in

engineering, consultancy, software development and

procurement

• Currently offering e-Sourcing software with the following

characteristics:

• Who are we?

• Cloud Software

o Adoption

o E-Sourcing

Software adoption - Cost

Pay per use instead of ownership is not a new concept:

• Power by the hour

• Power-by-the-Hour is a term coined by Bristol Siddeley in the early

1960s

• PFI initiatives

• such as the FSTA – Future Strategic tanker Aircraft

Cloud software -Pay for what you use.

Software adoption - adaptation

• Traditional software

o clunky

o led by technicians

o You need to adapt

• New cloud solutions o look at best practice

o customisable

o Adapts around you

Cloud software - Better fit

Managers End Users Directors

Reporting

Auditability

Visibility

Control...

Usability?

Efficiency?

Difficulty – uptake?

Software adoption - Usability

Traditional Software implementations - Where are the benefits?

Cloud software -

Bringing benefits to the end user

New Cloud Solutions - little training, easy to use, fast ROI

- Users want to use it

• Who are we?

• Cloud Software

o Adoption

o E-Sourcing

E-Sourcing in the cloud

The trends we have seen:

•A shift away from consultancy-based services

•Cloud applications used on top of ERP

•Inexpensive proof of concepts becoming the norm

•SMEs also want a piece of it

•Accessibility and on-demand opens up new markets

•Customers get a solution that fits around them

E-Sourcing in the cloud

Recommendations

•Increasing awareness and easy technology is reducing barriers

•Cloud enables a low risk, affordable way to try new approaches

•Best of breed is a viable alternative to an enterprise suite

•Use proof of concept to fund greater roll-outs

•e-Sourcing is a commodity

Aberdeen Group 2012

Tony Dawson Vice President, Coupa Software

The Impact Of Cloud On

Procurement

Topics

1. Traditional Procurement Role

2. Impact of Cloud

3. Key Takeaways

The Traditional Procurement Role

- Enforcer Spend and Policy Investigators

The Gatekeeper

Traditional Approval Chain

• Based on chain of command

• Budget owner often not involved

• No domain knowledge of purchase

• No accountability

Urgent Approvals

Information about purchases not readily available

No time to make informed decision

Lost negotiation leverage

Lack Of Visibility

Unable to block redundant spend across departments

Inability to leverage volume

Cloud Changes Procurement Role -Orchestrator

How Does It Change The Role?

Key enablers to shift the mindset are the

ability to-

• Map approvals to budget ownership

• Manage by exception

• Gain early visibility in the process

Map Approvals To Budget Ownership

Key Benefits

• Drives accountability

• Involves domain experts in decision making

Owners Provide

What is being purchased

What part of organization for

What project/product for new product

development

Manage By Exception

Key Benefits

• Focus on high value tasks

• Promotes responsible spending culture

Empower Employees

Rationalized approval limits

Self approvals for low $

Early Visibility In The Process

Key Benefits

• Spend avoidance

• Gain negotiation leverage

Leverage Technology

Insert yourself early in the process as an

observer

Ready access to critical information e.g.

spend analytics, supplier info

Software Fees

Year 1 Year 1

Year 2

Year 3

Old Model

Implementation

Database/Middleware

Hardware

Professional Services

Upgrade

Maintenance

Maintenance

IT Support

IT Support

Professional Services

Software Fees

Software Fees

Year 3

Year 2

Cloud Lowers TCO For Technology

Cloud

Final Thoughts

Cloud enables Procurement to:

• Orchestrate rather than play cop

• Stretch comfort limits to be effective

• Enjoy the benefits including lower TCO

Q and A

• Panel

– Andy Mathieson Chairman Andomise Ltd

– Nick Drewe Director Market Dojo

– Alun Rafique Director Market Dojo

– Tony Dawson VP Alliances Coupa

– Nick Bacon Managing Director EVR