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Procurement

IBM Emptoris Strategic Supply Management

Powering Procurement Transformation,extending Smarter Commerce

© 2014 IBM Corporation 2

Procurement

Delivering superior customer experiences that are highly informed and orchestrated

2

prepared for the unpredictable

A supply chain Marketing targeted to every customer

personally

what customers want before they do

Service that knows Selling that works with your customers,

fulf illing their needs


Procurement

Creating an exceptional customer journey requires collaboration and integration across the value chain

3

Seamless cross-channelcustomer experienceEVP of SalesGeneral Counsel

Adaptiveprocurement andoptimized supply

chainChief Procurement Officer

Chief Supply Chain Officer

MarketBuy

Service Sell


Procurement

Average percent of product value derived from suppliers

Chief Procurement Off icers are challenged by :

– Complex environments with growth in emerging markets

– Acceleration of business globalization and consolidation

– Increased reliance on suppliers – Volatility and risk in the global

economy– Attracting and retaining talent

Adaptiveprocurement

andoptimized

supply chain

Amount of savings CPOs are looking to achieve annually

IBM is reaching new buyers: Chief Procurement Officers

4


Procurement

Reaching new buyers: EVP Sales & General Counsel

SVP Sales & General Counselshave identified their top sellingchallenges:

– Gain visibility of agreements and theirlifecycle

– Define and manage risk to limitexposure

– Maximize revenue by acceleratingtime to closure

– Enforce compliance with standardizedplatform

Seamlesscross-channelcustomerexperience

To achieve these objectives, a combination ofbest practices and the right technology platform

is required.80%

Reduction in time taken to review Agreements

$60 MAgreement administration costs reduced in one year by one customer

55%Increase in compliance to agreement

30%Typical reduction in agreement administration costs

5


Procurement

IBM can offer a range of capabilities to help you on your procurementtransformation journey

Project andchange

management

StrategyTransformationBusiness case

Organizational designLeading and best

practices

Enabling technology(IBM Emptoris)

Supplier managementRisk and compliance

Source to contractEnterprise and category

spend management

ProcessProcure to payFull cycle procurementContract managementSourcingPolicies and proceduresTechnology enablement

SourcingSpend analysisBuying requirementsMarketplace analysisStrategyNegotiation and implementation

Rangeof practitioner

capabilities


Procurement

Key market trends

Procurement organizationsmore open to the Cloud

Pro-active vs. reactive supplierrisk management

Social, collaborative communitieswith internal and external parties

Cost savings responsibilities plusrevenue generating initiatives

New strategic and analytical skill sets needed by Procurement


Procurement

Key CPO challenges

Complex environments with growthin emerging-market segments

Acceleration of businessglobalization and consolidation

Increased reliance on suppliers

Volatility and riskin the global economy

Attracting and retaining talent


Procurement

Key CPO initiatives

Drive growth andsustainable savings

Manage risk and compliance

Deliver globally integratedsupply chain

Maximize sourcing andfulfillment flexibility

Identify volatility andoptimize predictability


Procurement

IBM strategy to support key CPO initiatives

Effectively manage suppliers to reduce costs,increase performance,mitigate risk andfacilitate compliance

Supplier management,risk and compliance

Enterprise andcategory spend

management

Source to contract

Analyze enterprisespend acrosssystems and

effectively source andmanage complex

categories

Enhance andpreserve savings

with advanced sourcingand enterprise contract

management capabilities


Procurement

What if you could achieve the following?

100%of contracts undermanagement and

compliance

35%reduction in number

of vulnerablesuppliers

95%on-time supply

100%compliance insupplier selectionprocess

100%of at-risk suppliersunder management

of suppliers beingmonitored for ethical

violations

95%


Procurement

Supplier Management, Risk and Compliance


Supplier Management,Risk and Compliance

Enterprise andCategory Spend

Management

Source to Contract



categories

Enhance and preserve savings

with advanced sourcingand enterprise contract



Procurement

Goals•Know the marketplace and manage the portfolioof suppliers•Raise overall performance of suppliers•Reduce exposure to risk and compliance issues

Market Challenges•Supply chain disruptions caused by unreliablesuppliers•Poor visibility into supplier spend,performance and compliance•Risk to company brand because of supplieractions•Missed opportunities to exploit supplierinnovation•Inaccurate or conflicting supplier information

Supplier Management, Risk and Compliance

Registration &assessment

Segmentation Compliance &Corporate Social

Responsibility(CSR)

Performancemanagement

Supplier RiskManagement

Development &Mitigation

Supplier Information &Compliance

Supplier Risk &Performance


Procurement


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100%of contracts undermanagement and

compliance

>99%enterprise spend

compliance

$170Min negotiated savings

annually

$5B+competitively

awarded each year

100%visibility of $90+

billion spend acrosscategories, geos and

business units

1M+active contracts

managed

All amounts are in US dollars.


Procurement

Source to Contract


Supplier management,risk and compliance

Enterprise andcategory spend

management

Source to contract



categories


with advanced sourcing and enterprise contract



Procurement

Goals•Achieve best value from suppliers•Negotiate and enforce standardized contracts•Enforce standard processes and help ensureaccountability for results

Market Challenges•Lack of visibility into source to contractprocess and supplier information•Poor adherence to standard processesaround the globe•Variable contract language andnoncompliance with contract terms

Source to Contract

Target savings Actual savings Realized savingsvs. vs.

Enterprisespend

management

Definecategory savings

program

Strategicsourcing

Procurementcontract lifecycle

management

Procurementcompliance and

savings validation

Refine category savings

program

Source to Contract


Procurement

return on investment(ROI) on telecom

expense managementdeployment

500%


100%visibility and control

over global contingentlabor headcount

>99%enterprise spend

compliance

$125Msavings on telecom

expenses over five years

100%visibility of $90+ billion

spend acrosscategories,

geographies andbusiness units

All amounts are in US dollars.


Procurement

Enterprise and Category Spend Management


Supplier Management,Risk and Compliance

Enterprise andCategory Spend

Management

Source to Contract


with advanced sourcing and enterprise contract

management capabilitiesAnalyze enterprise

spend acrosssystems and


categories


Procurement

Goals•Gain a more complete view into spending acrossthe global organization•Improve control over complextelecommunications and service categories•Reduce savings leakage

Enterprise and Category Spend Management

Identifysavings

opportunities

Facilitatecompliance and

reduce risk

Achieve greaterspend visibility

Realizepotentially substantial

savings

Market Challenges•Poor visibility into enterprise spend bysuppliers and categories•Managing spend for complextelecommunications and service categories•Poor accountability for savings goals


Procurement

Enterprise and CategorySpend Management

Source to ContractSupplier Management, Risk and Compliance

Strategic supply management capabilities

Supplier lifecyclemanagement

Sourcing

Contract management

Spend analysis

Telecom expensemanagement

Services procurement

Program management


Procurement

Go to market offering – integrated suite

Program management

Supplier lifecycle

management

Servicesprocurement

Telecomexpense

management

Contractmanagement

SourcingSpendanalysis

Virtual supply master technologyCategories | Suppliers | Organizations | Regions

Emptoris integration services

• Maplecroft• Beroe• Bloomberg• Sedex• Dun &

Bradstreet

• Thomson Reuters• EcoVadis• London Metal

Exchange• Equifax

Commoditizedtransaction data


Procurement

Virtual supply master—foundation for managing procurement information

Organization and regioninformation

Global category structure

Suppliermaster

Risk Compliance

Contracts

Profile

Spend Third-party data


Procurement

• Deeper analytics • e360 Reporting

• Mobility (ResponsiveDesign) and Usabilityenhancements

• Net Promoter Score

• Integrated intra-suite • External applications

(Cast Iron)

• Multi-enterpriserelationship mgmt.

• Align architecture tolatest IBM tools, qualityprocesses and techstack

ConnectUnderstand

EngageFoundation

IBM SSM suiteand external to your supply chain


Procurement

IBM experience

Spend visibility achieved forclients, on average

99%

Contracts under managementand compliance

90%

Average savings on totalsourced spend

11%

• IBM has helped hundreds of Global 2000clients transform their procurement functions

• IBM offers a range of capabilities to addressthe needs of CPOs, including strategy, process,sourcing and technology

• IBM Emptoris® solutions are recognized as aleader by industry analysts:

– Forrester Wave: Sourcing and Vendor Management, 2013

– The Forrester Wave™: Contract Life-Cycle Management, Q2 2011

– Gartner, Magic Quadrant for StrategicSourcing Application Suites, July 1, 2013


Procurement

Latin America$2.6B

8%

Europe-ME/A$6.9B21%

North America$11.8B

36%Asia Pacific

$11.535%

GlobalProcessServices$20.1B

38%

Services &General$22.1B

42%Production$9.7B18%

Logistics$1.0B

2%

IBM Procurement Profile

25

2013 Procurement Spend $52.9 Billion

2013 Procurement Spend by Geo $32.8 Billion*

Approx. 19K suppliers in almost 100 countries

*Spend by Geo based on IBM internal spend of $32.8B

Procurement internal spend ($32.8B) was equivalent to 33% of IBM’srevenue in 2013.


Procurement

Required use of

CentralizedProcurement

Function

ImplementedContractStrategy

EstablishedGlobal

CommodityCouncils

GlobalContract

Education

EstablishedContracts

Shared Services

Team

DeployedGlobal

ContractRepository

Tool

IBM Procurement & Contract Management Transformation

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Organization Process PeopleTechnology

Savingsgeneration

Improvedsupplierrelationships

Developmentof purchasingstrategy

Subject MatterExperts(SMEs)knowledgeableaboutpurchases

SMEs tomanagesupplierrelationships

Improvedcontractingefficiency

Standardizedtemplates

Templatesgloballyavailable foruse

Centralizedstorage fortemplates

Contract recordmanagement

Searchcapabilities

Skilldevelopment

Classroom andvirtual training

Contractingreferenceguide

Routineagreementssupport

Contracttemplatemanagement

Negotiationsupport


Procurement

162,000AgreementsActive

10,400Countries deployed100

200 Legal Templates

3,600 UsersInternal

Attachmentsmigrated

625K

Agreements Executed 2014

59K

Supplierrecords

40 Languages

100%utilization

IBM Contract Management System Deployment

27

Global buy side IBM Emptoris deployment by the numbers


Procurement

IBM paired transformation with technology to furtherstreamline its contract management processes

IBM Emptoris Contract

Management


Procurement

Thank you

Thyra Rauch [email protected]

Lynn [email protected]

Documents

IBM Emptoris Strategic Supply Management - SHARE Emptoris Strategic Supply Management ... IBM can offer a range of capabilities to help you on your procurement ... Spend analysis Buying