Post on 23-Jun-2020
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SIG Working Councils
Source-to-Pay Technologies 2017
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Microsoft
Philip Wood
Director
The Hackett Group
Amy Fong Senior Procurement Adviser/P2P Program Leader
Global Sourcing Optimization Services (GSOS)
Matthew Shocklee President and CEO
Meeting Agenda:
Time Topic Responsible
9:00am Welcome & Introductions Snehal Sindhvad (SIG)
9:05am SIG Working Group Concept & Structure, and re-branded approach Snehal Sindhvad (SIG)
9:15am Source-to-Pay Technology Considerations and Value Drivers Amy Fong – Hackett
10:00am Meeting Concludes
Introductions:
Matt Shocklee
SIG - Ambassador
Philip Wood
Microsoft
Working Council Leadership Team
Amy Fong
The Hackett Group
Dr. Beena George
Univ. of St. Thomas
Meeting Agenda:
Time Topic Responsible
9:00am Welcome & Introductions Snehal Sindhvad (SIG)
9:05amSIG Working Group Concept & Structure, and re-branded approach
Snehal Sindhvad (SIG)
9:15am Source-to-Pay Technology Considerations and Value Drivers Amy Fong – Hackett
10:00am Meeting Concludes
Our Charter:
• Ensure that SIG Members have a resource to turn to when they have questions concerning the use of Source-to-Pay technologies;
• Provide an environment for SIG Members to network and develop relationships with subject-matter experts, thought leaders and practitioners in this business area;
• Assist SIG Members in understanding how enterprises use Source-to-Pay technologies to drive value throughout the entire sourcing and relationship governance life-cycle (i.e. Source-to-Pay, Transition to Delivery, Relationship Optimization Risk & Compliance etc.);
• Enable SIG Members to stay apprised of how transformational technologies can either simplify and/or add complexity to the sourcing and governance environment, especially with the proliferation of advanced technologies and platforms.
The Charter or Purpose of this Working Council is:
Meeting Agenda:
Time Topic Responsible
9:00am Welcome & Introductions Snehal Sindhvad (SIG)
9:05am SIG Working Group Concept & Structure, and re-branded approach Snehal Sindhvad (SIG)
9:15am Source-to-Pay Technology Considerations and Value Drivers Amy Fong – Hackett
10:00am Meeting Concludes
March 2017
Amy Fong
P2P and Procurement Advisory Program Leader
Source-to-Pay Technology Considerations and Value Drivers
8© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Source To Settle Technology Map
Supplier Lifecycle Management
(Supplier Master Data, Performance and Risk)
Track performance, monitor risk, aggregate third-party data on suppliers, maintain master data, view performance
Automated Spend
AnalysisE-Sourcing Contract Lifecycle
Management
E-Procurement E-Invoicing / E-
Payables
Services
Procurement
• Identify category
opportunities
• Aggregate and report
on enterprise spend
• Cleanse and
rationalize spend data
• Define
requirements/aggrega
te demand
• Conduct RFx
• Evaluate suppliers
• Optimize bids
• Conduct e-auctions
• Create and store contracts
• Maintain standard templates
• Manage negotiation workflow
• Alert on milestones
• Maintain
e-catalogs
• Search approved
suppliers
• Punch-out to supplier
catalogs
• Create requisitions
• Input/upload invoices
• Match invoices
• Manage discrepancy
resolution
• Approve payments
• Manage requisition
workflow
• Benchmark rates
• Maintain service
agreements
• Track time and
approval workflow
Source: The Hackett Group
Dynamic Discounting /
Supply Chain Financing
Supplier Networks,
Portals, And
Marketplaces
Category Manager ToolsProject Pipeline And
Savings Dashboards
Cognitive, AI, And
Machine Learning
Robotic Process
Automation (RPA)
9© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Source To Settle Technology Adoption And Value Derived By Procurement
Source: Purchase-to-Pay Key Issues Poll, The Hackett Group, 2016
10© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
32% plan to consolidate to a single source to pay platform… but only 8% have achieved that goal today
8%
14%
15%
31%
32%
We use our ERP provider for all source-to-pay processes with only
limited exceptions
We use our ERP and a single source-to-pay solution for the majority of
processes
Our goal is to consolidate all source-to-pay applications on a single
platform provider but we still have disparate tools in place today
We have a “best of breed” strategy which allows us to pick and choose
individual solutions based on how well they meet our requirements
We use a single source-to-pay software provider with limited
exceptions
Which statement would you say best describes your source-to-pay technology strategy?
Source: 2017 Key Issues Study, The Hackett Group
11© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Niche/Best of Breed Solutions
• Best functionality for each specific job
• Support for industry-specific capabilities
• Bolt-on to ERP backbone for master source of data and
financial processing
• Agility and customer centricity
• Incremental investment as needs arise
• Integration can be more difficult
End-to-End Source-to-Pay Platforms
• Better integration across modules (at least theoretically);
can simplify Master Data
• Consistent user interface
• Single provider relationship
• Single supplier onboarding initiative
• In depth up front assessment and investment with
potentially broader implementation
Solution Provider Segments
ERP-Based Solutions
• Greater connectivity to back-end information (financial, HR, etc.) including facilitating Master Data
Management
• Newer versions have improved front ends and shopping experience
• Often a less user-friendly interface
• ERP vendors are typically not best of breed in any one of the core components
• High level of effort for implementation and maintenance
12© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
When it comes to emerging technology in procurement, cloud based applications and advanced analytics will lead in adoption over the next 2-3 years
26%
53%
12%
41%
8%
21%
10%
29%
2%
17%
3%12%
7%
43%
24%
22%
31%
30%
35%
33%
24%
23%
27%
15%
29%
8%
26%
Currently 2-3 Years Currently 2-3 Years Currently 2-3 Years Currently 2-3 Years Currently 2-3 Years Currently 2-3 Years Currently 2-3 Years
Cloud basedapplications / SaaS
Advanced analytics Social media /Collaboration
Mobile computing Internet of things RPA Cognitivecomputing / AI
Mainstream adoption Limited adoption
Cloud based
applications lead the
way in current adoption
Source: 2017 Key Issues Study, The Hackett Group
13© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Some procurement organizations are also piloting advanced analytics, cognitive computing and RPA
43%
32%27% 25%
18% 18% 16%
Advanced analytics Cognitivecomputing / AI
Internet of things RPA Social media /Collaboration
Mobile computing Cloud basedapplications / SaaS
Exploring / piloting
2x
% of procurement organizations currently
piloting the technology
Source: 2017 Key Issues Study, The Hackett Group
14© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Key Value Drivers for Source-to-Pay Technology
Technology Value Drivers
Spend Analysis
• Improve spend visibility, accuracy and reporting capabilities
• Identify and reduce non-compliant or “maverick” spend
• Identify more opportunities for strategic sourcing savings
• Reduce financial savings leakage by driving compliance with negotiated contracts
E-Sourcing
• Significantly reduce sourcing cycle times, bidding times, etc.
• Increase savings by executing more events more effectively
• Streamline workflows, enhance flexibility and add transparency to sourcing process
• Improve accuracy and availability of information on buyer/seller sides, facilitating collaboration, control and compliance
• Free up purchasing personnel to focus on more strategic activities
E-Procurement
• Increase compliance and spend visibility with guided buying from approved supplier catalogs at pre-negotiated prices
• Reduce invoice processing cycle times, delays and errors
• Achieve higher first-pass match rates between invoices and POs
• Gain savings from reducing maverick buying, cycle times and cost of data maintenance
E-Invoicing
• Reduce overall invoice processing costs
• Spend less time on supplier inquiries (e.g., payment status updates)
• Reduce the number of paper-based invoices
• Improve on-time payments
• Improve first-pass match due to better invoice accuracy
15© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Key Value Drivers for Source-to-Pay Technology
Technology Value Drivers
Contract Lifecycle
Management
• Automate contract creation processes to reduce contracting cycle times and processing costs
• Reduce risk by improving contract standardization (standard Ts&Cs)
• Reduce the following: time to find a contract, number of lapsed contracts, auto renewal of evergreen contracts, legal/regulatory issues,
overcharges and lost discounts and penalties
Supplier Lifecycle
Management
• Improve supplier qualification and onboarding using supplier self-service
• Improve supplier master data management and ongoing maintenance
• Enhance supplier risk and performance management and reporting
• Bring supplier information together into one place for better compliance, reduced risk, improved analytics and intelligence, and enhanced
SRM
• Lower supplier management costs
Services
Procurement
• Effectively manage services spend life cycle, from request to pay
• Ensure compliance with regulations governing the use of temporary workers or service providers
• Direct employees to preferred services providers and maximize realization of negotiated savings
• Capture granular detail of services received, billed, etc. to prevent overpayment
Supplier Portals &
Networks
• Effectively exchange P2P transactional information (i.e. POs, invoices, payments) with suppliers
• Enable supplier self-service for standard inquiries via web-based inquiry tools (i.e. payment status, receipt status, etc.)
• Improve supplier information and master data accuracy and ongoing management through supplier self-service, workflows, notifications,
etc.
• Improve new supplier/alternative supply source discovery through use of supplier networks
16© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Example: eProcurement Evaluation & Implementation Approach
Objectives
Monitor and
Enhance
Performance
Implement
eProcurement
System
Select
eProcurement
Vendor
Develop Business
Case for
eProcurement
Develop S2P
Service Delivery
Model
Assess Source-to-
Pay (S2P)
Performance
1 3 4 5 62
Overview ▪ Benchmark
organizational
performance
against peers
▪ Identify gaps to
industry best
practices
▪ Develop prioritized
initiatives for
improvement
▪ Identify
eProcurement
Savings Levers
▪ Develop Business
Case Model
▪ Assess Benefits of
Implementing
eProcurement
System
▪ Prepare Supplier
Assessment
▪ Execute Supplier
Assessment
▪ Plan/Execute
Negotiations and
Select
eProcurement
Vendor
▪ Design
configurations and
integrations
▪ Execute Change
Management
▪ Test and go-live on
new tool
▪ Gather
Performance
Information
▪ Evaluate Efficiency
& Effectiveness of
new Processes and
Technology
▪ Develop
Improvement Plan
▪ Design optimal
future state
processes
▪ Develop
governance
structure
▪ Understand S2P
performance and
identify
opportunities for
improvement
▪ Calculate the
financial costs and
benefits of
implementing an
eProcurement
system
▪ Evaluate
eProcurement
providers and
make selection
▪ Implement system
and rollout to
organization
▪ Monitor system
and organization
performance
▪ Design future state
people, process,
technology, and
policies
Working Council – What’s Next?
• WebEx Meeting: December 2017 – Westfield Group to discuss their S2P project and journey.
• What topics are we most interested in for our WebEx Meeting in February 2018?
• What speakers/thought leaders do we want to involve?
• Do we have any initiatives we would like to pursue?
• Other ideas, thoughts or suggestions?
• Meeting at Spring 2018 Global Executive Summit – Washington, D.C.
Thank You!
Matt Shocklee
SIG - Ambassador
Philip Wood
Microsoft
Working Council Leadership Team
Amy Fong
The Hackett Group
Dr. Beena George
Univ. of St. Thomas
SIG Working Councils
Source-to-Pay Technologies 2017
Philp Wood Microsoft philipwo@microsoft.com
Amy Fong The Hacket Group afong@thehackettgroup.com
Matt Shocklee SIG – Ambassador mattshocklee@gsos.org
Dr. Beena George Univ. of St. Thomas
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