Pulse of Procurement 2014 ZYCUS

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    Pulse of Procurement 2014

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    Page 2 | 2014 Zycus Inc. All rights reserved.

    INTRODUCTION

    Dear Colleague,

    Zycus is pleased to present its Pulse of Procurement 2014 report on the state of procurement performance and technology. The research

    is part of an ongoing Zycus initiative to comprehend enterprise procurement challenges and best practices around the globe.

    Having begun this research series back in 2011, we are now able to look beyond current snapshots into emerging trends as enterprise

    strategic procurement functions continue to evolve and gain in maturity. We are greatly excited to observe that, after many years of

    intense focus on fixing old problems, procurement appears to be moving into a new phase characterized by innovation in which

    information gets transformed into competitive business intelligence, sourcing and procurement activities become more forward-focused

    and predictive and the scope of procurements performance contributions expands into many areas beyond purchase costs and process

    efficiency. To achieve all of this, of course, procurement needs a new level of technology enablement. It needs integrated automation

    technology that:

    Expands team productivity and frees talent for the kinds of creative thinking that only human minds can accomplish.

    Shares information seamlessly and ensures one version of the truth.

    Makes it very easy to ask new, innovative questions and find accurate answers rapidly and from anywhere, with just a few clicks or

    finger taps.

    At Zycus, we are passionate about building solutions that combine seamless integration of sourcing and procurement processes, state-of-

    the-art functionality and ease of use along with superior responsiveness from our teams to help customers achieve their ever-evolving

    business performance objectives. We are driven by these principles and have invested heavily in building a complete suite of integrated

    procurement solutions from the ground up!

    We hope you find this report useful and instructive as you map your own journey to better business performance.

    Aatish Dedhia

    CEO, Zycus Inc.

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    2014 Zycus Inc. All rights reserved. | Page 3

    CONTENTS

    EXECUTIVE SUMMARY & DEMOGRAPHICS................................................................................................................................................... 4

    PROCUREMENT PAIN AREAS FOR 2014...........................................................................................................................................................5Enterprise procurement mandate ........................................................................................................ ..................................................................................6

    Top procurement pain points for 2014 .................................................................................................. ................................................................................7

    How procurement sees business intelligence evolving in the coming five years ....................................................................................................... 8

    STATE OF PROCUREMENT (PERFORMANCE BENCHMARKS) ......................................................................................................... 11Strategic maturity .................................................................................................................................................................................................................... 12

    Spend under management (SUM)......................................................................................................................................................................................... 13

    Cost savings ................................................................................................................................................................................ ............................................... 14

    Contract compliance ................................................................................................................................................................. ............................................... 15

    Sourcing and order cycle times .......................................................................................................................................................................... ................... 16

    PROCUREMENT TECHNOLOGY TRENDS........................................................................................................................................................ 19Investment and interest levels by major solution sets ................................................................................................................................. .................. 20

    Primary platform configurations: what procurement has versus what it really wants .......................................................................................... 22Technology adoption & use benchmarks ........................................................................................................................................................................... 24

    Technology utilization benchmarks ................................................................................................................................................................. .................. 26

    TECHNOLOGY IMPACT & WISH LIST................................................................................................................................................................. 29Successful tactics for driving procurement technology adoption & use .................................................................................................................... 30

    Sweet spot for procurement technology selection .......................................................................................................................................................... 31

    ABOUT ZYCUS................................................................................................................................................................ .................................................. 32

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    EXECUTIVE SUMMARY

    Zycus Pulse of Procurement 2014study encompasses input from more than 300

    procurement executives and professionals with demographic characteristics shown on

    this page.

    BIG OBSERVATIONS FROM THIS YEARS STUDY

    The rate at which corporations seem to be minting new enterprise strategic

    procurement groups has come to a virtual standstill over the past 2-3 years. This

    may signify saturation for procurement strategic transformation or simply reflect a

    shift in C-Suite attention away from defensive to more offensive business prioritiesas economic recovery continues. Either way, CPOs who wish to continue expanding

    their spheres of influence may need to change or raise their games.

    Procurement organizations continue to advance in placing additional spend under

    management, obtaining compliance to preferred supply contracts and saving

    money for their companies, but a majority still lingers in the lower performance

    tiers for cumulative cost-savings delivery and many are still encountering barriers

    in the big transition from occasional to more systematic types of performance

    wins.

    Investment in procurement process automation and information technology

    persists with solutions such as Contract Management and Spend Analysis nearing

    ubiquity. Nonetheless, procurement pros say their overall technology profiles are

    far from ideal, with most looking for greater integration among solutions in order

    to yield higher quality, more synthesized and predictive business intelligence.

    High-performing procurement organizations show notably stronger technology

    adoption, use and utilization rates than lower performers (p25). Look to p30 of this

    report to see how they are accomplishing this.

    Page 4 | 2014 Zycus Inc. All rights reserved.

    BY REVENUE>$5 billion ...........................................33%

    $2 bil - $5 bil .....................................29%$500 mil to $2 bil ............................ 18%

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    PROCUREMENTPAIN AREAS FOR 2014

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    Since Zycus began its Pulse of Procurementresearch seriesseveral years ago, the proportion of business enterprisesauthorizing global procurement teams to take control of

    corporate spending has not moved from seven in 10. While its

    possible this represents a saturation point for procurement

    strategic transformation that is, some 30% of corporate

    leaders will NEVER be persuaded to invest in procurement-

    powered business performance improvement it may also be a

    function of shifting economic winds, with C-Suite players simply

    refocusing on top- versus bottom line-boosting investmentsand activities. As long as global economic recovery and growth

    persist through the next several years, procurement leaders

    looking to continue expanding their spheres of influence should

    probably be planning to pursue more top-line enhancing activities

    such as:

    Driving supplier performance improvement and supply-risk

    identification and mitigation.

    Identifying and cultivating top-performing suppliersfor collaborative innovation and new product & service

    development.

    Writing contracts creatively to share (vs. shift) risk.

    Pursue most-favored or exclusive customer status with

    suppliers identified as critical to market position and/or

    capable of conferring competitive advantage.

    Page 6 | 2014 Zycus Inc. All rights reserved.

    Yes : 71%

    No: 21%

    N/A: 8%

    Could the C-Suite be losing interest in procurement-ledbusiness performance improvement?

    Does procurement have a mandate tomanage corporate spending?

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    2014 Zycus Inc. All rights reserved. | Page 7

    Investment in procurement technology continues to rise,but, when Zycus asks procurement professionals to citetheir biggest pain points for 2014, top vote getters are

    internal and external information quality.

    At first read, one might surmise that procurement

    technology is failing to deliver the quality of information

    procurement needs. On the contrary, though, findings

    from other parts of the study suggest it is less about

    technology failing to deliver, more about enterprisestrategic procurement teams dramatically raising and

    changing their standards for information (see page 8).

    While procurement continues to wrestle with longstanding

    challenges of performance measurement and driving

    corporate cultural change toward more disciplined,

    competitive and fact-driven spending behaviors,

    there also appears to be substantial focus emerging

    on obtaining greater adoption, use & utilization of

    procurement technology. This trend is investigated ingreater detail beginning on page 24 of this report.

    Internal info quality / 47%

    External info quality / 37%

    Performance measurement & managementsystems / 35%

    Corporate organization, governance& culture / 33%

    Technology adoption & use / 31%

    Technology utilization / 27%

    Contract compliance / 27%

    Talent/skills / 24%

    Technology stack/infrastructure / 23%

    Procurement process compliance / 15%

    Procurement hungers for better quality biz intelligence

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    Page 8 | 2014 Zycus Inc. All rights reserved.

    Big Data fever strikes procurement function

    Forward-looking &predictive

    Globalin scope

    Integratedw/external

    intelligence&

    Capableof being

    combined forreporting

    Credible& valid

    &

    Timely &up-to-date

    Granular/detailed

    57%

    Integratedacross

    processes

    Mobile

    Protected/secure

    41%

    35%34%

    29%

    24%22%

    19%

    8%

    Capable ofbeing

    shared w/other

    enterprises

    Two decades ago, few Chief Procurement Officers could do more than offer vague estimates of total corporate spending. They hadvirtually zero insight into spending at category or supplier levels and no useful means for evaluating procurement performance incontext of external or competitive market information. But, while huge strides have been made in all these areas, rather than satisfying

    CPOs and their teams, the improvements seem to have awakened a hunger for more, bigger, faster, better business intelligence. Call it Big

    Data for procurement. Here is how procurement pros vote in 2014 when asked how they might complete the following sentence (multiple

    responses allowed): In the coming five years, our procurement information needs to become more....?

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    2014 Zycus Inc. All rights reserved. | Page 9

    If you could ask for one innovation to make you moreeffective in your job, what would it be?

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    STATE OF PROCUREMENT(PERFORMANCE BENCHMARKS)

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    Asked to self rate for strategic procurement maturity, the Pulse of Procurement 2014study finds very little has changed in two years,with the top two categories for maturity gaining only a single point between 2012 and 2014. And, while the measure is relativelyimprecise, it reveals persistent frustration among procurement pros in crossing the great divide between sporadic performance wins and

    more systematic, sustainable and diverse sorts of business-value contributions by procurement. There are dozens of potential variables

    holding procurement back; a look into differentiators across a series of procurement KPIs suggests that prominent factors include:

    Essential procurement technology configurations.

    Weak adoption & inconsistent use of available procurement technology, especially among

    distributed procurement personnel, spend and other keystakeholders.

    Page 12 | 2014 Zycus Inc. All rights reserved.

    Starting/deliveringearly wins

    Gainingmomentum

    Extendinginfluence

    Systematicallydelivering

    wins

    Globalbest-in-

    class

    14%

    24% 25%

    32%

    5%

    Leap into top maturity tier continues to elude manyprocurement teams

    Top 2 tiers

    gain only 1-ptfrom 2012

    study{

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    While two-thirds of procurement pros remain reluctant to describe their organizations as tops for maturity, they are continuingto expand influence, with the percentage of companies placing themselves into the top two performance tiers for spend undermanagement (SUM) rising six points between 2012 and 2014. This advancement reflects continued

    inroads by procurement into some of the more complex indirect and services spend categories,

    including contingent labor and consulting; marketing, advertising and communications; legal,

    financial services and so forth. Two key observations:

    Persistently low SUM companies are more than 3X more likelythan high SUM companies to

    be relying primarily on homegrown procurement information technology.

    Companies in the top echelon for procurement SUM show substantially higher

    adoption & useof procurement technology among both decentralized

    procurement personnel and spend stakeholders.

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    Page 14 | 2014 Zycus Inc. All rights reserved.

    The upper echelon for cost savings performance also gained six points between 2012 and 2014, but the largest percentage ofprocurement organizations still falls into low mid- and low performance tiers, having documented cumulative cost savings (by theirown measures) at something less than 10% of total corporate spending. Two procurement technology-related observations:

    More than half (55%) of low savers use primarily homegrown procurement information technology while 27% rely mainly on

    ERP technology compared to 18% who have invested in

    professionally developed, dedicated procurement solutions.

    By contrast, some 43% of companies in the highest cost

    savings echelon use dedicated procurement technologyapplications with some 80% in that group using

    integrated procurement technology suites(versus

    mixing solutions from multiple providers).

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    2014 Zycus Inc. All rights reserved. | Page 15

    Despite being ranked as a top-three pain point by one in three procurement pros this year, the weighted average estimate for contractcompliance has risen 14 points since 2011 (note, 2011 is the last time Zycus benchmarked this metric; there is no comparable figure for2012). What is more, the percentage of procurement pros placing their companies into one of the top two tiers for contract compliance

    jumped 11 points over the same time span. Once again, there are noteworthy

    distinctions in terms of procurement technology with:

    Low compliance companies being 4X more likely than high compliance

    companies to be using mostly homegrown solutions.

    High compliance companies reporting procurement technologyadoption & use among spend stakeholders at a weighted average of

    50% compared to just 22% among low compliance companies.

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    Page 16 | 2014 Zycus Inc. All rights reserved.

    This year, Zycus has added new benchmarkKPIs for sourcing and order cycle times tothe study. Weighted averages are shown in the

    table on this page while detailed distributions

    among the study population are shown in

    charts on page 17.

    It was hypothesized that companies using

    e-Sourcing and/or Contract Management

    solutions would display shorter sourcingcycle times. This proves true, although

    more so for simpler spending categories.

    Companies using either e-Sourcing or

    Contract Management solutions report

    sourcing cycle times that are, on average,

    two weeks shorterfor simple categories, one week shorterfor complex and relatively the same for services categories. Of note is

    that this simple testing does not account for how companies actually apply their solutions (that is, they may or may not be using them

    frequently for all types of spend categories), so these results, while suggestive, should be interpreted with some caution. Nor does the

    testing account for possible time shifting within strategic sourcing processes. For example, with sophisticated bid analytics capabilities

    embedded in e-Sourcing solutions, companies are quite likely to be increasing the time they spend on analysis especially in complexcategories and achieving improved outcomes in terms of costs and other favorable contract terms.

    It was also hypothesized that companies using procure-to-pay (P2P) solutions would display shorter order cycle times compared

    to companies not using procurement process automation solutions. For simple categories, companies with P2P in place show

    weighted average order cycle times roughly half as longas companies not using P2P (three versus six days on average). For complex

    categories, the improvement is less dramatic (13 versus 16 days in total). For services, the improvement is 11 versus 13 days. Again,

    though, these simple tabulations account only for the presence of P2P solutions and not for sophistication of solution deployment.

    Pulse 2014 intros new benchmarks for sourcingand order cycle times

    Simple Complex Services

    Weightedavg sourcingcycle time (in

    weeks)

    6.3 13.5 10.7

    Weighted avgorder cycletime (in days)

    4.7 14.5 11.6

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    2014 Zycus Inc. All rights reserved. | Page 17

    0-2 2-4 4-8 8-16 16-24

    37%

    21%

    18%

    12%

    4%

    24+

    8%

    0-2 2-4 4-8 8-16 16-24

    2%

    17%

    20% 19%17%

    24+

    25%

    0-2 2-4 4-8 8-16 16-24

    5%

    25% 27%

    15%

    9%

    24+

    19%

    0-2 3-5 6-14 15-30 30+

    41%38%

    15%

    4%2%

    0-2 3-5 6-14 15-30 30+

    5%

    24%

    30%

    22%19%

    0-2 3-5 6-14 15-30 30+

    10%

    36%

    23%

    18%

    13%

    SOURCING CYCLE TIMES (IN WEEKS)

    ORDER CYCLE TIMES (IN DAYS)

    Simple Complex Services

    Simple Complex Services

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    PROCUREMENTTECHNOLOGY TRENDS

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    Page 20 | 2014 Zycus Inc. All rights reserved.

    Looking at investment interest by major procurement technology category,e-Sourcingshows the largest increase from 2012 with the percentage alreadyusing the technology or planning to invest gaining 11 points. Somewhat smaller, yet

    still notable increases are seen for both Contract Management and Spend Analysis

    (+7pts each), with investment interest in the remaining three categories tested

    procure-to-pay (P2P), supplier performance and information management (SM)

    and procurement process and performance management (PM) all being relatively

    flat compared with 2012. With that said, both Spend Analysisand Contract

    Managementappear to be approaching ubiquity with only one in 10 companies

    expressing zero interest in investing. Meantime, Procurement Management,which encompasses cost savings documentation, validation and alignment with

    corporate financial metrics as well as project and process management for strategic

    sourcing and other initiatives, leads for overall investment interest in 2014 with

    some 33% of procurement professionals expecting their organizations to invest

    soon in these types of solutions. Supplier Management, which encompasses

    supplier performance measurement, scorecarding and reporting as well as supplier

    information management takes a close second place with 32% overall saying they

    expect to see near-term investments in this area.

    Testing for presence of various procurement technology solutions by organizational

    maturity levels finds Spend Analysis to be, very often, the first stop on the

    procurement technology road map. Mid-maturity investments typically include P2P

    and Contract Management, while investments in e-Sourcing, Supplier Management

    and Procurement Management typically fall later in the lifecycles of evolving

    strategic enterprise procurement functions.

    As in prior Pulse of Procurement studies, presence of various procurement

    technology solutions was tested against performance tiers for cost savings, spend

    under management (SUM) and contract compliance. The most notable observations

    e-Sourcing shows biggest two-year gain in procurementtechnology investment interest

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    2014 Zycus Inc. All rights reserved. | Page 21

    SolutionAlready

    have

    Willinvestsoon

    Noplans toinvest

    Whereinvestment

    typically falls in

    maturity cycle...

    SpendAnalysis

    69% 22% 9% Early

    ContractManagement

    64% 25% 11% Mid

    e-Sourcing 51% 25% 24% Late

    P2P 53% 26% 21% Mid

    SupplierManagement

    46% 32% 22% Late

    ProcurementManagement

    45% 33% 22% Late

    in this years study:

    Companies falling into the top two

    performance tiers for cost savings are

    2.5X more likely to be using e-Sourcing

    than those falling into the lowest

    savings tiers. They are 1.5X more likely

    than low savers to be using Contract

    Management and 2.3X more likely to

    be using P2P solutions. High compliance companies are 2X

    more likely than low compliance

    companies to be using P2P.

    High SUM companies are 1.6X more

    likely than low SUM to be using P2P.

    Of note is that these observations are

    based solely on coincidence of solutions

    versus performance tiers and do not

    represent statistical evidence of causality.

    What is more, as procurement technology

    solutions have continued to achieve greater

    sophistication, market acceptance and

    saturation, what used to be very large

    tech gaps between high, mid- and low-

    level performers appear to be closing with

    many companies now investing in advanced

    procurement solutions much earlier in their

    transformation lifecycles than in the past.

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    32%

    18% 17%

    1%

    32%

    Mostlyhomegrown

    ERPmodules

    Procurementsoln mix

    Procurementsuite

    N/A

    With a vision of the future that includes integrated,predictive, synthesized and globally-scoped businessintelligence, it is hardly surprising that procurement pros are

    apparently dissatisfied with their current overall technology

    profiles. Roughly one third describe their current configurations

    as mostly homegrown, which includes solutions created in

    electronic spreadsheets and desktop database applications as

    well as custom solutions developed by in-house IT personnel.Another one third say they rely mainly on ERP modules while

    a slightly larger group has invested in solutions developed

    professionally and built from the ground up for procurement

    in particular (versus being adapted from primarily finance,

    accounting, manufacturing or other business perspectives).

    This latter group is split between companies mixing discrete

    procurement solutions from multiple providers and those

    investing in integrated suites designed to move information

    seamlessly and multilaterally among various steps in source-to-settle processes and to provide sophisticated dashboard types of

    reporting and on-demand information retrieval at any point in a

    strategic sourcing or procurement process.

    While current configurations often deviate substantially from

    what procurement pros see as their ideal technology setups, it

    does appear that many have technology road maps in place that

    will be at least moving them in the direction they want to go.

    Page 22 | 2014 Zycus Inc. All rights reserved.

    Huge gap identified between the technology procurementtypically has and what it really wants

    What procurement has...

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    5%

    10%

    60%

    7%

    18%

    Mostlyhomegrown

    ERPmodules

    Procurementsoln mix

    Procurementsuite

    N/A

    7%

    30%33%

    7%

    23%

    Mostlyhomegrown

    ERPmodules

    Procurementsoln mix

    Procurementsuite

    N/A

    2014 Zycus Inc. All rights reserved. | Page 23

    vs. what it expects to get vs.what it wants

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    Its one thing to invest in and deploy procurement technology, quite another to convert large, complex corporate organizations to bothroutine and advanced use of solutions available. A special focus area for Zycus Pulse of Procurement 2014was to understand: How extensively procurement technology is being

    adopted & used by various corporate constituencies.

    How much of an impact technology adoption &

    use might be having on procurements ability

    to deliver on key performance indicators.

    What factors might be influencing technology

    adoption & use either positively or negatively.

    Weighted average baselines for technology

    adoption & use are shown in the chart on this

    page. As might be expected, adoption & use

    declines the further away from enterprise

    procurement one looks, first to distributed/

    non-enterprise procurement personnel and

    then to spend or other corporate stakeholders

    who get involved to varying degrees in procure-

    to-pay, source-to-settle, supplier onboarding

    and performance evaluation, documentation of

    procurement cost savings and other procurement-

    related business processes.

    As the table on the next page reveals, there

    appear to be clear relationships between average

    procurement technology adoption & use rates

    Page 24 | 2014 Zycus Inc. All rights reserved.

    High performers in procurement show stronger technologyadoption & use across the board

    60%

    48%

    38%

    Enterpriseprocurement

    Distributedprocurement

    Stakeholders

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    2014 Zycus Inc. All rights reserved. | Page 25

    KPI ConstituencyLowTier 1

    MidTiers 2 & 3

    HighTiers 4 & 5

    Cost savings

    Enterpriseprocurement

    54% 60% 65%

    Distributedprocurement

    55% 47% 53%

    Stakeholders 24% 39% 46%

    SUM

    Enterpriseprocurement

    52% 54% 68%

    Distributedprocurement

    36% 43% 54%

    Stakeholders 19% 35% 45%

    Compliance

    Enterpriseprocurement

    45% 61% 66%

    Distributedprocurement

    31% 49% 53%

    Stakeholders 27% 35% 48%

    and performance tiers achieved, especially

    where distributed procurement personnel and

    stakeholders are concerned. So, for example,

    High performers on the cost-savings

    metric report stakeholder adoption & use

    rates that are nearly two times higher, on

    average, than their counterparts in low

    savings companies.

    High performers on the spend under

    management (SUM) metric are 16 points

    higher on enterprise procurement adoption

    & use, 18 points higher on distributed

    procurement and 26 points higher for the

    stakeholder constituency.

    For contract compliance, the gaps are

    similar, ranging from 21-22 percentage

    points cross all three of the user

    constituencies tested in the study.

    While, again, the study does not attempt

    to prove causality (i.e., that achieving high

    technology adoption & use drives performance

    directly), the consistency of the relationships

    shown is difficult to ignore.

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    Two other measures looked at in this years study include procurement technology utilization the estimated percentage of totalsolution functionality routinely employed by targeted end users and also procurement professionals personal assessments of thecurrent utility of available procurement technology in helping them perform their jobs. First, the good news: Procurements weighted

    average tech utilization rate has increased 12 points from 37% in 2011 (the last

    time the question was posed) to 49% in 2014. The bad news: At less than 50%

    utilization overall, either advanced procurement technology is not sufficiently

    easy to learn and use or companies are paying for bells and whistles they

    neither value nor have the capability to exploit.

    Of note is that this result dovetails quite closely with what Zycus has

    been experiencing in the market with many organizations looking to

    convert away from overly complex procurement technology

    implementations that have been poorly adopted.

    Technology utilization gains 12 points in three years

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    Primarytechnology

    configuration

    Weighted avg techutility ratings

    (0-7 scale)

    Avg. techutilization rates

    by primaryconfiguration

    Baseline (total studypopulation)

    4.1 49%

    Procurementsuite

    5.3 64%

    ERP 4.0 51%

    Procurement

    solution mix 4.0 52%

    Mostlyhomegrown

    3.6 41%

    Procurement professionals tech-utility ratingsunderscore the story being told on pages 22-23 of this report, which shows a strong preference

    for procurement technology that is organically and

    professionally engineered for procurement and also

    designed to move information seamlessly across andamong multiple stages in complex source-to-settle,

    supplier relationship and procurement management

    processes. As the table shows:

    Companies already using integrated procurement

    technology suites achieve tech utilization rates

    that are well above the baseline average.

    Procurement professionals working in

    companies that operate with suite setups ratethe usefulness of their technology much higher

    than procurement pros working with primarily

    homegrown, solution mix or ERP configurations.

    Our current procurement technology is...

    2014 Zycus Inc. All rights reserved. | Page 27

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    [Our] procurement professionals spend most of their timebuilding spreadsheets to get useful data out of our tools.

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    TECHNOLOGY IMPACT& WISH LIST

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    Page 30 | 2014 Zycus Inc. All rights reserved.

    Top tactics for driving technology adoption & use

    If procurement technology adoption & use supports procurement performance improvement, what are some of the best ways to promoteit? The study asked participants to cite their most successful tactics for promoting procurement technology adoption & use. Isolating justcompanies reporting high adoption & use rates for various constituencies yields the following:

    Achieving highestadoption and use

    rates among...Number 1 tactic Number 2 tactic Number 3 tactic Number 4 tactic

    Enterpriseprocurement

    personnel

    Build and presentstrong business

    case/60%

    Choose easy/intuitivesolutions/55%

    Choose solutionswith strong workflow

    capabilities/48%

    Monitor and reportusage/45%

    Distributedprocurement

    personnel

    Build and presentstrong business

    case/59%

    Choose easy/intuitivesolutions/48%

    Monitor and reportusage/44%

    Conduct extensivetraining/41%

    Spendstakeholders

    Build and presentstrong business case

    /52%

    Choose easy/intuitivesolutions/48%

    Monitor/reportusage/41%

    Strong workflow/41%Use policies/41%

    Conduct extensivetraining/37%

    Across-the-boardBuild and presentstrong business

    case/57%

    Choose solutionswith strong workflow

    capabilities/48%

    Monitor and reportusage/48%

    Choose easy/intuitivesolutions/45%

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    2014 Zycus Inc. All rights reserved. | Page 31

    Sweet spot for procurement technology selection: Easy-to-usestandard features coincide with higher adoption at all levels

    Weighted averagetechnology adoption& use rates among...

    Low ease of use instandard features

    Baseline (totalstudy population)

    Mid ease of use instandard features

    High ease instandard features

    Enterpriseprocurement

    personnel45% 60% 62% 69%

    Distributedprocurement

    personnel37% 48% 49% 53%

    Spendstakeholders

    27% 38% 39% 45%

    Atop tactic for companies achieving high rates of procurement technology adoption & use is to select solutions that are intuitive andeasy to learn. However, when asked to rate their current solution setups for ease of adoption & use, overall scoring is on the low side,especially with respect to advanced feature sets. On a scale of 1 to 7, with one being difficult and seven being very easy, procurement

    professionals rate standard features at an average weighted score of 3.9 (just slightly better than half way up the scale). They rate

    advanced features at a score of 3.3 less than halfway up the scale. For advanced features, some 60% of procurement professionals score

    their current technology at two or lower on the 1-7 ease-of-use scale.

    The table below compares average adoption & use rates according to where on the ease-of-use scale procurement professionals rate

    their currently deployed solutions standard features. Companies reporting high ease of use in standard features see the biggest upward

    usage bump among enterprise procurement personnel 24 points higher, on average, when compared to companies rating their standard

    solution features as essentially difficult to use. Among distributed procurement personnel, the adoption & use differential is +16pts; for

    spend stakeholders it is +18pts when standard solution features are rated as very easy to use.

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    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 procurementperformance solutions which includes Spend Analysis, e-Sourcing, 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.

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