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Roy Anderson EVP Procurement Services 470-514-3640 randerson@metaprocure.com Twitter: @procureguyvp Should the CFO invest in Procurement?

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Compare the Level of Investment as defined by Maturity of Procurement to Value Creation Research Project

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The Transformation Roadmap Pre AP Group Transactional Team Three bids and a buy Seven step process The transactional space

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The Transformation Roadmap More than a Quarterly Review Embedded Value, cross functional goals Based on business imperatives The Table Embedded in LOB plans Pre AP Group Transactional Team Three bids and a buy Seven step process The transactional spaceThe next generation strategic space Internal Team Focus

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Research Project Objective To understand where universities stand in terms of the transformation roadmap and show how investment in next generation capabilities impacts Procurement results in terms of Savings, ROI, and value creation to their institution Approach Collect facts from the NAEP membership to outline, within a range, the current position on the roadmap Compare the value created of those at various levels of maturity Answer Does investment in Procurement create substantial returns? 5

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Survey 6

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So little money!

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Impact To the Institution Ability to Impact Career BuilderOutsource Wrong Skills Who Cares High Impact and High Ability to Impact 12

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Impact To the Institution Ability to Impact Career Builder Outsource Wrong Skills Who Cares High Impact and High Ability to Impact 13

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SUPPLIER MANAGEMENT To Drive Innovation

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Supplier Management Time Value = Cost Benefits + Innovation Strategic Sourcing Value Supplier Management Value Sourcing events value decreases over time as requirements and best practices change Additional benefits by partnering with supplier and driving innovation Lost benefits without ongoing supplier management Implementing Supplier Management maintains cost benefits achieved during the Sourcing event and increases value creation by incorporating demand management, continuous innovation, improvement in quality, service and delivery

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Supplier Relationship Management Requires a strategic approach to managing critical suppliers Eliminate acting as an order-taker Easier said than done Think about suppliers in terms of potential for new value and the risk for loss of value Sit with stakeholders to set and execute SRM strategies Focus 30% of team on SRM Invest in building SRM skills within their teams

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Supplier Relationship Management Invest in governance and business processes such as joint strategic planning and performance reviews Develop Objectives, Goals, Strategies and Measures for each relationship in alignment with business requirements Investment in terms of tools, time and planning creates $ Millions of measureable value Innovation New revenues Improved end to end process Lower total cost Reduced risk Supplier Relationship Management: Where are we now? Where are we going? By Vantage Partners; Jonathan Hughes, Partner; Jessica Wadd, Senior Consultant and Ashley Hatcher, Senior Consultant, Vantage Partners Survey of 330 companies

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Supplier Management Program Company will implement a program for classifying vendors into three tiers, which will have varying degrees of oversight Poor performance Stellar performance Goal To manage compliance by driving the majority of the spend to the Preferred and Certified Vendors Certified Vendor Preferred Vendor Agrees to Companys MSA terms, general rate cards, and associated terms Only considered when Certified and Preferred Vendors do not meet standards or for niche/specialized engagements Strategic supplier Communicate directly with business partners Focus on Innovation and collaboration Highly competitive rates and discounts Opportunity to compete for all applicable engagements Measured against rigorous supplier metrics Communication is primarily with Procurement Competitive rates and discounts Opportunity to compete in many applicable events Measured against core supplier metrics Approved Pool

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Supplier Relationship Management Align SRM with strategic account management (SAM) at key suppliers Measure the total financial & strategic value delivered by SRM Integrate strategic sourcing, category management, contract management, and SRM Focus on relationships with suppliers Implement value based supplier strategy with multiple suppliers Develop multi-year strategic plans with the most important suppliers Supplier Relationship Management: Where are we now? Where are we going? By Vantage Partners; Jonathan Hughes, Partner; Jessica Wadd, Senior Consultant and Ashley Hatcher, Senior Consultant, Vantage Partners Survey of 330 companies

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PROCUREMENT UTILITY

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P-Card Compared to Procurement Utility P-Card Consortium Procurement Utility Supplier Cost to Supplier200 - 400 basis points Speed payment2-5 day pay Electronic and Matched Invoice to allow payment in 2-10 days Improves invoice approval timeNo Yes Drives compliance to contractNo Yes Lower sales costNo Yes Increase order accuracy end to endNo Yes Tools Spend VisibilityNo Yes SourcingNo Yes ContractsNo Yes RequisitioningNo Yes on line approvalNo Yes reverse auctionsNo Yes Services Provide improved unit priceNo Yes Facilitates 2%/10 pay termsNo Yes Spend Analytics No Yes Strategic sourcingNo Yes Consortium aggregationNo Yes ReportingYes Communication programNo Yes Buying supportNo Yes

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- WE GIVE YOU THE SOFTWARE -IMPLEMENT THE SOLUTION -ROLL OUT THE TOOL -PROVIDE SOURCING SKILLS -DRIVE CHANGE MANAGEMENT -ALL FOR THE COST OF P-CARD

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Rules for a Magnificent Career 1.If you dont know where you are going, you are going to get somewhere and youll be miserable. 2."If you find yourself in a hole, the first thing to do is stop digging." -Will Rogers. 3.Solve for scale. Point solutions dont scale, frameworks scale 4.99% of all arguments are based on a difference between what each person is solving for. 1.First, get to a shared vision. 2.Then disagree. 3.Then get to the best solution. 5.If you are a leader, remember it is never about you. It is always about the team and each person in it. 6.Nice guys/girls might not always finish at the top, but in the long run jerks will always finish last. Karma lives. 23 From Avinash Kaushik, Author, Blogger, Digital Marketing Evangelist, 11/11/13 12 Rules for a Magnificent Career

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24 Dont ask, What seat. JUST GET ON! - Sheryl Sandberg If you are offered a seat on a ROCKET SHIP

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Roy Anderson EVP Procurement Services 470-514-3640 randerson@metaprocure.com Twitter: @procureguyvp

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APPENDIX 26

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Solution Overview Strategic sourcing to create savings Cloud technology to drive efficiency and compliance Spend Visibility, Sourcing, Reverse Auctions, Contracts Procure-to-Pay, E-invoicing, Supplier Management Full system administration Communications to encourage change management Buying support Manage transactions Reporting A self-funded model Similar to a P-Card Cost Center Vendor Commodity Spend Analytics and Reporting E-invoicing ERP Payment Technology Services Supplier Relationship Management

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Ideas for Supplier Partnership Socialize with your key partners Arranged joint events for charity. Encourage collaboration Build momentum Deliver opportunities to create value out of the relationship. Create a brainstorming session All stakeholders and their counterparts at the supplier What can we do together to improve things Provoke challenges Be prepared to make changes within your own organization Commit to a joint action plan Rachel Scarrett, head of GI Claims Supplier Management, LV 28

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Ideas for Supplier Partnership Get your own house in order All great supplier management and innovation programs requires an internally signed off supplier strategy Poor performance from a supplier is most often a result of conflicting signals and messages coming from the customer organization Is the governance within your organization clear Does the supplier know where they should take their direction Is there a clear guide path articulated internally about that area of supply Is there internal stakeholders buy-in and explicit agreement Allison Ford-Langstaff, director, Future Purchasing 29

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Ideas for Supplier Partnership Find out what the world looks like from the suppliers point of view Most manage suppliers starting with the contract and introduce a mixture of performance and relationship management Get face-to-face with strategic suppliers and hold both operational and strategic discussions. Discover what the world looks like from their perspective. Find out where quick-win operational improvements can be made Identify those suppliers who can offer real innovation opportunities. Philip Halanen, supply chain relationship executive, British Airways 30

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Ideas for Supplier Partnership Encourage innovation from suppliers Two typical pitfalls The process to evaluate ideas is slow and this often leads to rejection of the idea. When a very good idea is retained, some procurement departments tend to take a win-lose approach. The procurement departments that generate most innovative ideas from suppliers are the ones that have developed effective internal processes so that the suppliers ideas can be quickly evaluated and with a high success rate. Then they focus on enlarging the pie in the deal, so that both parties can be happy. Giuseppe Conti, associate director procurement, Merck 31

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Ideas for Supplier Partnership Find motivated sponsors to establish a shared vision Bring the sponsors together to work through what it is that both parties see as important in the relationship and develop a shared vision. Spend time with the joint teams getting their input into the vision and opportunities for improvement. Build momentum by getting the joint teams collaborating on projects that can deliver quick wins buyer and supplier jointly celebrate and recognize the teams for those wins This really helps to build trust and reinforce the collaborative behavior the teams have demonstrated. Chris Holmes, head of supplier performance and innovation, Novartis International 32

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Value Creation 33 Build strategies to create holistic total cost management Enable efficiency Drive change and Demand management Common goals Capability Create long term value People, Process Line of Business Collaboration Technology Strategic Sourcing Strategy Category and Supplier Strategy Communication and Compliance Supplier Innovation Supplier Management Consortium Collaboration Build a community of value

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Moat Builders Moat builders 34 Not in my job description Not made here Winner takes all Thats my job