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1、Leveraging Technology Investments to Improve Internal Relationships&Elevate Procurement 01 I02 I03 IIntroductionSolution Review Spend Analysis Category Management Contract Management Sourcing eCatalog/P2PSummaryPage 03Page 04Page 07Page 08Page 11Page 12 Page 13Page 142Contents3Much has already been

2、written about how technology helps us collaborate with suppliers and external parties and how it has proved its value from the earliest EDI-enabled communications to modern eCatalog and supplier relationship management solutions.This paper,by contrast,explores the internal collaboration benefits tha

3、t can be achieved with Industry 4.0 technologies in greater depth,especially as they relate to cross-functional teams and stakeholders.It is a proven benefit of sourcing solutions,for example,that the procurement sourcing team collaborates on large bids that may span multiple regions or business uni

4、ts.By extension,what is the role of such technologies in engaging business partners and ultimately helping magnify procurements overall value proposition?We also want to understand how source-to-pay technologies elevate the traditional role of procurement.How well are they used to engage,collaborate

5、,and align with stakeholders.Procurement is often viewed as the“gatekeeper”to critical purchases because the processes and responsibilities of procurement are often invisible to business partners.How can technologies be leveraged to change this perception?The stakeholders hear,“I will work on that c

6、ontract”or“I can run a RFP to select a supplier for that spend category”and they are left to their own devices to understand what that entails.They seldom have visibility into the complexities of the process much less the risk mitigations,policy compliance and spend management under which these task

7、s are completed.Industry 4.0 tools are uniquely able to educate and inform your business partners while both increasing their visibility to your work and your credibility.01 IIntroduction4When I speak of Industry 4.0 technologies for the purposes of this paper,I am including the entire source-to-pay

8、 process which entails many sub-processes.I will focus on a few major ones,which does not preclude value created by other more specialized tools.They are:02 ISolution ReviewSpend AnalyticsSourcingeCatalog/P2PCategory ManagementContract Management5Spend analysis,contracts,sourcing and eCatalogs have

9、been around in various forms for at least a couple of decades.Category management,however,is relatively new from a technological focus.However,it is a well-established and essential part of procurements mandate to meet the needs of internal stakeholders,and has been,since Peter Kraljics 1983 study P

10、urchasing Must Become Supply Management which introduced the Kraljic Matrix.JAGGAER is a leader in this area and offers innovative solutions specific to the demands of category management.As we consider each of these solutions,we are going to ask who the critical business stakeholders are and their

11、perceived value specific to their interests.Then we will compare that to how procurement teams benefit from the solutions and seek to understand the mutual,overlapping gains.One should think of it as a type of Venn-diagram.This is helpful when developing a business case for these investments.You sho

12、uld know your audience and,since benefits that are unique to procurement will not necessarily be compelling to other functional areas,ultimately procurement efficiencies need to translate into business benefit.We should define solution users into two groups:first,the consumer users are those that de

13、pend upon the output of the solution they may be using standard dashboards or running custom reports,but they are not invested in how the solution is set-up or maintained and second,the primary users that are operating the solution to perform their work.Procurement users and their business partners

14、may be either type of user depending on the solution.For example,legal and procurement are Procurement ValueMutual ValueBusiness Valueprimary users of contract management solutions while the budget owners would likely be consumer users.The table below illustrates by solution type how stakeholders re

15、late to the solutions.It is not exhaustive,and every organization will have its own variations,but it is a good framework for considering the value proposition of various technologies.The first six groups are self-explanatory and refer to specific functional areas.The last three may span these and o

16、ther functional areas and it is worth clarifying exactly how they are used for our purposes:Budget Owners are anyone that has spend for which they are the deciders of the final supplier and product mix even if the process is managed by procurement.Supplier Managers are employees,both inside and outs

17、ide of procurement,that have a direct engagement and thus influence a suppliers relationship with the organization.They may be an official designated relationship owner or even a day-to-day contact involved in executing the services or goods purchased.Non-Professional Buyers are employees that are a

18、uthorized to make purchases but may not be budget owners.Typically,they have delegated responsibilities from the budget owner and/or have access to a p-card and/or an eCatalog solution.6ProcurementC-Suite/ManagementFinanceLegalITPlants/OperationsBudget OwnersSupplier ManagersNon-Professional BuyersS

19、pend AnalyticsCategory ManagementContract ManagementeSourcingeCatalog/Guided BuyingBusiness Stakeholders by Industry 4.0 TechnologiesPrimary UsersConsumer Users7Spend AnalyticsSolutions such as JAGGAERs Spend Analytics engine provide a flexible and integrated engine for leveraging your spend data to

20、 meet business requirements beyond those of a traditional ERP.This may be most apparent in decentralized organizations or ones that have grown through acquisition and may have multiple systems of record that require complex integrations but is equally applicable elsewhere.If we consider IT and finan

21、ce the primary users outside of procurement.The greatest value proposition may be that it creates a single source of truth around spend,much as an ERP was intended to do,while also allowing for more granular data enrichment to meet the unique needs of its various primary users.Finance needs to corre

22、late spend to the general ledger distinct from the multi-tier categorization procurement uses to manage its work.Meanwhile,IT can focus on integrating the data rather than fulfilling one-off requests for data reports.Additionally,by enabling interactive analysis that does not expose ERP directly the

23、se solutions reduce the risk of data errors or corruption.Finally,business leaders can easily understand their total spend by organizational unit,category,region and more which helps drive business strategy.Procurement can streamline its spend categorization exercise to aggregate spend by suppliers

24、and categories that easily map to finance and facilitates the conversations between these related functions.Furthermore,because much of the manual steps(both for IT and for procurement)are removed from the process the data is much closer to real-time.Large organizations may currently only complete t

25、he spend exercise once per year and take two-three months to do so making the data anywhere from 12-15 months old by the time it is being used to inform category strategy and sourcing roadmaps,not to speak of supplier relationship management benefits in terms of understanding the current spend with

26、any given supplier.Finally,this data is a critical input to sourcing roadmap development and by extension providing a realistic savings forecast to the business.Such clarity on savings opportunities increases procurements credibility with the business as it gets better and more accurate data.All par

27、ties benefit from process automation,agility and an agreed-to single source of truth for spend that can create a shared language that still maps to the data as utilized by the separate functional areas.For example,procurement may identify a savings for foil flexible spend that for finance it is simp

28、ly captured under packaging or even COGS.In turn,this reduces noise around savings discussions and target settings.Data visualization makes consuming the data and applying it to business decisions easier while close to real-time spend analysis enables agility and flexibility to respond to a market t

29、hat is shifting faster than ever.Category ManagementThe next solution area to explore is category management and JAGGAER differentiates itself from other providers here by providing a unique and compelling solution,that while designed for procurement,delivers value for the entire organization.Catego

30、ry management can be broken into three parts:creation;execution;and reporting/analytics.The first two traditionally are owned entirely by procurement and the latter is made available to business 89stakeholders.Industry 4.0 category management,powered by solutions like JAGGAERs Category Management,br

31、eaks these barriers and creates a collaborative feedback loop within the business that helps everyone align on a shared strategy and mutual vision.Historically category management is a process that exists entirely within the silo of procurement.First,the categories may or may not easily map to finan

32、cial reporting syntax nor do they always obviously align with operational business structures,and in fact may depend more on the procurement team structure and division of its work.Second,ensuring that business stakeholder needs,and risks,were clearly captured relied upon inconsistent and undocument

33、ed processes.Third,there was no easy way to cascade category policy from procurement to the business nor ensure feedback on the success of the policies.Finally,category strategy figures,from supplier count to spend to revenue impact,were often suspect by the business due to data lags in the spend an

34、alysis process used to inform such strategies.All of these challenges are addressed in modern Category Management solutions.As delineated in the Business Stakeholders by Industry 4.0 Technologies framework earlier,employees inside and outside of procurement may manage various aspects of a supplier.W

35、ith a category management solution in place,there is a shared feedback loop on expectations and performance and on policy and execution that creates a more consistent,unified message for the supplier.In turn,this prohibits suppliers ability to“game”the system,attempt backdoor sales,or play your orga

36、nizations employees off one another.It also facilitates faster response to emerging supplier risks as all parties have shared infrastructure for evaluating and communicating.This results in earlier identification of problems and quicker,orchestrated solutions.JAGGAER.COMCopyright 2021 JAGGAER All Ri

37、ghts Reserved1011Contract ManagementPerhaps the most ubiquitous solution is contract management.Like spend analytics,procurement likely does not own,even if it does provide input on,the selection of an organizations contract solution.Typically,legal is the owner with input from other functional area

38、s.In fact,early contract management solutions focused more on revenue contracts than buy contracts from which procurement is the happy beneficiary of a matured product offering.Legal has continued to benefit from this by increasing self-service opportunities and reducing demand on their expertise wh

39、ich in turn benefits the business by making it more responsive and agile while also increasing compliance to policies and reducing risk exposures.Early solutions focused on repository functionality(store and find)and likely included alerts of key contract dates,such as expiration or even renewal tri

40、ggers.As they evolved new capabilities such as user approval workflows with authority levels or version controls and clause libraries enabled and emphasized cross-functional collaboration.Integrations to digital signature tools,common word processors and even eCatalog/eProcurement moved these soluti

41、ons beyond the realm of legal and sales teams.As procurement has adopted these solutions,they have benefited from faster cycle times due to compliant empowerment which reduces bottlenecks by limited legal resources.Term triggers,risk assessment engines,and smart workflows all benefit procurement as

42、they do others.Procurement also benefits from the commitment and obligation triggers that support rebates,discounts and of course renewal terms.This drives contract compliance but more importantly to procurement stakeholders makes it easier to turn identified savings opportunities into achieved savi

43、ngs.Even more,companies like JAGGAER,offer integration into other procurement-focused modules such as eCatalog,category management,even eSourcing and others.Perhaps the most important benefit is the increased collaboration and transparency to stakeholders as they can see the number of redlines,versi

44、ons and the nuances through which procurement must navigate to execute a contract.Oftentimes a budget owner or non-professional buyer might not realize there was a high-risk term,or perhaps not how to counter the ask,and as they are made aware and have visibility to the iterations it helps to raise

45、their estimation of procurement as facilitator rather than gatekeeper.12eSourcingThere are multiple flavors of eSourcing and as procurement professionals,we should be aware of their various applications.At Pierpont Holdings we break these into three categories:portal-based,eAuctions,and big bid data

46、(optimization).JAGGAER offers solutions that fall into all these categories because they have different value propositions and use cases.Having the flexibility to apply the best technology based on your category strategy in consideration of your business partners needs and expectations empowers proc

47、urement.One of the greatest complaints about procurement is that it plays gatekeeper”and slows the business down from getting what it needs.”Seldom are we contracting our budget but rather we are helping marketing secure services,plants build up inventory or facilities stay clean and secure.Our busi

48、ness partners know what they want to and they often know who they want to buy from but they need procurement to review compliance and execute the contract.Then procurement may even come to them and say you have been buying,X,Y,Z from A,B,C and we want to competitively bid it.A lot of time the compet

49、itive process or what we do to be stewards of the companys resources,ensure policy compliance and mitigate potential risk is not transparent to the budget owners trying to make a purchase.Instead they feel that their job may be negatively impacted by procurement trying to complete its job.eSourcing,

50、when used as a collaboration tool,provides a win-win solution.Obviously,it streamlines the process and improves competition which equates to greater savings which reduces procurement effort.Many procurement teams leverage these solutions for knowledge retention as the historical bids help new catego

51、ry managers acclimate.Historically stakeholders may have been provided a timeline and updates as milestones were met,they may have even seen proposals and even helped review them,but it was time-consuming and still,procurements final analysis of the deal was likely to be completed with some opacity.

52、All eSourcing solutions increase transparency which is a major benefit for your business partners.Even portals allow for the stakeholders in real-time to see suppliers engagement and can include pricing summaries as well as scorecard processes.All of this helps automate the process,increase agility,

53、enable collaboration and get the right deal with efficiency.13eCatalog/P2PThe final Industry 4.0 technology of this paper has been around perhaps the longest and is known by many names,eProcurement,eCatalogs,P2P,or even guided buying.This discussion focuses on the process of a user finding a vendor,

54、placing an order and tracking a fulfillment for non-direct materials in a solution that guides buyers to the preferred and approved suppliers and goods.This drives behavior that increases spend under contract and allows procurement to develop contracts that meet business needs while providing busine

55、ss users a seamless means to request and acquire the goods and services they need for operation whether it is IT equipment or catering services.Since a non-professional buyer can be anyone from the recent hire looking to get a notebook,to an executive wanting to cater a lunch,to a field sales team m

56、ember looking for promotional items,this solution touches every part of the business.It must be inherently intuitive to use,or it becomes a barrier to compliance.14With over 25 years experience in this space,JAGGAER has one of the most comprehensive solutions that can handle all types of spend and e

57、ven requests that require redirection to another interface such as booking travel.Users can make their requests and the system guides them to either a list of potential providers or a link to the proper page for that request.These are big,complex programs and require management by procurement in col

58、laboration with IT to make sure that the information is up to date and accessible.In return,procurement has visibility into buying behaviors including understanding what business stakeholders are searching for,not just what they ultimately buy.Robust systems allow consumer users to request new suppl

59、iers be added and provide visibility to procurements process for allowing(based on company policies),or not,should they have a unique purchase.This creates more dialogue and exchange between procurement rather than encouraging the buyers to just ask forgiveness.If they know there is a pathway for th

60、em to achieve their objective,they are much more likely to work within the policies.Finance teams,specifically Accounts Payable,often see a dramatic reduction in demand as smart workflows and approvals allow for all but the exception POs to quickly and accurately be processed while providing visibil

61、ity to the buyer.Even three-way matching is enabled with the actual buyer acknowledging receipt of goods or services.Thanks to eCatalog solutions,both procurement and AP teams team can elevate their role from tactical paper management to focus on more strategic activities while still providing the s

62、ervice levels the business expects.Companies like JAGGAER,continue to innovate and invest in these solutions using Artificial Intelligence and big data analytics to enhance and evolve these solutions.03 ISummary15There are certainly additional solutions available through partnerships with companies

63、like JAGGAER that can help drive collaboration and elevate the role of procurement.Examining each of these solutions and the related processes demonstrates that procurement truly touches all parts of the business and collaboration with so many different stakeholders is critical to your success.By ex

64、tension,there is a correlation between how easy it is to collaborate with procurement seeing the value delivered by procurement.Technology facilitates this by making it easy for stakeholders to understand the process,track progress and anticipate outcomes.This discussion has touched on a few of the

65、major Industry 4.0 technologies enabling procurement including the newest area of category management,but it is worth looking at your organizational needs,its digital journey and other areas such as supplier management.All of these improve process speed and transparency and certainly,each of these s

66、olutions increases procurements effectiveness at delivering savings,contracts,and stable supply.However,there is a risk with all these solutions that they may appear to eliminate the need for professional buyers.Therefore,it is critical that in rethinking the paper process we use digitalization as a

67、 chance to enhance cross-functional collaboration and elevate procurements value proposition.We are no longer merely running a bid and providing the outcomes,we can and should anticipate,advise and advance business objectives.Nor are we simply aggregating spend and negotiating volume discounts we ar

68、e developing deep market and organizational insights that help orchestrate and optimize our resources to maximize returns.CollaborationWith All Suppliers EmbeddedIntelligenceAnalyze,Digitize and OptimizeQuality Management Supply ChainCollaboration JAGGAER ONE PLATFORMData Management,Integrations,3rd

69、 Party Systems,Innovations,JAGGAER University Execution:ControlyourspendStrategy:PlanyourspendUserInventory Management Invoicing eProcurementContractsSourcingSupplier ManagementCategory ManagementSpend Analytics16About the AuthorNila LaVanaway Charles is the Chief Executive Officer at Pierpont Holdi

70、ngs,LLC.Nila has worked in supply chain,procurement and supply chain technology since 2004 across a wide range of industries from consumer electronics to medical devices.She spent several years as a subject matter expert and consultant on technology adoption related to supply chain and procurement f

71、unctions.In 2019 she became CEO of Pierpont Holdings which provides consulting and services related for source-to-contract optimization through process efficiencies and technology.About JAGGAERWe drive customer value for buyers and sellers through our global connected network served by offices locat

72、ed inthe Americas,APAC,Asia and EMEA.JAGGAER develops and provides comprehensive source-to-settle SaaS-based solutions,including advanced Spend Analytics,Category Management,Supplier Management,Sourcing,Contracts,eProcurement,Invoicing,Supply Chain Management and Inventory Management.Theseall reside

73、 on a single platform,JAGGAER ONE.JAGGAER has pioneered spend management solutions for more than 25 years and continues to lead the innovation curve by listening to customers andstakeholders in all industry sectors,public services and academia.About Pierpoint HoldingsAbout Pierpont Holdings PIERPONT

74、 HOLDINGS LLC is a holding company that actively pursues beneficially disruptive technologies that have the potential for revolutionizing business.We focus first on Business to Business(B2B)Procurement since it represents the next largest opportunity after sales at over$9 USD trillion per year for t

75、he US alone.Finding new opportunities for product innovation,savings and cash flow improvements are drying up for old-line mature organizations.With New Technologies and our Proprietary S2C Processes,Pierpont can help your business increase the impact on every savings opportunity.17Contact UsWORLD H

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