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4 Key Procurement Objectives for 2014

This survey was aimed at understanding the business/procurement objectives and challenges anticipated by the webinar attendees in the year 2014.

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4 Key Procurement Objectives for 2014

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  1. 4 Key Procurement Objectives for 2014

  2. 4KeyP for201 Duringthe recentWeb KPIsfor2014&beyon Zycus asmallsurvey attendedthe webinar objectivesandchallen resultscanbeseenin Procurement Obje 1 Improving Thetoptwoenterpris betterRevenueGrow Withanobjectivetoiisimportantthatproc rocurementObjectives 4 inar‘Real-time ProcurementBenchmarking:InsightsintoKeyIssues& d’,heldonDec12,2013,inassociationwithISM,TheHackett Group& was conductedamong the 861procurementprofessionalswho . Thissurveywasaimed atunderstandingthe business/procurement gesanticipatedbythe webinarattendeesinthe year 2014.Thesurvey thisinfo-graphic:Driving DownTheProcurement2014Lane. , ctivesfor2014 Profits eobjectivesfor2014amongprocurementprofessionalsare toachieve th(40.9%)andtoImproveProfitMargins(44.2%). mproveprofitmargins,it urementfocus on identifyingsavingsopportunitiesby developingvisibilityintothe directand indirectspendofthe organization.Oneofthe Improve Margins 44.2% Revenue Growth 40.9% prevalentcostfactorsinmostbusinessesispurchased goodsandservices.Reducingthe costsofpurchased goodsandserviceshasadirectimpactonacompany's profitmargin.60%ofthe procurementprofessionals revealedthatreductionandavoidanceofpurchasing costsare the toptwoprocurement-relatedissuesthatneedtobeaddressedin2014.

  3. Thesurveyresultsals present46%oforg lessthan40%ofthe influencedformally Companieshave 97 spendformally influen 2013Hackett Groups Theother criticalpro whichneedstobead expandingawareness line Theseissuesmaybea i.InvestinginSkilled skillsand overallknow canenableprocureme fromsuppliers ii.LeveragingProcure orevealedthatat anizationshave irindirectspend . World-Class %oftheir indirect ced,asperthe tudy. byWorld class Companiesin 2013 IndirectSpendformallyinfluenced curementissue, dressedin2014accordingto45%ofthe procurementprofessionalsis, ofthe importanceofprocurementanditsinfluenceonthe bottom . ddressedbyadoptingthe followingprocess: Professionals:Investinginskilledprofessionalswithstrongnegotiation ledgeoftheindustry,the rawmaterialscostandsuppliers'capabilities nttomasterthenegotiationsand get bestdealsforthe organization . mentAutomation:Technologycanenablehighervisibilityand control over differentfacetsofthe procurementprocess,such as:sourcingactivity,supplierevaluation andselection,contracttermscompliance,overall spendetc.,thus enablingtimely identificationofbottlenecksand savingsopportunities.

  4. Forachievinghighvisi procurementorganiza analysissolution.Asp spend,increasescom performance-improve  Embeddingspend  Automatingandac  Synthesizingspen supply manageme Tolearnaboutthe Zy OBSER fromth Thetop2enterp for2014are a.RevenueGrow b.ImprovedProfi bilityandidentifyinggreatersavingsopportunities,best-in-class tions are leveragingprocurementautomationbyimplementingaspend endanalysissolutionfacilitatessourcingperformance,reducesmaverick plianceandgeneratessavings.Spend Analysis featuresexpandthe menthorizonby: dataclassificationintoreal-timebuying processes celeratingthe identificationofsavingsopportunities ddatawithglobalmarketintelligencetoinform competitivesourcingand ntstrategies cus' SpendAnalysisSolution,ClickHere VATION esurvey ACTION toimplement rise objectives Investin th(40.9%) and ts(44.2%) a.QualifiedPeople b.EfficientProcesses c.EffectiveTechnology OBSERVATION fromthesurvey ACTION toimplement Acriticalissuetobeaddressedin 2014 a.Formallyinfluencingthe indirectspend Adoptthefollowing Practices a.InvestinSkilledProfessionals b.Leverage Procurement Automation

  5. 2 Improving Accordingtothe surv significantability to Hackett Groupstudy data bysupplier ona asp current Signi Lackofaholistic view patternsacrosssuppli Visibility eyonly40%ofprocurementprofessionalsrevealedthatthey have viewspendsdata bysupplier onanenterprise-widebasis.Asperthe , 89%ofWorldClassCompanieshadsignificantability to viewspends nenterprise-widebasisin2013. er study forWorld Class Companies ficantabilitytoview spendbysupplier isamajor impediment toidentifyingsavingsopportunities,spend ers,utilizationofcontracttermsand,moreimportantly,trackingthe performanceofkeysuppliers. Best-in-classorganizationsare leveragingtechnologytoprovideseamlessinformationacross the variousdimensionsofthe procurementfunction,andnotjustgettingvisibilityintosupplier spenddata.AnintegratedSource-to-Paysolutionassistsprocurementprofessionalswitha singleviewacrossthe variousstagesofthe procurementprocesses. Someofthekeybenefitsofintegratingprocurementprocessesare: I.BetterVisibility:Anintegratedviewofspendanalysiswithsuppliermanagementwillprovide bettervisibility,notonlyintermsofspendpersupplier,butalsosegmentedpercategoriesand savingsrealizedpersupplier.Informationlikethiscanbetterenableprocurementprofessionals tosharpentheir categorysourcingstrategies,andreapbetterresultsfromtheir sourcing initiatives,leadingtosavingsmorequickly.

  6. ii.MonitorMaverickS spendanalysissuppli viewon-contractand onlyhelps withtrackin termsAlso ifcertain procurementprofessi (andthe discountagr withthe abilitytovie OBSER fromth Over60%ofres significantinfor intospenddata enterprise-wide pendand RealizebetterSavingsOpportunities:Withthe integrationof ermanagementandcontractmanagement,organizationswillbeableto off-contractspendsmadeineach categorywitheachsupplier.Thisnot gofmaverickspending,butalsohelps monitorsuppliersonkeycontract spendisoff-contractwithacertainsupplier,the organizationorthe onalraisingthe PurchaseOrder willbealertedregardingthe contract eed uponinthe contract),enablingrealizationofsaving opportunities wenterprise-wide-datainafewclicks. , . , VATION esurvey ACTION toimplement pondentslack mationvisibility bysupplieronan basis IntegrateProcurementprocesses to a.GainBetterVisibility b.Monitor MaverickSpendand RealizebetterSavings Opportunities

  7. 3 Addressin Accordingtothe surv cited strategicsourci capability-relatediss anapproachtoprocur needsofthe organizat suppliermarket TheimportantSteps 1. Analyze the requir 2. SearchforSupplier 3. RequestInformatio 4. Requestproposalo 5. EventRoll-out 6. Analyze SupplierIn 7 Awardthe contract Togetadetailedunde the e-book‘7StepGu Thesurveyresultsals gStrategicSourcingasakeycapabilityrelatedissue eyresults,45%ofrespondents ngasthe topprocurement uein2014.StrategicSourcingis ementwherebythe business ionare matchedwiththe 45% CitedStrategicSourcingas topcapabilityrelatedissue in2014 . ofStrategicSourcingare: ementforsourcing–identifyspend s n rquotation formation andbegin totracksuppliers . rstandingofthe above-mentionedstepsofStrategic Sourcing, idetoStrategicSourcing’. referto oshowthatonly29%of respondents,have 80%-100% ofannual RFX'sdoneelectronically.Thislowfigure indicatesthatmany organizationsstillneedto make betteruseoftechnology andadoptane- Sourcingsolutionforsourcingautomation.As perTheHackett Group,World-Class Companieshandled85%oftheir RFXs electronicallylastyear. forWorld Class Companiesin 2013 eRFXs

  8. Benefitsofe-Sourcin I.Reducescycle time: providesoutputinas structuredprocessred ii.Avoidbottlenecks: organizationcaneasil Thishelps incuttingc Tolearnaboutthe Zy OBSER fromth TopProcuremen relatedissuefor Sourcing,asme respondentsdur study g: Awell-definedandautomatedsourcingprocessiseasy tomanageand hortertimeframe.Accordingtoarecentstudybythe AberdeenGroup,a uces the sourcingcycletimeby25% -40%. Withhighervisibilityandcontrolover the sourcingprojects,the yidentifythe bottlenecksandtakepromptmeasurestoresolvethem. ostsandrealizingsavingsopportunities. cus' e-SourcingSolution,ClickHere VATION esurvey ACTION toimplement TheimportantStepsofStrategic Sourcingare: a.Analyzetherequirementfor sourcing–identifyspend b.SearchSuppliers c.RequestInformation d.Requestproposalor quotation e.EventRoll-out f. AnalyzeSupplierInformation g.Award thecontractand begin totracksuppliers tcapability- 2014isStrategic ntionedby45%of ingthecurrent OBSERVATION fromthesurvey ACTION toimplement Over70%ofrespondentshandle lessthan80%oftheirannual RFX'selectronicallyattheir organization Adoptane-Sourcingsolutionfor sourcingautomationand reapthe following benefits: a.Reducecycletime b.Avoidbottlenecks

  9. 4 Value reali 43%ofrespondents activities.Theseactiv ManagementandSpe SupplierManagement offersthe followingbe byreducingcycletime intohowtobestlever streamlineprocesses Thesurveyresultsals procurementprofessio formalscoringmetho selectfewstrategics Aformal scoringmeth andweaknessesofthe have bettervisibilityin zationthroughnon-sourcingactivities cited that10%-50%ofprocurementvalue arisesfromnon-sourcing itieslargely consistofSupplierRelationshipManagement,Contract ndAnalysis. canhelpcompanieshave bettervisibilityintosupplierdeliverablesand nefits:removalofhidden costdrivers,increaseincompetitiveadvantage s,inducingcharge-backsfornon-conformingmaterial,gaining insight age the supply base,and LackFormalScoring 1 2 . Methodology orevealedthat60.2%of nalseithertotallylacka dology orhave itonlyfora uppliers. 0 6 % odology forsuppliershelps the organizationunderstandthe strengths irsuppliers.Supplierperformancemanagementcanhelpcompanies tosupplierdeliverables.Scorecardscanalsohelpcompaniesdevelop their suppliersandhelpthemovercometheir weaknesseswhichisbeneficialtoboth the companiesandthe suppliers.Organizationscanleveragesuppliermanagementprograms whichhelpinsettingupkeyperformanceindicators,capturedatainputs,setstakeholder surveysandmanagesupplierscorecards. Benefit ofusingaScoringMethodologyforSupplierPerformanceManagement: DevelopsStrategicRelationships:Based onthe scorecards,organizationsmaychooseto benchmarksupplierswiththeir peersinthe industry,executesupplierdevelopmentprograms whichcanhelpthe organizationimprovesupplierperformance,product/servicequality, reduce costandattainhighervalue fromthe suppliers.Procurementcanthus leverageandenhance strategicsupplierrelationshipsandalsohelpreducebusinessrisks.

  10. Tolearn moreaboutS TolearnaboutZycus OBSER fromth Over60%ofpr professionalsha aformalscoring eitherdoesnot extendedand m aselectfewstra Conclusion Theincreasinglycomp objectivesrequirespr procurementtechnolo upplier Management,read'What, WhyandHowofSupplierManagement’ 'SupplierManagementSolution,pleaseClickHere VATION esurvey ocurement vedisclosedthat methodology existoris aintainedonlyfor tegicsuppliers. ACTION toimplement Aformalscoringmethodologyfor suppliershelpstheorganizationto a.Understandthestrengthsand weaknessesoftheirsuppliers& b.DevelopStrategicRelationships lexbusinessenvironment,coupledwithevolving procurementneedsand ocurementtofocus onthe rightpeople,processesandtechnology. The gylandscapehasevolvedtoprovidecutting-edgetechnologyformeeting , the requirementsatdifferentpointinthe procurementcycle.Theyear 2014requiresthe procurementfunctiontomovetowardsprocessstandardization,automationandintegrationfor enterprise-wideinformationavailabilityandtoovercomevariouscapability-relatedissues. Read AMD’scasestudytounderstandhowAMDleveragedthe ZycusSuite KnowMore ToknowmoreaboutProcurementAutomationSolutionsandthe value thatthe Procurement AutomationSuite candeliver toyourorganization,orforanyotheradvice onprocurement- relatedissues… Feelfree toContactZycusforhelpandclarifications.

  11. AboutZycus Zycusisdedicatedtopositioningprocurementattheheartofbusinessperformance.Withourspiritof innovationandapassiontohelpprocurementcreateeven greaterbusinessadvantages,wehave evolvedourportfoliotoacompleteSource-to-Paysuiteofprocurementperformancesolutionswhich includes-SpendAnalysis,eSourcing,ContractManagement,SupplierManagement,Financial Savings Management,andProcure-to-Pay. BehindeveryZycussolutionstandsanorganizationthatpossesses deep, detailedprocurement expertiseandasharpfocus on being responsivetocustomers.Weare alarge —600+ andgrowing —companywithaphysicalpresence invirtuallyeverymajor regionoftheglobe.We see each customerasapartnerininnovation andnoclientistoosmalltodeserveour FINANCIAL SAVINGS MANAGEMENT PROCURE- TO-PAY SPEND ANALYSIS attention. Withmorethan200solution deploymentsamongGlobal1000clients, wesearchtheworldcontinuallyfor procurement practicesproventodrive competitivebusinessperformance.We incorporatethesepracticesintoeasy-to- use solutionsthatgiveprocurement teams thepower togetmoving quickly—fromany pointofdeparture—andtocontinueinnovating andpushingbusinessandprocurement performancetonewheights. ZYCUS SOURCE-TO-PAY SUITE SUPPLIER MANAGEMENT E-SOURCING CONTRACT MANAGEMENT NORTH Princeton:103CarnegieCenter,Suite 201Princeton,NJ08540Ph:609-799-5664 AMERICA Chicago:5600NRiverRoad,Suite 800Rosemont,IL60018Ph:847-993-3180 Atlanta:555North Point CenterEast;4th Floor,Alpharetta,GA30022Ph:678-366-5000 EUROPE London: OfficeNo335,400ThamesValleyParkDrive,ThamesValleyPark, Reading, Berkshire,RG61PTPh:+44 (0)1189637493 ASIA Mumbai:PlotNo.GJ–07,Seepz++,SeepzSEZ,Andheri (East),Mumbai-400096Ph:+91-22-66407676

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