Unlock True Contract Management & Maximize Return on Investment

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Information about Unlock True Contract Management & Maximize Return on Investment
Business & Mgmt

Published on March 5, 2014

Author: Ariba

Source: slideshare.net

Description

It really takes two to tango. Managing contracts was never meant to be within the four walls of your enterprise. Collaborative contract management today offers organizations opportunities to mitigate those countless risks that haunt supply chain operations.

During this session, contract management professionals share their experiences with how working in tandem and on a real-time basis with their counterparts has helped them to identify and address compliance leakages, supply chain risks, and savings opportunities.

Learn more about Ariba LIVE at http://spr.ly/LIVE2014LV-d

Unlock True Contract Management and Maximize Return on Investment Speakers • Phyllis Sills – American Red Cross • John deBrun – Top Source LLC • Craig Fischer – Las Vegas Sands Moderator: • Jennifer Gassaway – Ariba, an SAP Company #AribaLIVE @ariba

Agenda • • • • 2 Introduction Panel Discussion Key Takeaways Q&A © 2014 Ariba – an SAP company. All rights reserved.

The Panel Team Speakers: Phyllis Sills – American Red Cross John deBrun – Top Source LLC Craig Fischer – Las Vegas Sands Moderator: Jennifer Gassaway 3 © 2014 Ariba – an SAP company. All rights reserved.

Contract Lifecycle Management Top Pressures Within Procurement Risk management, visibility, and compliance concerns are paramount Top 5 Top 5 Reasons Cited Reasons Cited Establish better control of enterprise spend 66% Poor visibility of contractual relationships 44% Pressure to reduce supply and supplier risk 40% 37% Need to improve compliance Poor visibility into supplier performance on contracts 34% Source: Aberdeen Group, Procurement Contract Lifecycle Management, January 2012 0 4 “Contract Management technology provides an opportunity for procurement organizations to take contract maintenance out of the hands of legal counsel, while allowing them to focus on increasing efficiency and driving cost savings.” 10 20 © 2014 Ariba – an SAP company. All rights reserved. 30 40 50 60 70

Ineffective Contract Lifecycle Management Results in Increased Compliance Risks 5 © 2014 Ariba – an SAP company. All rights reserved.

Contract Management Automation Lead to Better Visibility and Compliance Source: Aberdeen Group, Procurement Contract Lifecycle Management, January 2012 6 © 2014 Ariba – an SAP company. All rights reserved.

- - - And Drive Superior Procurement Results and Maximize ROI Source: Aberdeen Group, Procurement Contract Lifecycle Management, January 2012 7 © 2014 Ariba – an SAP company. All rights reserved.

Agenda • • • • 8 Introduction Panel Discussion Key Takeaways Q&A © 2014 Ariba – an SAP company. All rights reserved.

Unlock True Contract Management and Maximize Return on Investment Phyllis Sills, PMP American Red Cross #AribaLIVE

American Red Cross The American Red Cross prevents and alleviates human suffering in the face of emergencies by mobilizing the power of volunteers and the generosity of donors. Vision: The American Red Cross, through its strong network of volunteers, donors and partners, is always there in times of need. We aspire to turn compassion into action so that... ...all people affected by disaster across the country and around the world receive care, shelter and hope; ...our communities are ready and prepared for disasters; ...everyone in our country has access to safe, lifesaving blood and blood products; ...all members of our armed services and their families find support and comfort whenever needed; and ...in an emergency, there are always trained individuals nearby, ready to use their Red Cross skills to save lives. 10 © 2014 Ariba – an SAP company. All rights reserved.

The Starting Point • • • 11 2007 - 2009 Strategic Sourcing Organization implemented 2009 - 2011 – Search began for an end-to-end Supply Chain Management System May 2012 – ReQuest, the Red Cross Ariba solution was implemented! © 2014 Ariba – an SAP company. All rights reserved.

Ariba Solutions Deployed • • Ariba Solutions Implementation was a rapid deployment to the NHQ, Chapters, Disaster, In-Kind and non-regulated Biomedical lines of business. The roll-out moved us from paper to online ordering overnight. Full Suite of solutions: Supplier Information Procure to Pay Sourcing Professional Contract Compliance Contract Professional Integration of solutions to current data sets (Oracle, data warehouse, etc…) Order Management Process changes necessary to implement solutions Supplier Performance Management Supplier Enablement Spend Visibility 12 © 2014 Ariba – an SAP company. All rights reserved.

The Numbers • • • • • 13 1.3 billion = Sourceable spend 85-90% = Spend under Management 7,500 Suppliers 350 Suppliers Enabled to-Date 25 Catalogs are Live © 2014 Ariba – an SAP company. All rights reserved.

Challenges – Across the Enterprise • • • 14 Prior to ReQuest - Procurement was largely a paper operation Until 2012 - Chapters were unique entities with their own ordering processes and financials Some LOBs were/are change averse © 2014 Ariba – an SAP company. All rights reserved.

Challenges – Supply Chain • Contracts Moved to Ariba – we had all of our contracts together at last Training happened – Supply Chain Team – A lot of information but not a clear understanding No - Migration Plan for existing contracts. Direct impact on effectively moving forward with Supplier Enablement. • • • 15 Small team for support Accrual issues Contract Compliance vs. Purchase Orders © 2014 Ariba – an SAP company. All rights reserved.

Tackling the Challenges • Contracts Providing additional training for Supply Chain Team Developed migration plan for existing contracts. Direct impact on effectively moving forward with Supplier Enablement. Still struggle with setting up some contracts • • Small team for support Accrual issues Contacted Ariba and began a Crash coarse in Contract compliance resulting in training for Sourcing Managers Modified existing reports and developed additional reports to reflect accruals for the Red Cross Addressing issues as encountered 16 © 2014 Ariba – an SAP company. All rights reserved.

Change Management – still a challenge “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking." Albert Einstein 17 © 2014 Ariba – an SAP company. All rights reserved.

Unlock True Contract Management and Maximize Return on Investment March 2014 #AribaLIVE

Agenda • • • • 19 Introduction Panel Discussion Key Takeaways Q&A © 2014 Ariba – an SAP company. All rights reserved.

Agenda • • • • 20 Introduction Panel Discussion Key Takeaways Q&A © 2014 Ariba – an SAP company. All rights reserved.

TopSource Overview TopSource is a wholly owned subsidiary of Topco Associates LLC and provides not-for-resale (NFR) spend management. For 65 years, Topco has leveraged the scale with its members in procurement to lower product costs. For-Resale Programs          21 Frozen Dairy/Bakery Grocery HBC/GM Rx Fresh Meat Branded Meat Produce National Brands © 2014 Ariba – an SAP company. All rights reserved. NFR Spend Programs            Construction Equipment Hired Services IT Telecom Logistics & Distribution Marketing Office Products & Supplies Packaging & Supplies HR Benefits Fuel Utilities

TopSource Overview Our customer network represents collectively over $150 billion in annual retail sales which includes over sixty grocery retailers, drug stores, wholesalers, food manufacturing companies, food services, restaurants, and other retail businesses. 22 © 2014 Ariba – an SAP company. All rights reserved.

TopSource Overview TopSource manages not-for-resale spend on behalf of our wholesale and retail customers. In addition, TopSource conducts auctions on behalf of all customers across for-resale and indirect spend. Spend Management eSourcing Center Of Excellence Supplier Management    Retail and Distribution Strategic Sourcing Professionals Sourcing Leverage – over $13 Billion in potential indirect spend Proven sourcing process meshed with enabling technology (Spend Analytics, eSourcing, and Contract Management)      Dedicated eSourcing / Auctions team with wide ranging experience Mature process and capabilities Mature and Strategic Supplier Scorecarding Process Financial Risk Assessment Price Change Management

Strategic Sourcing and Contracting Process TopSource utilizes a number of esourcing technology tools to conduct its strategic sourcing process more effectively and to institutionalize their learning. Sourcing • Utilize Discovery Auction  Negotiate price  Standardize contract creation • Issue RFx and collect responses  Maximize • Store profile information  Increase • Create category specific templates • Drive process adoption 24 Contract Management © 2014 Ariba – an SAP company. All rights reserved. competition  Generate notifications to buyers and teams  Consider alternative price scenarios  Measure supplier performance  Store all contract related documents speed to savings Supplier Management  Provide robust search and reporting  Drive continuous improvement  Monitor supplier financials  Manage price changes

Challenges to Ensure Optimal ROI Compliance/People Consistent message from leadership Change management/incentivize use Diagnose reasons for non-compliance Take the easy way out Disagree/rogue/maverick Create training process for practice 25 © 2014 Ariba – an SAP company. All rights reserved.

Challenges to Ensure Optimal ROI Process Simple yet thorough process Initial upload – remember amendments Leads to dual processes and confusion Look for bottlenecks Look for ways to make amendments easier Run health check reports Have designated go to resource for questions Create a quick Legal Approval process 26 © 2014 Ariba – an SAP company. All rights reserved.

Results • • • • • 27 100% compliance within TopSource Over 1,300 contract workspaces 11 different processes for different departments, with associated super users Multi-location benefits Corporate council mandated the use of Ariba contracts throughout entire Topco organization © 2014 Ariba – an SAP company. All rights reserved.

Unlock True Contract Management and Maximize Return on Investment Craig Fischer Las Vegas Sands #AribaLIVE

LAS VEGAS SANDS CORPORATION (LVSC) Las Vegas Sands Corporation (NYSE: LVS) Leading global developer and operator of destination integrated resorts (IRs) Properties include Las Vegas, Macao, Singapore, and Bethlehem (PA) Net Revenue for the past 6 years from LVSC’s 2013 10-K Year Net Revenue 2008 2009 2010 2011 2012 2013 $4.38B $4.56B $6.85B $9.41B $11.13B $13.77B Confidential 29

VALUE OF A CONTRACT MANAGEMENT SOLUTION TO LVSC Controls Tool to ensure compliance to the contracting process • Global system of record (SOR) for all LVSC contracts • Ensures that Legal and Sr. Management approval workflows are followed • Facilitates the appropriate signature through eSignature capability and automatic storage of signed document • Access control that allows users to see contracts related to their areas of responsibility • Develop and quantify process improvements Confidential 30

GLOBAL SYSTEM OF RECORD (SOR) Global System of Record (SOR) Contract Management system that has: • Standard processes • Easy access to contracts details and analytics • Allows for compliance audits Legal Entity or Property Date of Deployment Contracts 2012 Contracts 2013 Contracts 2014 Corporate April 2012 276 444 123 Bethlehem May 2012 64 98 12 Las Vegas June 2012 325 885 116 August 2012 287 1,087 160 June 2013 1 848 403 953 3,362 814 Marina Bay Sands Macao Yearly Totals Totals Confidential 5,129 Contract Data as of February 27th Contract Data as of February 27th 31

PERCENT OF SPENDS VS. CONTRACTS Confidential 32

REQUIRED APPROVAL WORKFLOWS • Required Approval Workflows 3 Types of Approvals are used at LVSC:  Contract Request approval by Department Vice-President  Legal review of the contract  Sr. Management approval of tentative contract - Legal review completion is a predecessor to Sr. Management approval • Approval routes can be built on many factors such as dollar amount, General Operations vs. Capital Expense, etc • Approvals can be completed by email; email can be configured with document/summary information • Active Approval report in analytics allows for approval follow-up Confidential 33

EXAMPLE OF CONFIGURED APPROVAL EMAIL Example of Configured Approval email Confidential 34

ESIGNATURE CAPABILITY Integration of eSignature Capability • Solution configured for required LVSC signer to sign a contract – • Fully supported by the eSign Act of 2000 in the USA – • Completed contract is sent to all parties involved and uploaded automatically to the contract in Ariba Various countries have similar laws In use since February of 2013 for LVSC’s USA operations – – Deployed in Singapore in December of 2013 Over 1,200 contracts signed through eSignature • Signer can choose to sign electronically or physically • LVSC underestimated the value of eSignature. Applying it to other areas for efficiency gains Confidential 35

ACCESS CONTROL TO INFORMATION Access Control to contract information in Ariba Control can be set from the lowest of levels to the highest: • Low – Individual document or contract • Med – Department contracts • High – Property Access Control field is available in analytics for compliance checks Confidential 36

PROCESS IMPROVEMENT Process Improvement due to available contract data Contract Request Approval by VP switching to a Notification • Audit of approval data show no rejections by VPs Ability to do Self-Audits of contracts • Analytics can pull a majority of the audit data points Identify opportunities for Master Contract/Amendments vs. multiple contracts identified through data exploration Automated contract reporting for regulatory filings Many other ideas to explore… Confidential 37

Thank you Q& A Contact information: Jennifer Gassaway Product Marketing Manager E: jennifer.gassaway@sap.com 38 © 2014 Ariba – an SAP company. All rights reserved.

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