2. Today’s Session Challenges with traditional benchmark surveys Innovation that is changing reporting and benchmarking The 10 must measure metrics and KPIs How to build a benchmarking and measurement strategy

3. Who We Are Ravi Thakur Vice President of Services & Support Coupa Software Warren Ganda Corporate Purchasing Williams-Sonoma

4. About Coupa Empowering organizations to: Spend Less: Reduce maverick spending by ~33% Pay Less: Lower average order costs by ~25% Reduce Cycle Time: Reduce time to get goods by ~30% Reduce Operating Costs: Reduce time spent on purchasing / auditing by ~20% Improve Spend Predictability: Increase spend under management by ~20% Total Customers: 150+ including Platform Spend: More than $2.5B through 35,000 suppliers Spend Growth: 704% year-over-year System Availability: 99.999% uptime

5. About Williams-Sonoma The first store opened in 1956 Brand sells hundreds of products from around the world More than 250 stores nationwide Direct-mail business that distributes millions of catalogs a year Highly successful e-commerce site Dedication to customer service and strong commitment to quality

6. The Thing About Traditional Benchmark Surveys

7. They Can Tell You A Lot… Market metrics and trends Savings / spend 2 – 8% Quality: Rejection % 4.1% Cost of Processing per Order / Invoice (USD) PO: $217 average Spend Under Management 48% - 87% Req Approval Cycle (Time) 5.79 - 9.35 days Total Procurement Costs .34 -.38% of revenue, .80-.85% of spend (Source: AMR Research)

8. …but what can you do with it? High level data Limited segmentation ability by role or industry Insightful – but inactionable – findings Promotes the results of “best-in-class” But doesn’t tell you specifically how to get there Data quality Often collected 6-to-12 months prior to publication Self-reported, survey data subject to interpretation

9. A New Approach to Benchmarking & Measurement

10. Transactional – Not Survey – Driven Benchmarks Necessary to track your performance and demonstrate success Without true measurement, you cannot quantify results or define action plans Tremendous value to measure oneself against other organizations by industry, employees, spend, etc.

11. Establishing Transactional Benchmarks Benchmarks are only as good as the data being collected! The Cloud can help organizations incorporate benchmarks as a part of business flows Multi-Tenant architecture on one code line allows for the same set of measurements for the same metrics Instant scaling and load balancing for real-time data collection and calculation

12. Success in the Cloud

13. Innovation in the Cloud Traditional Dev Model Lengthy Independent Upgrades Difficult Independent Implementations Multiple Code Bases Non-viable long-term business model Cloud Dev Model Quick and Simple Upgrades Rapid Implementation One Optimized Code Base Sustainable Business Model VS Cloud Platform

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45. 10 Must Measure Metrics & KPIs

46. How To Demonstrate Success Spend management success measured by improvement in: Efficiency Removing road blocks that cause delays Eliminating need for manual intervention Driving user adoption of system Effectiveness Ensuring purchase policy compliance Moving toward 100% of spend under management Delivering savings to the organization’s bottom line

47. 10 Must Measure Metrics Efficiency Req & PO Approval Cycle (Time) Orders & Invoices Processed per FTE (#) Purchasing Operating Costs (USD) Days Payable Outstanding (DPO) ‘Touchless’ Procurement Effectiveness Savings / spend Quality - Rejection % Cost of Processing per Order & per Invoice (USD) Spend Under Management Customer Satisfaction Ratings

49. Provide pertinent information in requisition emails

50. Give real time budget information to approversRequisition Approval Cycle Time Requisition Approval Cycle Time Amount of time taken to approve a requisition from the time it is submitted Important to track the velocity of business

53. Enable invoice submission vis cXML or EDI

54. Utilize a supplier network to flip PO’s into invoicesNumber of requisition / invoice line items processed per FTE A large amount of requisitions / invoices should be processed by each FTE Should not touch each requisition / invoice, simply review exceptions

56. Streamline processes with advanced approval workflows, contract checks, etc.Total Cost of Procurement How much of your revenue and spend go to cover procurement costs, including: Soft costs: FTEs Hard costs: applications, hardware, maintenance costs, software, etc. TCO should be as low as possible

59. Move processes online when possible

60. Leverage workflow automation‘Touchless’ Procurement The efficiency of your procurement process Should require as little manual processing as possible Manual handling should be the exception, not the rule

62. Sole-source or find two or three vendors that can fit your needs

63. Negotiate with vendors to gain favorable pricing

64. Put controls in place to route employees to use the new negotiated pricingSavings as a % of spend Total amount saved through discounts, negotiated prices, avoidance, etc. across all spend Low percentage would indicate that certain areas of spend are not being covered by strategic activities

66. Ensure all spend goes through one centralized system

67. Include all spend: POs, expenses, indirect, etc.Spend Under Management How much of your spend is visible to the appropriate decision-makers Defines spend visibility and impacts the ability to properly control spend 100% spend under management means no spending surprises

69. Let customers provide input into the processCustomer Satisfaction Ratings How is the process impacting the ability to meet customer needs Employees get what they need to meet customer needs Negotiated pricing, discounts, etc. help keep customer costs low

70. Develop a Metrics Strategy Plan: Develop migration plan for the metrics with timeframes and milestones Scope: Define feasible and actionable scope, by supply chain, end-to-end Process: Pay attention to ownership, roles, responsibilities, and structure Culture: Manage the culture and motivation Tools: Invest in the tools that will enable repeatability Pilot: Use pilots to test the approach Tradeoffs: Beware of tunnel vision and understand the interdependencies Turning data into action: Identify conclusions using patterns and levers, prioritize results, and manage the communication Power through Process: Institutionalize the measurement program through a business process (e.g., S&OP/Procurement) to make it “sticky”

71. Williams-Sonoma Building a benchmarking and measurement strategy

72. The Benchmarking Challenge in Retail A distributed model Each brand operates “independently” Limited consistency in process, spend categorization and suppliers Difficult to access complete spend data by category

73. Benchmarking Today 3 BIG challenges No spend visibility Information “after the fact” No spend control Spend not approved prior to purchase Lost opportunity Limited ability to act based on insights available

74. A New Approach Cloud spend management One platform for all brands to manage spend Real-time data, benchmarks, alerts, action Starting with the end in mind Benchmarking is to key to long-term success Must be included as a part of upfront implementation efforts – you can’t go back after the fact to get the data you need!

75. Developing the Strategy Step 1: Identify Key KPIs Step 2: Establish a Baseline Step 3: Align Process, Technology & Measurement

76. Identify Key KPIs Spend category measures Commodities, supplier contracts, brands Efficiency measures Time / cost to process PO / invoice Effectiveness measures Savings vs. spend, rejection / approval rate Retail measures Store / warehouse inventory, sales vs. operating costs

77. Establish a Baseline Review: requisitions and categorize spend appropriately Calculate: spend by category, spend by budget, effectiveness metrics Review: existing processes and resource requirements Calculate: processing time, efficiency metrics Review: supplier contracts and spend compliance Calculate: % of spend that is on contract, preferred supplier savings, most favorable payment terms

78. Align Process & Technology… Stakeholder Requirements Supplier Relationship Management Category Planning Contract Negotiations & Management Requisition Issued Requisition Approval PO Issued to Supplier Items Received Purchase Need Invoice Matching Invoice Received Invoice Matched to PO Item Receipt Confirmed Invoice Paid

79. …and Technology & Measurement Stakeholder Requirements Supplier Relationship Management Category Planning Contract Negotiations & Management Requisition Issued Requisition Approval PO Issued to Supplier Items Received Purchase Need Metrics: Goods & Services, Suppliers, Amounts, Budget, Submission Timestamp Metrics: Accepted / Rejected Status, Approval / Rejection Timestamp Metrics: PO Number, Issue Timestamp, Supplier Transmission Timestamp Metrics: Receipt Timestamp, Supplier Ratings Metrics: Billed Amount, Budget, Invoice Timestamp Metrics: Final Amount Paid, Budget, Payment Timestamp Metrics: Discount Rate, Preferred Suppliers, Payment Terms Invoice Matching Database / Reporting Engine Invoice Received Invoice Matched to PO Item Receipt Confirmed Invoice Paid

80. Fully Equipped for Effective Spend Management Real-Time Executive Dashboards Up to the minute views into spend and budgets, real-time savings and performance reporting Real-Time Transactional Benchmarks Performance comparison with others in the market based on actual transactional data and trends Database / Reporting Engine Monthly / Quarterly Performance Review In-depth spend / performance review, identify areas for long-term improvement, adjust accordingly

81. Ambitious Goals & Targets Get 100% spend under management Regain spend visibility and control Drive 100% user adoption Phased rollout with 150 initial users, then company wide Cut process costs Continue to fine-tune for efficiency and resource optimization Consolidate to suppliers / category Reduce category overlap for the best deals and discounts Put an emphasis on expense management Drive savings not just through purchasing, but tighter expense management

82. A Plan for Success Baseline benchmark for comparison Data collection and metrics are a part of implementation Real-time data access through dashboards Periodic reports and reviews to identify areas for improvement

83. Q & A

84. THANK YOU! Ravi Thakur Vice President of Services & Support Coupa Software ravi.thakur@coupa.com Warren Ganda Corporate Purchasing Williams-Sonoma WGanda@wsgc.com