The Impact of Cloud on Procurement Presentation 30th may 2012

1. The Impact of the cloud on
procurement:
A Breakfast briefing on how new technologies are
changing the way companies do business
30th May at the ITC Livery Hall London

2. Agenda
• Welcome Dom O’Riley Andomise
• Views from the bridge Andy Mathieson Andomise
• Sourcing in the cloud Nick Drewe/Alun Rafique Market Dojo
• P2P Trends Tony Dawson Coupa
• Q and A Panel

3. The Cloud: A disruptive technology?
Some figures…
• Gerhard Gschwandtner: publisher of Selling Power, predicted that the
number of sales people in the US would fall from 18m to 4m by 2020
– “Death of a Salesman: Bob Apollo 2012”
• A Recent Gartner report projected that 85% of interactions between
businesses will be automated, without any need for human interaction
• 70% of the buying process takes place before the buyer and salesperson
meet
Roles and functions are changing and how we adapt will determine how
successful we are as individuals as well as companies

4. A View from the Bridge
Andy Mathieson
Chairman
Andomise

5. What is it?
Cloud computing refers to the delivery of computing and storage capacity as
a service to a heterogeneous community of end-recipients. ……….. wikipedia

6. What Changes for (ICT) Vendors?
• Planned subscription revenue vs
system/licence sale + annual maintenance
• Salesforce engage later in the sales cycle with
you (if at all).
• Marketing must inform the buyer at all points
of research & need
• Cost of sale driven lower
• “Zero touch” sales & service

7. Contract Suggestions
1. Get a wet-ink contract:
2. If you can, negotiate:
3. Termination: Protect & Safeguard
4. SLA:
5. Be sure you can get out easily:
Extracts from The Cloud | April 30, 2012 | CFO.com | US

8. Contracts
6. Make sure you can’t be bullied:
7. Demand full disclosure:
8. Guard against mergers and
acquisitions:
9. Maintain your right to audit:
10. Know who you’re dealing with:
The Cloud | April 30, 2012 | CFO.com | US

9. Sourcing in the cloud
30th May 2012
Nick Drewe, Alun Rafique

10. • Who are we?
• Cloud Software
o Adoption
o E-Sourcing

11. Who?
• New UK company based in the South West, focusing on
procurement “software-as-a-service”
• Founded by Bristol graduates with experience in
engineering, consultancy, software development and
procurement
• Currently offering e-Sourcing software with the following
characteristics:

12. • Who are we?
• Cloud Software
o Adoption
o E-Sourcing

13. Software adoption - Cost
Pay per use instead of ownership is not a new concept:
• Power by the hour
• Power-by-the-Hour is a term coined by Bristol Siddeley in the early
1960s
• PFI initiatives
• such as the FSTA – Future Strategic tanker Aircraft
Cloud software -Pay for what you use.

14. Software adoption - adaptation
• Traditional software
o clunky
o led by technicians
o You need to adapt
• New cloud solutions
o look at best practice
o customisable
o Adapts around you
Cloud software - Better fit

15. Software adoption - Usability
Traditional Software implementations - Where are the benefits?
End Users Managers Directors
Usability? Visibility Reporting
Efficiency? Control... Auditability
Difficulty – uptake?
New Cloud Solutions - little training, easy to use, fast ROI
- Users want to use it
Cloud software -
Bringing benefits to the end user

16. • Who are we?
• Cloud Software
o Adoption
o E-Sourcing

17. E-Sourcing in the cloud
The trends we have seen:
•A shift away from consultancy-based services
•Cloud applications used on top of ERP
•Inexpensive proof of concepts becoming the norm
•SMEs also want a piece of it
•Accessibility and on-demand opens up new markets
•Customers get a solution that fits around them

18. E-Sourcing in the cloud
Recommendations
•Increasing awareness and easy technology is reducing barriers
•Cloud enables a low risk, affordable way to try new approaches
•Best of breed is a viable alternative to an enterprise suite
•Use proof of concept to fund greater roll-outs
•e-Sourcing is a commodity

19. Aberdeen Group 2012

20. The Impact Of Cloud On
Procurement
Tony Dawson
Vice President, Coupa Software

21. Topics
1. Traditional Procurement Role
2. Impact of Cloud
3. Key Takeaways

22. The Traditional Procurement
Role
- Enforcer
Spend and Policy Investigators
The Gatekeeper

23. Traditional Approval Chain
• Based on chain of command
• Budget owner often not involved
• No domain knowledge of purchase
• No accountability

24. Urgent Approvals
 Information about purchases not readily available
 No time to make informed decision
 Lost negotiation leverage

25. Lack Of Visibility
 Unable to block redundant spend across departments
 Inability to leverage volume

26. Cloud Changes Procurement Role
-Orchestrator

27. How Does It Change The Role?
Key enablers to shift the mindset are the
ability to-
• Map approvals to budget ownership
• Manage by exception
• Gain early visibility in the process

28. Map Approvals To Budget
Ownership
Key Benefits
• Drives accountability
• Involves domain
experts in decision
making
Owners Provide
 What is being purchased
 What part of organization for
 What project/product for new product
development

29. Manage By Exception
Key Benefits
• Focus on high value
tasks
• Promotes
responsible
spending culture
Empower Employees
 Rationalized approval limits
 Self approvals for low $

30. Early Visibility In The Process
Key Benefits
• Spend avoidance
• Gain negotiation
leverage
Leverage Technology
 Insert yourself early in the process as an
observer
 Ready access to critical information e.g.
spend analytics, supplier info

31. Cloud Lowers TCO For Technology
Old Model
IT Support
Cloud
Maintenance
Upgrade
Professional Services
Software Fees
Year 3 Year 3
IT Support
Maintenance
Professional Services
Software Fees
Year 2 Year 2
Implementation
Hardware
Database/Middleware
Software Fees
Year 1
Year 1

32. Final Thoughts
Cloud enables Procurement to:
• Orchestrate rather than play cop
• Stretch comfort limits to be effective
• Enjoy the benefits including lower TCO

33. Q and A
• Panel
– Andy Mathieson Chairman Andomise Ltd
– Nick Drewe Director Market Dojo
– Alun Rafique Director Market Dojo
– Tony Dawson VP Alliances Coupa
– Nick Bacon Managing Director EVR