eSourcing: Picking up where ERP and eProcurement Fall Short - PowerPoint PPT Presentation

Loading...

PPT – eSourcing: Picking up where ERP and eProcurement Fall Short PowerPoint presentation | free to view - id: 1525af-MzJmN



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

eSourcing: Picking up where ERP and eProcurement Fall Short

Description:

1. ????????? TASKCO Corporation. Info_at_taskco.com ... Picking up where ERP and. e-Procurement Fall Short. June 1, 2001. ??? ??. ?????. 2002/03/16 ... SFA / CRM ... – PowerPoint PPT presentation

Number of Views:726
Avg rating:3.0/5.0
Slides: 70
Provided by: roberth95
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: eSourcing: Picking up where ERP and eProcurement Fall Short


1
e-SourcingPicking up where ERP and
e-Procurement Fall Short

64157 ??????????? ????????? 2002 Spring, Week 4-1
??? ?? ????? 2002/03/16
June 1, 2001
2
Todays Painful Reality
  • The first time you hear about a big purchase is
    when you see the invoice.
  • Purchasing is considered the enemy by your
    business units.
  • Best practices are for people with more time.
  • Cycle time for sourcing projects can be as long
    as 6 months.

3
Agenda
  • What is Strategic Sourcing?
  • Automating the Enterprise
  • e-Sourcing
  • e-Sourcing Solution
  • Integration Putting it all together
  • IT e-Sourcing

4
What is Strategic Sourcing?
  • Strategic sourcing is a disciplined process which
    organizations implement to more effectively
    purchase materials and services from suppliers.
  • The process generates savings by reducing product
    and operations costs through consolidation of
    purchases, elimination of duplicate and
    functionally equivalent parts, and rationalizing
    suppliers to the right number of partners.

5
Why Strategic Sourcing?
  • 73 of potential purchasing savings are in
    sourcing.
  • Resulting in savings of 2-4 overall going
    right to the bottom line
  • Some commodity areas can save more than 20

6
Evolution of Strategic Sourcing Solutions
7
Why an Enterprise Automation Software Solution?
  • An Enterprise Automation Solution
  • is a new class of product that complements (not
    replaces) existing enterprise systems.
  • can be integrated with other enterprise systems
    for maximum value (more on this later).
  • gives unprecedented visibility into the sourcing
    process including sensitive expenditure data.
  • supports a consistent, disciplined process for
    sourcing.
  • empowers the people you have.
  • promotes enterprise-wide collaboration.

8
Where does Strategic Sourcing fit?
9
Strategic Sourcing is distinct from Transaction
Execution
Demand Generation
Strategic Sourcing
Transaction Execution
10
Automating the Enterprise
ERP
e-Procurement
e-Sourcing
SFA / CRM
Top-line Sales Revenue
Operating Costs Efficiency
Bottom-line Cost Savings
Only e-Sourcing focuses squarely on bottom-line
cost savings (the 73 of purchasing savings
opportunity). It is estimated that every 1 saved
in sourcing is worth 5-25 in increased sales.
11
Automating the Enterprise
ERP
e-Procurement
e-Sourcing
SFA / CRM
Percent of Transactions
90
10
20
80
Percent of Spend
  • Most applications are focused on the 90 of
    transactions that only represent about 20 of my
    costs. E-Sourcing, however, is focused on the
    10 of my transactions that make up about 80 of
    my costs. You tell me which is more important
    for my business?
  • Roy Anderson, Director of Purchasing, John
    Hancock Financial
  • Services (20 years of corporate purchasing
    experience)

12
Automating the Enterprise
ERP
e-Procurement
e-Sourcing
SFA / CRM
The usual order of implementation follows the
emergence of these advanced technologies.
e-Sourcing automates more than putting paper on
the web it automates human negotiations and
decision making.
13
Agenda
  • What is Strategic Sourcing?
  • Automating the Enterprise
  • e-Sourcing
  • e-Sourcing Solution
  • Integration Putting it all together
  • IT e-Sourcing

14
A Process Viewpoint
Sourcing, thenRequisition to Pay Process
Delivery Warehousing Traffic Logistics
Inventory
Requisitioning
Payables
Sourcing
Buying
15
What is e-Sourcing?
  • Sourcing is the identification, evaluation,
    negotiation, and configuration of new
    products/suppliers.
  • Typically used for the negotiation of blanket
    contracts, strategic goods.
  • An online sourcing tool that allows buyers and
    strategic sourcing specialists to obtain closed
    bids (and/or conduct reverse auctions) in a way
    that
  • Gives consistent automated RFx creation,
    management and analysis
  • Increases efficiency by standardizing work
    processes
  • Qualifies new vendors and updates
    data/information on existing suppliers

16
e-Sourcing Process
17
Defining the e-Sourcing Framework.
18
Sourcing cycle provides the greatest opportunity
for procurement savings.
Sources CRPS, The Wacht Group, AT Kearney
19
However, sourcing remains a long, tedious process
at most organizations.
Source Aberdeen Group
20
Multiple Internet models target the sourcing
cycle.
  • Requirements/supplier identification/evaluation
  • OpenRatings, Thomas Register, TPN Register,
    WorldPreferred.com, etc.
  • e-Marketplaces
  • BizBuyer, Chemconnect, e-Steel, National
    Transportation Exchange, PlasticsNet, PartMiner,
    Ariba (SupplierMarket.com), etc.
  • Auction/exchange software
  • Commerce One (CommerceBid), Moai, OpenSite, Ariba
    (TradingDynamics), etc.
  • Aggregation/outsourced purchasing
  • AlphaDog, Demandline, EDS/CoNext, ICG Commerce,
    etc.
  • Sourcing solutions/services
  • Agile, eBreviate, Emptoris, FreeMarkets, Mindflow
    Technologies, ShareMax, Webango, etc.

21
How Internet sourcing can benefit your
organization.
  • Reduction in prices of materials/services (5 -
    20)
  • Rapidly establish competitive bidding space
  • Access new suppliers
  • Expand geographical reach
  • Shorter procurement cycles (25 to 30)
  • Automate the RFP/RFQ process
  • Streamline order-to-pay processes
  • Reduce administration costs
  • Improve buyer productivity
  • Reduce/eliminate paper-based processes
  • Improve ability to create/manage optimal supply
    base
  • Improved market data
  • Minimize demand peaks

22
Early sourcing solutions focused on dynamic
pricing.
  • Traditional pricing Prices set by hypothetical
    forecasts and cost plans.
  • Dynamic pricing Prices established in real-time
    by existing market conditions (i.e., actual
    supply and demand.)
  • From buyers point of view Reverse Auctions
  • Effective for standard/commodity products
  • Oil, gas, electricity, broadband, excess assets,
    inventories, etc.

23
Business negotiations need to determine the
Lowest Total Cost solution.
  • The most effective companies will be those that
    can establish the most efficient global supply
    chains at the lowest TOTAL COST.
  • Includes sum cost of price, quality, technical
    expertise, delivery, etc.
  • Negotiations and sourcing decisions based on
    multiple parameters to deliver the lowest total
    cost supply chain.

24
Key negotiation functionality required for
effective support of true B2B interactions.
  • Multivariable negotiations
  • Negotiations based on multiple parameters beyond
    just price, including quality, delivery,
    warranty, and financial terms.
  • Multi-stage negotiations
  • RFI RFP RFQ Award
  • Multi-threaded negotiations
  • Back and forth buyer-supplier interactions
  • Synchronous supply chain negotiations
  • Ensuring purchases are not made without due
    consideration of availability/cost of services
    required to use and deliver these products

25
Selecting an e-Sourcing framework.
  • Company large enterprise
  • Strategy purchase a negotiated commerce or
    e-Sourcing application.
  • Company mid-size
  • Strategy outsource sourcing of particular
    products to procurement service provider.
  • Company small
  • Strategy leverage dynamic trading platform and
    supply network of e-Market/exchange.

26
Strategic Sourcing Categorization
HIGH
Leverage Purchases Capital Plant
Strategic Purchases Direct Materials
Dollar Value
Marginal Purchases Indirect Materials
Tactical Purchases Indirect Materials
LOW
LOW
HIGH
Transactional Volume
27
Purchase Category - Examples
28
Approach Capital Purchases
HIGH
Capital Purchases
ERP Procurement
Dollar Value
LOW
Transactional Volume
29
Approach Direct Purchases
HIGH
Direct Purchases
ERPConnection
Dollar Value
HIGH
Transactional Volume
30
Approach Marginal Purchases
Dollar Value
Marginal Purchases
LOW
LOW
Transactional Volume
31
Approach Tactical Purchases
Dollar Value
Tactical Purchases
Web Buyer
LOW
HIGH
Transactional Volume
32
Web Buyer Function Tactical Purchase
  • Portal to communicate how to purchase supplies
    and materials.
  • On-line web-based ordering for many of these
    (using Web Buyer style) primary use is for
    tactical purchases (usually consumables)
  • Cost savings created by
  • - Lower transaction costs
  • - Compliance to leveraged agreements
  • - Data to create better deals and monitor
    compliance
  • - Supplier base consolidation
  • - Broad deployment globally

33
Agenda
  • What is Strategic Sourcing?
  • Automating the Enterprise
  • e-Sourcing
  • e-Sourcing Solution
  • Integration Putting it all together
  • IT e-Sourcing

34
Requirements for an e-Sourcing Solution
  • A complete, holistic solution includes
  • Expenditure Analysis
  • Project Management
  • RFP / RFQ
  • Reverse Auctions
  • Contract Management
  • Vendor Management
  • Sourcing Workbench
  • Ideally, all modules are integrated and designed
    to work together

35
A Frictionless Sourcing Example
36
RFP Proposal with Scoring Decision Support
37
E-Sourcing Software
  • QuickSource
  • QuickSource is the only e-sourcing solution
    designed for sourcing professionals by sourcing
    professionals. This comprehensive full-featured
    e-sourcing platform is local for automating,
    streamlining and providing visibility into the
    sourcing processes. Based on the industry leading
    e-sourcing technologies developed by FreeMarkets,
    QuickSource contains a robust set of features
    that allow buyers to create and conduct online
    auctions right from their desktops

38
E-Sourcing Software
  • QuickSource
  • Create re-usable templates for Requests for
    Information and Quotations (RFxs)
  • Collaborate with and manage suppliers
  • Create and run a wide variety of real-time,
    competitive bidding and negotiation activities
  • Conduct offline negotiations

39
E-Sourcing Software
  • QuickSource Add on Services
  • Market Operations Services
  • E-Sourcing Support Desk
  • QuickSource Supplier Training
  • QuickSource Rapid Implementation and Deployment
  • 15 Days to e-sourcing process
  • QuickSource website readiness
  • QuickSource team readiness
  • QuickSource launch preparation

40
E-Sourcing Services
  • FullSource
    (E-Sourcing Acceleration Program)
  • 19 average savings per contract for direct and
    indirect goods and services
  • 30-50 cycle time reduction in the sourcing
    decision process
  • Average return on investment of more than 20 to 1
  • An average of nine more suppliers per negotiation
    for greater pricing competition

41
  • FullSource
    (E-Source Acceleration Program)
  • Industry-specific program management driven by a
    dedicated, experienced team who will help design
    and implement a unique e-sourcing program for
    each customer
  • Expert e-sourcing services in hundreds of spend
    categories
  • Information and knowledge about specific
    commodities and supply market dynamics
  • FreeMarkets' industry-leading, real-time,
    advanced e-sourcing technology
  • 24-hour technical and operational support in over
    30 languages

42
  • FullSource
    (E-Sourcing Software )
  • Transformation bidding
  • Index bidding
  • Net Present Value (NPV) bidding
  • Multiple Offering bidding
  • Rank-Only bidding

FreeMarkets is the only e-sourcing solution
provider willing to share responsibility with an
organization to meet its strategic sourcing
objectives.
43
  • FullSource Global Market Operations
  • FreeMarkets' Global Market Operations Centers
    (GMOCs) are located in Singapore, Brussels, and
    Pittsburgh to service customers across world
    markets
  • Coordinate and test events Develop and enforce
    market rules
  • Proactively monitor bidder connections and
    bidding activity
  • Provide surrogate bidding for any bidders that
    experience technical difficulties
  • Train and support all participating suppliers
  • Provide real-time event support

44
  • Asset Management
  • Fast, market-based pricing when selling surplus
    assets
  • Quick, easy access to needed assets for buyers
  • A variety of sales venues, including Online Asset
    Auctions and Onsite Asset Auctions
  • Support by dedicated customer service teams
  • Ability to create a fair, neutral marketplace
    with equal access for all participants
  • Public or private access to a global asset
    database and trading environment
  • FreeMarkets Online Asset Auctions
  • FreeMarkets Onsite Asset Auctions

45
Future Functions
  • FreeMarkets continues to develop end-to-end
    enterprise e-sourcing platform code named Sierra
    Nevada
  • Functions of Sierra Nevada
  • 1) Collecting and analyzing data
  • 2) Developing sourcing strategies
  • 3) Locating, managing, and evaluating suppliers
  • 4) Creating requests for information, proposals,
    and quotations
  • 5) Selecting price discovery methods and
    executing negotiations
  • 6) Analyzing price discovery responses
  • 7) Awarding contracts and tracking implementation
  • 8) Managing awarded contracts and supplier
    performance
  • Release of Sierra Nevada in summer of 2002

46
Intelligent Trading Networks.
47
OnSite General Motors
  • Background
  • 1 automobile manufacturer
  • Expenditures 87 billion/yr.
  • 30,000 suppliers worldwide
  • e-Sourcing strategy
  • 64 reverse auctions (Nov. 99 Sep. 00)
  • Representing 500 million-plus of transactions
  • Including 10 million via forward auctions
  • 25 different commodity types
  • Primarily commodity/low-engineered parts
  • Events involved 470 suppliers

48
OnSite General Motors
  • Results
  • Typical savings of 3 to 30
  • Reduced process cycles to 3 to 4 weeks.
  • WARNING Bid transparency is not always to
    buyers benefit
  • Future plans
  • Multi-variable RFQ/evaluations
  • Multi-currency
  • Extend to more complex products

49
Agenda
  • What is Strategic Sourcing?
  • Automating the Enterprise
  • e-Sourcing
  • e-Sourcing Solution
  • Integration Putting it all together
  • IT e-Sourcing

50
Systems Integration
  • Many e-Sourcing modules can add immediate value
    without any enterprise systems integration.
  • However, large incremental value is realized with
    each integration including your ERP,
    e-Procurement, e-Catalog, data warehouse, and
    other enterprise systems.

51
Systems Integration Points
52
Agenda
  • What is Strategic Sourcing?
  • Automating the Enterprise
  • e-Sourcing
  • e-Sourcing Solution
  • Integration Putting it all together
  • IT e-Sourcing

53
IBM e-Sourcing Business Hosting
54
What is IBM e-business Hosting
  • e-business hosting includes a full spectrum of
    services that a customer may acquire from an
    external provider to support the deployment and
    operation of their business processes and
    applications on the web.
  • The service might range from the basic
    provisioning of secure data centre facilities,
    redundant network connectivity and equipment rack
    and floor space (co-location), to varying
    degrees of standard managed services through to
    our focus on highly customised solutions
    delivering enterprise applications over IP
    networks.
  • e-business hosting is comprised of modular
    service elements that may be selected by
    customers at any time in the life of the service
    engagement as their hosting needs evolve.
  • Do more business up front, and secure your future
    business growth

55
Why Customers Choose Hosting
  • Business Drivers
  • Technical Drivers
  • Freedom to focus on running
  • Access to specialised skills
  • your business
  • Performance optimisation
  • Faster time-to-market
  • High-bandwidth Internet
  • Maximise ROI potential
  • connectivity
  • Flexibility to respond quickly to
  • Enhanced security
  • market changes
  • Enhanced reliability
  • More cost-effective than
  • Reduced risk
  • in-house
  • Why
  • Cost Savings
  • Lack of Expertise
  • Companies
  • Not Core Competency
  • Choose
  • Reliability
  • Hosting Over
  • Responsiveness
  • In-House
  • Time Savings
  • Source Forrester
  • Lack of Technology
  • Research, May 2000

56
The Continuum of Hosting Services
Complex
57
Hosting Services
  • 15.1
  • IBM Global Services
  • Exodus
  • 34.4
  • Verio
  • 15.1
  • Next 10
  • Qwest
  • Digex
  • Global Center
  • 4.2
  • PSI Net
  • 1.4
  • Genuity
  • 3.8
  • 11.1
  • WorldCom
  • 2.3
  • 3.0
  • 2.7
  • EarthLink
  • 3.7
  • 3.1
  • Other
  • Source IDC,
  • 4/2001
  • IBM's Web Hosting Revenue Share as of 12/31/2000
  • Recognised Leadership in the Market, and in the
    scope of its e-business Hosted Solutions

58
Some of IBMs Customers
  • Financial Services
  • Travel/Transportation
  • Industrial
  • Wingspan Bank
  • ICSA T
  • iStarXchange
  • Citigroup, Inc.
  • Allied Holdings
  • Sony Electronics, Inc.
  • JP Morgan
  • Danone
  • Calberson
  • Moody's Investors Service
  • Thomson Multimedia
  • Retail/Services
  • NYSE
  • Aventis
  • Scoot
  • TAHO Commerce
  • Kellogg
  • Wimbledon
  • Group, LLC
  • BP
  • Roland Garros
  • Cahoot
  • Telemarine
  • IKON Office Solutions
  • Communications
  • Public Sector
  • Infrascope
  • GRAMMY Awards
  • Macy's
  • US Navy
  • Energy Argus
  • Sears Roebuck
  • GovernmentJobs.com
  • Telecom Italia
  • Company
  • American School
  • Bouygues
  • Victoria's Secret
  • Directory
  • ISP/ASP
  • Foundation for
  • Tinde
  • Economic Development
  • Alerio
  • Health Care
  • ASP-One, Inc.
  • Eli Lilly
  • Catapulse
  • I-TRAX.com
  • Expansionet
  • CareTouch
  • Pragmatix

59
Universal Server Farm Architecture
  • The Universal Server Farm v3
  • Internet
  • Internet
  • User
  • architecture delivers...
  • Secure customer separation
  • Switch and Firewall
  • Switch and Firewall
  • Multi-layered firewalls
  • Consistent architecture
  • Web Layer
  • Web Layer
  • worldwide
  • Enhanced scalability,
  • rapid change
  • Switch and Firewall
  • Switch and Firewall
  • Option for dedicated
  • environment
  • Data Layer
  • Data Layer
  • Logical design to enable
  • change via software from
  • remote locations
  • Switch and Firewall
  • Switch and Firewall
  • Cisco and other industry
  • products, and proprietary
  • management tools
  • Private
  • Customer
  • Networks
  • Premise

60
e-business Hosting - a Fully Managed Service
  • Account Support Structure
  • Security
  • Keynote, SurfAid
  • Standard Hardware Platforms
  • pSeries (RS/6000), AIX
  • xSeries (Netfinity), NT, Linux
  • Sun, Solaris
  • Standard Application Servers
  • WebSphere
  • Domino
  • Microsoft IIS
  • Netscape
  • Granular Service Components
  • Custom Services
  • Systems Management
  • Performance Management
  • Backup and Recovery
  • Applications Siebel, Broadvision, SAP, Oracle,
    Websphere

61
Multiple-ISP Internet Access Architecture

Level 3 VLAN Architecture Optional Redundant
Connections
  • Bandwidth Control
  • DOS Attack Monitor

CUSTOMER WEB ENVIRONMENT
Optional Cross Connect
e-business Hosting Center
POTS
62
Delivering Applications over an IP Network
63
Application Hosting Services
64
Hosted Applications
  • Alliances with market-leading
  • Fully managed infrastructure for Buy
  • application providers
  • and Supply, CRM, BI
  • IBM's Websphere
  • Industry-leading hosting for
  • e-marketplace applications
  • Ariba Technologies
  • Seamless data flow for B2B
  • i2 Technologies
  • transactions
  • SAP, Siebel, Broadvision, Oracle,
  • World-class support
  • Trading Partner enabling
  • Single point of contact
  • Global e-business presence
  • 500k worldwide EDI-enabled
  • partners
  • Customers in 160 countries
  • IBM hosts many of the world's
  • leading e-markets

65
The Future Building from Superior e-Hosting
Capabilities to e-Sourcing
  • Capacity On Demand
  • Applications
  • Infrastructure

MIPS on Demand
Storage on Demand
Bandwidth on Demand
Hosting Center Architecture
Hosting Facilities
66
Advantage in Hosting
  • Provide your clients with the safest, most secure
    and complete application hosting offering
  • Enhance your chances of Winning
  • Deliver a better service to your client
  • Secure the on-going business
  • Many competitors are experiencing financial
    difficulties
  • Troubled providers need to raise capital to fund
    operations
  • Downsizing can affect client service
  • Too much is at stake to take a chance at being
    there when "the lights are turned off"

67
What does e-Sourcing bring to?
  • Work Processes For
  • RFx Creation and Development
  • Customizable Templates
  • Supplier Qualification / Vendor Management
  • Electronic Transmission of Specs, Documents,
    Drawings Etc.
  • E-bidding
  • Sealed Bid
  • Reverse Auction / Forward Auction
  • Expenditure/Bid Analysis

68
Conclusion
  • 73 of the potential cost savings are in sourcing
    yet today, sourcing is done completely
    manually.
  • If youre a large enterprise with a sophisticated
    purchasing group, enterprise software is the
    right choice.
  • If youre choosing enterprise software, you need
    a holistic solution that addresses the entire
    sourcing process.

69
Efficient Effective Procurement
  • Everyone on the same platform (intellectually
    physically)
  • Global scope
  • Choosing using e- tools to help enable improved
    work process
  • Supplier consolidation / leverage
  • Avoiding the maverick purchase
  • Measure results
About PowerShow.com