alex saric – global vice president, business networks – sap se … · 2017-05-09 · alex saric...

Alex Saric – Global Vice President, Business Networks – SAP SE Kory Manley - Director, Sourcing Upstream Systems & Spend Compliance – Caesers Entertainment

Smarter Procurement through Effective Collaboration

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Business commerce is becoming increasingly complex

(1) PwC 17th Annual global CEO Survey

More Risk • Supply chain disruption / scandals • Financial risk and fraud • Geopolitics

Increased Globalization • Expansion into new markets • International supply chains • Increased off/near shoring

Greater Interdependencies • Increased outsourcing • Supplier-driven innovation • Business partnerships

Faster Innovation Cycles • New capabilities • New business models • New channels

New Sources of Competition • Need for profitable growth • Manage cost drivers • Better asset/capital management

Regulatory Changes • Increasing disclosure requirements • Country-specific regulations • Industry-specific disclosures

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Top 3 Procurement Drivers

Creating a challenge / opportunity for procurement

54% cutting cost

51% becoming more strategic

44% quality suppliers

Source: Procurement Leaders

Where is there “great” opportunity for procurement to increase its contribution

Percentage of respondents rating the procurement function’s opportunity to contribute as a “great opportunity”

14% 25% 29%

36% 44%

57% 64%

73%

Serving an advisory role

in M&A deals

Expanding into new markets / business

lines

Managing financial risk

Managing working capital

Managing risks to

business performance

Working with suppliers to

enhance product offerings

Strengthening relationships with suppliers

Finding opportunities

for cost savings

Source: CFO Research Services

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Collaboration empowers procurement to drive greater value

Product Innovation

Market Expansion

Working Capital Mgmt

CSR / Regulatory Compliance

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No need to balance against cost / risk objectives

Product Innovation

Market Expansion

Working Capital Mgmt

CSR / Regulatory

Compliance

Risk Mitigation

Cost Control

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Automation Connections

The key to effective collaboration

People

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People A new mindset

Traditional Thinking

How do I Bring category X under management?

Squeeze an extra Y% in price reductions from my suppliers?

Improve procurement efficiency?

Impose standard payment terms on suppliers?

Innovative Thinking

How do I Control ALL non-contracted spend?

Maximize value via my supply chain?

Align with finance/AP to ensure my P2P process maximizes company value?

Optimize our payment approach to mitigate supply risk and align with our WCM strategy?

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Automation End-to-end processes, all spend

INDIRECT – (source and non source)

Source & Contract

Collaborate & Transact

Invoice & Pay

COMPLEX SERVICES

TRAVEL & EXPENSES

INTEGRATION TO BACK END SYSTEMS

CONTINGENT WORKFORCE & SERVICES

DIRECT MATERIAL - LOGISTICS

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Connections Business networks: Simplifying business collaboration

Your Trading Partners

Your Company

Your Company

Your Systems

Risk & Sustainability

Workforce Management

Sales & Marketing

Finance

Supply Chain Management

Sourcing and Procurement"

Travel & Expenses

Business Network

Discover

Connect Collaborate

Gain Insights

10 © 2014 SAP AG or an SAP affiliate company. All rights reserved. 10 © 2013 Ariba, Inc . All rights reserved.

Business networks enable a broad range of benefits for all parties

REDUCE costs 1% - 8% in spend savings 60% reduction in operating costs

MANAGE compliance & risk 60% improvements in order accuracy Reduced stockout risk / need for excess inventory

INCREASE Revenues by 5-30% Find new customers Increasing business with existing customers through improved compliance and higher satisfaction

IMPROVE operational efficiency 50% - 75% faster transaction cycles >90% fully automated (“touchless”) transaction processing

OPTIMIZE cash flow 50% improvements in discount capture with suppliers 20% faster payment cycles with customers

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Caesars Entertainment Overview

Quick Facts 52 Casinos

14 States 5 Countries

3,000,000 sq ft gaming space 42,000 hotel rooms 70,000 employees World Series of Poker (WSOP) Caesars Interactive

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Procurement Evolution at Caesars Entertainment

People • Regional/Local Buyers Supporting Departments not Categories (Decentralized Transactional Purchasing) • Limited Strategic Sourcing Category Teams •Minimal Technology/Process/Compliance Support

Process • Fragmented Source-to-Settle Involvement • Strategic Sourcing Involvement Optional, Engaged only in Large Projects • Little to No Involvement in Capital Process

Technology • Paper PO’s • Purchasing System only for Inventoried Items & Food and Beverage • Limited Budget Tracking and No Procurement Policy Measurement Tools

Policy/Compliance • 2005 “Policy” – Bloated Mix of Policy & Procedure, No Technology to Support Compliance •No Policy Communication or Reporting

Before 3-year transformation process

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Procurement Evolution at Caesars Entertainment

People •Data Driven Strategic Sourcing Category/Commodity Teams • Centralized Process & Technology Driven Tactical Purchasing Organization • Communication to the Business: Frequent, In-Person, Customer Service & Compliance Oriented

Process

• Consistent, Streamlined Sourcing and Purchasing Process that Supports Rapid Turnaround SLA’s • Complete Source-to-Settle Involvement (incl. Capital) & All New Process Development Contains Customer Service Bias • Elimination of Perceived “Bureaucracy and Red Tape”

Technology • Complete Suit of Sourcing, Contracting & Purchasing Tools • Automated Spend via Catalogs, Collaborative Requisitioning, Contract Terms • Easy to Use, Relevant Reporting Tools (Budget Tracking & Compliance)

Policy/Compliance • Short, Concise Policy that Defines What all Parties Must Do • Simple, Transparent, Universally Accessible Compliance Reporting • Frequent Communication to Budget Owners Regarding Compliance Performance

After 3-year transformation process

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Procurement Supporting Rapid Expansion

Plug & Play Procurement

• Regulatory Requirements

• Involvement In Construction

• Transition to Operations • Centralized Procurement • Standard Process • Financial Controls • Budget Reporting • Policy Compliance

Local Regulatory Requirements

• Vendor State Registration

• Local Vendors

• Diverse Vendors • Minority Owned • Woman Owned • Veteran Owned • Disadvantaged • Hub Zone

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Business Network Enablement

Local Vendors

LCC Manufacturers

Diverse Vendors

Improving Our Vendors’ Book of Business

Operational Efficiency

Sourcing

Meet Local Requirements Cost Savings over National Providers

Direct-to-Manufacturer Opportunities Tremendous Cost Savings Potential

Education During Local Supplier Outreach Improved Sales Opportunities

Spend Automation Sourcing Cycle Time Reduction Low Value Add Offshoring Touchless Transactions

P2P

Faster Identification & Easier Compliance Greater Number of Vendors to Select From

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Receiving 5+ supplier responses on average Reduced cycle time for supplier discovery by 50% and sourcing projects by 90%, lowered costs by up to 10%

Streamlined supplier enablement for P2P as suppliers are already transacting on Ariba Network Quickly adds new suppliers to vendor master due to full integration with Ariba Sourcing

Supplier Discovery through the Ariba Network

Enables meeting CSR, regulatory, and other non-cost objectives simply and without sacrificing cost

Local Suppliers

Used Ariba to easily find and vet local, large beverage distributors already supplying other casinos

Received multiple responses despite very targeted search criteria, saved time by eliminating unqualified suppliers

Without Ariba, it would have been very challenging to find this supplier

Low-Cost Country

Discovered highly competitive supplier

Cut time it took to find low-cost country suppliers of banquet chairs by 50%

Received large number of high-quality bids for pens from all over the world

Already had extensive supplier database, but not always the right or the best suppliers

Diversity & Green

Discovered woman-owned, local CO2 supplier, also most competitive offer

Found minority-owned baked goods supplier, lowered lead turnaround time by 97%, closed multi-million dollar deal within 30 days, saved 10% in total cost

Now an essential piece of regional supplier diversity outreach program

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P2P through the Ariba Network

Touchless Rate 0% 55%

Before After

Spend through the System $300M $1.7B

Spend Compliance 30% 80%

Control • Visibility • Risk Mitigation • Speed • Performance • Savings

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Q&A

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Thank You!

Alex Saric Global Vice President, Business Networks SAP SE alexander.saric@sap.com

Kory Manley Director, Sourcing Upstream Systems & Spend Compliance Caesers Entertainment kmanley@lvrio.harrahs.com