Strategic Sourcing & B2B E Commerce Solutions for ASEAN Purchasing Professionals. Bill Kohnen

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1 2015 PASIAWorld Annual Conference 2020 Vision: Competitive Procurement, Logistics and Supply Chain

2 Strategic Sourcing & B2B E Commerce Solutions for ASEAN Purchasing Professionals Bill Kohnen

3 ASEAN As a region already among the biggest Growth rate in total larger than all others Shift to consumer of large portion of global GDP Exports will remain important but shift to regional demand ASEAN regional demand is diverse itself ASEAN skill base will need to evolve

4 Transformation From Offshoring Model Arbitrage labor costs by using lower-wage workers in developing nations Liberalization Economic policy Capabilities of emerging-market suppliers and workers Transfer proven management processes to new locales Transportation and Communications economics and capabilities As wages and purchasing power rise in emerging markets, their relative importance as centers of demand, not just supply, grows.

5 Next Shoring Proximity to demand More than two-thirds of global manufacturing activity takes place in industries that tend to locate close to demand Proximity to innovation Adapt products to different regions Utilize emerging technologies that could disrupt costs and process New supply ecosystems a differentiator Network of innovation-oriented partnerships, and a strong focus on technical skills.

6 Where will skills come from? Grasp the productivity potential of a range of new technologies Have enough ground-level knowledge of local markets to influence product strategies and investment trade-offs. The ability to build external relationships to develop vibrant, sophisticated supply ecosystems will also be a source of competitive advantage US, Europe, China, Japan.. Existing skill sets focused on export oriented outsource model M or F

7 TRANSFORMATION ASEAN Purchasing Solution Still Developing Strategic Sourcing E Solutions ASEAN Purchasing Model

8 Strategic Sourcing Basic Process Spend Analysis Supplier Mgmt. Sourcing RF(x) Contract Nego

9 Typical Solution Spend Analysis Sourcing Contracts Catalogue Network Transaction Pay Cloud Based Subscription Little Differentiation Tactical Modules more defined Only Sourcing has delivered any real value

10 Purchasing Sits at a Busy Intersection By its nature purchasing deals with virtually all departments Purchasing directly touch's 50% of the organizations total revenue At each interface point it seems there is a software solution to interface with that has different characteristics (enterprise, homegrown, cloud based, proprietary, legacy commercial etc ) The 40 or more interfaces create Strategic and Operational Challenges yet do not necessarily result in improved performance for purchasing. CPO FORUM DISCUSSION HMB RITZ CARLTON JUNE 2015

11 SHORT LIST OF THE 40+ SOFTWARE SOLUTIONS PURCHASING PROFESSIONALS USE ERP System Corporate Data Warehouse Internal resource website for Marketing Templates, Presentation Info, company news Synchronized to personal Mobile device Corporate Analytic Solution Corporate travel booking tool Planning System MES CRM On average 3 personal Aps that also are relevant to work ex. Maps, currency, business news feeds Customer Support tracking system for key suppliers P Card System Best of Breed Purchasing Solution(s) Spend, Contract Management, Sourcing, Catalog Management E Signature System IT Tracking System Service and Hardware Travel and Expense Card System Accounts Payable System Invoice Tracking/Supplier Payment System Internal Expense Reporting System Inbound Freight Tracking System Share point Supplier Punch-out and normal websites Department Shared Files MS Office Document Control System HR Employee Portal including punch outs for 401 And benefits External Work related social media sites (Linked In, Professional Orgs) Inventory System Internal QA system CPO FORUM DISCUSSION HMB RITZ CARLTON JUNE 2015 Field Support Systems Purchasing Transaction System Key Supplier hosted sites Corporate Social Responsibility reporting internal and external Purchase Request Systems Internal KPI reporting systems Video Conference Phone Conference

12 Traditional Purchasing Tech Choices Manual ERP System Enterprise Solutions Internal Development Hosted Cloud Based Shared Service / BPO

13 Vision and Solution Vision Strategic Innovation Integrated Mobile Insightful Decision Making Solutions Tactical Digitizing old practice Modules ERP on the web Excel spread sheet Pie in the sky

14 12 10 Purchasing Professional Value vs. Solutions Capability Spend Analysis Sourcing Catalogue Transactional Pay Purchasing Value Solution Maturity Solution Provider Interst

15 SPEND ANALYSIS IS THE TOP TOOL FOR A CPO CPO CHALLENGES SAVINGS BENEFITS TECHNOLOGY MORE 2% NOW TRANSPARENCY HELPS SPEED 10% MONTHS BASELINE CLOUD SaaS GROWTH 30% POTENTIAL ORGANIZATION ROI of 10X IN PRACTICE FEW ORGANIZATIONS HAVE THE CAPABILITY TO CONDUCT A COMPREHENSIVE SPEND ANALYSIS ISM SV Bill Kohnen July

16 WHY AFTER OVER 100 YEARS OF CORPORATE PURCHASING IS SPEND ANALYSIS NOT WIDESPREAD DATA RESOURCES COLLABORATION PROJECT HARD TO GET DISPERSED PEOPLE TOOLS SHARING DATA REVIEWING NON REPEATABLE EVENT STATIC RESULTS

17 SPEND ANALYSIS Technology Not The Answer So Far TECHNOLOGY MAINFRAME CLIENT SERVER/NETWORK ERP MS OFFICE SUITE CLOUD SOLUTIONS CONSTRAINT Access to Data No User Interface Data Further Dispersed Access to Data Poor Analytics Start to Analyze Data Driven by Strategic Sourcing Security Process and Capability ISM SV Bill Kohnen July EVEN WITH IMPERFECT DATA YOU CAN START THE PROCESS AND GET IMMEDIATE VALUE FROM SPREADSHEETS

18 Spend Analysis Cloud Solution What Does this Mean: You will provide raw spend data in any format to the solution provider who will transform the data into meaningful views. Solution provider delivers the service via an internet connection so no hardware is needed Implementation is measured in weeks Complete ROI should be achievable in 6 months or less Repeatable Process ISM SV Bill Kohnen July

19 Questions TO ASK Data Acquisition Data Processing User Experience Product Implementation Formats Data Prep Automated Proprietary References Configurable Standalone Information Security Time Professional Services ULTIMATELY USER EXPERIENCE WHICH IS VIEWING MEANINGFUL OUTPUT IS MOST IMPORTANT TO BEST DETERMINE CAPABILITY HAVE PROVIDERS RUN A DEMO USING A PORTION OF YOUR DATA

20 Solutions Have Challenges Enterprise powers are behind and know it Really are introducing new products Newer Solutions providers do not have deep subject knowledge Really little differentiation Adoption is the key metric Basic things still challenges Supplier On boarding Document Output Auto close of purchase orders Choice is who do you ant to start journey with

21 What to Look For Ideal Social Media Real value from IoT Real Mobile Access Easy Data Analytics Effortless Transactions Single data sources Optimized for you

22 BEST PRACTICES DO NOT CREATE SUSTAINED VALUE Best Practice Formula For Sameness Unique Practice Best For Company Risk Averse Learning Efficiency Innovation Commodity Value WEALTH IS CREATED BY INSIGHT TO DIFFERENTIATE WITH DISTINCTIVE PRODUCTS Summary of Thoughts Presented by Jules Goddard at Nudgestock2

23 ASEAN Based Purchasing Professionals Strategic Sourcing and E Commerce are important and will be increasingly important because of regional growth driven by local demand Skills needed are unique and not what is being practiced in BPOs, shared services organizations or purchasing outside of ASEAN Merge high end strategic sourcing, regional knowledge and e commerce B2B solutions that meet needs in ASEAN countries not off the shelf western tool.