Leveraging SaaS as Part of a Technology-led Procurement Transformation Jesse Hanger, Specialist Master Sean Rhoades, Senior Consultant September 29, 2014
Soft ware as a Ser vice (SaaS) (/sæs/ or /sɑːs/) a licensing and delivery model in which software is centrally hosted and licensed on a subscription basis trans for ma tion (/tɹæns.fɔɹ.meɪ.ʃən/) a thorough or dramatic change in form or appearance, especially one for the better
Deloitte has identified several trends within the marketplace directly related to procurement technology Cloud Solutions License based, cloud solutions that require less maintenance and shorter deployment timeframes Increased use of Analytics Build the right internal capabilities to leverage the power of analytics to track savings and enhance reporting effectiveness Contract Compliance Minimize rogue contracting through efficient management and tracking of contracts through a central repository including fullscale template driven authoring Touchless Procurement Continue focus on reducing total number of touches, and eliminating physical touches Category Specific Solutions To fully address spend, leading organizations are configuring solutions by category Supplier Self Service / Supplier Network Connect suppliers through self service and allowing collaboration and automation through transactions across a network or portal Mobile Devices Develop a strategy encompassing workforce mobility, ideally it improves usability Extended Supplier Relationship Management Optimize relationships with trading partners and manage performance, compliance, and information flow User Adoption Focus on the end user experience to reduce or eliminate resistance to change Single Global Instance Unlock new opportunities by creating a single global instance and installing standardized process and building in regional requirements 3 Copyright 2014 Deloitte Development LLC. All rights reserved.
Procurement organizations are facing challenges with common themes emerging from the CPO community. Operating Model Enablement We know we need to invest in procurement technology, but we don't know where to invest to get maximum benefit fast" 70% of CPOs plan to invest in technology in 2014 1 Productivity "Our Procurement organisation is already stretched, but being asked to increase savings further" 79% of CPOs see cost reduction as a top priority 1 Collaboration and Innovation Benefits Realization and Control Procurement must get under the skin of what the business needs by being able to ask the right questions." We need to ensure that hard negotiated savings are realized within a complex global environment Sources: 1) The Deloitte Global CPO Survey 2013 2) Gartner "Establish a Savings Management Process to Drive Procurement's Financial Performance", 2013. 77% of organizations are already working in cross functional teams 1 91% of top performing CPOs place high/very-high importance on savings management 2 4 Copyright 2014 Deloitte Development LLC. All rights reserved.
Chasing trends is not the answer, organizations need to unify technology and leading trends to solve tomorrow s challenges We identified six pillars to focus your procurement strategy and approach to combat procurement challenges. Common Themes from CPOs Operating Model Enablement Mobile Working Productivity On-line Collaboration Embedded Analytics Collaboration and Innovation Benefits Realization and Control Cloud Deployment PROCUREMENT 2.0 Social Networking Usability Prioritized 5 Copyright 2014 Deloitte Development LLC. All rights reserved.
Most organizations are choosing a solution involving the cloud 90% of new Procurement Applications deals involve cloud solutions 1 Hybrid solutions, with On-Premise ERP complimented by SaaS solutions, continue to be a path of choice for a growing percentage of companies. 41% Percent of organizations complement or plan to complement their ERP systems with SaaS solutions 2 When considering SaaS Procurement Software, 66% will either complement or replace On- Premise with SaaS (up from 54% in 2013) 2 Sources: 1) Gartner "The Top Four Impacts of Cloud Computing on Procurement Applications". 2) Forrester "Application Adoption Trends: The Rise Of SaaS". 6 Copyright 2014 Deloitte Development LLC. All rights reserved.
On-Premise versus SaaS / Cloud is not an either-or decision Hybrid solutions allow organizations to take advantage of SaaS solutions while still maintaining best-of-breed vendors. SaaS On-Premise Illustrative Hybrid Solution Procurement Financials Sourcing Supplier Management Contracts Purchasing Hybrid Solutions Contains SaaS and On-Premise modules or solutions Allows for shorten deployment timeframes across the enterprise Increases ability to scale and expand scope Leverages pre-built integrations and APIs Allows organizations to strategically select modules to deploy early Ability to use system internally or externally Handles complex goods and services Increases flexibility and speed to value Reducing complexity is one key to overcoming challenges. Top organizations utilize 80% fewer platforms and 37% fewer applications. 7 Copyright 2014 Deloitte Development LLC. All rights reserved.
Best-of-vendor and best-of-breed strategies should be combined Developing a Pace-Layer strategy helps to identify which systems should be part of an application suite, and which systems should be integrated with an application suite. Illustrative Breakdown of Systems by Layer Systems of Innovation Quickly adopt new concepts Systems of Differentiation Organization or Industry unique processes, dynamic Systems of Record Core processes, follow common standards, common approaches Workforce Social Media Innovation / Project Management Predictive Analytics Custom developed applications esourcing / eprocurement Extended Supplier Relationship Management Core Financials Manufacturing Inventory Management Regular strategy reviews help identify when systems migrate between layers. 8 Copyright 2014 Deloitte Development LLC. All rights reserved.
Procurement Transformation Considerations Things to consider when deploying procurement technologies. Number of Customizations Cost Model Deployment Timeline Number of Integrations Scalability 9 Copyright 2014 Deloitte Development LLC. All rights reserved.
Key concepts when considering a SaaS strategy 10
SaaS / Procurement Playbook Maximizing the value of SaaS solutions requires different priorities than traditional procurement initiatives and technologies. Strategy: Layering = Flexibility Accelerated timeline requires different communication approach Strategy Focus on the business case and communicate benefits Approach: Stay agile! Use an iterative approach to design sessions Approach Integrations require concurrent design, build and test phases Deployment: User adoption is #1 Create challenge sessions to limit customizations / integrations Deployment Increase your testers and super users Sustainment: Singles win games Promote early success and benefits Sustainment Leverage support services 11 Copyright 2014 Deloitte Development LLC. All rights reserved.
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