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E-Procurement The Administrative Application That Could Anthony Rotoli Channel Sales Manager SciQuest, Inc. Copyright Anthon Rotoli 2004. This work is.

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Presentation on theme: "E-Procurement The Administrative Application That Could Anthony Rotoli Channel Sales Manager SciQuest, Inc. Copyright Anthon Rotoli 2004. This work is."— Presentation transcript:

1 E-Procurement The Administrative Application That Could Anthony Rotoli Channel Sales Manager SciQuest, Inc. Copyright Anthon Rotoli This work is the intellectual property of the author. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the author

2 2 Agenda About SciQuest Tactical vs. Strategic Procurement HigherMarkets Solution Case Studies

3 3 What is the innovation supply chain? About SciQuest

4 4 SciQuest's secure on-demand solutions integrate organizations with their suppliers to enable comprehensive spend management for the life sciences and higher education markets. SciQuest's suite of modular applications helps to automate the source-to-settle process. When used with the SciQuest Supplier Network, these solutions reduce redundant tasks and maintain data integrity throughout the cycle of finding, acquiring and managing goods to increase efficiency, reduce cost and provide total spend visibility.

5 5 SciQuest Customers Life Science GlaxoSmithKline Schering-Plough Amgen Biogen Memorial Sloan Kettering Corixa Theravance Aventis Pharmaceuticals Burnham Institute Boehringer Ingelheim Lexicon Pharmaceuticals Genentech Ciba Vision Inspire Pharmaceuticals Dendreon Corporation Ambit Biosciences The Salk Institute Epix Medical Roche Enanta Pharmaceuticals OSI Pharmaceuticals Higher Education University of Chicago University of New Mexico Rensselaer Polytechnic Institute University of Edinburgh Emory University University of Michigan University of Notre Dame University of Arizona Indiana University University of Nottingham University of Nevada Reno Pace University Moody Bible College University of Pennsylvania University of Kentucky Arizona State University Penn State University Industrial Research Air Products GE Corporate Research Johnson & Johnson

6 6 Current State of Higher Education Increased Demands on Campus Services DECREASE IN BUDGETS Dramatic reductions in state and federal funding INCREASED COST PRESSURES Plunging endowments and restricted grants INCREASE IN REGULATIONS Patriot Act regulations, increased EPA fines, threat of bad press INCREASE IN STUDENTS Serving more people with less resources

7 7 Traditional Approach FIND BUY MANAGE Manual searches Limited selection of suppliers No integrated visibility into inventory FINDBUYMANAGE Overall Increase in Indirect Spend Increased cost of goods Increased Processing Costs Increased Risks & Inventory Costs Manual requisitioning High volume of orders to multiple suppliers No tracking beyond receipt Separate process from purchasing Redundant purchases Manual tracking, limited chemical information Manual compliance reviews and reporting

8 8 Integrated Solutions for Higher Education Integrated Sourcing FIND BUY MANAGE Integrated Processes Integrated Inventory Cost of Goods Processing Costs Inventory Costs The smartest purchase is the one that isnt made. Maximize productivity, minimize risk. Change what they buy, not just how they buy.

9 9 What is the innovation supply chain? Reaching Your Strategic Procurement Goals

10 10 Tactical vs. Strategic Procurement Focused on spend management Set and achieve long term goals Proactively working with departments and suppliers Perceived as a value creator STRATEGICTACTICAL Focused on transactions Set and achieve short term goals React to departmental purchasing needs Perceived as a cost center

11 11 Procurement Continuum See opportunities for improvement Desire to make an impact Unsure of the best approach STRATEGICTACTICAL Managing manual processes effectively Disparate data Using human resources to fullest capacity MOST ARE HERE

12 12 What is the innovation supply chain? Bridging the Gap


14 14 E-Procurement Enables Best Practices Improve Productivity Better Decisions Right Results Automate Manual Tasks Capture Comprehensive Data Influence Buyer Behavior

15 15 Automate Manual Tasks Gain more resources to devote to strategic initiatives SPEND DIRECTOR REQUISITION MANAGER Enable and Configure Catalog and non-catalog suppliers Select and Compare Products User friendly shopping experience Electronic Routing Approval Workflow Order Parsing & Distribution Process Orders ORDER MANAGER SETTLEMENT MANAGER Receiving Electronic Invoicing

16 16 Capture Comprehensive Data Purchasing Data Supplier Data Transaction Data Better data helps you make better decisions

17 17 Influence Behavior How end users buy What they buy Who they purchase it from Achieve your strategic goals by helping end users

18 18 The Experts Agree… Aberdeen Research survey concluded the typical post-implementation benefits of e-procurement include: 5--10% reduction in indirect / non-production spend 73% reduction of costs per purchase order ($114 to $31 per order) Andersen Consulting estimated that the typical organization will reduce its indirect spend by 7% by using e-procurement Giga predicts e-procurement solutions will deliver 5-15 percent cost savings in the first year. Gartner estimates that small and mid-tier life science companies can achieve savings of 15-20% annually by using e-procurement solutions that help researchers make smarter buying decisions.

19 19 Increase contract compliance Promote preferred vendors in search results Promote Organizational best buys Provide detailed data for auditing user and supplier compliance Identify new savings opportunities By Supplier and Commodity using detailed spend reports Realize significant productivity savings Increase efficiency of end users and procurement Minimize IT commitments E-Procurement Solutions Deliver Financial and Productivity Savings

20 % 61.6% (7.1% increase) Began using preferred positioning for key suppliers Preferred positioning of key suppliers increases on-contract spending and decreases materials purchase by % Spending Trend With Preferred Suppliers

21 21 Began using preferred positioning for key suppliers Preferred positioning also consolidates clients supplier base by 20% resulting in less work for accounts payable Order Distribution Trend with Preferred Suppliers

22 22 Avg Cost* of a PO:= $114 (per NAPM/ISM) Avg E-Procurement PO Cost: = $31 (per Aberdeen) Savings with e-procurement:= $83 per PO * Primarily based upon total allocated labor costs from sourcing through payment Example: 2,000 orders per year x $83 savings per order $166,000 productivity savings (~ equivalent to recouping the productivity of two to three staff members) By minimizing the unproductive time that users spend sourcing, requisitioning and procuring products, they will have more time for value-added activities such as research and negotiating savings. By minimizing the unproductive time that users spend sourcing, requisitioning and procuring products, they will have more time for value-added activities such as research and negotiating savings. Productivity Savings

23 23 What is the innovation supply chain? Introduction to HigherMarkets


25 25 Flexible Supplier Enablement Options Your Preferred Suppliers Key Supplier Punch-outs Hosted Configurable Catalog SUPPLIER NETWORK Your Local Inventory Approved Network Suppliers

26 26 Partnership with SCT Jointly develop and market HigherMarkets for SCT Banner Fully-integrated, comprehensive procurement solution Works with Banner Finance 6.0 and Luminis Data Integration Suite SCT is the leading global provider of technology solutions for colleges and universities of all sizes and complexity. The Company supports more than 1,300 client institutions worldwide with administrative and academic solutions.

27 27 SciQuest Higher Markets HigherMarkets for SCT Banner Higher Markets Adapter Luminis Message Broker SCT Banner Luminis Message Gateway Luminis Data Integration for eProcurement Higher Markets for SCT Banner

28 28 Integration with Luminis Data Integration LDI for e-Procurement is a built on LDIs Publish and Subscribe architecture LDI for e-Procurement is standards based (JMS, HTTPS, XML, IMS Enterprise Specification, OpenEAI, etc.) HigherMarkets for SCT Banner and LDI for e-Procurement allows these systems to behave as if they were one application Leverages the current investment into Banner Eases burden on IT staff and resources An open, interoperable, and extensible solution

29 29 HigherMarkets Benefits All Stakeholders One-stop shopping experience Freedom of choice: wide range of suppliers and products from which to choose Fast, easy requisitioning End Users Control and visibility of spending Contract compliance Paperless process Error-free requisitions Procurement Reduced materials costs Increased purchasing and user productivity Better budgeting information Senior Management Low maintenance software Secure, reliable access Straight-forward integration Information Technology

30 30 What is the innovation supply chain? HigherMarkets Product Introduction

31 31 Search Hosted Catalogs or Punch-Out to Suppliers Punch-out to suppliers e- commerce Web sites Use parametric criteria to search hosted catalog content

32 32 Quick Order Enter catalog number or SKU and immediately add to cart

33 33 Favorites Manage personal favorites Administer organizational Best Buys, approved items and supplier specials

34 34 Search by Keyword Search using parameters Refine searches by limiting searches to specific subcategories

35 35 Product ReSources Antibody ReSource Column ReSource Chemical ReSource with structure searching Oligo ReSource also available

36 36 View Search Results Refine search by supplier or category Basic product information with your contract pricing. Access to complete product descriptions Search results from preferred suppliers appear first Select multiple products to compare

37 37 Side-by-side Product Comparisons Compare detailed product information Add to cart from product compare screen

38 38 Accurate Requisitions Pre-populated ship to/bill to information Pre-populated item information from shopping cart

39 39 Customized Approval Workflow Customize approval workflow based on any requisition field End users can preview approvals

40 40 Track Order Status Access all order online Track order status

41 41 What is the innovation supply chain? Case Studies

42 42 University of Pennsylvania Location: Philadelphia, PA Enrollment: 18,913 Client Since: 2003 ERP: Oracle Challenges: Supplier enablement User adoption Solution: Spend Director Supplier Promotion Module

43 43 University of Pennsylvania Results Campus-wide implementation to 1,600 users Enabled 75 preferred suppliers, representing 3 million SKUs and cover 68% of all transactions within 120 days Realized $2.1 million in documented cost savings from 16 renegotiated contracts

44 44 Rensselaer Polytechnic Case Study Location: Troy, NY Undergrad Enrollment: 5100 Client Since: 2001 ERP: SCT Banner Challenges: Inefficient purchasing processes Inability to control maverick spending Solution: Spend Director Requisition Manager Order Manager SciQuest Supplier Network Business Intelligence

45 45 Rensselaer Return on Investment $1,615,000$370,000$1,245,000TOTAL $680,000$155,000$525,0004 $480,000$110,000$370,0003 $285,000$65,000$220,0002 $170,000$40,000$130,0001 TOTAL SAVINGS PROCESS SAVINGS CONTRACT SAVINGS YEAR

46 46 Conclusion E-Procurement should be a critical component of an e-business strategy Benefits are real Cost Savings Process Efficiency Renegotiated Contracts Integration with ERP can extend value

47 47 Questions Q & A

48 48 "What people need to realize is that purchasing can have a direct impact on the bottom line. The economy is very bad, the state institutions are not getting funded, and there are cutbacks. But theres a multiplier effect through smart purchasing: Every dollar we save though smart purchasing translates to 10 or 15 dollars thats not needed in revenue. …You really cant afford not to pursue an e-procurement initiative. Tim Gibney Assistant Vice President for Procurement Services University of Notre Dame Taking the Pain Out of Purchasing, University Business. April 2003

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