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 /s ɑː s/) a licensing and delivery model in which software is centrally hosted and licensed on a subscription basis trans·for·ma·tion (/t ɹ æns.f ɔɹ.me ɪ. ʃ ən/) 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 Contract Compliance Minimize rogue contracting through efficient management and tracking of contracts through a central repository including full- scale template driven authoring 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 Mobile Devices Develop a strategy encompassing workforce mobility, ideally it improves usability Touchless Procurement Continue focus on reducing total number of touches, and eliminating physical touches Extended Supplier Relationship Management Optimize relationships with trading partners and manage performance, compliance, and information flow Increased use of Analytics Build the right internal capabilities to leverage the power of analytics to track savings and enhance reporting effectiveness Supplier Self Service / Supplier Network Connect suppliers through self service and allowing collaboration and automation through transactions across a network or portal Category Specific Solutions To fully address spend, leading organizations are configuring solutions by category Cloud Solutions License based, cloud solutions that require less maintenance and shorter deployment timeframes 3Copyright © 2014 Deloitte Development LLC. All rights reserved.

Procurement organizations are facing challenges with common themes emerging from the CPO community. “We know we need to invest in procurement technology, but we don't know where to invest to get maximum benefit fast" Operating Model Enablement Productivity "Our Procurement organisation is already stretched, but being asked to increase savings further" Collaboration and Innovation “Procurement must get under the skin of what the business needs by being able to ask the right questions." Benefits Realization and Control “We need to ensure that hard negotiated savings are realized within a complex global environment” Sources: 1) The Deloitte Global CPO Survey ) Gartner "Establish a Savings Management Process to Drive Procurement's Financial Performance", % of top performing CPOs place high/very-high importance on savings management 2 70% of CPOs plan to invest in technology in % of organizations are already working in cross functional teams 1 79% of CPOs see cost reduction as a top priority 1 4Copyright © 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. Operating Model Enablement Benefits Realization and Control Collaboration and Innovation Productivity P ROCUREMENT 2.0 On-line Collaboration Mobile Working Social Networking Embedded Analytics Cloud Deployment Usability Prioritized 5Copyright © 2014 Deloitte Development LLC. All rights reserved. Common Themes from CPOs

Most organizations are choosing a solution involving the cloud 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 90% of new Procurement Applications deals involve cloud solutions 1 Sources: 1) Gartner "The Top Four Impacts of Cloud Computing on Procurement Applications". 2) Forrester "Application Adoption Trends: The Rise Of SaaS". 6Copyright © 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. 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 7Copyright © 2014 Deloitte Development LLC. All rights reserved. Procurement FinancialsPurchasing Supplier Management SourcingContracts SaaS On-Premise Illustrative Hybrid Solution Reducing complexity is one key to overcoming challenges. Top organizations utilize 80% fewer platforms and 37% fewer applications.

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 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. Workforce Social Media Innovation / Project Management Predictive Analytics Custom developed applications eSourcing / eProcurement Extended Supplier Relationship Management Inventory Management Core Financials Manufacturing 8Copyright © 2014 Deloitte Development LLC. All rights reserved. Illustrative Breakdown of Systems by Layer Regular strategy reviews help identify when systems migrate between layers.

Procurement Transformation Considerations Things to consider when deploying procurement technologies. Cost Model Number of Integrations Deployment Timeline Scalability Number of Customizations 9Copyright © 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 Approach Deployment Sustainment Strategy: Layering = Flexibility ‒ Accelerated timeline requires different communication approach ‒ Focus on the business case and communicate benefits Approach: Stay agile! ‒ Use an iterative approach to design sessions ‒ Integrations require concurrent design, build and test phases Deployment: User adoption is #1 ‒ Create challenge sessions to limit customizations / integrations ‒ Increase your testers and super users Sustainment: Singles win games ‒ Promote early success and benefits ‒ Leverage support services 11Copyright © 2014 Deloitte Development LLC. All rights reserved.

Questions and Answers