Indirect Spend 2.0 - Moving Beyond Business as Usual
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The document presents a comprehensive overview of Caesars Entertainment's procurement strategies and their partnership with Ariba, focusing on optimizing indirect spend through enhanced management practices. It highlights key initiatives aimed at improving compliance, cost savings, and procurement efficiency across various departments. Significant results include increased spend under management, cost savings, and enhanced operational metrics, outlining a journey of implementing technology to boost procurement performance.
Indirect Spend 2.0 - Moving Beyond Business as Usual
- 1. #AribaLIVE @ariba Indirect Spend 2.0 Moving Beyond Business as Usual Stephen Sinnott, Purchasing Operations Manager, Caesars Entertainment Rich Lazzara, Director IT, CA Technologies, Inc. @rplazz April 8, 2015 © 2015 Ariba – an SAP company. All rights reserved.
- 2. #AribaLIVE @ariba Indirect Spend 2.0 Moving Beyond Business as Usual A Holistic Cost Control Model Stephen Sinnott Purchasing Operations Manager Caesars Entertainment
- 3. #AribaLIVE @ariba Caesars Entertainment Overview • Quick Facts • 50 Properties 14 States 5 Countries • 3,000,000 sq ft gaming space • 42,000 hotel rooms • World Series of Poker (WSOP) • Caesars Interactive • $2.6B Addressable Spend • 4 Portfolios, 14 Segments • 120+ Categories © 2015 Ariba – an SAP company. All rights reserved.3
- 4. #AribaLIVE @ariba Building an Environment to Influence the Cost Structure of the Business Enable Compliant Spending Practices (Spend Under Management) • Provide Operators an avenue to conduct business within the company’s control framework • Encourage Partnership & Planning • Risk Prevention/Mitigation Optimize Economic Benefit (Cost Savings) • Increase Directed Spend & Contract Compliance • Identify & Act on Budget Impacting Events Maximize ROI per FTE • Leverage Networked Economy to Enhance the Sourcing Process • Increase Spend Automation • Offshore Low Value-Add Activities Process Normalization Resource Alignment Systematic Governance © 2015 Ariba – an SAP company. All rights reserved.4
- 5. #AribaLIVE @ariba Spend Under Management A Function of Customer Service Consistency Accountability Responsiveness Procurement Operations Pillars Process Aligns With Control Framework System Governed Process & Workflow KPIs Derived from Actual Work Product Ariba Provides real time process execution Performance Management Easily Integrates With Big Data Platforms For Performance Trending analysis © 2015 Ariba – an SAP company. All rights reserved.5
- 6. #AribaLIVE @ariba Cost Savings Driving Measurable EBITDA Impact Behavior Management: Use of Efficiency Drivers Increases Contract Compliance “Buying It Our Way Is The Easy Way” Catalogs • Allows For “Amazon”-like purchasing experience • Speeds Request-to-Delivery Contract Terms (ACC) • Don’t need to cut a PO every Time • Prevents accounting challenges caused by traditional BPO Collaborative Req (ACC) • Allows for automation in “Preferred Vendor “ based categories • Critical In Services Procurement • Validate Project Budget • Identify Budget Reduction Opportunities • Reallocate funds / Reassess ROI • Directly Associate SKU or Scope Transitions with historical consumption • Easily Identify Impacted BUs/Depts • Decrement/Increase Budgets As Is Appropriate` OpEx: Expense Budget Reduction CapEx: Capital Budget Reallocation © 2015 Ariba – an SAP company. All rights reserved.6
- 7. #AribaLIVE @ariba Increase Departmental ROI Maximizing Value Generation Per FTE Why Does Spend Under Management Matter? • Provide Sourcing Resources Optimal Leverage • Ensures Economic Benefit is Realized • Resource Planning & Tasking Optimization • Accounting & Finance Integrity • Reduce transactional touches • Define a standard and validate deviation requirements • Leverage a networked economy to drive efficiency & Supply chain development Stage 1: Categorize & Centralize Stage 2: Operationalize Category Strategy Stage 3: Automate & Offshore © 2015 Ariba – an SAP company. All rights reserved.7
- 8. #AribaLIVE @ariba Technology As a Work Force Multiplier Ariba Discovery Ariba SIM Ariba Sourcing Pro Ariba Contracts Ariba P2P • Qualified Vendors Find You • Control Vendor Setup & Supplier Onboarding • Execute RFx Quicker • Maximize Value Generation Through eAuctions • Expedite Contract negotiations & Execution • Govern Contract Billings • Increase Contract Compliance • Oversee transactional Bidding • Automate PO Generation & Transitions • Reduce Invoice touches Increasing Caesars Procurement Value Generation Increase Speed To Market Reduce Transactional Touched Drive Compliance To Category Strategy Reduce Procurement Resource Requirement © 2015 Ariba – an SAP company. All rights reserved.8
- 9. #AribaLIVE @ariba Controlling Enterprise Variable Cost Structure • 27% Increase In Responsiveness (Request Processing Time) • 7/10 Survey Responses: “I See Sourcing As a Key Partner in Running My Business” • 2% of Spend Requests Rejected • Direct Integration Into Budgeting Process • $1B Annual Ariba Runrate 2014 Project Results 29% Increase Spend Under Management $45M In Year Cost Savings 92% Increase Spend Managed Per FTE Doing More With The Same | Provide Advance Cost Management Controls | Improve Business Engagement © 2015 Ariba – an SAP company. All rights reserved.9 Doing More With The Same | Provide Advance Cost Management Controls | Improve Business Engagement
- 10. #AribaLIVE @ariba Indirect Spend 2.0 Moving Beyond Business as Usual Rich Lazzara, Director IT, CA Technologies, Inc. @rplazz April 8, 2015 © 2015 Ariba – an SAP company. All rights reserved.
- 11. #AribaLIVE @ariba Topics • Background • Ariba Footprint at CA • The CA/Ariba Journey • Benefits of Ariba • What’s Next © 2015 Ariba – an SAP company. All rights reserved.12 @rplazz
- 12. #AribaLIVE @ariba Background • CA Technologies $4.5B software company headquartered in New York ~14,000 employees SAP and Ariba strategic part of our IT ecosystem • Team Responsibilities Support Chief Procurement Officer – All Procurement functions plus Asset Management and Travel – Mobility and UX © 2015 Ariba – an SAP company. All rights reserved.13 @rplazz
- 13. #AribaLIVE @ariba Ariba Footprint at CA © 2015 Ariba – an SAP company. All rights reserved.14 2 USA Canada Started with North America @rplazz Spend Thru Ariba $400,000,000 Users 6,000 Countries 2 Suppliers 1,300 Catalogs 35 Purchase Orders 16,000 Invoices 26,000
- 14. #AribaLIVE @ariba Ariba Footprint at CA © 2015 Ariba – an SAP company. All rights reserved.15 USA Canada Australia China Hong Kong India New Zealand Singapore South Korea 9Added Asia Pacific @rplazz Spend Thru Ariba $20,000,000 Users 3,200 Countries 7 Suppliers 10 Catalogs 21 Purchase Orders 3,100
- 15. #AribaLIVE @ariba Ariba Footprint at CA © 2015 Ariba – an SAP company. All rights reserved.16 USA Austria Canada Belgium Czech Australia Denmark China Finland Hong Kong France India Germany New Zealand Ireland Singapore Israel South Korea Italy Netherlands Norway Poland Portugal Spain Sweden Switzerland UAE UK 28Added EMEA @rplazz Spend Thru Ariba $5,000,000 Users 2,000 Countries 19 Suppliers 9 Catalogs 136 Purchase Orders 6,000
- 16. #AribaLIVE @ariba Ariba Footprint at CA © 2015 Ariba – an SAP company. All rights reserved.17 USA Austria Canada Belgium Czech Australia Denmark China Finland Hong Kong France India Germany New Zealand Ireland Singapore Israel South Korea Italy Netherlands Argentina Norway Brazil Poland Chile Portugal Columbia Spain Mexico Sweden Peru Switzerland Venezuela UAE UK 35Will add LatAm in 2016 @rplazz Spend Thru Ariba tbd Users 500 Countries 7 Suppliers tbd Catalogs tbd Purchase Orders tbd
- 17. #AribaLIVE @ariba The CA/Ariba Journey Calendar 2014 SAP APAC DecOctSepAugJulJunAprMarFebJan May Nov Ariba Invoice Pro for NA • Business Case • Prep began July 2013 • Approved September 2013 • Project started end of October 2013 • September 2013 – JPM gives notice • Project go-live March 10, 2014 APC/PO in NA • Business Case • Prep began Sept 2013 • Approved December 2013 • Project started late January 2014 • Project go-live July 21, 2014 • Business Case • Included in overall SAP rollout • Project started October 2013 • Project started end of January 2014 • Project go-live August 18, 2014
- 18. #AribaLIVE @ariba Calendar 2014 SAP APAC DecOctSepAugJulJunAprMarFebJan May Nov Ariba Invoice Pro for NA APC/PO in NA Ariba Procure-to-Pay for EMEA Ariba Upstream • Business Case • Prep began July 2014 • Approved September 2014 • Project started October 2014 • Project go-live March 2015 • Business Case • Prep began Sept 2014 • Approved December 2014 • Project started December 2014 • Project go-live June 2015 The CA/Ariba Journey (continued)
- 19. #AribaLIVE @ariba Ariba Procurement Content/PO Automation Soft Benefits • Consumer-grade shopping experience • Cross-catalog search • Multiple suppliers in the same shopping cart • Product comparisons • Easily switch suppliers • Reduced supplier-related catalog issues © 2015 Ariba – an SAP company. All rights reserved.20 @rplazz
- 20. #AribaLIVE @ariba Hard Benefits • Reduced shopping cart to PO cycle time from 6 days to 2.5 • Reduced turn-around time to enable a catalog from 6 weeks to less than 2 weeks • Gain the benefit of compliance with company pre-negotiated products and pricing • Eliminate point-to-point handling of transmission of POs • Single cXML format interface for all purchase orders • Goal for EMEA: Increase order volume through catalogs from 34% to 70% © 2015 Ariba – an SAP company. All rights reserved.21 @rplazz Ariba Procurement Content/PO Automation
- 21. #AribaLIVE @ariba Catalog vs. Non-Catalog Spend in EMEA vs. NA 34% Vs. 66% (2.5 days) (6 days) @rplazz
- 22. #AribaLIVE @ariba Catalog vs. Non-Catalog Spend in EMEA vs. NA 78% Vs. 22% (2.5 days) (6 days) @rplazz
- 23. #AribaLIVE @ariba Ariba Invoice Professional Key Benefits • No loss of functionality • Foundation for a global procure-to-pay process • Offline invoice approval • Integrated procure-to-pay process • High level of automation • Lower error rate • Achieved 92% electronic invoice submission rate in six months Compared to 86% JPM XIGN after 3+ years © 2015 Ariba – an SAP company. All rights reserved.24 @rplazz
- 24. #AribaLIVE @ariba Ariba Upstream Solutions Key Benefits • Integrated data across sourcing, contracting, spend and supplier • Increased spend visibility and analytics • Cost neutral to acquire new Ariba software • Reduced cycle time for contracting • Document repository to support compliance with FATCA © 2015 Ariba – an SAP company. All rights reserved.25 @rplazz
- 25. #AribaLIVE @ariba Ariba Procurement Content/PO Automation • Deploy into Latin America Ariba Invoice Pro • Investigate rolling out into other regions • Started EMEA Ariba Upstream Solutions • Complete initial implementation • Build integration into back-end system CA/Ariba Journey – What’s Next @rplazz
- 26. #AribaLIVE @ariba Indirect Spend 2.0 Moving Beyond Business as Usual © 2015 Ariba – an SAP company. All rights reserved. Q&A
Editor's Notes
- #3: Earnings Report Impact
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- #22: Hard Benefits of APC/PO Reduced Shopping Cart to PO cycle time from 6 days to 2.5 days due to less approvals and automated PO release for catalog orders Products purchased from catalogs automatically create the PO once SC is fully approved – quicker turn-around time EMEA to increase order volume through catalogs from 34% to 70% and gain the benefit of compliance with company pre-negotiated products and pricing, estimated to be $167K cost-avoidance over the next three years for EMEA alone Single interface for PO’s as they go to the Ariba Network in a common cXML format vs. point solutions from CA to each individual supplier * * Implemented Ariba Procurement Content in NA, EMEA and APAC which allows for managing catalogs and shopping in the cloud. This is a more consumer grade shopping experience than SRM shopping functionality Implemented Ariba Purchase Order Automation in NA, EMEA and APAC which allows for a single interface for PO’s as they go to the Ariba Network in a common cXML format vs. point solutions from CA to each individual supplier
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