Three keys to solving services eprocurement
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The document outlines three key strategies for improving services eprocurement: understanding use cases, itemizing for efficiency, and empowering suppliers. It emphasizes the challenges of service procurement compared to goods procurement, advocating for the 'productization' of services and the use of self-service tools. Additionally, it discusses the importance of digital optimization and transformation in enhancing procurement processes and achieving better spend management.
Three keys to solving services eprocurement
- 1. September 3, 2019 THREE KEYS TO SOLVING SERVICES EPROCUREMENT
- 2. AGENDA ▪ Introduction to OpusCapita ▪ Goods vs. Services eProcurement ▪ Three keys to solving services eProcurement -Know your use cases -Itemize for efficiency -Empower the Supplier ▪ Summary
- 3. Rowan Lemley (host) Introductions Sami Grönroos, Source- to-Pay Presales, OpusCapita
- 4. OpusCapita by the numbers Established 1984 ~350 Employees 65m € Revenue 2018 3000 Customers with users in over 100 Countries Over 1 Million Suppliers and 100,000,000 eTransactions Over 40,000,000 products and services bought & sold Over 130 Billion € in payments annually
- 5. DIGITAL OPTIMIZATION The process of using digital technology to improve existing operating processes and/or business models. DIGITAL TRANSFORMATION The process of exploiting the latest digital technologies and practices to create a new sustainable digital business model. THE PATH TO BECOMING A DIGITAL BUSINESS Gartner, Digital Business Transformation: Closing the Gap Between Ambition and Reality, Ian Cox, Kristin Moyer, 18 June 2018.
- 6. GLOBAL PAYMENTS PAYABLES AUTOMATION SOURCING & SUPPLIER ENGAGEMENT RECEIVABLES AUTOMATION OPERATIONAL PROCUREMENT CASH MANAGEMENT Comprehensive supplier information management and agile sourcing for goods and services. Improve your cash inflows and reduce the time spent matching payments to invoices. Create a centralized product catalog with a modern guided buying experience with full mobility. Consolidate and optimize your in- house bank and liquidity management functions. Enable control and compliance over AP while dramatically lowering transactional costs. Connect directly to over 200 banks, SWIFT certified for global payment coverage. OpusCapita is a platform that combines source-to- pay & cash management, enabling full source-to-cash process optimization. HOW WE SUPPORT YOU CONNECT, TRANSACT AND GROW ON THE OPUSCAPITA BUSINESS NETWORK
- 7. “Several studies suggest that, in practice, service procurement is more challenging than goods procurement. The underlying but largely implicit argument is that the procurement process for services involves higher buyer uncertainty and therefore requires extra efforts to mitigate this uncertainty.” -Journal of Purchasing and Supply Management, 2018 NATURE OF DEMAND GOODS VS. SERVICES (E)PROCUREMENT -definite vs open-ended -materials vs resources -inputs vs desired outcome SPECIFICATIONS & REQUIREMENTS -specific vs imprecise -stakeholder involvement -understanding value add CONTRACT AND SRM DELIVERY AND QA -frame agreements + SOWs -transactions vs relationship -service delivery is SRM -what vs by whom & how? -results & receipt tracking -proactive vs reactive QA SERVICES VS PRODUCTS PROCUREMENT
- 8. THREE KEYS TO SOLVING SERVICES EPROCUREMENT
- 9. KNOW YOUR SERVICE PROCUREMENT USE CASES A thorough as-is vs. to-be analysis is required to significantly impact purchase and process costs when it comes to the operational procurement of services. SERVICE ITEMIZATION OR “PRODUCTIZATION” In terms of requisitioning, some service categories can be treated like goods. By productizing services and utilizing service order configurators even complex service categories can be managed efficiently. EMPOWER THE SUPPLIER In certain service procurement use cases it is highly feasible to utilize supplier self-service tools, after all reducing the TCO should be a joint effort. THE THREE KEYS
- 10. MAPPING OUT THE USE CASES
- 11. Requisition Internal Workflow Automated Replenishment Reverse workflow Invoicing Network portal Electronic data interchange eInvoice Paper via mail (un/)Structured PDF via email Supplier quota Budget Limit Recurrence Three way matching Two way matching Manual Rule dependent Invoice HandlingPurchase Formalized freetext Informal Itemized product / service Order Configurator Running or open frame Receipt Assumed Goods Services Getting to 100% Spend Under Management Case by Case Essentials for AP automation
- 13. GUIDED BUYING FOR SERVICE CATEGORIES • Reduce complexity by standardizing and repackaging services to be more “product-like” • Start planning in the pre-contract phase and lay the foundation for efficient services eProcurement • Get instant results especially from service categories with measurable & specific variables, like: • Operational communication & marketing • Information & telecom services (software licences) • Admin services, conference rooms & catering • Courier services • Guide buying via catalogs and e-forms / smart forms SERVICE ITEMIZATION / PRODUCTIZATION
- 14. GUIDED BUYING FOR SERVICE CATEGORIES • Increase efficiency of requirements specification by utilizing order configurator forms (smart forms). • Get results from inherently complex service categories, such as: • Professional and commercial services • Temporary staffing • Maintenance & repair operations • Training & personnel services • Guide buying via smart forms with field dependencies • Enable enhanced control, compliance & automation, especially in combination service entry sheets SERVICE ORDER CONFIGURATOR
- 15. EMPOWER THE SUPPLIER VIA SELF-SERVICE
- 16. SERVICE REQUISITION • often based on an estimate • hard to estimate task/effort correctly • is often the basis of the purchase order SERVICE DELIVERY • actual task/effort can deviate from the original order • can have an objective driven outcome • is the basis of the invoice SERVICE ENTRY • allows the supplier to report the “actuals” • bridges gap between order/delivery • is a service receipt / enables control & accounts payable automation SERVICE CONFIGURATION & SERVICE ENTRY “Ten hours of work should do it” “Phew, I can’t believe this took 15h” “Time to report the actual effort” Buyer Supplier
- 17. “REVERSE” REQUISITION VIA SERVICE ENTRY • is initiated by the supplier… • …. meaning the estimate of work is often more accurate • estimate / service entry subjected to Buyer approval CONTROL POINT • approval is often based on e.g. vendor quota or budget • easy to automate • can be redone after service delivery & reporting of efforts SERVICE DELIVERY AND SERVICE (RE-)ENTRY • after the approval, the service is delivered • service re-entry only required if the delivery deviates from original entry • results in a service receipt REVERSE REQUISITIONING OF SERVICES “This facility needs tending to” “This seems to be in order” “Seems I was a bit off, but not by much” Supplier Buyer Supplier
- 18. KNOW YOUR USE CASES ITEMIZE TO IMPROVE EMPOWER THE SUPPLIER In order to significantly increase the spend under management in service categories a comprehensive analysis of the service procurement use cases is required e.g. from requisition to invoice matching and the associated costs. Itemization is crucial groundwork for services eProcurement overall, with quick wins achievable via: operational communications & marketing, information & telecom services, admin. services, conference rooms & catering, courier services etc. Supplier self-service and collaborative tools should not be overlooked in efforts to decrease the TCO. In service procurement optimization it is in both the Buyer’s and Supplier’s interest to make the process work. THE THREE KEYS SUMMARY
- 19. THANK YOU!
Editor's Notes
- #5: Founded 1984, approximately 400 employees, 65m€ in 2017