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Transformation for Agile Procurement

Transformation for Agile Procurement

9th Oct 2018

CPO

Taken from CPO Celtic Manor Event, October 9th 2018

Charles Cao, Director, Industries and Strategic Markets EMEA - Apttus
Mark Fleming, Sales Director - Apttus

 

Our view of the world is what helps us to drive the solutions we build, the clients we engage with and the value we aim to provide for our customers. From a procurement perspective, we have gone from agricultural times when supply chains existed but were uncomplicated, to the industrial revolution which was driven by technology which became a bit more complicated and now from 2000 onwards, we are seeing unparalleled change with companies like Netflix and Uber.

 

What we are seeing is lots of new business models, but what we see is that every customer we talk to, no matter where they are and what their current model is, so many of them are now moving to a subscription model. So things that you never thought would rentable or able to use without buying are headed in that direction.

 

We are also seeing lots of new engagement models such as augmented reality so you can see what a piece of furniture would look like in your living room for example. And these models will continue to grow in time and move into businesses. There are also additional insights as we have data coming in from everywhere and we have AI growing up in parallel to help us understand it.

 

Forbes are currently saying that subscription companies are growing by 800%, so if you are a venture capitalist then that’s where a lot of money is going at the moment. Gartner state that 56% of CEOs say that digital investment is driving net profit, while Harvard Business School states that AI probably won’t replace managers, but managers who use AI will likely replace those who don’t.

 

There are really four objectives that privately owned companies have:

  • Make money
  • Save money
  • Stay out of trouble
  • Remain agile

What can you do

  • Optimise your process for making and saving money
  • Help shape the behaviour of the people in your organisation who execute those processes
  • Provide them with intelligence to make smarter decisions using AI

The Middle Office

Where Apttus focuses is on connecting the data points between the front office (CRM, accounts, sales etc.) and the back office (supply chain, compliance etc.). One of the main solutions is what we call CPQ (Configure Price Quotes) which sales uses to provide a guided setting and environment to create quotes and it provides guidance to products and prices/discounts to look into and uses historical data to their advantage.

 

However in that environment, procurement becomes key. Sometimes procurement is supporting sales directly, whether you have a tender based sales process in which case you need to support them with cost information, or indirectly by buying things to help the company sell. So having that unique platform for the entire organisation becomes critical because you have a single source with all the information you need to run the business.

How do we deliver Agile Procurement?

  • Single Data Model- deals with products, price, contracts, orders and rebates which supports the sales team, the front end and the back end
  • Omniservices- the functionality and applications that bring all these objects together and make then interact with each other (Apttus Intelligence Cloud)

As a process, we cover procurement and the purchasing scenario, an unboarding scenario to engage with suppliers, then configuring price codes and supporting the whole sales process including rebates and supplier contracts and finishing with renewal.

 

We are able to execute both processes on the same platform using the same data model. With enterprise contracting, all of your contracts can go into one repository which allows you to do things like make sure obligations are backed up by appropriate entitlements from your suppliers.

 

Also, if you are in a business that has any regulatory interest, one thing you can do is consider regulatory obligations like GDPR and establish obligation to it and make sure your supplier side agreements have the necessary entitlements to enable you to satisfy the obligation. Then if you have these two processes on the same data model, it allows you to share intelligence between them. For example, sharing information around staffing and promotions linked to pricing and revenue.

 

In terms of what our customers typically see from us, in terms of compliance, typically if you would put a process in place and some reporting in place you would expect to see an improvement in visibility of what you are doing, which usually enables you to optimise your process and behaviours.

Audience Question- In terms of sourcing, how do you identify the suppliers that you send quotes to?

We are building out our tech support for the buying process. We have a sourcing application which our current customers use primarily for managing RFPs. So we haven’t yet got the point of helping our customers identify sources of supply. There are others who do and we may decide to do so in the future.

 

What we will do is support the process of sending and generating contracts and then managing the negotiation. We will then identify all the suppliers in the market and provide that to the clients.

Audience Question- When data is collected, would your customer then collate it all and input it into a system?

We have different ways to deploy that, but the most standard way is for us to sit on your CRM and the information will be an extension of that CRM or supplier management system. Some of our customers do have CRM that is fit for purpose and they will want us to feed information that is already in CRM and feed it forward. Similarly, they may already use a sourcing application that has information about suppliers and want to feed that forward too.

 

If you have a CRM that is not fit for business purpose, we’d like to understand your plans for making it so and in the interim, the question we would ask is ‘if you want to populate this data, where else could it come from?’ Quite often, our customers will prime their Apttus system first time around with data they have put in from many sources.

 

We were born as a Salesforce native platform. Then a few years ago we developed with Microsoft to be able to let us deploy Apttus via Microsoft. We also deploy is as a stand alone application that sits on the Azure platform that can connect independently to any systems you may use.

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