coupa 'crank up the savings' road show - dallas
TRANSCRIPT
Tony Wessels Vice President, Marke0ng
Coupa
Thank You
Ravi Thakur Vice President, Customer Success
Coupa
Keaton Miller Director, Procurement Advisory
KPMG
Jack Miles Industry Visionary, Former CPO CIGNA CA, Inc., AIG, CIBC, Travelers,
Tom Brewer Vice President, Shared Services
Michaels Stores
Bhaskar Deka Sr. Director, Product Marke0ng
Coupa
You AEendee, Coupa Roadshow
Coupa Overview ������
Tony Wessels���Vice President, Marketing
Coupa’s Mission
Delivering software innovation that breeds responsible spending while impacting the
company bottom line.
Coupa’s Mission
Delivering software innovation that breeds responsible spending while impacting the
company bottom line.
InnovaCon – Integrated Cloud PlaGorm
Bolt-on Functionality Organic, Integrated Functionality
Cloud
Yesterday Today
Client Server
Coupa’s Mission
Delivering software innovation that breeds responsible spending while impacting the
company bottom line.
Responsible Spending – User AdopCon
Complicated, Time Consuming Convenient & familiar
Users Spend Money Back Office - Process Automation
Yesterday Today
Coupa’s Mission
Delivering software innovation that breeds responsible spending while impacting the
company bottom line.
Impact BoKom Line
Products Service
Customer Satisfaction
Customer Success
Yesterday Today
Coupa’s Explosive Growth
180% Bookings
YOY
+95% Renewal Rate
YOY
150% Pla7orm Usage
YOY
One World, One PlaGorm
10 Languages
40 Countries
Customers Highlights Retail Finance Mfg. Health Care High Tech
Real Estate
Coupa Vision & ���Platform Overview ���
���Ravi Thakur���
Vice President, Customer Success
CFO Journal Entries
VP HR Employee Records
VP Sales OpportuniCes
Procurement Spend TransacCons
Starts With the Employee
Employees Have DramaCcally Changed
Our Vision is the Coupa PlaGorm
The Coupa PlaGorm
The Coupa PlaGorm
The Coupa PlaGorm
99.9% Uptime SLA
500,000 Daily Transactions
300,000 Suppliers
4+ API Calls p/Second
The Most Active Cloud Procurement Platform On the Planet
User Sourced
Execute
Confirm Receipt
2 & 3 Way
Match
Contract Source Analyze
Order Ack & ASN
Seamlessly Integrated PlaGorm
Requisition Submitted
Purchase Need
PO Issued To Supplier
Order Fulfilled
Invoice Received
Invoice Paid
Requisition Approval
RequisiCon to Approved Invoice
Requisition Submitted
Purchase Need
PO Issued To Supplier
Order Fulfilled
Invoice Received
Invoice Paid
Requisition Approval
• 18,000 Users • 3,500 Locations • 4,000 + PO’s & Invoices p/day • OK to Pay Invoices flow into Lawson • Emptoris Integration for Advanced Contracts
RequisiCon To PO & Receipt
Requisition Submitted
Purchase Need
PO Issued To Supplier
Order Fulfilled
Invoice Received
Invoice Paid
Requisition Approval
• 1,000 users • Over 500k Catalog Items • Over 500 Custom Views • PO’s and PO changes flow into SAP • Receipts flow into SAP
RequisiCon To PO
Requisition Submitted
Purchase Need
PO Issued To Supplier
Order Fulfilled
Invoice Received
Invoice Paid
Requisition Approval
• Over 6,000 users • Integration to McDonalds Intranet Applications • Over 4,000 logins daily • Over 10,000 p-cards
Demonstration
Marketing
Innovation
Market
Customers
Roadmap Influencers
What this All Means to You
Thank You!
Sustaining Value Through Integrated Procurement Transformation���
���Keaton Miller���Director, KPMG
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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Procurement Advisory at KPMG
Our mission is to make Procurement a competitive differentiator for our clients.
Organizational effectiveness
Supplier Risk Management
Technology Enablement
Master Data Management
Process Optimization
Category Sourcing & Management
Tax Efficient procurement
Supplier Relationship Management
Rapid Assessment
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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Session objectives
n Discuss the key elements of an integrated procurement target operating model
n Provide a high-level overview and insight into how the procurement technology space has evolved in response to customer demand for innovation and lower cost of ownership
n Highlight critical success factors of an integrated approach for successful and sustained procurement transformation
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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KPMG has an integrated, life-cycle view of the procurement function
It is critical to recognize the interconnectedness of the different components: Strategic Sourcing generates the savings while Transactional Procurement delivers them to the bottom line.
Vendor Risk and Portfolio Management help preserve the value delivered.
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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Value leakage can occur at every stage of the Source-to-Pay cycle
Strategic Sourcing " Total cost levers " Cross-functional team
approach " Rigorous tracking of
generated savings
Contract Management " Established contract
management teams " Defined contract
management plans " Active performance
and transition management
Deliver
" Lack of business buy-in to sourcing strategies
" Limited use of eRFx tools
" Lack of transparency around supplier selection
" Buyers too focused on tactical purchasing
" Limited visibility to negotiated contracts
" Paper contracts distributed across organization
" High degree of off-contract spend
" Conflicting/duplicate contracts with the same vendors
" Disparate processes and tools
" Few upfront purchase orders
" ‘After-the-fact’ approvals
" Blocked invoices " Duplicate payments " Limited use of ACH/
EFT
" Abundance of data; little intelligence
" Incomplete, incorrect, inconsistent data – materials and vendors
" Spend data dispersed across multiple systems; Enterprise view not available
Identify Sustain
Lead
ing
Prac
tice
Com
mon
Pra
ctic
e
Operational Procurement " Documented policies
and procedures " End-to-end process
visibility and transparency
" Standardization and automation
Procurement Intelligence " Defined KPIs and
metrics " Enterprise tracking
and Reporting " Data accuracy and
reliability
Supplier Management " Formalized supplier
management program " Dedicated supplier
account teams " Aligned KPIs
" Exception-based supplier management
" Tactical interactions versus strategic relationships
" Limited supplier collaboration and sharing of data
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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Technology is a key enabler for procurement effectiveness and transactional efficiency…
People & Organization – Procurement operating model (centralized, center-led, decentralized), roles, responsibilities and people that should be supporting the defined process.
Process – P2P processes, activities and tasks for each of the buying channels including the mapping to specific functions and departmental roles performing them.
Technology & Tools – tools and applications that are used to enable the P2P processes, policy compliance, internal controls, and report generation.
Performance Measurement – Internal key performance indicators and metrics to manage people and processes, and drive correct behavior. Includes procurement operational and executive reporting needs.
Governance & Policies – Policies, procedures and controls in place to mitigate risk of processing errors, linked to specific steps in the Requisition-to-Pay process.
Master Data – Quality of master data associated with procurement and invoicing processes e.g. materials, services, vendors, commodity codes, etc. Includes processes and controls to maintain master data and sustain its quality.
Performance Measurement
Organization Layer People & Organization
Processes
Technology & Tools
Governance & Policies
Master Data
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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0%
20%
40%
60%
80%
100%
Financial Services Health Manufacturing / CPG
Public Sector Retail TMT / Busn Services
Transportation / Logistics
ENR & Process Not for Profit
Foundational or Established Leading or Excellence
… Yet most companies are immature adopters of procurement technology
Very few companies exhibit Leading or Excellence maturity levels for procurement technology – levels that indicate that users are
empowered to use technology, and procurement can refocus on strategic work
Source: KPMG’s Power of Procurement Survey, 2012
82%
18%
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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ERP
The procurement technology landscape has evolved dramatically – making it easier to successfully adopt
Typical Procurement 1.0 Landscape Procurement 2.0 Landscape
Contract Management
Spend Analytics Sourcing &
RFx)
Operational Procurement
Supplier Collaboration
Invoicing
ERP
Key Characteristics of the typical procurement 1.0 landscape: n Standalone, single purpose point solutions n Low to moderate degrees of integration n On-Premise Centric n High Total Cost of Ownership n Less focused on end user experience
Key Characteristics of an evolving procurement 2.0 landscape: n Suite-oriented solutions n Tight integration n Open standards n Greater accessibility and scalability n Greater use of on-demand resources n Internal and external collaboration tools n Oriented towards the end user experience
¹ Operational procurement includes requisitioning, purchase order, and receiving functions
Sourcing & RFx
Invoicing
Operational Procurement
Supplier Collaboration
Spend Analytics
Contract Management
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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Optimizing use of the cloud as part of your technology strategy can serve as a game changer
§ By removing traditional barriers to access, the cloud has created a resurgence in demand for technology, by making investments in innovation more affordable to companies of all sizes and scale
Innovations in procurement are being delivered through the cloud
§ The cloud is already changing how we collaborate with our coworkers and business partners, and the speed at which those interactions can occur.
§ By virtualizing processes, the cloud creates new opportunities and business models for deployment.
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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KPMG recognizes that procurement transformation is a journey – not a destination
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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We understand the keys to transformation success…
* Source: Mori Study
Top 10 Risks toTransformation Programs * Culture 54% Inappropriate org structure 48% Employee resistance 46% Senior mgmt resistance 45% Fear 43% Change overload 36% Ineffective performance measurement 33% Failure to sustain momentum 23% Failure of past projects 21%
Critical Success Factors 1. Focus on people and changing
behaviors 2. Start generating savings early to
establish credibility 3. Striking the right balance between
“running the business” and “transforming the business”
4. Include internal and external stakeholders in the journey
5. Recognize the role of foundational elements to drive sustainable savings
Includes Technology Enablement
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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… And have found that an integrated approach to transformation can drive sustainable value
• Accelerate the time to achievement of savings • Generate additional value and savings • Sustain value and savings by ensuring compliance to preferred suppliers and contracts
Benefit
Time to value
Integrated approach
Speed
Additional value
eProcurement and Contract Mgmt alone
Addressing eProcurement, Contract Management, Classical Strategic Sourcing, Organization and Technology together will:
Sourcing alone
Sustained benefit due to compliance
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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In summary…
• Current cloud technology-enabled procurement transformation programs demonstrate feasibility and tangible, realizable benefits
• World-class performance in procurement can be achieved and can drive sustainable business value
• Dramatic changes in procurement technology now makes adoption of foundational enablers easier and more cost effective
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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For more information….
Samir Khushalani Principal Advisory KPMG LLP 811 Main Street Houston, TX 77002 [email protected] KPMG is a U.S. limited liability partnership.
Tel 713 319 3570 Cell 713 459 2236
Keaton Miller Director Advisory KPMG LLP 811 Main Street Houston, TX 77002 [email protected] KPMG is a U.S. limited liability partnership.
Tel 713 319 3825 Cell 214 316 9682
What We Do > Advisory > Management Consulting >
By Function > Strategic Sourcing & Procurement
…Email our KPMG Procurement Advisory Mailbox… [email protected]
…Contact us directly…
…Or visit our website at www.kpmg.com!
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 108976
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 52188DAL
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Jack Miles
54
Former CPO, CIGNA
Conversations with an Industry Visionary
Break
Agenda Time Item Presenter
8:30 – 9:00 Coffee All
9:00 – 9: 15 Welcome – Coupa Overview Tony Wessels, V.P. Marketing Coupa
9:15 – 10:00 Coupa Solution & Roadmap Ravi Thakur, V.P. Customer Success, Coupa
10:00 – 10:30 Sustaining Value Through Integrated Transformation
Keaton Miller, Director, KPMG
10:30 – 11:00 Conversation with an Industry Visionary Jack Miles, Former CPO CIGNA
11:00 – 11:15 Break All
11:15 – 11:45 Customer Success – Best Practices Tom Brewer, V.P. Shared Services, Michaels
11:45 – 12:15 Calculating TCO Bhaskar Deka, Sr. Director Product Marketing, Coupa
12:15 – 12:30 Closing Remarks Tony Wessels
12:30 – 1:00 Coupa Demo
Tom Brewer
57
VP, Shared Services Michaels Stores
Customer Success – Best Practices
58
Michaels Privileged & Confidential
Michaels Stores
Category Leader in Arts & Crafts
• Over 1,000 stores in U.S. and Canada
• 40,000+ SKUs across a variety of general & kids crafts, art supplies, framing and seasonal / décor categories
• $4.0 Billion in Revenue
59
Michaels Privileged & Confidential
Michaels Vision & Strategy
A World-Class Performer that: • Inspires and enables consumers to experience creativity • Leads industry growth & innovation • Creates a fun and rewarding place to work that fosters meaningful connections with our communities
Vision
PEOPLE: World-Class Workforce / Environment / Performance
CO-SOURCING: Systems & Process Enablers
StoreGrowth
CategoryMgmt
GlobalSourcing
CashFlow
Mark-eting
CustomerExperience
PEOPLE: World-Class Workforce / Environment / Performance
CO-SOURCING: Systems & Process Enablers
StoreGrowthStoreGrowth
CategoryMgmt
CategoryMgmt
GlobalSourcingGlobalSourcing
CashFlowCashFlow
Mark-etingMark-eting
CustomerExperienceCustomerExperience
Strategic Priorities
60
Michaels Privileged & Confidential
The Goal….
Lean Process and Improved Accuracy
• Reduce invoice coding and approval time by 60% (support department )
• Reduce invoice processing effort by 25% (Accounts Payable)
• Reduce costs for invoice scanning and online retention by 30%
• Improve On time payment by 25%
• Ensure 100% centralized systemic visibility to complete non-merchandise purchase obligations (Compliance)
• Corporate-wide systemic process
• To record PO obligation
• Leverage authorized suppliers and items
61
Michaels Privileged & Confidential
The Decision….
Lean Process and Improved Accuracy
• Oracle Financials rolled out in 2006 • Needed to implement many modules to function effectively
• iSupplier
• Procurement
• Purchasing
• Projects
• No available capital or resources for an indirect spend tool
• Coupa provided ease of use and quick start for the process • No capital investment or IT resources required
• Offered control and approval to spend before PO placed
• Consistent use of approved vendors
62
Michaels Privileged & Confidential
The Journey – Identifying Opportunities
• Conducted workshops and interviews
• Captured Voice of Customer (VOC)
• Identified Improvement Opportunities
• Segregated Effort and Process Control related Issues
• Conducted Surveys to estimate AS-IS Effort
• Completed Process Mapping for finding process bottlenecks.
63
Michaels Privileged & Confidential
The Journey – Analyze & Identify Waste
• Charted an Affinity diagram to • Identify all process improvement opportunities
• Classify and group opportunities
• Built Value Stream Map to determine
• Value adding & enabling steps (essentials)
• Non value adding steps (Wastes)
• Identified Manual Efforts, rework and errors to be reduced
• Cash flow impact analysis to ensure no negative impacts on cash flow
Manual Rejection
$2,576,050.00
$1,356,432.00
$931,822.00
$- $473,442.00 $568,858.00
$-
$500,000.00
$1,000,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$3,000,000.00
Duplicate Payment
Missing Information
Clarification Miscellaneous Approval Missing
Incorrect Payment
Type of Errors
$ V
alu
e
64
Michaels Privileged & Confidential
Achieving the Goal….
Lean Process and Improved Accuracy
• With vendor interface the vendor invoices will presented by the vendor in the tool to eliminate the need to:
• Scan
• Route to departments for approval
• Coding is linked PO eliminating the need to add coding
• Recover invoices
• Tool will hold all PO’s for indirect spend
• Control vendor setup to only approved vendors and pricing
• Interface Payment information from AP to Tool to aid vendor in payment status
65
Michaels Privileged & Confidential
Where we are…..
Lean Process and Improved Accuracy
• Capital and expense items for corporate and DC’s operational • Using punch outs to vendor catalog and selected items build into our item list
• Suppliers link invoicing into tool
• Electronic invoicing
• Over 5,000 PO’s / $83 M orders
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2
66
Michaels Privileged & Confidential
Projected benefit is HUGE
The Journey – Reaping the Benefits
• Shifted effort of invoice coding and approval time from departments to AP
• Saving from Accounts Payable Invoice
Processing
• Improved Working Capital
• Control of budgets and projects in one central tool
• CFO – controls for projects
67
Michaels Privileged & Confidential
Next Steps
• Partner with Coupa to add Budget/Project tracking into system
• Coupa setup allows only authorized access to set item level data to include account coding
• Linked with Tax Department for reporting
• Invoice approval in tool with feed to AP for funding
• Develop reverse feed into tool of Spend data for analysis and accruals
68
Michaels Privileged & Confidential
Questions
? ? ?
Calculating TCO For A ���Rock Solid Business Case���
���Bhaskar Deka���
Sr. Director, Product Marketing
Making the Business Case May Seem Complicated ..
You Manage: § ApplicaCon § RunCme § IntegraCon § Database
Vendor Manages:
§ Server Hardware/Software
§ Storage
§ Network
Hosted SaaS/Cloud On-‐Premise Vendor Manages: § Application
§ Runtime § Integration
§ Database
§ Server Hardware/Software
§ Storage § Network
Especially, with 3 Deployment OpCons …
You Manage: § Application
§ Runtime § Integration
§ Database
§ Server Hardware/Software
§ Storage § Network
Which OpCon Is The Best For The Long Term?
Customer Records
TCO To The Rescue
TCO Whitepaper TCO Calculator Tool
Are You Familiar With Total Cost Of Ownership (TCO) Analysis ?
§ Yes, used TCO Analysis before § Yes, sort of familiar § No, never used
What is TCO? Direct Cost Indirect Cost
Over the lifeCme of an Asset ..
§ Hardware § Sohware
§ InstallaCon § Training § Professional Services § Upgrades
Why Care about TCO?
§ SoluCon costs vary greatly based on the delivery
model
§ Need a simple model to compare cloud vs. on-‐
premise/hosted soluCons
§ IniCal terms look aKracCve but will crush you in
the long run
Key Metrics to Consider for TCO
§ # of Users § Expected user growth
§ Spend through system
§ Expected growth of spend through system
§ # of LocaCons
Company Profile
§ # of ERP instances § # of Other IntegraCon Points
§ # of Custom Fields § # of Complex Approval Rules
Complex
§ # of Purchase Orders § # of Invoices § # of Catalogs § # of Suppliers § # of Punch-‐outs
Environmental
Cost Drivers For Procurement AutomaCon
Cost Driver On-Premise Cloud
Software 1x Licensing Cost Annual Subscription
Hardware & Infrastructure Servers & Databases No fees
Configuration/Implementation Professional Services Set-up fees
Data Migration Extensive Minimal
User Training Required Lower Cost – Ease of Use
Annual Maintenance 19 – 20% of Software None
78
Soft Costs & Gotchas���
Cost of Delaying Savings
• Many projects never get started
• Savings are delayed or never begin
Project Management
• Costs of engaging with IT
• Time away from more strategic tasks
• Custom forms & ?ields, multiple charts of accounts
• Special features can double/triple cost
Complex Requirements
4 Steps for TCO Analysis
Evaluate Functionality
Determine Initial/Upfront Costs
Identify Annual/Recurring Costs
Enter Data into TCO Tool & Compare Optons
4 Steps for TCO Analysis
Evaluate Functionality
Determine Initial/Upfront Costs
Identify Annual/Recurring Costs
Enter Data into TCO Tool & Compare Optons
4 Steps for TCO Analysis
Evaluate Functionality
Determine Initial/Upfront Costs
Identify Annual/Recurring Costs
Enter Data into TCO Tool & Compare Optons
4 Steps for TCO Analysis
Evaluate Functionality
Determine Initial/Upfront Costs
Identify Annual/Recurring Costs
Enter Data into TCO Tool & Compare Optons
§ $2 Billion Manufacturer of Energy Related Materials § Decentralized purchasing - Plant managers control material - Services procurement (45% of spend) black hole
§ ParCally Centralized AP with Imaging - 1,200,000 annual invoices - Limited EDI/Electronic Invoices
§ Issues/Pains - Lots of paper/long PO approval cycle - No visibility to non-‐PO purchases - Late payments/Missed discounts - Too much manual effort
Case Study Fortune 100 Manufacturing
Cost Categories Year 1 Year 2 Year 3
Cloud Traditional and Network
Cloud Traditional and
Network
Cloud Traditional and
Network
One Time Costs Software & Hardware
Software License $137,500 Software Upgrades $15,000
Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Typical Configuration & Implementation: Data migration $0 $75,000
Services Procurement $0 $60,000 Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000 Professional services $0 $175,000
Program management (vendor) $0 $150,000 Training $0 $90,000
Typical Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000 Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000 Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000 Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500 Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
Case Study Fortune 100 Manufacturing
86
Cost Categories Year 1 Year 2 Year 3 Cloud Traditional
and Network Cloud Traditional
and Network
Cloud Traditional and
Network
One Time Costs Software & Hardware
Software License $137,500 Software Upgrades $15,000
Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Typical Configuration & Implementation: Data migration $0 $75,000
Services Procurement $0 $60,000 Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000 Professional services $0 $175,000
Program management (vendor) $0 $150,000 Training $0 $90,000
Typical Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000 Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000 Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000 Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500 Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
One Time Costs
87
Cost Categories Year 1 Year 2 Year 3 Cloud Traditional
and Network Cloud Traditional
and Network
Cloud Traditional and
Network
One Time Costs Software & Hardware
Software License $137,500 Software Upgrades $15,000
Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Configuration & Implementation: Data migration $0 $75,000
Services Procurement $0 $60,000 Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000 Professional services $0 $175,000
Program management (vendor) $0 $150,000 Training $0 $90,000
Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000 Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000 Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000 Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500 Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
One Time Costs
88
Cost Categories Year 1 Year 2 Year 3 Cloud Traditional
and Network Cloud Traditional
and Network
Cloud Traditional and
Network
One Time Costs Software & Hardware
Software License $137,500 Software Upgrades $15,000
Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Configuration & Implementation: Data migration $0 $75,000
Services Procurement $0 $60,000 Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000 Professional services $0 $175,000
Program management (vendor) $0 $150,000 Training $0 $90,000
Typical Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000 Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000 Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000 Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500 Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
One Time Costs
Cost Categories Year 1 Year 2 Year 3 Cloud Traditional
and Network Cloud Traditional
and Network
Cloud Traditional and
Network Annual Costs
Maintenance / Hosting / Subscription Hardware / infrastructure maintenance $5,000 $5,000
Software maintenance $27,500 $27,500 Application Support $50,000 $50,000 $50,000
Procure to Pay subscription $650,000 $300,000 $650,000 $300,000 $650,000 $300,000 Req to PO subscription
Expense management subscription Contracts module subscription $0 $50,000 $0 $50,000 $0 $50,000 Payables module subscription
Spend analysis subscription $0 Transaction fees $0 $400,000 $0 $400,000 $0 $400,000
Hosting fees Maintenance / Hosting / Subscription $650,000 $800,000 $650,000 $832,500 $650,000 $832,500
Services & Fees: Supplier enablement $0 $50,000 $0 $50,000 $0 $50,000
Supplier fees $0 $1,200,000 $2,000,000 $2,400,000 Services & Fees $0 $1,250,000 $0 $2,050,000 $0 $2,450,000
Total Annual Costs $650,000 $2,050,000 $650,000 $2,882,500 $650,000 $3,282,500 Opportunity Costs
Savings lost from continued maverick spend $0 $1,250,000 $0 $937,500 $703,125 Savings Lost $0 $1,250,000 $0 $937,500 $0 $703,125
Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125
89
Annual Costs
Cost Categories Year 1 Year 2 Year 3 Cloud Traditional
and Network Cloud Traditional
and Network
Cloud Traditional and
Network Annual Costs
Maintenance / Hosting / Subscription Hardware / infrastructure maintenance $5,000 $5,000
Software maintenance $27,500 $27,500 Application Support $50,000 $50,000 $50,000
Procure to Pay subscription $650,000 $300,000 $650,000 $300,000 $650,000 $300,000 Req to PO subscription
Expense management subscription Contracts module subscription $0 $50,000 $0 $50,000 $0 $50,000 Payables module subscription
Spend analysis subscription $0 Transaction fees $0 $400,000 $0 $400,000 $0 $400,000
Hosting fees Maintenance / Hosting / Subscription $650,000 $800,000 $650,000 $832,500 $650,000 $832,500
Services & Fees: Supplier enablement $0 $50,000 $0 $50,000 $0 $50,000
Supplier fees $0 $1,200,000 $2,000,000 $2,400,000 Services & Fees $0 $1,250,000 $0 $2,050,000 $0 $2,450,000
Total Annual Costs $650,000 $2,050,000 $650,000 $2,882,500 $650,000 $3,282,500 Opportunity Costs
Savings lost from continued maverick spend $0 $1,250,000 $0 $937,500 $703,125 Savings Lost $0 $1,250,000 $0 $937,500 $0 $703,125
Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125
Annual Costs
Cost Categories Year 1 Year 2 Year 3 Cloud Traditional
and Network Cloud Traditional
and Network
Cloud Traditional and
Network Annual Costs
Maintenance / Hosting / Subscription Hardware / infrastructure maintenance $5,000 $5,000
Software maintenance $27,500 $27,500 Application Support $50,000 $50,000 $50,000
Procure to Pay subscription $650,000 $300,000 $650,000 $300,000 $650,000 $300,000 Req to PO subscription
Expense management subscription Contracts module subscription $0 $50,000 $0 $50,000 $0 $50,000 Payables module subscription
Spend analysis subscription $0 Transaction fees $0 $400,000 $0 $400,000 $0 $400,000
Hosting fees Maintenance / Hosting / Subscription $650,000 $800,000 $650,000 $832,500 $650,000 $832,500
Services & Fees: Supplier enablement $0 $50,000 $0 $50,000 $0 $50,000
Supplier fees $0 $1,200,000 $2,000,000 $2,400,000 Services & Fees $0 $1,250,000 $0 $2,050,000 $0 $2,450,000
Total Annual Costs $650,000 $2,050,000 $650,000 $2,882,500 $650,000 $3,282,500 Opportunity Costs
Savings lost from continued maverick spend $0 $1,250,000 $0 $937,500 $703,125 Savings Lost $0 $1,250,000 $0 $937,500 $0 $703,125
Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125
Annual Costs
Year 1 Year 2 Year 3 Procure to Pay Costs Summary Cloud Traditional
and Network Cloud Traditional
and Network
Cloud Traditional and
Network One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
Annual Costs $650,000 $630,000 $650,000 $727,500 $650,000 $742,500
Total Costs $650,000 $1,442,500 $650,000 $827,000 $650,000 $827,000
Annual Differerence $792,500 $177,000 $177,000
Total Three Year Savings = $1,146,500
Results
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
Initial Investment Year 1 Year 2 Year 3
Mil
lio
ns
On-site Development Costs
Cloud Development Costs
Initial Investment Year 1 Year 2 Year 3On-site Development Costs $0 $3,855,000 $3,822,000 $3,987,625Cloud Development Costs $0 $850,000 $850,000 $850,000
Cumulative Total Cost of Ownership
Results
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Closing Remarks������
Tony Wessels���Vice President, Marketing