truespend - indirect spend management_10.6.2012

7/31/2019 Truespend - Indirect Spend Management_10.6.2012

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Gaining access to large hidden

cost savingsJoonas Jantunen, Truespend JLT

Dubai, 10.6.2012

Indirect spend managementby truespend


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Indirect Spend

Indirect spend refers to purchases of goods andservices that are not directly incorporated into aproduct being manufactured and sold to endcustomers.

Indirect spend can be a very large part oforganizations overall spend and revenue (30-90%) -but often has very little focus due to many reasons,mainly lack of internal expertise.

In the current economic downturn, it is important forcompanies to control indirect spend for efficiency. Forcompanies in the services and supplies sector, it iseven more critical, since optimizing their indirectspend may significantly affect their bottom lines!

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Indirect Spend

Indirect spend includes all of the supplies and servicesthat are necessary to run any organization such as Marketingrelated services (i.e. media buying and creative agency

services),

ITrelated supplies and services (i.e. hardware, software, telecom), HR related services (i.e. recruitment and headhunting, training,temporary labor, insurances),

Professional services (i.e. financial and audit services,management and IT consultancy),

Travel related services (i.e. travel agencies, airlines, hotels, rentalcars),

Facilitiesmanagement, office services and utilities (i.e. furniture,cleaning, catering, printers, gas, electricity, water etc.).

Logisticsservices (i.e. courier services, warehousing etc.)10/6/12 truespend 3


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Benefits to you

Typical cost savings from centralized and professionallymanaged indirect procurement projects range from 7-25%!

As example, 12% annual savings from USD 50M spendon facilities services equals USD 6M on to be presentedon bottom line profits or spent on more strategic areas.

Additional benefits include i.e.1. improving spend control and maximizing spend visibility for

management and budget holders,2. driving efficiency and innovation with external suppliers,3. possibility to fully focus on more strategic procurement

areas while truespend manages the non-core areas withexpert resources.

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Truespend model

Truespend is a Procurement Service Provider specializingfully in indirect spend management, outsourcing andconsultancy.

We operate as an extension to your existing (indirect)procurement teamor in case such does not exist, managethe selected categories independentlybut in closecollaboration with your key stakeholders and with definedcriteria.

All our consultants are specialized in indirect procurementand have long professional careers either as categoryspecialists or generalists from global blue chip companiesand leading procurement consultancy companies.

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Truespend model

Truespend works as an outsourcing partnerfor companiesthat

1. do not have a dedicated procurement team formanaging indirect spend but want to take advantage ofthe savings opportunities or

2. that are looking to focus on more strategic directprocurement areas and want to let a specialized team tomanage their indirect/non-strategic spend

by taking ownership and responsibility of analyzingrequirements, creating sourcing plans and executing thesourcing projectsfollowing tested processes and tools with aclear dedication of delivering financial savings or otheragreed results.

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truespend services

Our services are all focused on improving your indirect spendmanagement, and depending on the situation of your organization wecan engage by starting with

TrueState Analysis(i.e. thorough spend and process analysis) andmoving to

TrueProject Services(executing dedicated needs on i.e. trainingor procurement tool selection) or going directly to

TrueSource Servicesof managing sourcing projects on behalf ofyou in selected categories (including .

We stand behind our expertise and quality and provide theTrueSource sourcing services on a contingency/shared savingsmodel which means that you only pay against clear results nosavings, no fees.

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Our sourcing service

offering

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Spend analysis Process analysis TrueSteps Proposal

Customer requirements, operatingenvironment and expectation

management

TrueState Analysis

Independent Sourcing Project Management Category Spend ManagementTrueSource Services

Defining and establishing strategies, policies andgovernance models Centralizing procurement services Tool selection and implementation Defining and establishing reporting systems Training services Supplier Base and Relationship Management Contract Management

TrueProject Services


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truespend model examples

Analysis will be conducted byanalyzing Company spend and

process data gathered from each

operating country from key datasources. Data mining will provide

clear visibility in low hanging fruits

and long term development needs.

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!

Analysis will be conducted on and off site from customer premises utilizingspecialized spend analysis tools and depending on state of data, will require

collecting, cleansing, classifying and analyzing expenditure data with the

purpose of reducing procurement costs, improving efficiency and

monitoring compliance.

As an example, a typical TrueStateAnalysis


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Based on analysis work the customer will have a clear view of its spendareas through an informative dashboard:

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Example of a typical TrueStateAnalysis

! Final step of the Analysis work is a TrueSteps Proposalthat will be done

to plan out next steps in managing the indirect spend.


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As an example, a typical TrueProjectService

would consist of developing, implementingand training staff on indirect procurement

strategies, policies and processes or

selecting, implementing and training therequired purchasing or sourcing tools.

All TrueProject Services are conducted typicallyon a traditional consulting model with fixedrates.



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Truespend team will

analyze, plan, define

specifications and needs,

execute, coordinate andcommunicate the activities

together with the company

governance/stakeholder

team for full transparency.10/6/12 truespend 12

In a typical TrueSourceService, specialized team managessourcing projects for the company on the selected categories (i.e.management consultancy) with an agreed savings target.

Depending on complexity, criticality and spend volume, Truespend

executes parts or fully of its Sourcing process on each project (seebelow).


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Once the sourcing process is

finalized and desired results are

achieved from negotiations,

Truespend will help (if required)in implementing and managing

the agreement and supplier(s)

within the company structure.


TrueSource services are provided on a

shared savings/contingency model to ensure

significant results are delivered efficiently.

eSourcing tools (eRFI, eRFP, eRFQ, eAuction)

are used to drive the cost down and manage

process consistently.


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Please contact:

Joonas Jantunen, CEO and Lead Consultant

Truespend JLTJumeirah Lake Towers, JBC 2 Tower, Dubai, UAE

Phone: +971 56 7450725

Email: [email protected]

truespend.comfor more information

truespend - indirect spend management_10.6.2012

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