Leveraging SaaS as Part of a

Technology-led Procurement Transformation

Jesse Hanger, Specialist Master

Sean Rhoades, Senior Consultant
September 29, 2014
Soft·ware·as·a·Ser·vice (SaaS) (/sæs/ or /sɑːs/)
a licensing and delivery model in which software is
centrally hosted and licensed on a subscription basis

trans·for·ma·tion (/tɹæns.fɔɹ.meɪ.ʃən/)
a thorough or dramatic change in form or
appearance, especially one for the better
Deloitte has identified several trends within the marketplace
directly related to procurement technology
Cloud Solutions
License based, cloud solutions that require less
maintenance and shorter deployment timeframes
Contract Compliance
Minimize rogue contracting through efficient management and
tracking of contracts through a central repository including full-
scale template driven authoring
Touchless Procurement
Continue focus on reducing total number of touches, and
eliminating physical touches
Mobile Devices
Develop a strategy encompassing workforce mobility,
ideally it improves usability
User Adoption
Focus on the end user experience to reduce or eliminate
resistance to change
3 Copyright © 2014 Deloitte Development LLC. All rights reserved.
Increased use of Analytics
Build the right internal capabilities to leverage the power of analytics to
track savings and enhance reporting effectiveness
Category Specific Solutions
To fully address spend, leading organizations are configuring solutions by
category
Supplier Self Service / Supplier Network
Connect suppliers through self service and allowing collaboration and
automation through transactions across a network or portal
Extended Supplier Relationship Management
Optimize relationships with trading partners and manage performance,
compliance, and information flow
Single Global Instance
Unlock new opportunities by creating a single global instance and
installing standardized process and building in regional requirements
Procurement organizations are facing challenges
with common themes emerging from the CPO community.
Operating
Model
Enablement
“We know we need to invest in procurement technology, but
we don't know where to invest to get maximum benefit fast"
70%
of CPOs plan to invest in technology in 20141

Productivity
"Our Procurement organisation is already stretched, but being
asked to increase savings further"
79%
of CPOs see cost reduction as a top priority1

Collaboration
and
Innovation
“Procurement must get under the skin of what the business
needs by being able to ask the right questions."
77%
of organizations are already working in cross
functional teams1

Benefits
Realization
and Control
“We need to ensure that hard negotiated savings are realized
within a complex global environment”
91%
of top performing CPOs place high/very-high
importance on savings management2
Sources: 1) The Deloitte Global CPO Survey 2013 2) Gartner "Establish a Savings Management Process to Drive
Procurement's Financial Performance", 2013.

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Chasing trends is not the answer, organizations need to unify
technology and leading trends to solve tomorrow’s challenges
We identified six pillars to focus your procurement strategy and approach to
combat procurement challenges.
Common Themes from CPOs

Operating Model
Enablement
Mobile
Working

On-line Embedded
Productivity Collaboration Analytics

PROCUREMENT
Collaboration 2.0
and Innovation Cloud Usability
Deployment Prioritized

Benefits Realization Social

and Control Networking

5 Copyright © 2014 Deloitte Development LLC. All rights reserved.

Most organizations are choosing a solution involving the cloud

90% of new Procurement Applications deals involve cloud solutions1

Hybrid solutions, with On-Premise ERP complimented by SaaS solutions, continue

to be a path of choice for a growing percentage of companies.

41% Percent of organizations complement or plan to complement their ERP systems

with SaaS solutions2

When considering SaaS Procurement Software, 66% will either complement or

replace On- Premise with SaaS (up from 54% in 2013) 2

Sources: 1) Gartner "The Top Four Impacts of Cloud Computing on Procurement Applications". 2) Forrester "Application Adoption Trends: The Rise Of SaaS".

6 Copyright © 2014 Deloitte Development LLC. All rights reserved.

On-Premise versus SaaS / Cloud is not an either-or decision
Hybrid solutions allow organizations to take advantage of SaaS solutions while still
maintaining best-of-breed vendors.
Illustrative Hybrid Solution Hybrid Solutions
• Contains SaaS and On-Premise modules or solutions
SaaS
• Allows for shorten deployment timeframes across the
enterprise
Procurement Sourcing Contracts
• Increases ability to scale and expand scope
• Leverages pre-built integrations and APIs
On-Premise • Allows organizations to strategically select modules to deploy
early
Financials
Supplier
Purchasing • Ability to use system internally or externally
Management
• Handles complex goods and services
• Increases flexibility and speed to value

Reducing complexity is one key to overcoming challenges.

Top organizations utilize 80% fewer platforms and 37% fewer applications.

7 Copyright © 2014 Deloitte Development LLC. All rights reserved.

Best-of-vendor and best-of-breed strategies should be combined
Developing a Pace-Layer strategy helps to identify which systems should be part of an
application suite, and which systems should be integrated with an application suite.
Illustrative Breakdown of Systems by Layer

Workforce Social Media

Systems
Innovation / Project Management
of Innovation
Quickly adopt
Predictive Analytics
new concepts
Custom developed applications
Systems of Differentiation
Organization or Industry eSourcing / eProcurement
unique processes, dynamic
Extended Supplier Relationship Management

Core Financials
Systems of Record
Core processes, follow common Manufacturing
standards, common approaches
Inventory Management

Regular strategy reviews help identify when systems migrate between layers.

8 Copyright © 2014 Deloitte Development LLC. All rights reserved.

Procurement Transformation Considerations
Things to consider when deploying procurement technologies.

Number of
Customizations

Deployment
Cost Model
Timeline

Number of Scalability
Integrations

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Key concepts when considering a SaaS strategy

10
SaaS / Procurement Playbook
Maximizing the value of SaaS solutions requires different priorities than traditional
procurement initiatives and technologies.
• Strategy: Layering = Flexibility
‒ Accelerated timeline requires different communication approach Strategy
‒ Focus on the business case and communicate benefits

• Approach: Stay agile!

Approach
‒ Use an iterative approach to design sessions
‒ Integrations require concurrent design, build and test phases
• Deployment: User adoption is #1
Deployment
‒ Create challenge sessions to limit customizations / integrations
‒ Increase your testers and super users
• Sustainment: Singles win games Sustainment
‒ Promote early success and benefits
‒ Leverage support services
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Questions
and Answers