Its Not All About eProcurement

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• Its Not All About eProcurement
• Catherine M. Colemire, CPPO, CPPB
• Purchasing Agent
• Western Southern Financial Group
• NAPP Conference
• Marina Del Rey February 2008

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Agenda

• Corporate Overview
• WSFG Procurement Group
• Where We Were Why We Needed Change
• Project Differentiators
• Our Requirements
• Selection Process
• Challenges Opportunities
• Changing Purchasings Role
• Results
• Benefits
• Lessons Learned
• Next Steps
• Questions Answers

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The Western Southern Financial Group

• Chairman, President CEO John F.
  Barrett
• Local employees 1,810
• Total employees 4,519
• Year established 1888 (The Western and
  Southern Life Insurance Company)
• Number of local locations 14
• Number of worldwide locations 189
• Most current fiscal year revenue 4.8 billion
  (2006)

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The Western Southern Financial Group
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WSFG Procurement Group

• Annual Spend 91 million

What We Buy And Who We Buy For Printing - paper,
supplies, equipment General Office Management -
furniture, facilities management, MRO Equipment -
lease and purchase Relocations IT - hardware,
software, services
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Where We Were

• Problems we were facing
• Lack of efficient and appropriate checks
  balances for purchasing, receiving and accounts
  payable
• No standards resulting in total misunderstanding
  of processes
• Their impact
• Lost productivity with inefficient processes
• Lack of collective buying ability
• Change was needed
• New Director of Purchasing brought to the
  attention of upper management the problems, their
  impact and the savings that were being lost with
  splintered buys, duplicate buying and duplicate
  contracts.

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Project Differentiators

• The project had its own characteristics
• Within the company
• Purchasing Inventory Management touched
  affiliates and every facet of the group.
• Compared to companies
• Critical to all the groups distribution channels
  
• If product could not get to our distribution
  channels in an timely, efficient and effective
  manner result would be no sales.
• Project was imperative to the integrity of our
  back office accounting
• Purchasing
• Materials Management
• Accounts Payable
• Tax

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Identifying Our Requirements

• Everyone defines eProcurement differently
• To us, eProcurement is part of the procurement
  process, not a total replacement, which is a
  common misperception.

• We needed an eProcurement solution to provide
• On-line catalogs, punch-outs, approval workflow
• as well as general Procurement support
• Ordering process, sourcing, contracting,
  receiving, settlement
• and also Inventory and Asset Management
• Document management uniforms, print-on-demand
• and lets not forget environmental considerations
• Reducing waste through reduced inventories
  (obsolete forms)

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Selection Process

• Defining the requirements
• Set up a cross functional team to identify
  critical paths
• Requirement must haves
• Systematically able to open and close the
  purchasing circle with the appropriate checks and
  balances
• A total and autonomous audit trail within the
  system modules.
• Potential to expand/grow with the industry
• Adaptable with affiliates within our group
• Soliciting Initial Candidates
• Using a Request For Information (RFI) process,
  solicit suppliers who could provide a complete
  Procurement solution meeting the criteria as
  defined by members of the team
• Getting to the short list
• Final selection process

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Overcoming Challenges

• Security
• Peace of mind of associates with the changes
• Common misperception was that the goal was to
  reduce FTEs
• Educate the need to elevate employees to more
  productive and strategic roles
• Change
• Getting people to understand a new way of working
• Education
• Why the changes in peoples jobs were important
• Politics
• Enhancing company culture

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Changing Purchasings Role
Procurement software provides buyers the ability
to move away fromroutine tasks and become more
strategic in their supplier management
Corporate Strategy
Supply
Contracting
Profit Center
Supplier Management
Bid Analysis
RFQs
Supplier Performance
Supply Assurance
Zero line
Overdue orders
Creating Purchase Orders
Cost Center
Arranging returns
Processing paperwork
Invoice Queries
Confirmation Orders
Expediting
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The Results

• Accountability
• Checks and balances are much more advanced and
  clearly defined
• Productivity
• Processes are streamlined
• We even found some we didnt know we had!
• Consolidation without total centralization
• Total view of corporate spend
• Standard practices throughout the organization
• For example, a unified invoice matching process
• Professionalism
• Purchasing has moved to a higher level from where
  we started

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Benefits

• Significant reduction in duplication and
  potential areas of fraud
• Better invoice management - less errors, faster
  cycle times
• Requisitioners have their own one-stop shopping
  capability and the ability to systematically
  track their orders
• In turn, taking purchasing professionals out of
  routine processes to operate more strategically
• Utilize the procurement information the
  application provides
• Focus more on decision support and sourcing
• Take a longer view to supplier management and
  total value

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Lessons Learned

• Tackle the project one step at a time
• Break down each module
• Simulate current processes with system processes
• Rework internal processes as needed
• Recognize the role of users change with
  automation
• Align your internal processes with the software
• Put the software into your company . . .
• . . . rather than put your company into the
  software

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Doing Things Differently

• If we had to do it again
• Develop and follow a Project Plan
• Phase in the software modules
• Requisitions and approval workflows
• Purchasing
• Materials and Asset Management
• Invoice Matching
• Watch for scope creep
• Follow the project plan
• Stick to initial requirements, avoid
  customization
• Stay current
• Deploy software upgrades as they happen
• Dont apply multiple levels of upgrades at the
  same time

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Next Steps

• Reach out work closer with our internal
  customers
• Subsidiary Affiliate Companies
• Related Business Units
• Individual departments
• Cafeteria Services
• Corporate Graphics
• Printing Services
• Help our customers use the software solution more
  effectively
• Service Templates, Navigator, Reporting
• Form strategic partnerships between the
  procurement group and the individual customer
  groups

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Its Not All About e-Procurement

• Questions Answers