Buyer Persona: VP of Procurement
Persona role
Solution
VP Procurement
Reports to
Industry
Procure-to-Pay
CIO or CPO
Company size
Geo
All*
>$1B Revenue
All*
My role and experience
How I am measured
Resources I rely upon
I lead the global procurement
organization across the entire enterprise,
including all business units and regions,
for all direct and indirect sourcing and
procurement. I have a team of senior
direct reports who are sourcing and
procurement professionals.
We need cost savings that improve EPS.
Here’s where we’re focusing:
Unprompted:
•
Analysts
•
•
Consultants
•
Networking with peers
I am directly responsible for material
deflation, indirect savings and supplier
development and performance, including
quality and lead time reliability.
I have more than 15 years of experience
in procurement and supply chain
operations.
•
•
Looking at our supply base and trying
to determine if we can regionalize our
suppliers across DNA to eliminate
some of the tier-two, tier-three
suppliers and move more work up into
the tier-one.
Prompted:
•
Starting to look at utilization practices
as well as where we're able to
standardize products better.
Conferences / Associations:
ProcureCon, ISM, Bravo, Ariba user
conference
•
LinkedIn is my primary social media
•
Twitter
Defining KPIs within our systems, with
a dashboard for everyone’s use
•
Facebook
* This Persona is intended to be applicable for all Geos. It is based on field work conducted in NA. The persona-building methodology tells us whether a particular Persona is
applicable for more than one Geo (or Industry, or Role/LoB). That process has ascertained that this Persona is applicable for Geos in EMEA, NA and LAC.
Buyer Persona
Description
Insight #1
Priority Initiative
© 2014 SAP AG. All rights reserved.
Insight #2
Success Definition
Insight #3
Perceived Barrier
Insight #4
Decision Criteria
Insight #5
Buyer’s Journey
Internal and Confidential
Buyer Persona: VP of Procurement
Insight #1 - Priority Initiative: What priorities or business environment triggers the buyers investment in this type of solution?
Our A/P process was out
of control and wasting
everyone’s time
We were spending too
much because we weren’t
using preferred suppliers
I had one of my staff members, who was a
procurement professional sourcing manager,
strategic sourcing manager, spending 32
hours a week handling accounts payable
issues with suppliers. I started asking my
peers in management meetings, "Hey, are
you guys experiencing the same thing?" And
over half of them said, "You know what?
Yeah, we didn't think anybody else was doing
this.“ It was like a light bulb went on and
everyone had an epiphany around the issue.
We lose, on a regular basis, and this has all
been documented, about 30% of our savings
due to compliance issues, meaning that we
have a preferred product, but our end-users
are going someplace else.
###
Our payment tool was: Receive a hard copy
of an invoice, write on the invoice that you
approve it, scan it, take the invoice to another
person, jot down your signature and approval,
write a couple codes on it, scan it again and
move on to the next person, and this was
very labor intensive process. We were
maintaining an excel spreadsheet of every
spend against a project budget.
Buyer Persona
Description
Insight #1
Priority Initiative
© 2014 SAP AG. All rights reserved.
###
As soon as I got into the procurement role,
the first thing that I said is, look, we need to
have better spend visibility, which we do not
at the moment, still. We need to ensure that
as soon as we have a contract source with
whatever supplier on whatever commodity or
service, that there is compliance, and that we
have a governance model in place that would
allow us to ensure that we maximize our
preferred suppliers.
Insight #2
Success Definition
Insight #3
Perceived Barrier
We need to control
spending and compliance
We had a new chief financial officer coming
on board so he challenged our procurement
organization to identify opportunities how we
could manage our costs and then become
more efficient.
###
What the organization was noticing over a
three year period was that there was a year
after year 5% increase in our overall cost
basis.
###
I would say only about 10% of our total global
spend goes through any kind of eprocurement system.
###
We found that purchase orders were being
issued some time after work was completed
with our supplier or our sub-contractors.
Insight #4
Decision Criteria
Insight #5
Buyer’s Journey
Internal and Confidential
Buyer Persona: VP of Procurement
Insight # 2 - Success Definition: What results or outcomes does this buyer persona expect from a new investment in this type of solution?
I’ll be able to reduce costs
by eliminating FTEs
Suppliers would send in faxes or mail them
and 20 people would look at this requisition or
this invoice and process them. It's all
automated now, and with the hooks into our
ERP system, the invoice comes in, and we
can see that a POs been issued against that
invoice. We actually eliminated 20 FTEs with
this process.
Our suppliers will have
control and visibility,
which saves us time
We can track spend
against budget, ensuring
compliance
So rather than, putting that in the email,
statement of work services can be uploaded
into the VMS and the supplier can easily see,
make changes and they can be visible in real
time to us. So we're not wasting time writing
emails and negotiating.
Make sure that we capture the savings that
we negotiated, so, spend compliance.
###
###
If I'm saving an average of 10% on every
project and I work on six projects a year, so
just extrapolate and that's 24 projects in one
year. If I, in this day and age unfortunately
gotta say this, I had to reduce headcount, I
need these systems. For the cost of a single
FTE, I can enable these systems that will
return, from a productivity standpoint, ten-fold
their cost.
We've cut our order-to-cash cycle down quite
a bit by implementing a few of these
technologies and really tried to make our
invoice PO rec process, our procure-to-pay
process automated as much as possible with
the suppliers actually controlling the front end
of that through the portal.
Buyer Persona
Description
Insight #1
Priority Initiative
© 2014 SAP AG. All rights reserved.
###
To have a single source where our suppliers
and we could all have a single warehouse
that kinda maintained all of our specifications
and C of A's and processes.
Insight #2
Success Definition
Insight #3
Perceived Barrier
###
The visibility around how well whatever is
being purchased is within the approved
budget of whoever is purchasing it. That's
been a real gap for us in the past where
there hasn't been a tight control around
buying something. But do I really have it in
budget?
###
We needed to understand or attach a budget
to every purchase order, and to track spend
against the budget using the purchase order
tool, or a procurement tool.
###
We need a centralized system to manage
those grants, funds and commitments. So,
this is really gonna help us do that, from a
funding source perspective, from an
approval perspective, and then actually
spending down on those funds.
Insight #4
Decision Criteria
Insight #5
Buyer’s Journey
Internal and Confidential
Buyer Persona: VP of Procurement
Insight #3 - Perceived Barriers: What attitudes or concerns prevent this buyer from addressing this priority, or from purchasing this solution
from SAP?
Coupa’s architecture is
faster and easier to
implement at a lower cost
Does Ariba still charge my
suppliers? It would be
better if they charged me
I don’t want to hear that
the capability I need is on
your roadmap
I like Coupa for it's transactional ease, but it's
also it's ease of implementation. And because
of it's ease of implementation the cost is
greatly reduced. I don't have a six month
project, I've a six week project. From a
business case standpoint, cost, I can give
you round numbers, but Ariba is clearly 20%
to 30% more expensive.
Look, I don't really like to say that you guys
are gonna charge my suppliers for using the
portal." I'd rather you charge me, then I'd
know exactly what it's gonna cost me. Now,
it's kind of murky and you could say, "Well,
not everything is gonna make its way to you
and we're only charging suppliers with certain
volume, certain amount of transactions." I
said, "But somebody's gonna have to pick up
the check.
There is one vendor I still remember, who
had a lot of good things but not in practice, in
their road map. Now you would not prefer to
go with a solution that is still on paper
because we know that to implement even one
small improvement can take months. There
are a lot of errors that come into play, a lot of
testing and go live gets pushed out.
###
The upside that Coupa has is they started to
really develop their tools with the Cloud when
the Cloud was already there, right? I mean
Ariba had been around for 12 years. So they
actually have a completely different
architecture that it's gonna take them a long
time to turn it around and turn it into a true
Cloud-based solution.
Buyer Persona
Description
Insight #1
Priority Initiative
© 2014 SAP AG. All rights reserved.
###
Now, at the time there was a cost to enter
into that, a cost to our suppliers. My
understanding is, and I haven't seen it, that
they changed the model. And that would be a
good thing.
Insight #2
Success Definition
Insight #3
Perceived Barrier
###
We were led to believe that certain modules
were part of it. The other modules were still in
development.
Insight #4
Decision Criteria
Insight #5
Buyer’s Journey
Internal and Confidential
Buyer Persona: VP of Procurement
Insight #4 - Decision Criteria: Which aspects of the solution or vendor does this buyer persona evaluate as they compare alternative
approaches/vendors?
First, it has to be easy to
use with minimal training
It has to integrate with our
existing systems
We are also considering
implementation services
First and foremost is going to be the end user
experience. We recognize that the tool must
be intuitive for the end users to adopt and
utilize with minimal training, because we
know probably the biggest risk to the
implementation of this procure-to-pay solution
is going to be adoption.
One is how well does this tool integrate with
our accounting system. In this case, Oracle.
The downside of Coupa is they actually don't
have consulting. Ariba would do the whole
implementation. They would do everything.
They would not just setup the tool, but they
would help us with the local requirements that
we may have in Europe. They have a lot of
experience with global deployment, they've
got a lot of global accounts.
###
User adoption is key. I mean, I can implement
anything I want, if nobody uses it or if there is
a band of resistance then nobody's gonna
use it. And if nobody uses it, I will have no
visibility, there will be no spend through my
portal. That defeats the whole purpose.
###
Ultimately, this is about user experience. One
of the frustrations and limitations of the
current tool is that it's so clunky and
frustrating in many ways that there's a real
hesitation about its viability.
###
It has to be simple or people are going to
revert back to their old way.
Buyer Persona
Description
Insight #1
Priority Initiative
© 2014 SAP AG. All rights reserved.
###
Secondly, which is also important, especially
for our global technology folks, is technical
integrations. We need to ensure that it’s
compatible with our ERP technical landscape.
###
To move data from this system to that
system, you can have error detection to see if
the job ran right or not, but it still becomes a
failure point. I'm a reliability engineer by
background, so I'd rather eliminate those if
possible. It also becomes an opportunity for a
finger pointing exercise where if the job
doesn't transfer the data correctly, was it the
first system's problem or the second system's
problem or the middle ware's problem or blah
blah blah? I don't even wanna mess with that.
###
We didn’t want two systems where people
are doing dual entry. We wanted a solution
that integrates with our project mgmt. system.
Insight #2
Success Definition
Insight #3
Perceived Barrier
###
This is going to be a tool that is going to be
deployed to all of our offices, so we need to
take that into consideration because
countries may have specific requirements. Or
in some cases like China, there may be
specific language requirements too.
###
Now that we know which software we're
implementing, do we want that company to
implement it or there's other consulting firms
that can implement that same software. The
company doesn’t have to implement their
own software, but there's a natural
advantage, they should have the best product
knowledge.
Insight #4
Decision Criteria
Insight #5
Buyer’s Journey
Internal and Confidential
Buyer Persona: VP of Procurement
Insight #5 – Buyer’s Journey: What is this buyer persona's role in this decision and who else will be involved?
IT has a lot of influence
It was, "Here's a solution from our current
ERP supplier and here are two... " other
suppliers that we want to benchmark against.
We have a high bias towards our current
supplier but we want to make sure that we
are getting the functionality and tools that we
needed.
###
The IT team brought the majority of the
suppliers with input from the operations team.
Consultants, analysts &
networking reveal options
We want demos based on
our own use cases
We have connections with Hackett. We
started that procurement transformation I
referred to earlier with McKinsey last year. So
they actually said, "Hey, you may wanna look
at these three guys.
We developed a very detailed agenda with
specific use cases that we want each of these
providers to take us through and how an end
user would go about in terms of entering a
purchase requisition within the tool.
###
###
We have a third party that assists us in
procurement, IBM.
I gave them scripted scenarios that they were
to come in and present. And then we got a
kind of a standardized view of each software
solution, that we could compare more easily.
###
I did some research
I'm in an organization called "Procurement
Leaders", and I do get a guide from them as
well. So, we looked at the guide, and in the
guide it would list various, like in procure-topay, or purchase-to-pay as it was listed in the
book, they had a number of companies that
were identified, probably to the tune of about
35 companies listed.
###
Well initially the research was performed just
[chuckle] based on Google.
Buyer Persona
Description
Insight #1
Priority Initiative
© 2014 SAP AG. All rights reserved.
I've worked at Foot Locker and a couple of
other companies. I tap into my network.
###
The next session we wanted to get into
details of their system; which was not on site
but more of a WebEx, where we created
examples that we wanted them to show us.
###
By leveraging Gartner reports, we were able
to identify who's playing. And what are people
saying about those that are playing.
My team works with IT to decide, the CFO approves
I'm the executive sponsor as the owner of our "procurement services group" which includes
vendor management, purchasing, contracting, those functions. The CIO will not be involved in the
analysis gathering but we will go to him as well as the CFO for validation of the recommendation.
###
Ultimately, big decisions like this will be made by the CFO.
Insight #2
Success Definition
Insight #3
Perceived Barrier
Insight #4
Decision Criteria
Insight #5
Buyer’s Journey
Internal and Confidential