Transcript Slide 1
BPC Advanced Webinar Series Sourcing Pro
Standard Sourcing Templates 101
2/13/2013
© 2012 Ariba, Inc. All rights reserved.
BPC Advanced Webinar Series
Standard Sourcing Templates 101
Presented by: Ariba’s Best Practice Center (BPC) Today’s Presenter:
Mauricio Roveri Sourcing Consultant
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© 2012 Ariba, Inc. All rights reserved.
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Overview
When you’re creating an event, do you ever wonder which sourcing template is best suited to meet your needs?
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This session will take you through the differences between the out of the box templates, and how to make better decisions about what template to use and when to use them.
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It is expected that you are already somewhat familiar with the Ariba Sourcing Technology.
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© 2012 Ariba, Inc. All rights reserved.
Let’s start at the beginning…..how do you choose the right opportunity for eSourcing? Below are common questions you may ask...
Creating the Project - Selecting the right opportunity
Is the business even available?
What’s the best strategy for awarding the business
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How soon can I award this business?
How much time do I have?
What are the gaps in my information?
Do I have my data and specifications ..... and are they accurate ?
How well do I know this industry?
How will success be defined?
How strong are our incumbents?
How much information do I need?
Can I expect any savings?
Who are my suppliers?
What is the risk?
How attractive is this business?
How will my incumbents react?
Will I have internal resistance to new suppliers?
Will my suppliers be resistant to the new technology?
These questions are not unique…buyers ask them anytime they need to address a basic business need
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The easiest and quickest method for selecting an opportunity for Sourcing is the use of the “Six C’s” • • • • • •
Make sure your project meets all the Six C’s requirements Contractually Available Commercially Attractive Competitive Supply Base Clearly Defined Requirements Compressible Margins Commitment 5
When you consider projects for eSourcing, don’t be swayed by any of the following myths…..
Creating the Project - Selecting the right opportunity
Myth Truth
Contract award is based on price alone You as the buyer make the final award decision, and price is only one factor in that decision. The solution is designed to find market price. Small businesses are placed at a disadvantage Process works well for commodities but not complex goods or services.
Projects can be configured (i.e. lotted) in such a way to carve out parts of the business for smaller suppliers. You as the buyer make that decision.
The process has proven to be effective for most categories of spend… use the “Six C’s” as the litmus test for identifying projects
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The Sourcing Process
The Two Phase Sourcing Process is Recommended for All Sourcing Projects Present initial requirements Collect initial bids Collect creative options In-depth options analysis Short list suppliers Determine Phase 2 approach RFP/Sealed Bid Reverse Auction
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Creating the Project:
Choosing the Appropriate RFx Type
Request for Information (RFI)
• Create a Questionnaire, gather supplier feedback and qualify suppliers based on their responses.
• Items/Lots can be created for informational purposes but pricing cannot be collected at this stage, only qualitative information.
• Buyers can weigh and grade supplier responses, and create an overall score for each supplier.
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© 2012 Ariba, Inc. All rights reserved.
RFPs – Non-Competitive
Request for Proposal
• Collect Pricing Information through Line Items/Lots • Contains the Essential Features to conduct most RFPs • Buyers can weigh and grade supplier responses, and create an overall score for each supplier.
RFP with Total Cost
• Contains features that allow the buyer to additional cost factors (terms) which will calculate additions, subtractions, multiplications, on top of an Extended Price to calculate a Total Cost per line item/lot for each supplier.
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© 2012 Ariba, Inc. All rights reserved.
Auctions - Competitive
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Reverse Auction
• Competitive and Dynamic Bidding Event where suppliers compete for business • Contains the Essential Features to conduct most RFPs Focused on Price Time Compressed
Total Cost Auction
• Contains features that allow the buyer to additional cost factors (terms) which will calculate additions, subtractions, multiplications, on top of an Extended Price to calculate a Total Cost per line item/lot for each supplier.
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© 2012 Ariba, Inc. All rights reserved.
Ariba Sourcing provides you with three event types to assist you in your buying decision Request for Information (RFI) “In order to make intelligent purchasing decisions, factors other than price must often be considered. The RFI enables you to create a questionnaire and assign preliminary scores and grades to each question.”
Request for Proposal (RFP) “An RFP provides an efficient means of gathering competitive market and pricing information. RFPs provide a non competitive negotiation format.” Auction “…is a dynamic online bidding session in which suppliers submit legally binding bids for business. Suppliers can receive feedback about others bids…..and can then adjust their own bids.”
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Use the RFI type when: You need additional information about the capabilities of the supply base.
You are anticipating a future need You are not prepared to go to market because of incomplete data 14
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Use the RFP type when: You may not be sure what you need and are asking suppliers to offer suggestion to include pricing You want the option to award business now or in the future via auction You know the supply base will reject an online auction 15
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Use the Auction type when: There are clear indicators of a competitive landscape You know what you want and can satisfy all Six C’s 16
Event Process • • • • • •
Phase 1 RFx Execute Phase 1 RFx to determine Phase 2 approach Draft Phase 2 RFx
Construct RFX
Internal Practice Auction
Test event settings with internal practice event
Publish RFx
Publish event for supplier review and response
Supplier Practice Auction
Conduct practice event to complete suppliers’ training Spend Assessment Sourcing Analysis Initial Planning Phase 1 RFx Draft Phase 2 RFx Internal Practice Auction Publish RFx Supplier Practice Auction Prebids Live Bidding Event Post Event Communication
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Recommended Sourcing Process Always focus on Total Best Value regardless of which sourcing approach is used.
The best buyers know which Phase 2 tactic to utilize and are skilled at executing that tactic.
Avoid negotiations after Phase 2 RFP or Reverse Auction. It undermines the effect of the competitive bidding process.
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Wrap-Up
Questions and answers will be posted on Ariba Exchange by close-of-business today
http://exchange.ariba.com
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Help us improve this offering
You’ll be prompted at the conclusion of the webinar 10-question multiple-choice survey •
Please join us for our next sessions:
February 27 th , 2013 @ 2:00pm ET – Working with Notifications (Sourcing & Contracts) February 28 th , 2013 @ 9:00am ET – Administration Best Practices (Sourcing & Contracts)
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© 2012 Ariba, Inc. All rights reserved.
Follow Up on Ariba Exchange
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To sign up for Ariba Exchange:
Go to http://exchange.ariba.com/welcome Click on the “Register” link, and enter your email address to begin the quick and easy registration process.
Access the Community on the left-hand side of the screen for the product you are interested in to see what other customers are saying, and to ask questions and interact.
Use to tag of “BPC_Webinar” in any of your posts. We will do the same with any follow up, making it easy for you to use the search term “BPC_Webinar.”
© 2012 Ariba, Inc. All rights reserved.
The BPC and Your Company
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Subscribers to Ariba’s Best Practice Center gain access to experts consultants like your presenter today and get strategic advice and guidance on getting the most out of your Ariba solutions when you need it.
Customers Subscribing to the BPC can access additional Advanced Webinar Recordings via Exchange. Topics include:
Administrative Features: Enumerations and Mass Edit Administrative Features: User Management, Data Imports and Exports Contracts: Preparing the Main Agreement: Document Preparation, Cleansing and Styles Contracts: The Contract Request Process Sourcing: Matrix Pricing Sourcing: Custom Offline Response Sheet Many more topics on the way!
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© 2012 Ariba, Inc. All rights reserved.
The BPC and Your Company
For more information on how the BPC could have an impact at your company, contact your Customer Engagement Manager. If you are currently a BPC subscriber, ask your BPC Representative or your Customer Engagement Manager about how to access these recordings.
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© 2012 Ariba, Inc. All rights reserved.
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