how bp is leveraging technology to energize supplier ... · sirionlabs is transforming the way...

© 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.

A WEBINAR BY IACCM AND SIRIONLABS FEATURING BP

FEB 13, 2018

How BP is Leveraging Technology to Energize Supplier Relationship Management

2© 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.

THE HOUSEKEEPING ITEMS:

• Webinar slides and recording will be emailed

• Enter questions in chat on webinar panel

Before we get started


AJAY AGRAWAL

Founder and CEO

SirionLabs

[email protected]

SALLY HUGHES

CEO

IACCM

[email protected]

JASON DONNER

Head of IT Infrastructure Sourcing

BP

[email protected]

Meet the speakers


IACCM insights on the evolution of relationship management

The inside view of BP’s data-driven supplier relationship management

The limitations of the traditional, subjective approach

How BP drives improved results through its technology-driven relationship management strategy

What will be covered today


The International Association for Contract & Commercial Management enables organizations and professionals to achieve world-class standards in their contracting and relationship management process and skills.

For more information, visit www.iaccm.com

SirionLabs is transforming the way buyers and suppliers engage with each other in complex contracts using its SaaS platform –Sirion. Leveraging automation and advanced analytics, Sirion helps enterprises create higher value and more successfulrelationships, while effectively managing cost and risk in strategic supplier engagements.

For more information, visit www.sirionlabs.com

About the organizers

The networked world & ERP

• Opened global markets

• Standardized process

• Simplified internal communication

• Eliminated resources through systems and outsourcing

New forms of complexity

• Pressures on price

• Rapid growth of services

• Lack of skills and systems to manage inter-enterprise relationships

• Value leakage

Simplicity. Flow. Speed.

• RRP – Relationship Resource Planning

• Intelligent systems that streamline supply ecosystems

9

How BP is Leveraging Technology to Energize Supplier Relationship Management

10

A global energy business, involved in every aspect of the complex energy system that drives our world

COUNTRIES OF OPERATION

72

NUMBER OF EMPLOYEES

74,500

REVENUE$183B

PER DAY PRODUCTION (BARRELS OF OIL EQUIVALENT)

3.3M

RETAIL OUTLETS~18,000

BP overview

11

BP supply chain overview

BP has 72,000 suppliers across the world, with thousands more supporting them

• Equipment

• Raw materials

• Infrastructure

• IT products & services

• Logistics

• Professional services

IT sourcing comprises of a number of suppliers across:

• Service desk

• Network infra services

• Hosting services

• ADAM

• Telecom services

12

IT is core to business

• IT infrastructure and capabilities need to keep pace

• Strengthening capabilities in areas like cloud computing, automation, data visualisation

• Focusing on emerging technologies including AI, blockchain and robotics

• BP Well Advisor

• Distributed acoustic sensing

• Seismic imaging

• Advanced reservoir simulation

• Cloud-hosted wells data platform

13

Complexity of managing strategic services

Inter and intra-company collaboration is critical

Value retention and efficiencies are difficult to realize without technology

Advanced analytics is key to success

Commonly Seen in Traditional Environments

• The absence of a single-source-of-truth impedes trust, transparency and collaboration between buyers and suppliers

• A significant part of the dialogue between buyers and suppliers is focused on whose data is correct

14

Relationships are weakened by functional silosF

UN

CT

ION

AL

SIL

OS

TE

CH

NO

LOG

Y

ISL

AN

DS

INVOICE MANAGEMENT

S E R V I C E D E L I V E R Y

SUPPLIERRISK

CONTRACT MANAGEMENT

RELATIONSHIP MANAGEMENT

Strategic supplier lifecycle

PROCUREMENT

WHAT WAS PROMISED? WHAT WAS DELIVERED?WHAT WAS INVOICED?

PRE-CONTRACT (6-12 MONTHS)

SERVICE DELIVERY

CLM ITSM GRC ERPEmail/ExcelP2P

Functional silos and technology islands interrupt communication and collaboration between teams. Such silos are seen between enterprise teams as well as between the buyer and the supplier

15

Value leakage

Value Leakage is defined as the loss of value that the Customer expected to receive by entering into anoutsourcing relationship.

Engagements where the relationship is not strong and a single-source-of-truth is absent, the extent of valueleakage is higher.

Invoice Verification

• Incorrect resource units billed• Inappropriate rate card used• Missed service credit payments• Incorrect currency conversions• Annual rate reductions not

applied• Annual rebates missed

Service Levels

• Accepting poor performance• Creating mitigations for the

supplier• Allowing supplier

concessions on paying service credits

• Continuous improvement

Failure to Deliver the SOW

• Increased project work• Paying twice for services• Not receiving services• Paying for tooling • Lack of innovation• Lack of optimization

16

What needs to happen?

Relationship management is integral to and the glue that ties all supplier governance components together

Relationship Management

Contract Management

Performance Management

Financial Management

Satisfaction, direction setting

Ensure compliance

Validate and manage costs Right work, done right

17

Our relationship management approach is built on the following principles

• Not all suppliers are equal

• A single-source-of-truth

• Transparency, trust and alignment

• Data-driven relationships

18

Supplier segmentation

The relationship management focus should be determined as per the segmentation framework

Strategic

Managed

Performance

TransactionalDep

th o

f R

elat

ion

ship

Segmentation Criteria

Criticality of service provided

Level of spend

Supplier risk

Barriers to change

Supplier capabilities/Perceived value

Ability to influence supplier

19

How we implement relationship management as a critical success factor

EXECUTIVE

MANAGEMENT

OPERATIONAL• Contract management• Performance management• Financial management

• Relationship health check• Overall performance check• Issue/dispute escalation & tracking• Dashboard/scorecard review

• Overall tone of the relationship• Business alignment with supplier• Strategic outlook and innovation

20

A single-source-of-truth improves trust and alignment

• Both buyer and supplier personnel view and update common data

• Common view of obligations and performance requirements

• Automated performance and invoice validation improving trust

PROCUREMENT

LEGAL/CONTRACTS

BUSINESS UNIT

FINANCE

RISKMANAGEMENT

RELATIONSHIPMANAGEMENT

BUYER ORG SUPPLIER ORG

SALES

LEGAL/CONTRACTS

SERVICE DEL IVERY

FINANCE

COMPLIANCEMANAGEMENT


CONTRACTS

P2P ITSM GRC CLM ERP SSO

21

Data driven dialogues between BP and our suppliers

Data-driven management of relationship governance activities enables:

• An objective assessment of the relationship health

• Fact based dialogues in governance meetings

• Clear documented actions, issues and decisions

• Monitoring to ensure timely resolution of actions and issues (aging, cycle time, and process-step lead times)

• Linking issues and action items to contract clauses which facilitates improved contracting

• Comparison of relationships with suppliers across regions/services based on actions/issues

22

Insights drive our supplier relationships

Relationship management is part of the overall supplier scorecard

Data-driven dialogues with suppliers

23

Benefits of our integrated approach

SUPPLIER 1

SUPPLIER 2

SUPPLIER 3

INTER-ENTERPRISE CONNECTIVITY

• Better visibility resulting in improved performance and reduced value leakage

• Shared understanding resulting in improved collaboration

• Improved trust and transparency resulting in stronger relationships

• Reduces effort on both sides

INTRA-ENTERPRISE CONNECTIVITY

• Reduced manual effort resulting in efficiency, savings and agility

• Better co-ordination resulting in improved monitoring and value leakage reduction

PROCUREMENT

LEGAL/CONTRACTS

BUSINESS UNIT

FINANCE

RISKMANAGEMENT


242014 2015 2016

$ T

ENS

OF

MIL

LIO

NS

2014 2015 2016

$ T

ENS

OF

MIL

LIO

NS

Improved relationship contributes to bottom-line success

Significant savings realized through, amongst other things:

• Reduced project cost

• Improved visibility to obligations

• Improved invoice validation

• Improved relationship resilience

NETWORKING SERVICES

2014 2015 2016

$ T

ENS

OF

MIL

LIO

NS

HOSTING SERVICES

WORKPLACE SERVICES

25

Results and the road ahead

• Current Implementations:

• Global Field Network Services

• Global Print Services

• One Voice

• PC as a Service

• Global Email Management Services

• Software-as-a-service Contracts

190+%Savings/Return on

Investment

7XIncrease in Suppliers

Under Active Governance

1200Number of obligations

being tracked

Currently managing strategic contracts for Integrated Service Desk/Global Hosting Solutions and Global Telecom Services on Sirion


About us

$200-300B OF VALUE IS LOST ANNUALLY DUE TO LACK OF EFFECTIVE GOVERNANCE OF COMPLEX CONTRACTS

USA

INDIA

NETHERLANDS

DENMARK

UK

SINGAPORE

Sirion is transforming the way buyers and suppliers engage with each other in complex contracts

PORTFOLIO COMPANY UK Government G-Cloud Supplier

THE WORLD’S MOST INNOVATIVE COMPANIES


Complex contracts dominate enterprise sourcing spend today

Purchased services as %age of aggregate procurement spend (2015)

Source: Forrester


Holistic management of complex contracts is critical

© 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.

It takes management of all elements of flight to keep a plane in

the air.

Managing supplier relationships is no

different.


How are complex contracts managed today?

$

$

Value Leakage

equivalent to

15-20% of ACV

Revenue Leakage

equivalent to

3.8-10% of ACV


Sirion has successfully delivered hard savings of 9.78% through invoice reductions

$3.1BI N V O I C E A M O U N T

V A L I D A T E D

600,000+T O T A L O B L I G A T I O N S

M A N A GE D

$18B+T C V U N D E R M A N A G E M E N T

250,000+S U P P L I E R S O N S I R I O N

© 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.

Hard savings of over $300M delivered by SirionHard savings = Invoice reductions

Hard Savings Achieved

$303M

Invoice Amount Validated

$3.10B


Sirion’s end-to-end solution for managing complex contracts

CLAUSE LIBRARY

TEMPLATE LIBRARY

AUTHORING WORKFLOW

E‐SIGNATURE

DOCUMENT REPOSITORY

OBLIGATION CAPTURE

DOCUMENT CHANGE MANAGEMENT

CONTRACT INTERPRETATIONS

SERVICE LEVEL MANAGEMENT

OBLIGATION COMPLIANCE

SOW/WO/PO MANAGEMENT

CREDITS & EARNBACKS

INVOICE AUDITING

SPEND POOL MANAGEMENT

FINANCIAL ANALYSIS AND PLANNING

VALUE ASSURANCE

GOVERNANCE FORUMS

ISSUE/ACTION ITEM MANAGEMENT

GOVERNANCE PROCESS HEALTH

SURVEY MANAGEMENT

REGULATORY COMPLIANCE

POLICY COMPLIANCE

SUPPLIER AUDITS


Enabling effective execution of relationship management

Evaluate effectiveness and efficiencies of ongoing governance forum(s)

Ensure timely follow-up, escalation, and tracking to closure of governance related issues and action items

Real-time tracking of key metrics monitoring the health of all key governance processes

Governance Forums

Issue/Action Item Management

Governance Process Health

Collect and analyze feedback between the supplier and client organizationsSurvey Management

Relationship ManagementAlign supplier and governance organizations on an intuitive interface to manage and track all key relationship activities,

processes and metrics


List of all governance forums withkey stats such as Frequency,Participants and Owner

1

Capture meetings details andoutcomes in the system

2

Analysis ofgovernance data

3


SirionLabs is offering a fresh approach to a

challenge that has vexed procurement and vendor management teams for

many years.

The most innovative new software player we’ve seen recently in complex third-

party management is SirionLabs.

We realized cost-savings equating to 300% return on our Sirion investment within the first year as it enabled us to identify discrepancies in supplier invoices which would otherwise go unnoticed.

HENRIK KRARUP STEFANSENSenior Director, Global IT Sourcing

Although Sirion has only recently gone live we have identified increased revenue and/or cost avoidance which if applied across the Trust’s portfolio of commercial agreements, will deliver a projected saving/revenue increase of circa £20m within the next few years.

SIR ROBERT NAYLORFormer Chief Executive, UCLH NHS Foundation Trust

“

“

Testimonials and endorsement


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What’s next?

[email protected]

THANK YOU

@SirionLabs

how bp is leveraging technology to energize supplier ... · sirionlabs is transforming the way...

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