prepared for: ism - chicago

PREPARED FOR: PREPARED FOR:

ISM - Chicago

SIG Los Angeles Regional Roundtable

A Profession in Transition

Our profession has really evolved over the last

30 years.

© Hiperos. CONFIDENTIAL. All rights reserved. 2 December 9, 2011

Pre-1990 1990’s 2000’s

Order Takers Deal Makers Spend Optimizers

What’s next?

Agenda

• Market Observations

• Real Implications

• Company Responses

• Use Case

• Q&A


It is clear that the environment that we operate

in has really changed.

• Increased reliance on third parties

• Expanded use across

functions/business lines

• Broader geographic coverage

• Increased regulatory environment


Scope

Price Risk

Adds a whole new dimension to assessments

Despite this fewer than 50% of companies

regularly measure or monitor risk.

0

10

20

30

40

50

60

70

80

90

100

Manufacturing Non-manufacturing

Measure

Important


Source: CAPS Research

This is likely the result of the complex

environments that we operate in.


N

S

EW

Purchasing

Business Unit

IT

HR

Manufacturing

Corporate Responsibility

Diversity

Regulators

Management

Accounts Payable

Research

Compliance and Risk

SA8068

Third Party

Solvency

I-9’s

Geo-political

Z-score

Mass CMR 17

Diversity

Code of conducts Lean assessment

Contact information

Export licensing

gCAT

Privacy

SOX

Disaster recovery

SAS 70

Insurance

REACH

Gesi

Business continuity

GRI G3

ISO Certification

W9 Tax Payer ID

Corruption Index

HIPAA

Executive Order 13224

OSHA Form 300

At-risk Fees

Service location

Anti-money laundering

Bill to address

Bank routing

InfoSec

Liens

Capabilities

KPI’s/SLA’s

Overall risk

DUNS number

Watch list

EMR Rating

TAX ID

EU 2004/9/EC

FDA part 21 CFR

Agenda




• Use Case

• Q&A


Unchecked, third parties can have a broad

impact on a business.


“Lack of control, consistency, and visibility puts our financial performance and brand at risk”

Director SRM, Biotech

Quality Viability Regulatory

Compliance

Customer Service

Innovation

Safety Delivery

Sup

plie

r

Reputation/ Brand

Cu

sto

mer

Financial Performance

Quality of Service/Care

Example 1. Regulatory Compliance


Regulation Impact

HIPAA, no willful neglect $50,000 per violation, with an annual maximum of $1.5 million

Foreign Corrupt Practices Act Up to $2MM/v. Willful intent up to $25MM/v.

Gramm Leach Bliley Act Company $100K/ Officers and Directors$10K

Immigration Reform and Control Act Wal-Mart and the DOJ reached a settlement in which Wal-Mart

agreed to pay an $11 million fine, the independent contractors, who had actually employed the illegal immigrants, only paid a $4 million

fine, collectively

Example 2. Corporate Responsibility


Three-fifths of chief executives said they believed corporate brand and reputation represented more than 40% of their company's market capitalization.

Source: World Economic Forum and Fleishman-Hillard

Source: Victor Cooke Jr.

Agenda




• Use Case

• Q&A


1. C-level execs are paying closer attention to

risk indicators.

Recent interruption

Capacity issues

Inconsistent quality or

performance

Regulatory changes or exposures

Supplier rationalization


Heavy reliance on outsourcing

Single sourcing arrangements

Lean processes and just-in-time

inventory

Lack of understanding of risks

Lack of contingency plans.

Source: Protiviti

2. Frameworks are being put in place to create

more structure.


Source: Deloitte

3. Tools and processes are being deployed to

measure and monitor critical areas.


Assessed at both the supplier and contract level

Performance

Corporate

Responsibility

Compliance

Financial

Viability

Market

Volatility

4. Companies are implementing a new breed of

solutions to tackle risk.


Source: Gartner

Agenda




• Use Case

• Q&A


Use Case: Inherent to residual risk.


Develop risk assessment

Complete assessments

Inherent Risk

Apply Business Rules

Control Programs Internal Completion

Risk/Control Programs

Collaboration Residual Risk

Pull external data

Each key element is addressed.


• Consolidate requirements and

expectations from different functions

and business lines for suppliers and

third party providers

• Communicate requirements and

expectations to stakeholders and third-

party providers

• Collect information and artifacts from

stakeholders and third-party providers

and data services

• Collaborate across stakeholders to

answer questions and remedy issues

Lesson learned: Keep it simple.


Agenda




• Use Case

• Q&A


Hiperos Overview

• Market Drivers:

• Reliance upon outsourcing for high value activities

• Dramatic increased in supply chain disruptions

• Increased regulation

• Hiperos launched in ‘07 to manage the extended enterprise:

• Information Management

• Risk & Compliance

• Performance Management

• Results:

• A solution design uniquely suited to extended enterprise management

• Broadly adopted by leading companies across many industries

• 100% client satisfaction, ranging from enthusiastic to fanatical


http://images.google.com/imgres?imgurl=http://www.hcwt.com/files/american_express_logo.jpg&imgrefurl=http://www.hcwt.com/H36_references.php&usg=__2fLSyBnmQbv233lUJttPrxZPDBU=&h=709&w=800&sz=50&hl=en&start=2&um=1&tbnid=yChDvGebFPD5_M:&tbnh=127&tbnw=143&prev=/images?q=american+express+logo&hl=en&rlz=1Q1DLUS_enUS357US357&um=1

http://images.google.com/imgres?imgurl=http://dailycontributor.com/wp-content/uploads/2009/03/united-technologies-job-cuts.jpg&imgrefurl=http://dailycontributor.com/united-technologies-to-cut-11600-jobs-worldwide/3835/&usg=__cJ3ju7cgsITGIFInqdBQV-SddWg=&h=301&w=354&sz=50&hl=en&start=3&um=1&tbnid=kSsYFP-ExESz_M:&tbnh=103&tbnw=121&prev=/images?q=united+technologies&hl=en&rlz=1Q1DLUS_enUS357US357&um=1

CONTACT INFORMATION

Mark DeLuca

Hiperos

[email protected]

908-981-0083


mailto:[email protected]

prepared for: ism - chicago

Documents