Zycus Spend Management Solutions

-- Placing Customers over complexity

Presented by: Kevin Killian
Regional Sales Manager
© Zycus Inc. All rights reserved
Agenda

Zycus Corporate Overview




Spend Analysis


Strategic Sourcing Tool



Zycus Strategic Sourcing Services



Contract Management Solution



Q&A


© Zycus Inc. All rights reserved

Zycus – Continued Success Story

A worldwide leader in
Spend Management
Software solutions
Corporate Presentation 2009-2010
• Recognized as one of the Top 3 Global Market Leaders
in Spend Management Domain by leading analysts and
Industry observers
.
• More than 200+ customers in 20 countries across
industry verticals
.
• One of the most rapidly growing customer base with a
growth rate of 50% - 70% year on year
.
• Received the Red Herring Global 100 2009 Award -
Cited as one of the most promising private tech firms
with Asian origin
.
• Profitable, Global organization with multiple offices
in US, Europe and Asia
“Zycus, the Spend Management provider has quietly branched
out from a leadership position in the data cleansing and
classification market to offer a wide array of sourcing, contract
management and analytics capabilities, all of which are quite
novel in their approach to the market.”
Jason Busch, Spend Matters
Why Zycus?

Easy to use SaaS based software solutions that accelerate ROI
ü Flexible deployment options based on immediate priorities and goals
ü Creative pricing models linked to ROI

Faster user adoption
ü Web 2.0 software that requires minimal training
ü Entire suite built on a single frame work that facilitates integration
ü Efficient International support: UI and Customer support in multiple languages


“Zycus is a strong alternative to pricier ERP

products. In this economy, best of breed continues
to advance, which begs the question, what will the
ERP vendors do to counter and stop the movement
to best.”

Mickey North Rizza-

Research Director, AMR Research.

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© 2009 Zycus Inc. All rights reserved
 Why Zycus?

“We consider Zycus to be an excellent provider of Spend Management technology. They are very responsive; it's an
effective product and technology solution.” - Miguel Miciano, Director of procurement, Amgen.

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© 2009 Zycus Inc. All rights reserved
 Mining Financial Services F&B, Hospitality
Consumer Goods Power Generation

Manufacturing

US Federal Government Media & Communications

Oil & Gas

Forestry & Wood Products

Diversified Tech. & Services

Automotive
Specialty Materials
Pharmaceutical

Shipping and Logistics

 Zycus Spend Management solutions
Spend Management Solutions Suite

Source Strategically
& Manage Savings Opportunities Award Contacts & Track Manage Track Supplier Performance
Supplier Information
Compliance Discover New Suppliers

Spend Contract Supplier Supplier Supplier

eSourcing Information Performance
Analysis Management Discovery
Management Management

Monitor 360 degree contract compliance

elligence
Drag &based Single enterprise
Dropclassification
based event -wide repository for supplier information
modeling

Define andEasy
manage qualitative
  quick
& search of and quantitative
supplier by categorysc
, g
Track contract performance and utilization
nity
Onefinder
click and
bid trackerSimplified
analysis supplier on-boarding and registration
& optimization

Define and create Launch RFIsystems
within the
  personalized ranking
Guided workflow for contract authoring
Advanced savings tracker Configurable workflows
apabilities
SPEND ANALYSIS

Click here to return to Agenda

 What is Spend Analysis (SA)?

SA answers the following questions :-

How much you are spending?

Who are your suppliers?

How much you are spending with each

supplier?

How much you are spending in each

category with each supplier?

What parts, materials and other tools

you're getting from each supplier?

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© Zycus Inc. All rights reserved
 Why Spend Analysis?

“Spend Analysis Why Cost Savings instead of Revenue

Facilitates generation?
In tough economic times (Recession),
Discoveries of Cost revenue is harder to come by.
Saving
Opportunities.” Cost cutting increase net income:
Increase in net income -> greater
earnings per share (EPS) -> A higher
market value.
Table 1: The Spend Analysis Advantage

Performance Metric Incremental Benefit

Average Savings achieved from a sourcing 93.0%
effort

Spend under management 39.4%

Contract compliance rates 30.6%
Maverick spend reduction 16.3%
Source: Aberdeen Group, October 2008

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© Zycus Inc. All rights reserved
 Why Spend Analysis? Contd..

Cost Savings affects the bottom line directly.

Revenue to cost ratio is about 3 : 1; E.g. Increasing revenue by $300
has about the same effect as cutting costs by $100

Savings are typically discovered & achieved by:

Identifying opportunities to aggregate spend and negotiate superior
contracts
Identifying and reducing non-compliant or “maverick” spend
Improving procurement operations and supplier performance

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© Zycus Inc. All rights reserved
 Spend Analysis
Savings Potential – Aberdeen Group Findings

$500 million under management

34% increase in spend under management $170 million
5% (low) savings estimate applied to new spend $8.5 million

$8.5 million incremental benefit

Source: AberdeenGroup, August 2007

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© Zycus Inc. All rights reserved
 Garbage In Garbage out
•Inconsistent •Faulty Reports
•Inaccurate •Low reliability
•Non-granular data Distributed data •Lower ROI
Analytics
Data Mart Multiple GL codes
Multiple languages

Multiple classification standards

Invoice PO PO

UNSPSC PO eCl@ss UNSPSC

ENGLISH FRENCH RUSSIAN
eCl@ss
PO
GERMAN
eCl@ss Invoice
AP SPANISH
UNSPSC
HOME GROWN ENGLISH
PORTUGUESE

© 2008 Zycus Inc. All rights reserved

 AutoClass – Adding Value to Spend Data
Plant Item Description Material Material Group Invoice
code Amount
Classification Category
Code
Spend for Notebook Computers
US 647445 HP NC6000 LAPTOP WIRELESS Office supp 293200
6% 43211503 Notebook computers
German Latitut 12% 43211503 Notizbuchcomputer 54000
43211503 Notebook computers
35% US
Australia HP
4%NC6000 Latutude   Computer 38500
German 43211503 Notebook computers
England NX6120 notebook / 256MB RAM DELL-L131 "Mach & Equip, Misc"
Australia 12830
43211503 Notebook computers
Australia 2 latitu for DC. : KINGSTON 256MB PC2700 HP PAVIL 0206ZX MainframeEngland
Purchases 268605
43211503 Notebook computers
France Ordinateur portable donné pour la haute de Napoleon xSDF12 Australia
Équipement d'Office 32568
43211503 Notebook computers
France
Russian 647445 л.с. NC6000 ноутбук беспроводная оргтехника 102635
32% 6% 43211503 Notebook computers
4% Russian
China 对于金大中笔记本 1% 88HHSX 55689
China 43211503 Notebook computers

Accurate,
Poorly Consistent
structured and Granular or
Data (inconsistent Classification
missing material definitions)
Multilingual classification capabilities
Incomplete data (cryptic, abbreviations, mis-spelt words)
Handles cryptic,
Multilingual abbreviated, mis-spelt descriptions
descriptions
Does not rely on material groups for classification

These
Turns theissues make
garbage spend
into analysisinformation…
actionable a “Garbage in
and Garbage out” exercise….
 QUALITY IN QUALITY OUT

Data Mart

REPORTS

Invoice PO PO

UNSPSC eCl@ss UNSPSC

PO
ENGLISH FRENCH RUSSIAN
eCl@ss
PO GERMAN

eCl@ss
Invoice
SPANISH
AP
UNSPSC
HOME GROWN ENGLISH
PORTUGUESE

© 2008 Zycus Inc. All rights reserved

 Zycus’ Actionable Spend Analysis

CUSTOMER’S SOURCE SYSTEMS SOLUTION STACK

Data from all Source systems across all BU’s

Spend SCHE STAG
Transactions DULE ING
R AREA
(Input)
SE
SAP CU
RE
FT
P
AR
Oracle EA

P-card

Others

Totally Automated process

•SLA of granular visibility on more than 80% of spend.
•Throughput of more than 180k per hour
•Can handle multilingual and poor quality data
•Zero rule writing, implies minimal resource requirement
•Intuitive opportunity finder with an opportunity pipeline management workflow

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© Zycus Inc. All rights reserved
 Zycus Value Proposition in Spend Analysis
Common Practices Zycus Value Proposition

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© Zycus Inc. All rights reserved
 Zycus Actionable Analytics

Category
Spend Details

SAVINGS
OPPORTUNITIES
Intuitive Opportunity Finder
Quickly find opportunities &
Supplier
to Category Ratio build a savings pipeline for
Commodity Managers
Easily slice-n-dice data using
powerful spend analysis
pivot interface
Easily configure new analysis
Supplier-wise techniques for finding more
Verification
opportunities

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© Zycus Inc. All rights reserved
 Opportunity Pipeline Management
IDENTIFIED OPPORTUNITIES

Pipeline based Spend Analysis Process

Get visibility into all identified savings opportunities across VALIDATE OPPORTUNITY

the organisation
FINALIZE
Prioritize opportunities that need to be acted upon
PRIORTIZE
Set savings & compliance targets for the Procurement team
and effectively track them

 Sourcing Wave 1

Easy & Objective Driven

Easily evaluate, quantify & finalise savings opportunities for

SAVINGS
sourcing Sourcing
Wave 3

Collaborate on opportunities with team members

Get instant visibility into spend without relying on IT Sourcing
Wave 2

or creating any reports LOW HIGH

EFFORT

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© Zycus Inc. All rights reserved
 Savings accrued by a Zycus Customer
Metrics pertaining to General Electrics
Startling revelations at GE CORP post Zycus implementation
Instant returns were realized when in-depth spend visibility revealed that a large MRO provider, with
whom GE CORP had a corporate wide contract, was selling the same range of products to GE Aircraft
Engines at a premium price, 4% higher than the base CORP price.

GE Initiative
Total spend classified is USD $20b approx 90
of indirect material and services. 80
 70
Utilisation today is by 55,000
60 N u m b e r o f Re q u is itio n s [K ]
requisitioners and approvers worldwide.
50
 Ite m A c c u r a c y [% ]
40
95% of GE’s businesses are on board and Po o r De s c r ip tio n [% O f Ite m s ]
30
using AutoClass.
 20
Accuracy leaped from 28% to 85% in a 10
matter of months. 0
 O c t-0 2 J a n-0 3 A p r-0 3 J ul-0 3 O c t-0 3 D e c -0 3
Savings estimates 5 – 13.5% on a sample
spend of USD $1b - Metrics from GEPS

SLA Time to UNSPSC code < 4 secs
STRATEGIC SOURCING TOOL

What is eSourcing? Why eSourcing?

Savings Potential -Aberdeen Group Findings
iSource - Overview
Savings accrued by an existing Zycus Customer

Click here to return to Agenda

 What is “e-Sourcing”?

“e-Sourcing is using the Internet to make decisions and

form strategies regarding how and where services or
products are to be obtained."

Tools for e-sourcing:-

e-Auctions
Achieve 15-25% cost savings using Reverse e-Auctions, increased
process compliance.
eContract Management
Increase adherence to contract, and reduce risk
eTendering
Reduce costs and speed up the tender process, greater regulatory
compliance.

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© Zycus Inc. All rights reserved
 Why eSourcing?

E-Sourcing Value Proposition for Buyers:

•Low Sourcing cost due to trading on a more efficient medium with large
number of participants.
•Lower Total Cost of Ownership due to reduced costs in discovering
suppliers, optimized business processes and employee productivity.
•Discovery of Best Prices for the commodity.
•Enhanced resource time share for value added activities like strategic
sourcing
•Forces the Buyer to concentrate on quality and technical requirements.

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© Zycus Inc. All rights reserved
 Strategic Sourcing
Savings Potential – Aberdeen Group Findings

Average Superior
Performer Performer

Source: Aberdeen Group, 2008

 Zycus’ iSource : Strategic Sourcing solution

Full featured , Easy-to-use strategic sourcing solutions

ZYCUS iSource- Robust eAuction and RFX engine

Project Management

Supplier Management
Event Event Event Event
Modeling Scheduling Scoring Analysis

Document Management
kr o we mar F noi t ar oball o C

Drag & drop, excel Multi configuration Collaborative Multi-parameter

based item auction engine scoring analysis
creation Spot/Future capabilities Interactive
On-the-fly custom scheduling Comments based graphical what-if
columns 500+ Suppliers/ scoring analysis
Complex cost event Multi parameter One-click bid
breakdown scoring analysis
capabilities Single view side- Automated ranking
3000+ items at one on-side scoring
go 
Near 99% category
modeling

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© Zycus Inc. All rights reserved
 Powerful & easy event modeling
Event Modeling Challenges
Impacts- multi parameter analysis, pricing scenarios, categories under source
Accounts for 20% of the whole process
Often is the single largest source of frustration for users
With Zycus
Drag and Drop Excel based item creation Multi Item creation

Free Text Box Company Information

Simple item
Multiple Choice
ANswer TCO item
Radio Button Technology Information
Complex cost breakdown
Table
On-the-fly formulae
Other information
Custom columns


Technology Information

Reduce cycle time by 20% Model up to 99% of categories Create complex items with ease

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© Zycus Inc. All rights reserved
 Exhaustive and easy supplier analysis
Supplier Analysis challenges
Improper event modeling leads to lack of multi-parameter analysis
Need to be an application expert
Tedious analysis- Flip through multiple screens, lacks intuitiveness
With Zycus
Single view interactive
Multi-parameter Analysis Automated ranking
Analysis

Create multiple what-if Real time ranking of Single screen analysis

scenarios across 20+ suppliers Powerful graphical analysis
parameters 360 degree ranking Adjust weights, scores and
One click bid-analysis Automated lowest cost parameters
Multi-round negotiations recommendation
 

Maximize Savings Reduce Analysis time by 45% Easy analysis

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© Zycus Inc. All rights reserved
 Easy collaboration
Collaboration challenges
Lack of common platform for buyers to collaborate
Communication with suppliers through third party tools
Lack of ability to refer to the past events
 With Zycus
Collaborative Scoring Supplier Collaboration Live event Monitoring

Invite multiple stakeholders Common platform for Witness bids live

across the organization information sharing, to- Multiple buyer views
 and-fro communication Real time savings
Comment based scoring 
 No dependence on third
Assign weights and scores party tools

Invite more than 500+
suppliers

Faster Evaluation Maximize savings Maximize savings

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© Zycus Inc. All rights reserved
 Zycus Value Proposition in Sourcing Tool
Common Practices Zycus Value Proposition

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© Zycus Inc. All rights reserved
 Savings accrued by a Zycus Customer


Profile:

A large Fortune 500 ranked manufacturing diversified company



Key Solution Requirements:

A software to facilitate savings

Easy to use esourcing software with a simple user interface and support in 22 languages

Strong Buyer-Supplier Collaboration and Communication



Zycus implementation:

Zycus conducted 3 fully managed sourcing events to achieve cumulative savings to the tune of
approx USD 1.25 Million.

Following is a brief Summary of the events conducted for this Customer.



Event 1

Commodity Sourced: Three types of sim Cards: 32K sim Card, 64K sim Card & 128K sim Card.

Type of Event: Reverse auction

Total No. of Suppliers who participated in the event: 9 Suppliers.

Total Existing Cost: US$ 11,270,408

Total Lowest Bid Amount: US$ 10,205,632

Total Savings for the Event: US$ 1,064,775

Savings Percentage for the event: 9.45 %

 Savings accrued by a Zycus Customer

[ .. Cont]



Event 2

Commodity Sourced: Six types of Cables.

Type of Event: Reverse auction Followed by Bid-Reconciliation RFQ.

Total No. of Suppliers who participated in the event: 9 Suppliers.

Total Existing Cost: US$ 573,121

Total Lowest Bid Amount: US$ 474,365

Total Savings for the Event: US$ 98,755

Savings Percentage for the event: 17.23 %



Event 3

Commodity Sourced: Different types of Castables.

Type of Event: RFQ

Total No. of Suppliers who participated in the event: 7 Suppliers.

Total Existing Cost: US$ 957,309.00

Total Lowest Bid Amount: US$ 884,665.58

Total Savings for the Event: US$ 72,643.42

Savings Percentage for the event: 7.59 %

Contract Management

Savings Potential -Aberdeen Group Findings

iContract - Overview
Savings accrued by an existing Zycus Customer

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Click here to return to Agenda
 Contract Management
Savings Potential – Aberdeen Group Findings

20% to 30% of company’s purchases occur

outside of contractual agreements*
LOSS PRONE ZONE
3%-5% opportunity is lost due to evergreen
contract getting auto-renewed in absence
OFF-CONTRACT ~ NON COMPLIANCE LOSSES
of monitoring and re-negotiation*
Revenue = US$ 5 Bn
Ineffective management of contracts cost Annual purchase @40%=US$ 2 Bn
businesses $153B per year in missed Off-contract purchase @25%=US$ 500 Mn
savings opportunities* Lost opportunity @ 17.5%=US $ 87.5 Mn

Companies pay on average 17.5%more for

maverick purchase as compared to
purchases made from contract#

* Source - Aberdeen Research

# Source - Aberdeen-Penton
 Contract Management
Savings Potential – Aberdeen Group Findings

vABERDEEN: COMPLIANCE BENEFITS

Improve Contract compliance by
Revenue = US$ 5 Bn
50%-55%
Reduce procurement costs by 2% to Annual Costs @ 40% = US$ 2 Bn
7% COMPLIANCE SAVINGS @ 2% = US$ 40MN
Reduce administrative cost by 25%
to 30%

vGARTNER:
Achieve 90% contract compliance

vPWC:
Realize 2% of savings on annual
cost by eliminating inaccuracies
& non-compliance

 Zycus’ iContract
Zycus iContract

User defined
Secured Access
access

Multi Alerts &

Parameter Search Reminders
iContract iCONTRACT AUTHORING

Repositor
y
Utilization Report &
Tracker Analysis

Compliance Tracker

Zycus iContract Repository for Zycus iContract Authoring for

accelerated savings contract creation & approval

* iContract Repository and iContract Authoring are available as two distinct modules

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© Zycus Inc. All rights reserved
 Zycus iContract Repository for Accelerated Savings
Authorised user access
Create and manage users Expiry/Renewal Alerts
Search by Create user views Utilisation Alerts
category/Supplier/ FOREX/Commodity Index Alerts
Contract No.
Search by Keyword
Line Item Search
Secured Access
User defined
access

Multi Alerts &

Parameter Search Reminders

iContract
Repository
Utilization Report &
Tracker Analysis

Multidimensional
Track utilisation Compliance Tracker reports
of contracts Adhoc & Precanned
Track reports
FOREX/Commod Share,print & export
ity Index trends reports
and deviation Spend to contract match
Non contractual spend tracker

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© 2008 Zycus Inc. All rights reserved
 Zycus’ iContract Authoring

MS Word integrated: 
Template Library:
Author contracts using Easy Template retrieval

MS Word Create new Templates

MS Word to iContract

import

iCONTRACT AUTHORING
Wizard based Clause Library:
contract authoring Pre-approved Clauses
Configurable step
wise process

Collaborative Authoring Contract Negotiation:

Set hierarchies Standard/customised
Invite multiple negotiation workflow
stakeholder Review & add
amendments

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© 2008 Zycus Inc. All rights reserved
Zycus Value Proposition in Contract Management
Common Practices Zycus Value Proposition

38
© Zycus Inc. All rights reserved
 Savings accrued by an existing Zycus Customer

Business Challenges

A Multi-Billion Dollar Conglomerate



Business Challenges

Generating the best price and terms for each agreement with vendors and suppliers

Managing the volume of contracts that are required to monitor

Inability to effectively monitor the utilization of each contract

Lack of centralized repository to share with other departments: buyers, finance



Zycus iContract Solution

Centralised repository

All approved stakeholders have access to the appropriate contract data and can use advanced search
capabilities to locate the correct contract

Buyers can document the contracted price and discounts contracted by the contract manager



Results

The contract manager now has the ability to frequently monitor contract usage and take required
action if necessary.

Proactively manage contracts to receive the maximum intended value from the contract

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© Zycus Inc. All rights reserved
THANK YOU

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