Trends in Procurement Analytics

Trends in Procurement Analytics Innovative Practices Today & for the Future ProcureAbility John Evans President & CEO Iron Mountain Fahd Osman Director Caesars Entertainment Mike Fath CPO Vice President

AGENDA Analytics Trends Iron Mountain Caesars Entertainment 2

AN APPROACH UNHEARD OF IN TRADITIONAL CONSULTING AND STAFFING FIRMS We give clients access to unbundled resources, plus the ability to selectively add value through leading-edge methodologies, the latest best practices, and specialized insight and advice. Since 1996 we ve focused only on procurement s success. IT S ALL WE DO. 2017 Copyright ProcureAbility. All Rights Reserved. 3

The Data Analytics Technology Landscape Advanced Data Analytics Technology Self Service Data Visualization & Reporting Technology Supplier Data Social Media Data Market Intelligence Stakeholder Data Analytics ERP Data External Data Customer Data Data preparation, integration & categorization Machine learning capability Data abnormality detection Predictive Analytics & Optimization capability Typically used by advanced data users/engineers Used to integrate data from various sources, of various types to categorize and analyze for meaningful analytics 2017 Copyright ProcureAbility. All Rights Reserved. Custom reporting and audience-specific dashboards Alerts and notifications What-if analysis Typically used by a wide range of users (nontechnical) Easy to use, cloud based 4

The Evolving World of Procurement Analytics Rapidly Evolving Technologies Tools are evolving rapidly. Millions of dollars are being invested but what was best in class today can become quickly stale or even obsolete tomorrow. Uncertain Path Companies are in the embryonic stages of developing Procurement Analytics capabilities and only the surface has been scratched in terms of potential analysis and insights. Progress is often hindered by data availability and quality issues Predictive Analysis Traditionally, most analytics have been based on historical data. The new age of Procurement Analytics will use procurement data, combined with forward looking data as well as predictive algorithms to create powerful predictive data and insight. New Data Sources We see a convergence of market intelligence, business forecasts and other corporate, publicly available or social media/news data that will combine with traditional Procurement/AP data to give a holistic supply chain view. 2017 Copyright ProcureAbility. All Rights Reserved. 5

Procurement Analytics vs. Spend Analytics Live Data and Predictive Analysis Traditionally, most analytics have been based on historical data. The new age of Procurement Analytics will use both historical and live procurement data, combined with forward looking data as well as predictive algorithms to create powerful predictive data and insight Big Data - New Data Sources and Wider Views We will likely see a convergence of market intelligence, business forecasts and other corporate, publicly available or social media/news data outside of Procurement) combined with traditional Procurement/AP data to give a holistic supply chain view. Relevant benchmark data will be extremely valuable New Analytics Tools and Skills The use of predictive analytics and big data will require new capabilities, tools and technologies. Advanced data management, sophisticated algorithms and modeling tools will be a part of the new environment. New skills will be required such as data analytics and advanced Mathematics Actionable Insights The biggest challenge and current point of failure is figuring out how to use data to provide actionable insights. The value of tools and/or services will be measured on the value directly created 2017 Copyright ProcureAbility. All Rights Reserved. 6

Where We See Procurement Analytics Going Procurement Analytics Common Today Future Capabilities Expected Spend Analytics Spend Categorization Self Service Spend Analytics & Reporting Periodic Updates Cost Modelling & Should-Cost Analysis Market Intelligence Real Time Performance Dashboards & Scorecards Next Generation Spend Analytics Predictive Spend Analytics, including Spend Forecasting Supply/Suppler Risk Forecasting Price & Market Forecasting Integration of Market Data and Spend Data Integration of non-standard data into Procurement analytics Social Media Newsfeeds Procurement Resource Analytics Resource Modelling and Forecasting 2017 Copyright ProcureAbility. All Rights Reserved. 7

AGENDA Analytics Trends Iron Mountain Caesars Entertainment 8

About Iron Mountain Over 230,000 customers and trusted by over 95% of fortune 1000 Located in over 50 countries with revenues in 2017 of $3.85 B Primary business in Records Management (including patents, fine art, film, photographs etc) Other areas include Data Centers, Document Imaging, Iron Cloud Storage 2017 Copyright ProcureAbility. All Rights Reserved. 11

Quarterly extract Procurement Systems Overview Global US and Canada, Brazil, Colombia, Peru Procurement Systems ROW UK, Ireland, Germany, Netherlands, Spain, Poland Contract Repository Contingent Worker/AGS Supplier Risk Manager Europe Spend Analytics Supplier Diversity LATAM Argentina, Chile, Mexico Sourcing Corporate Card Programs 2017 Copyright ProcureAbility. All Rights Reserved. 12

Analytics Evolution at Iron Mountain 2010 2018+ Annual/Quarterly Refresh Monthly, real time data Static Reports looking at history Actionable reporting, forecasting spend trends Information islands, systems not connected Enhanced system connectivity/ extraction Reporting at single tier level Multi-tier reporting, suppliers via VAR s, third parties Basic spend reporting (supplier, spend) Advanced reporting (diversity, DPO, compliance) 2017 Copyright ProcureAbility. All Rights Reserved. 13

Spend Visibility Process AP Spend from Oracle, GP and EXACT Quarterly refresh cycle 6-7 weeks for refresh process Custom taxonomy Collect global spend data and categorize it into Sourcing categories Category Cube Implemented in Q2 of 2014 Suppliers 2017 Copyright ProcureAbility. All Rights Reserved. 14

Compliance Geographic Distribution Global Sourceable Spend 2017 Global Spend: $ 1 B* Operations Technology Services HR & Finance Marketing $500 M $200 M $200 M $100 M $50 M 2016 2017 4% 14% 2% 15% 17% 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 NA $ 400 M $405 M $100 M $150 M $ 140 M $145 M $ 70 M $80 M $ 30 M $ 20 M Wes EUR $45 M $50 M $ 8 M $30 M $30 M $35 M $ 7 M $ 10 M $15 M $ 15 M LATAM $30 M $ 35 M $ 19 M $ 15 M $ 10 M $ 10 M $ 9 M $ 5 M $ 3 M $ 7 M IMECE $ 4 M $ 5 M $ 1 M $ 3 M $ 4 M $ 4 M $ 1 M $ 3 M $ 1 M $ 3 M APAC $ 4 M $ 5 M $ 2 M $ 2 M $ 1 M $ 6 M $ 1 M $ 2 M $ 1 M $ 5 M PO (Q4 2017) NA >$1k for Opex 80 % 90 % 90 % 90 % 70 % Contract $ (excludes expired) 80 % 90 % 100 % 80 % 100 % Contract Count (excludes expired) 60 % 70 % 80 % 70 % 80 % 2017 Copyright ProcureAbility. All Rights Reserved. * Excludes inter-co, employee reimbursements, rent, bank transfers, taxes and unclassified spend 15

DPO Comparison Year over Year Annual Spend Invoice Count $ 250 M 80 K $ 227.2 M $ 228.2 M 70 K $ 200 M $ 190.5 $ 193.22 M M $ 173.6 M 60 K $ 150 M $ 139.7 M 50 K $ 125. M 40 K $ 100 M $ 90.3 M 30 K $ 50 M $ M $ 20.91 M $ 21.19 M $ 6.79 M $ 7.9 M $ 32.4 $ M25.9 M $ 4.5 M $ 4.2 M IMMEDIATE Net 10 Net 15 Net 20 Net 25 Net 30 Net 45 Net 60 20 K 10 K K 2017 Copyright ProcureAbility. All Rights Reserved. 2017- Spend 2016- Spend 2017- Invoice Count 2016- Invoice Count 18

AGENDA Analytics Trends Iron Mountain Caesars Entertainment 19

About Caesars Entertainment Global leader in entertainment, hospitality, meetings and convention and gaming. Home to the most recognized and iconic brands in the industry Most experienced operator in the world: 80-year history Best performances and entertainment in the world. Lead the industry in innovation and deploy the latest technologies and hospitality amenities available We stand for integrity, diversity, and service with passion. We are committed to our employees, our communities, our environment, and our guests CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL 20

About Caesars Entertainment Our Code of Commitment the first of its kind in the industry is a promise to treat employees with respect, to create memorable experiences for our guests and promote Responsible Gaming, to make our communities healthy and vibrant places to work and live, and to operate an environmentally-aware business. CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL 21

Category Strategy Development Procurement Analytics are leveraged in each step of Category Strategy Development process at Caesars Entertainment. Monitor Execution Analyze Category Form Strategy Analyze Evaluate both spend & transactional metrics to prepare for a balanced scorecard. Form Create KPI goals and action-driven plans to meet or surpass them. Monitor Utilize analytical dashboards to assess real-time progress towards KPI goals. CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL 22

Creating Comprehensive Category Strategies Pulling from several data sources, the Sourcing Analytics Team builds holistic and scalable category strategy data into a template for each of our 90 categories Spend Coverage Purpose: Illustrates Sourcing s control of category spend across the enterprise through: Vendor Rationalization Purchasing System Compliance Sourcing Program Adoption Location and Scale of Maverick Spend Creation Process: Enrich Accounts Payables spend data with category and transaction details from Procurement Systems CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL 23

Creating Comprehensive Category Strategies Project Timeline & Savings Projections Purpose: Contextualizes and consolidates category opportunities to achieve savings targets Prioritizes disparate opportunities based upon timeline, workload, and company need Creation Process: Combine expiring contract data from Purchasing System with Savings Project Tool data CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL 24

Creating Comprehensive Category Strategies Purchasing Operations Efficiency KPIs Purpose: Measures operational impact of Sourcing programs to drive continuous improvement: Reduce cash cycle Reduce turn time Reduce labor Increase automation Creation Process: Utilize P2P (end-to-end) transactional reports from Purchasing System to calculate holistic KPI scorecards at a supplier level CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL 25

Creating Comprehensive Category Strategies Templates allow category managers to easily digest multiple datasets and effectively employ their expertise to design a dynamic category strategy. Category scope definition Current state overview Internal company demand history External supply base properties Challenges & risk factors Category plan outline Annual Roadmap 2-3 Year Plan Spend Coverage Project Timeline & Savings Projections CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL Purchasing Operations KPIs 26

Category Strategy Management Category managers are empowered with the tools required to monitor category execution in real-time. Monitor Execution Analyze Category Form Strategy Data From Savings Tracker & SAP Ariba Aggregation of data from both sources to calculate KPIs tailored to Caesars Entertainment category management Monitoring KPIs With Tableau Connecting data sources to visualization tool to enable simple monitoring by category managers and leadership Compliance Tracking Quarterly meetings with leadership to ensure strategy execution is taking place CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL 27

Future of Procurement Analytics The Next Generation of Procurement Analytics at Caesars will be geared towards Predictive Analytics and Rapid Process Automation. Predictive Analytics: Category Savings Potential savings based upon operational metrics and category market Contract SLAs Completion date based upon agreement type, spend size, and category complexity Labor Analysis Resources required based upon category volume and savings potential Robotic Process Automation (RPA) Cornerstone Dashboard Data refreshes are completely automated and scheduled CAESARS ENTERTAINMENT PROPRIETARY AND CONFIDENTIAL 28

Contact Information John Evans CEO, Executive Vice President ProcureAbility jevans@procureability.com Mike Fath CPO Caesars Entertainment mfath@caesars.com Fahd Osman Director of Procurement Analytics & Technology Iron Mountain Fahd.Osman@ironmountain.com 2017 Copyright ProcureAbility. All Rights Reserved. 29

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Session # 8 Trends in Procurement Analytics: Innovative Practices for Today...and Tomorrow John Evans CEO, Executive Vice President ProcureAbility jevans@procureability.com Mike Fath CPO Caesars Entertainment mfath@caesars.com Fahd Osman Director of Procurement Analytics & Technology Iron Mountain Fahd.Osman@ironmountain.com Download the App: sig.org/app Tweet: #SIGspring18

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