Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: Ariba.
Dana Gardner: Hello and welcome to a special BriefingsDirect podcast series coming to you from the 2012 Ariba LIVE Conference in Las Vegas. We're here to explore the latest in cloud-based collaborative commerce and learn how innovative companies are tapping into the networked economy.
We'll see how they are improving their business productivity along with building far-reaching relationships with new partners and customers.
Our next innovator interview focuses on Cox Enterprises, a major communications, media, and automotive services company, with revenues of nearly $15 billion and more than 50,000 employees, and with major subsidiaries, including Cox Communications, Manheim, Cox Media Group, and AutoTrader.com.
We'll learn how Cox, through the Ariba Network, manages multiple ERP systems for an improved eProcurement strategy and has moved toward more efficient indirect spend efforts to improve ongoing operations and drive future growth.
To hear more about how they have done this, we're here with Brooke Krenn, the Senior Manager of Procurement Systems for Cox Enterprises, based in Atlanta. [Disclosure: Ariba is a sponsor of BriefingsDirect podcasts.]
Welcome to BriefingsDirect.
Brooke Krenn: Thanks, Dana. Great to be with you.
Gardner: I am glad you could join us. Let me ask you first about these multiple ERP systems. I think that's pretty common. A lot of organizations either have organically developed multiple systems for different groups or, for merger and acquisition reasons, have different ERP. How has that been a challenge, when it comes to procurement?
Krenn: We have six separate ERP systems. Cox is a very interesting company in that our business units are very diverse and very unique. Across four divisions and our holding company we have those six ERP systems.
So with that, obviously, there are a lot of challenges. There's not a lot of common ground, when it comes to purchasing. Across those six ERP systems we needed some way to drive consistency, as we focused on really capitalizing on our indirect spend across all the business units.
Gardner: Let’s hear a bit more about the scale of your operation as a very large company. Tell me about your position and the depth and breadth of the procurement activities that you are responsible for?
Procurement systems team
Krenn: My team is the Procurement Systems Team. We fall under supply chain in Cox Enterprises. I have a team of three, and we manage our eProcurement platform, with which we do about $50 million year-end POs, and average about 1,500 POs a month. We also manage our P-Card program, which is about $130 million a year in spend, and also our fuel card program, which is about $50 million a year.
Gardner: I briefly described what Cox is and does, but maybe you could fill that out a little bit. It’s a very large organization with a fairly diverse group of products and services.
Krenn: All across the United States our Cox Communications division is the cable Internet telephone. We have Manheim, which is the wholesale car industry. AutoTrader.com, which hopefully a lot of your listeners are familiar with or maybe even used in the past, is an online form for buying and selling used as well as new vehicles. Also our Cox Media Group, which is our TV stations, radio stations, and newspapers, are all throughout the U.S.
Gardner: So with 50,000 employees, that’s a lot of indirect procurement to keep them productive and engaged. Back to the whole issue of procurement. What’s been your story? What have you been doing for the past few years, and why has that been important in the way in which you've used Ariba to accelerate your benefits?
Krenn: Historically, our spend, specifically the indirect spend, has been all over the place. We haven’t had a lot of visibility into that spend and haven’t had a consistent manner in which we purchased.
We had an eProcurement solution for about 10 years. We were on that software for a decade, and it was just very dated. It wasn't supported very well. We knew it was time to make that change. Where we were in the economy, everyone was looking at the most logical places to save time and money and to become more efficient. Obviously, procurement was one of those areas where we could do very quickly.
We knew the first step was replacing the software that we did have. Immediately, Ariba was one of the top contenders, as we looked for a new solution, simply because of the user experience was most important to us, and also how quickly we could implement it.
Gardner: So you’re going from an on-premises software installed affair to now more of a software-as-a-service (SaaS) and cloud affair. Was that something that was difficult or something you were looking forward to?
Krenn: Moving to the cloud in an on-demand solution was great for us. Having the on-premises software in the past, any time there was an upgrade or an update, we had to be sure IT knew about it and we scheduled the time on a night or a weekend. We had to call on resources internally within the company. So it was very exciting for us to move to an on-demand solution and all of the technology that was available with that.
Gardner: Let’s hear more about what this has done for you, not just in terms of savings, but in terms of productivity and agility. How have the users adapted to this, and what has it brought to them in terms of a business benefit?
A great change
Krenn: For the users, it's been a great change, because now they consistently know there's one place to go. When they need to order office supplies, when they need to order something for their break room, when they need to order business cards, they know where to go. In all of our divisions and all of our locations, employees want to do the right thing. They want to purchase the right way. A lot of times they're just not sure of what to do.
So with this implementation of a new tool, we were able to really drive them in the right direction, and it was an easy solution for them. It was easy for us to implement, and it's been very easy for our end users and our employees to adopt.
Gardner: Has that, in fact, translated into other metrics of success that you could describe for us. Maybe they're hard numbers, like dollar savings, or maybe they’re the ability to find better products that suit your constituents' needs when they’re in a certain new or interesting activity?
Krenn: Probably one of the biggest wins for us has been just driving compliance against our contracts. We’re able to see very easily now when a location or a business unit within one of the divisions is purchasing off-contract or when they're not utilizing one of our preferred or negotiated suppliers. That's probably been the biggest win for us.
Gardner: How often does that happen? Have you been able to effectively reduce how often that happens? And what does that mean when you can get everyone on the same page?
Krenn: We have the visibility now to see very quickly within our P2P tool and also within our spend management tool to see where this spend is taking place and able to reach out directly to those locations or to those employees that are purchasing off-contract. Obviously, the more purchasing power we have, the more spend we are driving to these contracts, the better our pricing is going to be going forward.
Gardner: How about for folks who might be thinking about a different eProcurement strategy, recognizing that they also have multiple ERP systems? Tell us a bit what you suggest, particularly on how you bridged those multiple ERP systems with this new sort of centralized strategy?
Krenn: We went about implementing our new P2P solution a bit unconventionally, you could say. About 98 percent of our transactions are actually on a supplier card -- a P-Card model, which has just been tremendously successful for us. With that, we didn't have to integrate directly into our six separate ERPs because our payment method is with that supplier card.
Ease of implementation was one of the biggest wins. Also with that is the ease of use for the end user. There's no reconciliation for them at the end of the month. We’re taking care of all of that GL coding information, all of the approvals, upfront.
The supplier card model, again, has been great on the end user side as well as on the AP reconciliation side.
Gardner: We’ve been talking about how Cox Enterprises, through the Ariba Network, has gained insight and control over its procurement and instituted a strategic approach to eProcurement with their indirect spend efforts.
I'd like to thank our guest. We’ve been here with Brooke Krenn. She is the Senior Manager of Procurement Systems at Cox Enterprises. Thanks so much.
Krenn: Thanks so much, Dana.
Gardner: And thanks to our audience for joining this special podcast coming to you from the 2012 Ariba LIVE Conference in Las Vegas.
I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of Ariba-sponsored BriefingsDirect discussions. Thanks again for listening, and come back next time.
Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: Ariba.
Transcript of a sponsored BriefingsDirect podcast on how eProcurement helped Cox Enterprises get a better handle on indirect spend. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.
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