Cabot - Digital IT procurement and the benefits of punchout

George Bakker is the Buyer Manager at Cabot, a global specialty chemicals and performance materials company. His detailed presentation at Markit Forum 2023 was highly notable for its level of transparency of the KPIs (Key Performance Indicators) Cabot use in procurement and the results they have achieved so far.

Cabot had previously decided to implement the Coupa punchout system and their P2P priorities were described as:

#1 - digital transformation

#2 - stakeholder satisfaction

#3 - obtain more value from the P2P process

Cabot have already made some notable achievements in the following areas:

Increased requisition/order ownership in the business
Supplier invoice processing
Digital supplier onboarding
Changes in requisition and PO processing for purchasing

George added that purchasing is no longer touching/reviewing every requisition. Instead, buying channels such as punchouts have been set up to guide people to the correct place. If they buy through one of the predefined buying channels, then the purchasing function is not involved again. Instead, the focus is on order follow-ups, ensuring timely delivery, and a shift to working with data to help Cabot achieve better outcomes.

In the future Cabot aims to optimise their approach with more focus on certain areas:

Increasing automated supplier invoice processing
Guided buying – “I need something, please show me”
Data analytics and reporting
Tail spend management

As to specific opportunities in the IT category George sees purchasing supporting the sourcing function with:

Spend data and buying channel usage data analysis
Educating requesters on quality requisitions and correct usage of buying channels
Provide end users with recommended purchases

Data analysis and insights

Focus on making smart choices on the right things
Consider the full picture (price, product selection, quality, availability, delivery time, Vendor Risk Management)
Process & system improvements and harmonization

Open buy

Optimize features to enhance the ‘I need something’ experience
Consolidation of requests into existing contracts

George also gave a detailed view and explanation of the results achieved so far (you will need to watch the video) but in summary, comparing 2022 with 2021:

Punch out EMEA region 3.8 vs. 17.5% (goal 50%)
Touchless POs 87 vs. 94% (goal 75%)
On contract spend 0 vs. 40% (goal 50%)

Watch the Cabot presentation on YouTube now.

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Read the main Markit Forum 2023 Report or check the other individual client presentation reports from:

CBRE - Gaining control over CAPEX and OPEX expenditure in IT procurement

Hurtigruten Group - Steering procurement from local to global in a 130-year-old cruise tourism company

Danone - Building USERS’ independence in the purchasing process

Zoetis - Vendor relationship management

BCG - Overcoming challenges of the global partner model in IT procurement

Novedades

Cabot - Digital IT procurement and the benefits of punchout