PROCUREMENT ADDING VALUE, INSPIRING INNOVATION

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XCHANGING HAS EMERGED AS THE GLOBAL LEADER IN PROCUREMENT SERVICES. WITH 12 YEARS’ EXPERIENCE, WE WORK CLOSELY WITH OUR CLIENTS TO ENSURE THAT VALUE, RISK AND INNOVATION ARE MANAGED ACROSS YOUR SUPPLY BASE.

Since the financial crisis of 2008, many companies have taken a closer look at their procurement of these activities specifically.There are good reasons why.

Even companies with large, well-established procurement teams continue to find new opportunities for savings as they seek to effectively convert cash and improve their profit and cash positions.

A range of strategic considerations accompany this imperative for savings.

Procurement leaders are currently facing a number of challenges, including lack of resources to execute, and unmanaged spend. This ‘leaves money on the table’ and creates compliance and supply risks.

Procurement is now a business critical issue – not only a cost manager but a strategic partner alongside Finance and HR teams.

Many companies only manage 50% of non-core spend. This is driven by a lack of category expertise, supply market intelligence and sourcing rigour.

Non-core spend such as travel, logistics & transportation and human resources amongst others can represent up to 20% of revenue.

Procurement excellence can unlock 10-30% of value from indirect spend.

40% of negotiated savings never hit the bottom line. That’s because even after the sourcing process there remains non-compliance by employees and suppliers.

Xchanging has emerged as the global leader in procurement services. With 12 years’ experience tackling these challenges, we work closely with our clients to ensure that value, risk and innovation are managed across your supply base.

We give your executives space to focus on core strategic activities. We improve your procurement performance through expert market knowledge, process optimisation and technology enablement.

We ensure that every saving directly benefits your bottom line unlocking the true value of procurement.

Xchanging believes procurement should play a larger role within organisations, inspiring innovation and generating funds to support growth and investment across the business. Specifically, indirect procurement is a relatively neglected vein of additional value within most companies.

PROCUREMENT – EMBRACING THE COMPLEXITY OF YOUR COST BASE

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Indirect procurement is still a largely untapped value stream. Understanding where you fit on our procurement maturity matrix can help to define where the key challenges and therefore opportunities are within your organisation. In addition, it can highlight your strengths and help you understand how to build on them.

We help our customers create a value-conscious culture that improves shareholder value and supports investment in growth.

GETTING BETTER RESULTS FROM YOUR PROCUREMENT PROCESS

Depending on where you are, we will advise you on the best approach for your organisation and either support the delivery of a procurement program with your existing team (Co-Sourcing) or take full responsibility for the people and the program delivery (Outsourcing).

ABOUT US

PROCUREMENT LIFECYCLE

Spend Analysis

Strategic sourcing

Contract management

Requisitioning

Purchasing / Spot Buys

Payment

Gather spend data from

accounts payable

Analyze spend

Determine compliance

Identify sourcingprojects

Identify Suppliers

Run sourcing events /

RFx Evaluate

responses Select supplier

Negotiate contract

Execute contract

Manage contract and catalogs

Search catalog, create shopping

cart

Create requisition

Requisition workflow and

approval Create PO /Spot Buy Goods

receipt

Supplier performance

Invoice receipt

Invoice reconciliation and workflow

Payment settled, update accounts

payable

Our 600 procurement specialists across 4 continents and 20 countries become an integral part of your team. We work with you to identify all avenues for cost reduction. We provide expertise in non-core spend areas and liberate you to focus on strategic priorities.

By using our services, you reduce spend and improve control and transparency. You can keep better track of your different business areas and focus on adding value in your marketplace. We can help by putting into place efficient procurement processes that enables you to increase effectiveness and reduce supply risks.

We can reduce your expenditure by 5-30% through the use of accelerated procurement processes. Xchanging will work with you to increase compliance throughout your business. We use supplier management skills and extensive resources to monitor compliance.

PROCUREMENT LIFECYCLEThese are our current services which cover the entire source to pay (S2P) spectrum:

Spend Analysis – We help our customers understand their spend base and then keep their data accurate for the future. We also use that data to find ways of making their procurement more efficient and cost-effective.

Strategic Sourcing – We help our customers make savings. We help you understand your requirements then run sourcing events to negotiate and help you choose the right supplier.

Contract Management – Once suppliers are appointed, we make sure that contracts are put into action as agreed – and we keep looking for ways to add extra value too. We actively monitor savings and customer satisfaction levels as well as using technology for specific categories such as an online travel booking tool or resourcing portal.

Purchasing / Spot Buy – For non-recurring and one-off spend, there’s often a need to search quickly for suppliers or run project-specific bid activity. We help our customers efficiently express their needs in the marketplace and then run fast bidding activity. We’ll also do our best to bundle similar requirements across our portfolio to give customers greater economies of scale.

Requisitioning and Payment – Often called P2P, this is the back office processing of the orders that our customers place. Requisitioning is helping our customers get control of who is raising requisitions in the business and identifying how to keep those orders with an agreed list of suppliers. We also help converting requisitions to purchase orders, placed with the suppliers of choice. Once suppliers have completed their work order they can submit invoices which we can manage along with the final payments. We work on customers’ own platforms and offer access to on- and off-shore solutions to make transactional works fast, efficient and cost effective.

WHERE IS YOUR ORGANISATION ON THE PROCUREMENT MATURITY MATRIX?

• Co-sourcing approach: We support your expansion into new geographies  or categories using our expertise and flexible workforce to boost your internal staff capabilities.

• Procurement outsourcing approach: Typically this approach works for organisations in 3 scenarios: 1 if you have limited or no existing capability 2 where the cost of upgrading your in-house skills and infrastructure is prohibitive and 3 to help your team focus on core and

strategic activiities.

Benchmark 1 – Immature 2 – Reactive 3 – Proactive 4 – Strategic 5 – Best in class

Spend Under Management

< 15% 25% - 30% 35% - 50% 50% - 70% >85%

Enterprise savings targets

No call to action Some targets at the BU level

Targets established, not communicated throughout enterprise

Targets established and intergrated into corporate strategies

Targets monitored and linked to business outcomes

Spend analytics and visibility

No process Low visibility. Some data analyzed at local levels

Available for some categories 30-60% classified

Spend data leveraged and strategically utilized. 60-85% classified

Consistent use of technology to classify >85% of spend and used stategically

Supplier fragementation

Highly fragmented 80% of spend with more than 30% suppliers

80% of spend with 20-30% suppliers

80% of spend with 10-2w0% suppliers

80% of spend with <10% suppliers

Technology No technology used Technology adoption: 25-30%

Technology adoption: 35-40%

Technology adoption: 45-65%

Technology adoptions around 80%

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Xchanging’s principal office locations and the geographic territories where customers are served.

ABOUT US

Globally, we work with customers across all the most common indirect procurement categories including:

PROPERTIES & FACILITIES• Property Management• Facilities Services• Capital Projects• Utilities• Office Supplies• Furniture• Repair and maintenance

TRAVEL• Air Travel• Hotels• Rental Cars• Travel card• Meetings• Car fleet

IT & TELECOM • Hardware• Software• Services• Voice & Data• Wireless

HUMAN RESOURCE• Recruitment• Contingent Labor• Training• Benefits• Relocation

PROFESSIONAL SERVICES• Consultancy• Accountancy• Financial advisory• Engineering services• Legal services• Commercial Printing• Advertising• Promotions• Trade shows & events• Public Relations• Market Research• Marketing

TRANSPORTATION• Ocean freight• Rail / Intermodal• Airfreight / Expedited• Courier & messenger• Small package• Storage / warehousing

MRO• Consumables• Electrical supplies• Industrial supplies• Equipment rental• Machine Parts• Uniforms• Safety equipment

Europe: UK, France, Spain, Germany, Italy, Netherlands, Scandinavia

UK

Asia: Australia, Singapore, India India

Chicago, New York US

SOURCING HUBS TRANSACTIONAL HUBS

• 50 Procurement staff• 2 Operational hubs

AMERICA • 250 Procurement staff• 8 Operational hubs

EUROPE• 300 Procurement staff• 4 Operational hubs

APAC

We’ve completed more than 6,000 sourcing projects, creating over £500m in savings We complete over 5m operational procure-to-pay transactions every year We won ‘Star Performer’ status from Everest in June 2012

Annually, we manage £10bn of spend

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BAE SYSTEMS

WE MANAGE A £1BN SPEND FOR BAE SYSTEMS ACROSS THE US, EUROPE AND AUSTRALIA. WE STARTED WORKING TOGETHER BECAUSE THE CUSTOMER WANTED TO IMPROVE VISIBILITY OF THEIR SPEND, RESOLVE INCONSISTENT PERFORMANCE AMONGST SUPPLIERS AND ENSURE COMPLIANCE TO PURCHASING POLICY. SO FAR, WE’VE DELIVERED £200MILLION IN SAVINGS FOR BAE SYSTEMS AND PROVIDED A RANGE OF RELATED ADVANTAGES

• We’ve improved savings tracking and visibility through transparent calculations and reporting

• We’ve increased the percentage of indirect spend under formal commodity management

• We’ve standardised specification, process and supply consistently applied across all business areas and locations while allowing for unique local business-driven requirements

• We’ve expanded existing technology/infrastructure and improved efficiencies through the introduction of web-enabled tools.

WHAT OUR CUSTOMERS SAY…

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L’OREAL

L’OREAL WANTED TO ENHANCE THEIR INDIRECT PURCHASING THROUGH A ‘CO-SOURCING’ APPROACH: A TARGETED BLEND OF OUTSOURCING AND CONSULTANCY.

This solution showed real innovation and required strong project and management skills. L’Oreal benefited from measured and validated bottom-line savings, as well as a range of softer benefits. We saved the customer tens of millions and raised the profile for procurement across their organisation.

L’Oréal say that they chose Xchanging as their procurement partner because of our strong track record in managing change and compliance within large organisations.

‘OUTSOURCING INDIRECT PROCUREMENT TO XCHANGING ENABLES US TO ACCESS TOP PROCUREMENT TALENT SUPPORTED BY A PROVEN APPROACH TO SOURCING THAT WILL PROVIDE VALUE TO OUR BUSINESS’

Vice President Strategic Sourcing, BAE Systems Inc.

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EUROPE

LondonXchanging 34 Leadenhall Street London EC3A 1AX, UK +44 (0)20 7780 6999  www.xchanging.com/procurement

Fulwood Xchanging Caxton Road Fulwood Park  Preston PR2 9NZ, UK

Glasgow Xchanging 3rd floor, 135 Buchanan Street Glasgow G1 25A, UK

Paris Xchanging 2nd Floor, 34-36 rue Guersant 75017 Paris, France  +33 (0)1 70 39 70 39 

Frankfurt Xchanging Wilhelm-Fay-Straße 31-37 65936 Frankfurt am Main, Germany  +49 (0)69 12 0 12 0 

Hof Xchanging Windmuhlenweg 12, 950350 Hof, Germany +49 (0) 92 81 7 25 0

Madrid Xchanging Caléndula, 93 Edificio E - Miniparc III 28019 – Alcobendas (Madrid), Spain +34 917 912 900

Milan Xchanging Kedrios SpA, Viale Certosa 218, 20156 Milano, Italy +39 (0)2 623651

AMERICA

Chicago Xchanging 200 W. Adams, Suite 1175 Chicago, IL 60606, USA +1 312 236 1800 

APAC

Gurgaon Xchanging Basement, Ground and 1st Floors 271 Udyog Vihar, Phase- II Gurgaon- 122016, India +91 (0)124 4339333 

Bangalore Xchanging Xchanging Tower SJR iPark, EPIP Area, Whitefield Bangalore, 560 066 India +91 (0) 80 30540000

Singapore Xchanging 13 International Business Park 06 - 01 Jurong East Singapore 609932 +65 679 96000 

Sydney Xchanging P.O. Box Q1461 QVB Post Office NSW 1230 Level 2, 201 Elizabeth Street Sydney, NSW 2000, Australia +61 (0)28667 9700

Adelaide Xchanging PO box 270 Elizabeth SA 5112 Australia +61 (0)88480 7585

OUR OFFICES

34 Leadenhall Street London • EC3A 1AX • UK

Telephone +44 (0)20 7780 6999Facsimile +44 (0)20 7780 6998Email info@xchanging.comWebsite www.xchanging.com/procurement

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