So hello, and welcome, everyone. We're so excited to dive into all things purchase prep today with a great group of speakers. My name is Caitlin, and I'm on the product marketing team here at Tropic, and I will be guiding us through today's session.
First, a couple housekeeping details before we get started.
This webinar is being recorded, and we'll send out a link to the recording later this week. Second, if you have any questions at all, please feel free to post them in the q and a box in Zoom, and we'll address them at the end of the webinar.
And I'd like to take a moment to introduce today's speakers. Russell Lester is our CFO here at Tropic.
Tommy Noonan is our director of product management, and we're so lucky to have a Tropic customer with us today. Scott Johnson is the senior director of procurement at Ivanti, where he leads the global procurement and travel functions. He is responsible for contracts with key vendors and leading digital transformation efforts across the function.
Prior to Ivanti, Scott successfully established global procurement functions at Pegasystems and Omego.
Scott holds an MBA from Babson College and a BBA in accounting from the University of Iowa.
Alrighty.
So for those of you newer to Tropic, Tropic is your virtual procurement partner that saves you time and money by offloading the most painful parts of spending.
Using a combination of AI and human expertise, we'll help you identify cost optimization opportunities and quickly action on them, which we'll see today with purchase prep.
We do this by automatically ingesting your spend data and combining it with our unbiased pricing and negotiation insights from over fifteen billion in managed software spend, And the result is over four hundred million delivered in savings with a twenty one percent average customer savings.
Now with that I'm actually going to stop sharing and hand it over to Russell to really kick us off here.
Thanks, Caitlin. Appreciate it. Excited to be here today. And thanks, Tommy and Scott, for your presence as well. Let's begin by just acknowledging the pain point.
Whether you are a leader in finance, procurement, IT, operations, or any other group that has been assigned the process of procuring things, you know this world that we live in is complicated, it's messy and it requires what I like to call helicopter skills. What are helicopter skills? Well, about when you're flying in a plane, how long it takes to descend.
The captain will come on and tell you that you're about to land at the airport and forty minutes later you're there.
Whereas with a helicopter it's able to go vertical very quickly and also go really deep into the situation and when you're being asked to approve things and review things and deploy capital and determine is this the right investment? Am I getting the right price? Has everybody looked at this that is supposed to? What alternatives were considered?
Is this tool doing what we even hired it to do?
It can be overwhelming and so how do you quickly achieve those helicopter skills needed to go right down into the situation and answer all those questions. The answer is in the old way it's next to impossible and it's certainly impossible to do at scale And so how do we fix that? Well that's what Tropic set out to do is figure out a way to make this better for people like me because if you're like me All day, every day, people are asking for your approval.
They're asking for money, they're asking for your review and it's too much to just get into the details and so Tommy I need help.
And so luckily we have help on the way and that's Purchase Prep.
Before we dive into how we built Purchase Prep, Scott, I just wanted to bring you in here and ask if, you know, even though you're a director of procurement and Russell is a CFO, those functions often work closely together. Do a lot of the pain points that Russell was kind of pointing out resonate with you and your experience as well?
Oh, very much. Yeah, mean, I'm constantly talking to our CFO as well as my peers and various finance functions around approvals, around kind of how something's being used and what renewals are coming up and everything like that. So no, it definitely resonates with me. I wish I had several helicopters.
Don't we all? Well, fortunately, we have Tommy here to help us understand how purchase prep can act as one of your helicopters, if you think of it as that kind of metaphor. So Tommy, you want to take it away?
Yeah, thanks, Caitlin. Let me go ahead and start sharing screen here.
Perfect.
Okay. Great. So thanks, Russell and Scott. I I have spoken to a number of finance and procurement leaders this year and I think all of them have told me some sort of version of this helicopter story.
You know, there's so many renewals. It takes a long time to prepare for each one and preparing for one renewal takes you away from preparing for another. Know, this is, you know, it's you have to make an explicit decision to go deep and land that helicopter.
And what I typically hear is everybody goes about this in some form or fashion of listing out the renewals that are coming up in the next quarter, circling the one with the highest amount of spend and then going forward and putting eighty to ninety percent of your effort in trying to achieve the most success you can with that one contract.
But what you miss out on when you do this is that contract typically already has great pricing.
That contract may be from a supplier that is just notoriously difficult to negotiate with on renewals. And lastly, there may be another contract somewhere else that was a lower price, didn't rise to the same level of scrutiny, but maybe it's just no longer needed by your team anymore.
And so we've invested in a ton of great data over the past couple years, whether that's our best in class price benchmarks, our negotiation intelligence built off of those thousands of negotiations our services team has been doing against these suppliers in the market.
But when I go out and have conversations with contract owners, and I do think contract owners are extremely important here because most procurement leaders are, you know, typically wanting contract owners to join more into this journey of cost savings for their organization. They'll tell me things like, well, can't Tropic just tell me what to do? You have all the data. I may not be super familiar with benchmarking data or have the expertise to actually leverage some of these negotiation tactics. So I I need a little help.
I also talk to the procurement and finance leaders, and they go into every renewal assuming they have a bad deal because they simply can't go deep on preparation for every single contract they have out there.
And so why I'm super excited about Purchase Prep is for the contract owners, AI has proven itself to be extremely good at taking all of this complex information and synthesizing it down to a very simple indirect recommendation and with some next steps for what the contract owners can do and take a lot of the ambiguity and the hesitation out of it for them.
And then for our finance and procurement leaders, you know, no longer do they have to just soft circle the highest contract. But PurchasePrep is gonna analyze all of these contracts for them already and give them a a bit more tangible of a road map on, hey. These are the ones out of the next quarter that you should actually be spending your time on. So it's great to, you know, walk you through some of the concepts that led us here, but I'm super excited to actually walk you through what purchase rep looks like in the app today.
And so I'm gonna start with the renewal reminder because this is typically where most of our users experience purchase prep for the first time. Renewal reminders in the past have always been, you know, going out to contract owners ninety days before renewal as a reminder to, you know, don't miss your auto renewal and your opt out. Get that request in so it can go through the proper approval process. But it was, you know, mostly a process oriented thing.
With the purchase prep, contract owners are now gonna have this very succinct recommendation right there in front of them based on all of the analysis that purchase prep has been doing beforehand and comparing it to the Tropic network data, all these negotiations, the price benchmark data, etcetera. So contract owners are now contract owners are now going to get a recommendation to negotiate. And by reading this first paragraph here, I'm going to understand there's a significant savings opportunity. There's multiple compliance gaps with this contract. And maybe most importantly, this supplier is actually known to be reasonable to negotiate with on a renewal. There's not only an opportunity, but there's the ability to execute on it. Because we've analyzed your contract, we've compared it to the success we've had against this supplier in the past, and we find that there's a great matchup here.
So what can you do as a contract owner at this point? Well, for one, now that there's an opportunity here, maybe this is a signal to you that, hey, I should loop in procurement or finances help. There is opportunity for us to achieve real savings.
Maybe this is something you go out to Tropic services team to to go get for you. Or if you're a savvy contract owner, you know, maybe this is something where you can see, okay, I see my negotiation strategy down here at the bottom and which levers to use. Maybe I can do this one on my own.
By clicking into contract insights, you're gonna get all of that information that PurchasePrep has prepared and analyzed for you kind of in one place. It's like a Tropic executive summary for your contract. What what do we view as the opportunities here?
You'll see things that you're probably familiar with, like the price benchmark. So an overview of every line item you have on your contract, your current price, and how that compares to the tropic average.
By clicking into this, you can get more information, maybe giving yourself an idea of what a target price should be for this specific contract or where some different opportunities to be to save.
We can also have the compliance check. Now compliance check previously had only been on Tropic requests, and it was a way for you to log information that was a compliance policy for your organization, whether that was finance terms, security, legal terms, etcetera.
We've completely overhauled this feature to be able to apply it to contracts. And now we are able to look at things like finance terms, auto renewal, opt out days, etcetera, and compare that not only to your own compliance terms, but also what does the Tropic network data say about the supplier in these terms. So you may find things like the net payment terms where first twenty But when we look at what other suppliers or other customers of Tropic are contracting with this supplier, we see that there's probably not a great opportunity for you to improve this term. That's in a great contrast to something like payment frequency, where your contract is annual, the policy is quarterly payments.
But we actually see here there's a plausible opportunity to get to quarterly or semi annual payments. And so, purchase prep is then going to recommend, hey, this is a contract term that you should look for and push on in your negotiation.
The last thing I'll mention about this contract insights page is the pulse survey agent. It's relatively new and it coordinates feedback from key users of different software ahead of the renewal. And it gathers information of things like, hey, is this supplier still, or is this capability still necessary for the business? And if it is, how is the supplier and actually achieving that capability?
A lot of times people will find, you know, smaller spend that didn't necessarily get scrutiny on renewals is potentially no longer needed just by having someone going out and coordinating and asking these questions from key users of the software. Another thing people are finding out is that because we have the Tropic network average across all of these, you can start to see how are other Tropic customers sensing the supplier. Sometimes your organization may not like a supplier, and if the Tropic network, you know, is coming in very positively, potentially, it's just a training or an implementation issue and can save you from costly sourcing or, you know, going out and looking for a new supplier.
Awesome. So we spent a lot of time on you know how the purchase prep is gathering different information, how it's presenting recommendations to contract owners. But I also wanted to present this through the lens of, you know, centralized functions like finance and procurement leaders.
And they are kind of ingesting this information in a couple of different places.
One is the contract calendar on the home page.
You will see this priority column over here, and this represents the purchase press assessment of, you know, where are your high priority contracts, where are the places that you should be landing the helicopter as, you know, as low as possible, And which are the ones that you're probably fine to just keep flying over, whether that's an auto renewal or maybe let the contract owner negotiate this themselves. There's not a significant savings opportunity for your organization.
Another place that this can be helpful is the contracts index itself.
So we are going to assign a priority on every single active contract that you have.
Now you can sort these from very high down to the low, or even just filter this by your upcoming renewals which are the ones that are a high priority or higher And so now what used to be I got to come into every renewal and fight tooth and nail for every single term now comes into, I'm going to go into these nine renewals. I'm going to know exactly which terms that I'm going to fight for. I'm going to know exactly which negotiation levers to use. And I'm going to know exactly what target price I should aim for.
So, hopefully, maximizing your savings by always choosing the right opportunities, but also being able to execute properly on them, because you need both in order to bring those maximum savings home to your organization.
Awesome. So thank you, Caitlin. I think I can hand it back over to you now.
Perfect.
That was such a great like, to continue our helicopter metaphor, such a great, like I don't know how high helicopters fly, thousand foot view of purchase prep. So thank you, Tommy. Clearly, a lot of work and effort put into developing this, to listening to customers.
To kind of start a bit of a, like, discussion q and a session, Scott, when you first learned about purchase prep, what were kind of your initial thoughts? What were the immediate, like, wow, this could potentially solve something for me?
Thank you. Was really just, I felt like I got an additional member of my team because now we have access to all this information. And I think as Tommy was mentioning, part of the hard challenge of procurement is trying to figure out where to put your time and where to focus. And this was just a very much better place to just jump in and say, okay, I've got these four contracts that are really important to deal with in the next sixty to ninety days. These other ones we can kind of put to the side. So it's been very helpful from that perspective initially.
Fantastic. And Russell, obviously, you are a very involved c CFO and leader, and you have also been a part of this process of bringing purchase prep to life. When the product team initially came to the executive team here at Tropic and said, this is something we want to build because we feel like, to Scott's point, it will provide an additional member of a team to our procurement and finance folks. How did that initially land for you? What was your level of excitement?
Yeah. Well, super excited. But taking a step back, as a company like Tropic evolves and as a tool like Tropic evolves, it will naturally increase the capabilities at an exponential rate and that's what happened. We've got all these rich features and functionality and capabilities and what we know is that unless you are a power user perhaps it was actually hard to remember where to locate those.
And I'll tell on myself. We do spin reviews. Michael Shields is our head of procurement here and he holds those spin reviews And he also helps keep us compliant to our own processes. And he would be like, hey, Russell.
Why'd you approve that one out of cycle?
So even I, as a user, use it imperfectly. Well, with purchase prep, I now have that twenty four seven agent that's keeping me honest, making sure I know, hey, I don't have to run a price benchmark. One has been run already. Hey, I don't have to reach out on Slack and try to figure out if the team likes this tool that I'm about to renew. I can check the pulse survey and see that so I was most thrilled that we were taking all of the power that has been built over the past several years and really making it really user forward in a really accessible way. That's the most exciting part of this.
It's all at your fingertips.
Amazing.
And then how do you Scott, I'll go ahead and start with you. How do you see purchase prep improving your renewal process, both for yourself and any other members of your team moving forward?
It's really going to help me make sure that I have the right people on
Right now, I've got a small team, and it's always a challenge to figure out who the right staff member might be to take something on. This will give me the ability to take some contracts. And somebody can jump in even if they're not familiar with the vendor and be able to understand how to negotiate with that vendor. And so it's really actually going to help train them and help bring everyone's skill level up as well.
Love that. Is there a particular feature, whether that's, like, the opportunity impact flag or having, the opportunity in the renewal email? Is there one particular facet? Because there's a lot kind of bundled into Purchase Prep that really stuck out to you.
Yeah. I think I mean, my favorite view is actually just that contracts view, you know, because that's, you know, where I every morning, you know, I pop in, take a look at that, you know, see what's see what's going on. And just having that red, you know, red, yellow, green right there is just, you know, the easiest way to jump in and you see something that's red, that there's an opportunity, you know, I'll click I'll click into those, take a look and see, you know, where the opportunity is and, you know, kinda decide, you know, what makes sense to do to do next. So but I think all of it together. And I think, you know, I'm not sure, Russell, if you mentioned this, but, you know, I think one of the things before, you know, the the data was all out was in Tropic, but it was maybe a little harder to get to. Now everything's all in one place, and I think that just makes it just that much more useful.
Definitely. Russell, what about from your perspective?
Yeah, I mean as president and CFO I'm thinking through my approval with a multivariate approach. I'm thinking about a lot of different things.
And it would be left to me to remember to check for all of those things but not with purchase prep. So I like the way that it's presenting all of the considerations that I should put into whether or not I ultimately approve this request.
Visually pleasing, red, yellow, green, but also the hover capability. So hovering over it and knowing, okay, here's the areas I need to focus on and so, high level view and then, you can using the helicopter analogy, you can go down as deep as you need to all the way to the poll surveys all the way to the negotiation playbook if it's indicating there's an opportunity there. So, if every month you're reviewing multiple things and you don't have time to go deep on all of them, it's helping me see what are the ones I do need to go deeper on and really think through my approval for.
Definitely. I certainly don't manage as many contracts as the two of you, but for the few that I do manage, I have to say the negotiation recommendation has been very helpful for me as someone who is perhaps a bit averse to negotiating. It's definitely been a helpful guide so that I know, okay. This is actually something where I I need to spend a bit more time. So it's great to hear that there are kind of different parts of purchase prep that are helpful for different people, but in general, it really does act as that assistant and that additional member of your team.
Tommy, I have kind of a product question and and a bit of a vision question for you, kind of double clicking into at one point, while we were working on the launch together, you mentioned that you kind of thought of this as, a CRM for renewals in a way of like helping teams prioritize that ten percent that really does matter. When did that kind of come to you in the process of building purchase prep?
Yeah, thanks, Caitlin. You know, it's funny. I like to think of a lot of things as different funnels when building, specific products. And so I always thought of incoming contract renewals were potentially leads of a CRM.
And purchase prep is going through all of the leads and scoring them and understanding how good of a fit is this for me to actually spend my time to work it and how big do I think that the opportunity is gonna be to do that. And so I think that like kinda came to me early on where a purchase prep is kind of scoring all of these leads for you. And then as a procurement or a finance or a contract owner you're then getting that recommendation and deciding okay yes this is valuable to me. I'm gonna you know, promote this to, you know, I guess an opportunity to continue that analogy and actually go on and work it and see if I can get to the, what's it called, savings there.
So, you know, if I as I continue that analogy, that that's kind of where my head is at in terms of, like, what comes next for purchase prep. Scoring the leads is one thing, but then helping people actually go out and execute them to me is, the second step.
Nice. And then kind of piggybacking off of that and looking further ahead into q four, how can our customers like Scott and our internal users like Russell and myself expect purchase prep to kind of evolve?
And what are the are you able to share some some next steps with us?
Yeah, definitely.
Let's see. So there's two different things that I think of with this. One is, you know, where is some new data that I can potentially inject into the corpus of purchase prep so that it can be used to consider for its recommendation. And the big piece that I'm excited to introduce will be alternate suppliers is going to be like a new agent that will be running on all of your contracts to identify things like, hey. Where do you protect potentially have overlapping capabilities in your tech stack? Because that's very important for the purchase price recommendation.
Where are you potentially paying for a supplier that may not be popular with your specific company size or vertical? Or maybe there's other suppliers that are more popular, newer, potentially cheaper, etc.
And so just in general, this analysis of alternate suppliers competitive capabilities is going to be like one new kind of skill to the purchase prep recommendation.
The other thing that we're gonna be working on is, you know, like I said, analyzing the leads is one thing, but when you are going into a renewal, you're then gonna get your updated proposal. Maybe you are adding more seats. Maybe they're raising prices on you. Maybe you're adding another line item entirely.
Being able to analyze kind of the new information that's coming in as you're negotiating and getting an updated recommendation from the purchase prep is extremely important. And being able to compare your updated proposal versus your existing contract is also super material for us helping you chart your negotiation strategy and path.
And so those are the two things that I'm most excited about in Q4, both new skills and alternate suppliers and overlapping capabilities, and then just kind of extending the purchase prep deeper into your negotiation workflow?
I'm personally selfishly really excited for those. Scott, I'm curious how those land for you as you think about how you're going to continue using purchase prep, especially in q four when there's a lot of renewals that are typically coming up.
There's definitely a lot of renewals that are, you know, on my plate at the moment. And, yeah, I think just, you know, seeing those capabilities evolve will just make us be that much more efficient. You know, we're our company is actually a relatively new adopter to Tropic overall. You know, we went live in August initially, and then we've loaded since then probably four or five hundred contracts. And just, you know, kind of seeing this capability evolve in such a short period of time, I think is something that's, you know, just really, really helping me out. So I'm really looking forward to, what Tommy has on on on his plate.
Perfect. Well, keep an eye on your email because we have we have quite a few updates coming your way as well as some in app notifications. Well, thank you all so much, Russell. I want to hand it back to you for some closing thoughts here.
Yeah, thanks Caitlin. I want to appeal to people out there that may be asking why purchase PrEP? Why all of this?
Can't I just get this information for free?
Isn't there AI out there available?
Can't I just trust my budget owners to do the right thing?
I'm busy. I'm working on an ERP integration. I don't have time for this.
Or like there's competing priorities. I don't think I can convince our CEO to spend money on something that helps us better spend money.
And to all of that, I would just ask, take a step back for a moment and think, how your company is spending money is the most important indicator of the strategic bets you're placing is a business.
So don't you owe it to yourself and your business to put the best foot forward and do that with excellence?
Because guess what?
You get what you pay for.
Free data?
Probably not informed by experts in the marketplace.
And so leaving it to just try to remember to do all of these steps, we're all too busy for that. I couldn't remember to do to do them all.
So, we need things like purchase prep to help do the work while we forget or while we sleep at scale, fed by expert data, industry leading data and the investment pays for itself in hard dollar savings of course, time savings, risk avoidance. As you can see, purchase prep is touching on a lot of different personas.
It's good for finance. It's good for operations.
It's good for IT.
It's good for compliance. It's good for every budget owner asking to buy something.
It's even, I would argue, good for the suppliers we're negotiating with because it's setting forth good clean standards for how we at arms length will negotiate professionally with you. And so, this is a win win for the market. You owe it to yourself to invest in this area and lean in. You're not going to hurt purchase prep. So, you're a customer and you have access to this, Use it. Play around with it.
You'll probably be surprised the value you can get from it and you have a direct line to me if you want to chat through and learn more about how I'm using it.
And we're super excited about Purchase Prep as you can see but we're also excited about some other cool stuff we're cooking up and can't wait to share that later.
Amazing. Thank you Russell. If anyone has questions about purchase prep and you are already a Tropic customer please get in touch with your account manager and otherwise you can reach out to our team.
We have several options to get in touch on our Tropic website. And finally, a huge, huge thank you to Scott. We're so glad you're here with us. We really appreciated your insight, and we wish you the absolute best of luck with all of your q four renewals and beyond.
Thank you for the opportunity.
Alright. Thank you everyone and have a great rest of your day.
