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Reimagine 2030 Procurement
Procurement with Purpose
Disruptive Technologies will Redefine Procurement in the Future
April 18, 2018
Dr. Marcell Vollmer, SVP and Chief Digital Officer SAP Ariba
@mvollmer1 marcellvollmer
3© 2018 SAP SE or an SAP affiliate company. All rights reserved
Global Megatrends Impacting Society into 2030
Demographics Technology Climate Change Politics
5© 2018 SAP SE or an SAP affiliate company. All rights reserved
When Will Your Industry Get “Ubered?”
Robotics
Blockchain
Data
Intelligence
Big Data
Internet
of Things
Industry 4.0
Artificial
Intelligence
Machine
Learning
…
6© 2018 SAP SE or an SAP affiliate company. All rights reserved
“Every company will become a
software company“
Bill McDermott, CEO SAP
8© 2018 SAP SE or an SAP affiliate company. All rights reserved
CPO Survey 2018 – About the research
GEOGRAPHY SENIORITY
30,7%
2,2%
44,6%
24,2%
INDUSTRY SIZE
CPO, SVP, VP of
Procurement
CFO, SVP, VP of
Finance, Shared
Services, Treasury
Director, Manager,
Buyer, Shared
Services Expert
Other
DEMOGRAPHICS OF SURVEY
US / Canada
Latin America
Europe/Middle East/Africa
Asia
Australia
43,4%
24,4%
16,3%
10,0%5,9%
24,9%
23,9%
12,7%
11,0%
10,7%
7,3%
5,4%4,2%
Automotive
High Tech, IT, Telecom
Discrete
Manufacturing
Consumer
Products & Retail
Financial Services,
Insurance
Chemicals,
Healthcare, Life
Sciences
Other
Utilities
28,6%
21,9%16,7%
13,4%
12,2%
7,2%
$750 - $999M
$1 - $5B
$5.1 - $10B
$10.1 - $20B
>$20B
N/A
Welcome to the SAP Ariba & University of
Wurzburg-Schweinfurt “What’s the Next Big
Thing in Procurement” survey. This year’s survey
provides new and groundbreaking insights on
trends and challenges that are shaping the future
of procurement, as well as opinions/sentiments
that are shaping the function.
This year’s survey received 452 number of responses* from
Procurement and Operational Leaders across the globe.
In this report, you will find:
• Challenges that procurement leaders face in creating a more
efficient function
• Trends in organization structure
• Application of emerging technologies and the road ahead
• How leaders think and track procurement risk
We hope you find this report insightful.
Finally, we’d like to thank the executives who contributed to this study.
*in total 2,419 people have been approached to respond
9© 2018 SAP SE or an SAP affiliate company. All rights reserved
Key Findings
83% of respondents believe Digital
Transformation will be impactful but only
5% of respondents have highly automated
processes
30% of participants recognize talent
management as a roadblock but 63% don’t
have a talent management strategy to
address it
IOT is the largest current technology
trend but RPA & AI are the future
Procurement most commonly reports into
CFO, CPO or COOs but organizational
reporting structure varies and is fragmented
The CPO role will continue to evolve
into a more strategic role, especially in
emerging markets
88% of respondents have purpose
objectives defined for procurement and see
the value
Analytics / data quality & budget
restrictions are the largest roadblocks to
achieving functional efficiency
Hard savings, cost avoidance and
compliance are the top KPIs to measure
procurement performance
Corruption and child labor are the largest
purpose driven risks managed
10© 2018 SAP SE or an SAP affiliate company. All rights reserved
83% of participants
think Digital
Transformation will
impact procurement,
supply chain, finance
more in 2018, than in
2017
Question: Do you think the Digital Transformation will
impact procurement, supply chain, finance more in 2018
compared to last year?
11© 2018 SAP SE or an SAP affiliate company. All rights reserved
But, 63% of participants
think automation is
important and have
automation on the
roadmap63%
31%
2%
On the roadmap
Undecided
Will never
implement
Question: In your opinion, how important is self-service
automation in your Procurement/ SCM/ Finance function?
12© 2018 SAP SE or an SAP affiliate company. All rights reserved
Talent management
and a lack of talent
strategy are
roadblocks for future
success
30%Participants indicate lack
of internal know-how and
talent shortage as
roadblocks for making the
organization more efficient
63%Participants do not have a talent
management strategy or are in-process of
developing one
Question: Do you have a dedicated talent
management strategy in place for your
function?
13© 2018 SAP SE or an SAP affiliate company. All rights reserved
4
Evaluate opportunities to automate processes by
embracing the wave of Digital Transformation.
Invest in technology of the future: RPA, AI, ML
Develop a talent management strategy to
advance roles, skills and knowledge
CPO’s should embrace complexity and new
challenges their role will continue to evolve.
Success measurement will focus on value and
purpose beyond cost savings to measuring progress
1
2
3
4
Key
Elements of
the Next Big
Thing in
Procurement
CPO’s and category managers should focus on
collaboration with internal stakeholders and
suppliers
15© 2018 SAP SE or an SAP affiliate company. All rights reserved
Future Organization
Powered by Data – Driven by People
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How does Digitalization Impact (Back)Office Functions in the Future
Focus
on ValueSupplier
Collaboration
To
day
To
mo
rro
w
Role of the CPO in the Future
Chief Value or
Chief Collaboration Officer?
Priority for CPOs to innovate and transform
digitally CPO Survey 2018
Operational,
tactical tasks
Key KPI: Savings
Focus on business
value and strategic
Procurement / Big Data
Supplier innovations
Supplier Risk &
Performance
Sustainable
Supply Chain
Top 3 KPIs – value creation, supplier innovation
hard savings - CPO Survey 2018
Price, terms
& conditions
negotiations
Category
Management
Identify, develop
and innovate to create
value for the lines of
businesses
Leverage the power of
business networks
Digitalize Business
AutomationDevelop
Talents
73% see high impact for operational
procurement CPO Survey 2018
No. 1 challenge identified
CPO Survey 2018
Paper based POs
Goods Receipt
and Invoices
Scanning
Lights out shared
services with
end-to-end automation
Automated ordering,
machine learning and Spot
buy integration in catalogs
Mix of operational
and strategic
buyers with
different skills
Strategic tasks are
dominating – operational
tasks are automated –
Attracting and retaining
talents is key priority
(procurement as
talent pool)
18© 2018 SAP SE or an SAP affiliate company. All rights reserved - @mvollmer1
Procurement with Purpose – Social Responsibility, CSR, Diversity
Supply Chain Risk Management Government impact
Supply Chain Diversity Apple easy – Google fast ShoppingLive People out of poverty
© 2017 SAP SE or an SAP affiliate company. All rights reserved. 14
SAP and SAP Ariba in the Context
of the Digital Economy
Engagement
BU
YE
RS
SU
PP
LIE
RS
Fulfill SettleSell
SP
EN
D C
AT
EG
OR
IES
Customer Management
Procure SettleSource
Supplier Management
Ariba NetworkBlockchain embedded in NetworkDigital Business Framework
SAP‘s Portfolio supports end-to-end business in a highly networked world
Direct
Indirect and MRO
Contingent labor
Travel
Integration to SAP and non-SAP solutions, secure, open platform
21© 2018 SAP SE or an SAP affiliate company. All rights reserved - @mvollmer1
77% of the
world’s transaction
revenue touches an
SAP system.
Data
Science
Platform
Intelligent
Services
Intelligent Apps
Conversational Interfaces
Machine Learning
SAP Leonardo Business Outcomes
Increase
revenue
Re-imagine
processes
Quality time
at work
Customer
satisfaction
Enabling
innovations
Intelligent
S/4HANA
Intelligent
Cloud
On SAP Cloud Platform &
SAP HANA
26 industries
12 lines of business
SAP Leonardo Enables the Intelligent Enterprise
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Machine Learning – Use Case @ SAP Ariba
file:///C:/Users/d045467/AppData/Local/Temp/OneNote/16.0/Exported/%7B0059ED68-8ECD-4182-93FB-
17F46F58A5CF%7D/NT/0/Try%20asking%20RFP%20Questions.html
23© 2018 SAP SE or an SAP affiliate company. All rights reserved
SAP connects more than
3.1 million companies in
180 countries in the Ariba
Network, the world’s largest
business-to-business network.
24© 2018 SAP SE or an SAP affiliate company. All rights reserved
SAP Ariba in a Nutshell
One UX for buyers performing sourcing, employees ordering goods
or services and lines of businesses to request purchases
SAP Ariba is the most complete
Source-to-Pay / Settle Cloud Suite in the Market
One marketplace to connect buyer and seller to collaborate,
negotiate and settle business
Ariba Network is the
B2B Marketplace of the Future
26© 2018 SAP SE or an SAP affiliate company. All rights reserved
To
da
yT
om
orr
ow
Demand planning and aggregation
supported by Artificial Intelligence
Manual or free text
purchase requests
Automated and mobile payment
Manual or semi-automated
Supplier Management
Risk Management based
on experience and reactive
Manual completion of data
Scanning of documents
Signed contracts and
contract archiving
Robotics Process Automation (RPA)
for repetitive tasks / Machine Learning
Blockchain transactions with full
transparency and insights
Direct calls from suppliers on invoices
and purchase orders
Process breaks and
idle time
Systems not fully integrated
Automated supplier management,
vendor master and risk assessment
Integrated collaboration and automated
platform with automated transactions
One-click processing of
purchase requests
Full automation of all end-to-end
process
Chatbots to automate
communication & negotiationAutomated negotiation of standard
contracts and sourcing events
Source & Contract Buy & Make Invoice & Pay
ContractSourceDesign MakeOrderRequest ManageReceive Pay
Plan
CommitForecast
Source to Settle Process Challenges Today are the Opportunities Tomorrow
27© 2018 SAP SE or an SAP affiliate company. All rights reserved
Transformation of SAP’s Source-to-Pay
SAP SRM 5 on SAP ERP R4.7OpenText: Vendor Invoice Management
Source & Contract Buy & Make Invoice & Pay
ContractSourceDesign MakeOrderRequest ManageReceive Pay
2004 – 2011
28© 2018 SAP SE or an SAP affiliate company. All rights reserved
Transformation of SAP’s Source-to-Pay Function 2012 - 2015
SAP SRM 7.02 integrated (only workflows in use) into SAP ERP on HANAVendor Invoice Management
2011 Upgrade SRM 7.02
2011 Global Categories and
Procurement SSC
2013 SAP Ariba
2014 SAP Fieldglass
2015 SAP Concur
Implement Global Categories and Procurement SSC (approx. 5bn Spend in 2016)
Spend Visibility | eSourcing & eAuctions | Contract Management
Supplier Management | Ariba Catalog & Spot Buy ebay
Ariba Purchase Order & Invoice Automation | Discount Pro
Travel booking and reimbursement
Temp labor and SOW sourcing
Source & Contract Buy & Make Invoice & Pay
ContractSourceDesign MakeOrderRequest ManageReceive Pay
today
29© 2018 SAP SE or an SAP affiliate company. All rights reserved 29© 2018 SAP SE or an SAP affiliate company. All rights reserved.
Achievements SAP’s Source-to-Pay Transformation
Streamline Entire Source-to-Pay Process Achievements: Facts & Figures
3 MonthsImplementation Time
>6,200Suppliers on ARIBA
Network
>700,000Documents transmitted
50%Increase in Automation
>20%Productivity gain
10.6 FTEs by migration
25 FTEs by automation
+2.1ppAdditional savings
achieved
Leverage economies of scale and control through shared
services
Cut costs through automated data extraction and process
automation
Create workforce efficiency through streamlined processes
including mobile approvals
Reduce errors at the source
Improve working capital management through better visibility
to cash requirements
Optimize cash discount utilization including dynamic
discounting
It’s Simple. It’s Done. It’s SAP Ariba
1m tripsProcessed on
Concur p.a.
60% Less clicks to book
and reimburse trips
for 66 countries (24
months roll-out)
100mSourced on Fieldglass
(1,300 external
workers)
30© 2018 SAP SE or an SAP affiliate company. All rights reserved
Achievements SAP Ariba Customers by SAP’s Business Networks
Sales /
Marketing Procurement Finance
Risk &
Compliance
Workforce
Management
$33M+ in services
cost savings
associated with $65M
in contingent spend
50% reduced in
cycle time to find
diversity sellers
Processing costs
reduced from $8 to
$2 per purchase
80% fewer people
required to support
compliance
98%+ touchless
invoicing -- integrate
with 8 SAP systems
worldwide
30% growth in
accounts
70% reduction in per
PO operating costs
75% reduction
in cycle time for labor
request with 20% reduction in time-to-
fill
Reduced time to deal
with regulations from
years to weeks
>30% reduction in
BPO costs
Supply
Chain
Travel &
Expense
Reduced inventory
financing, excess
inventory, and
airfreight costs
Dramatically gained
visibility into direct
supplier relationships
Reduced time spent
entering expense
data by 12 hours
per week
Over 60%
reduction in
expense claim
processing times
75%Lower order processing costs
40%Fewer customer service calls
99%Average fill rate
Double-digitgrowth annually from
onboarded customers
80%Greater efficiency in
order management
More consistentspending from
onboarded customers
10%of overall sales automated through Ariba Network
65%of orders processed and invoiced electronically
12%greater value of online versus offline sales
$200Kadditional new business with
minimal effort
25%annual growth in Ariba
Network channel
Over 50customers supported via
Ariba Network
‘Buyers’ on the Ariba Network ‘Suppliers’ on the Ariba Network
Achievements SAP Ariba Customers by SAP’s Business Networks
31© 2018 SAP SE or an SAP affiliate company. All rights reserved
Optimize and Transform BusinessNew digital products & services, new industries, new business models
Procurement can make the difference in
the global Supply Chain
Define the Future Business Model
Drive digital transformation and the change, higher profits and improve
productivity by leveraging purchasing power.
Reduce costs per transaction by automation and improve customer
experience plus increase revenues
‘Run and Win…’
Be a driver not a passenger for Digital Transformation by Creating Value
33© 2018 SAP SE or an SAP affiliate company. All rights reserved
Thank you
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Dr. Marcell Vollmer
SVP, Chief Digital Officer
SAP Ariba, Dietmar-Hopp-Allee 16, D-69190 Walldorf
E marcell.vollmer@sap.com
@mvollmer1
marcellvollmer
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