Reimagine 2030 Procurement - MERCATEO€¦ · Reimagine 2030 Procurement Procurement with Purpose Disruptive Technologies will Redefine Procurement in the Future April 18, 2018 Dr

EXTERNAL

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

The Big Picture

3© 2018 SAP SE or an SAP affiliate company. All rights reserved

Global Megatrends Impacting Society into 2030

Demographics Technology Climate Change Politics

Disruptive Technologies


When Will Your Industry Get “Ubered?”

Robotics

Blockchain

Data

Intelligence

Big Data

Internet

of Things

Industry 4.0

Artificial

Intelligence

Machine

Learning

…


“Every company will become a

software company“

Bill McDermott, CEO SAP

CPO Survey 2018


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


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


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?


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?


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?


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

(R)Evolution of Source-to-Pay


Future Organization

Powered by Data – Driven by People


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)

Procurement with Purpose

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

Next Generation

Source-to-Pay

© 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


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


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


SAP connects more than

3.1 million companies in

180 countries in the Ariba

Network, the world’s largest

business-to-business network.


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

Transformation Source-to-Pay


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


Transformation of SAP’s Source-to-Pay

SAP SRM 5 on SAP ERP R4.7OpenText: Vendor Invoice Management



2004 – 2011


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



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)


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

http://www.unilever.com/


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


Questions


Thank you

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011010

Dr. Marcell Vollmer

SVP, Chief Digital Officer

SAP Ariba, Dietmar-Hopp-Allee 16, D-69190 Walldorf

E [email protected]

@mvollmer1

marcellvollmer

mailto:[email protected]


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