Procurement: at a digital tipping point?
The Deloitte Global CPO Survey 2016
Brussels, September 30th 2016
Patrick Vermeulen
Director Deloitte Consulting
Sourcing & Procurement
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Deloitte Supply Chain & Operations
Global expertise in all aspects of the supply chain
Supply Chain & Operations Sourcing & Procurement
One of the largest supply chain consulting firms in the world with over 2.000 advisory professionals across the globe
Able to offer an integrated end-to-end approach helping clients to improve their supply chain operations and deliver more value across the business
Leveraging both deep process, technology and organizational experience as well as access to a highly ranked range of capabilities across consulting, financial advisory services, tax and risk management
Addressed over $100 billion in sourceable spend in recent client projects
Expertise in 250+ spend categories
140+ category-specific initiatives w/ savings results exceeding 20%
Leading implementer of ERP, e-sourcing, ande-procurement technology
Leader in e-sourcing on multiple platforms
Most up-to-date database of category spend benchmarks
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Survey conducted in association with
Odgers Berndtson
From multiple leading organization
spread across 33 countries
With a combined annual turnover of
US$ 4,4 trillion
Covering all major industries
Deloitte Global 2016 CPO Survey
Annual Deloitte survey conducted with 324 of the most senior procurement leaders...
Report available on www.deloitte.com/be/cposurvey2016
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Deloitte Global 2016 CPO Survey
... providing benchmark indicators in the procurement function of today and tomorrow
VALUE
Cost reduction remains the main
focus of procurement
ORGANIZATION
Procurement is increasingly centralized
& strongly linked to the C-Level
RISK
Procurement related risk
increased over the last 12 months
TALENT
Team qualification is becoming
more critical over recent years
INNOVATION
Supplier collaboration & innovation
are turning into a key priorities
TECHNOLOGY
Investments in new technologies
are increasing year on year
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Deloitte Global 2016 CPO Survey
Going forward Procurement is expected to face a major skills and technology gap
Procurement as a bottleneck can lead to worse decisions through:
Business needs
External supply
Procurement
Wrong focus – disconnected with business bottom line impact & customer experience
Lack of speed – too slow to respond to rapidly changing market dynamics
Biases – impacting the ability to make the right decisions
Insufficient information –unable to stay on top of all internal & external market and category data
Outdated information – lack of resources to analyze real-time market info and supplier performance
Inability to track outcomes – difficulty tracking the outcomes and benefits of all its decisions
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Procurement: at a digital tipping point?
Digital technologies have the potential to help and transform the procurement function
Improving efficiency and user experience of operational & transactional procurement activities
Improving procurement value creation through evidence-baseddecision making and increased accuracy & speed of execution
Digital technologies
Enabling technologies:
• Self-service portals
• Cloud based solutions
• Mobile
• Social media
• Robotics
Enabling technologies:
• Cognitive analytics
• Internet of things/everything
• Crowdsourcing
• Digital analytics & reporting
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Procurement: at a digital tipping point?
Only 40% of CPOs have a clear digital strategy for Procurement solutions
Procurement does not have a clear digital strategy
60%
Procurement has a clear digital strategy
40%
Procurement does not have a clear digital strategy, but is exploring options for digital enhancement
Procurement has a clear digital strategy aligned to the needs of the wider organization
Procurement does not have a clear digital strategy, not is it exploring options for digital enhancement
Procurement has a clear digital strategy, but this is not aligned to the wider organizational needs
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Procurement: at a digital tipping point?
At the same time, CPOs recognize the need to invest in Procurement technologies ...
38%
P-card
Supplier information Mgmt.
30%
37%
Direct Procurement Mgmt.
6%
6%
Electronic data interface
8%
Requisition to pay
Supplier relationship Mgmt.
Innovation Mgmt.
11%
Supplier risk Mgmt.
28%
4%
10%
Procurement Performance Mgmt.
Invoice routing and approval
11%
13%
17%
Electronic payment
Catalogues & Content 19%
24%
eSourcing
Contract Mgmt.
Spend analysisKey priorities when selecting new technologies:
• Integration with existing technology
• Cost
• Highest performing functionality for required processes
Procurement technology investments over the next year
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Procurement: at a digital tipping point?
... and leveraging the latest innovative solutions to gain a competitive advantage
TRADITIONAL LEADING
e-procurement
online catalogues
EDI
spend reporting
supplier collaboration
platform
procurement portal
e-buying channels
knowledge exchange (e.g.
SharePoint)
self-service procurement portals
IoT
big data
robotics / automationSaaS
mobile technologies
e-invoicing
cloud-based computing
crowdsourcing
Adoption of disruptive technologies currently focuses on internal use cases
blockchain
predictive analyticscognitive
analytics
social media
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Procurement: at a digital tipping point?
70% of CPOs focusing on user engagement & experience through delivering self-service solutions
26%
45%
Cloud-based computing
2014
2015
6%
16%
Social media
2014
2015
43%
70%
Self-service portals
2014
2015
Mobile technologies
2014
2015
23%
42%
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Procurement: at a digital tipping point?
A grasp from successful use cases of digitalization within procurement
Cloud based self-service procurement portal
Procurement engagement advisor
Cognitive spend insights (CSI)
Cloud-based network connecting buyers &
suppliers
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Is your procurement function ready to embrace the digital revolution?
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