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The Future of Procurement: Why Is Technology Lagging Behind? The Future of Procurement: Why is Technology Lagging Behind? A WEBINAR BY IACCM AND SIRIONLABS FEATURING A.T. KEARNEY AND FORBES SEPT 25, 2018 © 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential. Before we get started THE HOUSEKEEPING ITEMS: • Webinar slides and recording will be emailed • Enter questions in chat on webinar panel 2 © 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary. Meet the speakers DR. HUGO EVANS PAUL MARTYN SALLY HUGHES AJAY AGRAWAL Vice President Supply Chain Expert CEO Co-founder and Chairman AT Kearney Forbes Media IACCM SirionLabs 3 © 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary. What will be covered today Challenges and gaps New generation of Strategies for your 1 in traditional 2 specialized platforms 3 organization’s procurement that have the potential to transition to the technology set-ups transform procurement procurement tech effectiveness stack of the future 4 © 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary. About the organizers The International Association for Contract & Commercial Management enables organizations and professionals to achieve world- class standards in their contracting and relationship management process and skills. For more information, visit www.iaccm.com SirionLabs is transforming the way buyers and suppliers engage with each other in complex contracts using its SaaS platform – Sirion. Leveraging automation and advanced analytics, Sirion helps enterprises create higher value and more successful relationships, while effectively managing cost and risk in strategic supplier engagements. For more information, visit www.sirionlabs.com 5 © 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary. A different era, different types of relationship • Technologies: multitude of choice, but most under-perform • Relationships: increasingly complex portfolio to be managed • Procurement: inward, price-based focus is transforming to outward, value-based view Most Procurement groups are ill-equipped to meet the needs of today 6 Redefining needs • Technology to support the business, not the function • Integrated solutions facilitating data flows and user adoption • Expanding scope to drive performance, not just report problems The modern era requires technology that oversees networks and empowers human decision-making 7 Assessment & Evaluation ✓Ease and speed of implementation ✓Integration with other systems ✓User benefits to drive adoption ✓Value to be generated A whole-business solution, supporting collaboration, eliminating value erosion 8 Managing in an uncertain world • Trading relationships lie at the heart of every business • Change is the only certainty • Systems must monitor AND facilitate performance • Shared and actionable data is the critical competitive advantage Are you equipped for the emerging era? 9 The Future of Procurement: Why is Technology Lagging Behind? September 25th, 2018 Dr. Hugo Evans A.T. Kearney is a globally recognized consulting firm – offering scale in industries, functions, and geographies Clients We work with more than two-thirds of the Fortune Global 500, the world’s Americas Atlanta Dallas San Francisco largest companies by revenues, as well as with the most influential Bogotá Detroit São Paulo governmental and non-profit organizations. Boston Houston Toronto Calgary Mexico City Washington, D.C. Chicago New York Locations A.T. Kearney has 58 offices located in major business centers in 40 countries. Team We are 3,500 people strong worldwide who Asia Pacific Bangkok Kuala Lumpur Seoul Beijing Melbourne Shanghai have broad industry experience and come from leading business schools. Brisbane Mumbai Singapore We staff client teams with the best skills for each project from across Hong Kong New Delhi Sydney A.T. Kearney. Jakarta Perth Tokyo Europe Amsterdam Lisbon Paris Berlin Ljubljana Prague Brussels London Rome Bucharest Madrid Stockholm Copenhagen Milan Stuttgart Düsseldorf Moscow Vienna Frankfurt Munich Warsaw Istanbul Oslo Zurich Middle East Abu Dhabi Dubai Riyadh and Africa Doha Johannesburg 11 “A.T. Kearney is the clear market leader in the procurement space” – Forrester Research Assessment of Return on Supply Holistic Procurement The Purchasing Strategic Sourcing Excellence in Management Assets Transformation Chessboard® Procurement (AEP) (ROSMA©) (HPTTM) Value Invention Leverage Functionalit Specificatio chain on innovation y n Revenue Profit Strategic reconfigu- sharing sharing alliance demand network assessment assessment ration Supply Sustainabilit Design for y Project Value Management Core cost Design for Product manufactur Supplier based based analysis sourcing teardown tiering managem e partnership sourcing Strategy ent Collaborati ve Virtual Intelligent inventory Total life Collaborati Vertical deal Composite Process capacity cycle ve cost integration benchmark benchmark managem Organizational structure managem concept reduction ent Alignment ent Political Visible Bottleneck framework process Vendor Supplier Supplier managem Product Complexity managed developme fitness managemebenchmark reduction organizatio ent inventory nt program nt n Sourcing-& Supplier Operating Cost data Leverage Process Sourcing Buying Standardi- RFI/RFP Expressive Total cost of market commodity Relationship community consortia mining zation process bidding ownership Management imbalances management Management Mega Master Spend Procureme data Supplier nt supplier transparen market Reverse Price Unbundled managem auctions benchmark prices outsourcing intelligence Performance Knowledge/Information strategy ent cy management management Complianc Closed loop e spend Supplier Bundling Cost consolidati across Make or regression Factor cost managem manageme buy Best shoring analysis on generations analysis Human Resources Management ent nt Bundling Contract across Cost based Linear Demand manageme Bundling Global LCC price performan reduction product across sites sourcing sourcing nt modeling ce pricing lines • Introduced the idea of • Periodic global • Toolbox to assign the right • Sustainable frame-work to • Framework to chart a Strategic Sourcing benchmarking to identify method to work with assess Procurement client's journey towards best practices based on suppliers based on supply Performance excellence in Purchasing • Landmark global the “House of power and demand Management engagements Procurement” power • Provides right combination • Illustrates value in “CFO of content and people • Introduced 7-step • Hundreds of participants • Works for all industries resonating language” focused tools sourcing, now a worldwide across all industries and standard across industries regions with most recent • Highly cross-functional • Benchmarks performance update done 2018 on a peer-to-peer basis 12 The Future of Procurement series TheThe Future Future of of Directs Directs The Real Disruption Procurement talent: It’s The Complete Future of time to panic! Procurement (October 2018) (November 2018) (December 2018) (September 2018) (October 2018) (November 2018) (December 2018) 13 Why now? What’s driving the change? Key drivers 1 Suite providers are Traditional suite providers are changing dramatically and others are going out of business changing 2 Consumerization Why isn’t corporate procurement like Amazon? 3 New businesses offerings, more specific solutions, new technology, new approaches mean massive Disruptive offerings disruption 4 Good is no longer good To compete (and survive) today you must be continually improving, innovating, and delivering value enough 5 Automation, automation, automation Most traditional procurement is being automated and the rest will be very soon 14 Traditional procurement technology follows a linear flow Procurement Process Strategic Procurement Planning and Performance Management Operational Procurement “Upstream” “Downstream” Spend Monitoring and Analytics • Project In-Take / Pipeline • Initiative & Resource Mgt. • Spend Analytics • Benefits Tracking Compliance Management Management Supplier Requisition Supplier Information eSourcing Contract Performance/ Risk Management Payment Systems Management (SIM) Management Management Accounts Payable • eRFX • Risk Assessment • Contract Warehouse Requisition SCF2 / eInvoicing • Auctions • Supplier Portal • Contract Authoring • Surveys/Scorecards Purchase Order P-cards • TCO Analysis • Supplier Data • Dynamic Alerts • KPI Tracking Workflow Mgt. Dynamic Discounting • Optimization • Compliance Mgmt. Catalog Mgt Governance and Management • Collaboration • Templates • Benchmarking & • Best Practices • Master Data • Knowledge • Performance Tools Industry Reports Management Management Management Source: A.T. Kearney 15 The traditional procurement technology vendor landscape does not effectively support automation, innovation, and analytics Non-exhaustive Procure to Spend Analytics eSourcing Contract Mgmt. Supplier Info. Mgmt Supplier Perf. Mgmt. Knowledge Mgmt. Pay Suite Solutions Functional Specialists Source: A.T. Kearney 16 The future will be a microservices (API) connected ecosystem of value creating technologies Illustrative services cognitive buying sourcing contract commodity management indirects smart contracts spend visibility AI Hub risk monitoring p2p bot sourcing esourcing travel analytics sourcing temp labor 17 The panacea of “one size fits all” is rapidly fading, as best-of-breed functionality comes of age Procurement Technology Journey
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