deloitte - procurement at a digital tipping point

Procurement: at a digital tipping point?

The Deloitte Global CPO Survey 2016

Brussels, September 30th 2016

Patrick Vermeulen

Director Deloitte Consulting

Sourcing & Procurement

Comarch | ICT Breakfast© 2016 Deloitte Belgium 2

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


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



... 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



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



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



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



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



... 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



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%



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


Is your procurement function ready to embrace the digital revolution?

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