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PUBLIC

CPO Survey 2018What’s the Next Big Thing in Procurement

&

Dr. Marcell Vollmer Prof. Karsten Machholz

Chief Digital Officer, SAP Ariba Strategic Procurement & Supply Chain Management

2PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ

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

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

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


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?


Only 5% of

respondents

have highly

automated

systems /

processes within

the function..

While 83% of respondents think Digital

Transformation will impact procurement,

supply chain, finance more in 2018, only 5%

of respondents have highly automated

systems / processes…

Highly automated

5%

Very automated18%

Somewhat automated

54%

Not automated mostly manual

21%

32%

23%

30%

20%

18%

17%

17%

55%

58%

48%

58%

59%

57%

53%

14%

19%

22%

22%

24%

26%

29%

Automotive

Chemicals, Health Care, LifeSciences

Others

Manufacturing, Disrecte

Utilities

Consumer Products & Retail

Financial Services, Insurance,Private Equity

Financial Services, Consumer Products and

Retail have the least automation

AI

Legend

Highly

automated

Somewhat

automated

Not

automated


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?


IOT is most

common technology

used; but,

organizations plan

to invest in RPA and

AI over the next 12

months…

TECHNOLOGY CURRENTLY USED PLANNED FUTURE USE

Robotic Process

Automation (RPA), 20%

Artificial Intelligence /

Cognitive Computing,

17%

Machine Learning, 15%

Internet of Things /

Industry 4.0, 15%

Others, 12%

Chatbots, 9%

Blockchain, 8%

3D Printing, 4%

Internet of Things/

Industry 4.0, 22%

Robotic Process

Automation (RPA), 19%

Artificial Intelligence /

Cognitive Computing,

9%

Machine Learning, 8%

Chatbots, 8%

3D Printing, 6%

Blockchain, 3%

Others, 26%


Asian-based

companies plan on

investing heavier in

machine learning,

while Australia-based

organizations plan on

investing more in AI

TECHNOLOGY CURRENTLY USED (CU) VS PLANNED

FUTURE USE (PFU)

United States / Canada

Latin America

Europe / Middle

East / Africa

Australia

Asia

9%

10%

11%

5%

3%

6%

19%

14%

18%

16%

23%

21%

16%

29%

16%

11%

10%

3%

5% 17%

11%

17%

11%

22%

29%

13%

34%

10%

10%

9%

4%

6%

12%

20%

12%

15%

10%

23%

27%

17%

25%

21%

6%

8% 3% 23%

13%

18%

6%

21%

38%

8%

38%

7%

10%

9%

7%

5%

3%

17%

7%

22%

10%

19%

21%

21%

41%

PFU

CU

PFU

CU

PFU

CU

PFU

CU

PFU

CU

Chatbots Blockchain 3D Printing AIMachine

Learning

Robotic Process

AutomationIOT

Legend


Analytics /

insights and

master data

quality are the

largest inhibitors

for function

efficiency

Lack of internal

talent / know-how’s

TOP INHIBITORS BY REGION

Analytics / Data

Insights / Master

Data quality

Analytics / Data

Insights / Master

Data quality

Analytics / Data

Insights / Master

Data quality

Lack of internal

talent / know-how’s

Question: What are your roadblocks in

making your organization/function more

efficient?

4%

11%

13%

13%

17%

19%

23%

Other

Regulatory requirementsand Compliance

Speed of TechnologyChange

Talent shortage (external)

Lack of internaltalents/know-how

Budget Restrictions

Analytics / Data Insights /Master Data quality


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?


Procurement most

commonly reports to

CFO, CPO or COO but

the structure is still

fragmented

Chief Financial

Officer

Chief

Procurement

Office

Chief Executive

Officer

Chief Operating

Officer

Chief Supply

Chain OfficerOther

PROCUREMENT

20.7% 8%17%34.4% 8.3%

11.5%

Question: Where does procurement report into? (% of respondents)


Hard savings, cost

avoidance and

compliance are the top

KPI’s to measure

Procurement’s

performance

Question: Which KPIs do you use to measure your procurement performance?

23%

28%

24%

24%

22%

16%

15%

18%

24%

16%

16%

15%

15%

13%

14%

Asia

Australia

Europe / Middle East / Africa

Latin America

United States / Canada

23%

28%

24%

17%

19%

18%

15%

14%

15%

CPO or SVP, VP Procurement

CFO or SVP, VP Finance, Shared Services,Treasury

Director, Manager, Buyer, Shared Services expert

Hard

Savings

Cost

Avoidance

Ensuring

Compliance

Soft

Savings

Supplier

Innovation

Reduction

in Maverick

Buying

Mitigating

Risk

Legend

RESPONSES BY REGION

RESPONSES BY TITLE


The majority of

respondents have

purpose objectives for

procurement and see

the value of doing so.

They also most closely

monitor corruption &

child labor risks

Do you have CSR, sustainability

and diversity objectives

established for your suppliers?

7%

16%

77%

Not sure No Yes

Do you see Creating Purpose for

Procurement/Supply Chain/ Finance as a

huge differentiator and priority?

7%

5%

88%

What risks do you monitor?

7%

9%

13%

13%

16%

17%

25%

Others

Poverty in your supply chain

Human trafficking

Conflict minerals

Slavery/ forced labor

Child labor

Corruption


Most see the CPO role

evolving, especially in

emerging markets like

Asia & Latin America

Do you think that the CPO will evolve into a more strategic role in the

future, such as Chief Value Officer or Chief Collaboration Officer?

29%

16%

55%

Not sure No Yes

66%

48%

32%

65%

GLOBALLY

% OF RESPONSES THAT THINK CPO ROLE WILL EVOLVE

57%


9

Evaluate opportunities to automate processes by embracing the

wave of Digital Transformation

Develop a talent management strategy to advance roles, skills and

knowledge

Invest in technology of the future: RPA and AI

Regardless of reporting structure, an adaptive and agile operating

model is necessary to meet business requirements

CPO’s should embrace complexity and new challenges –

their role will continue to evolve

Organizations that do good, do well. Create purpose beyond

traditional procurement objectives

Consider making investments in data quality and collaborating with

Finance on annual budget discussions

Success measurement with a focus on value beyond cost savings

is key to measuring progress

Active risk management will ensure business and operations

continuity

12

3

4

5

678

9

Key

Elements of

the Next Big

Thing in

Procurement

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