the future of the cpo - marcell vollmer, sap ariba
TRANSCRIPT
HOW THE DIGITAL ECONOMY WILL CHANGE PROCUREMENT
Dr. Marcell Vollmer, SVP and Chief Operating OfficerJune 23, 2016
Things havechanged.
Services mash-up
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Today, four trends are dramatically reshaping the economy
Cloud ComputingTechnology infrastructure is now rented to eliminate barriers to entry. Project timelines are dramatically shortened, and customer relationships are becoming increasingly direct.
Big DataThe limits of 20th century computing power are gone. Networking and in-memory computing allow for the creation of new business opportunities previously unimaginable.
Industry 4.0Sensors, robotics, 3D printing, and artificial intelligence are the new normal, driving an outcome-based economy.
Hyper-connectivityEvery supplier, consumer and machine is connected, disrupting established business channels, processes, and relationships.
Networks
Disruptive Trends for Procurement & Source-to-Pay
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Mega Trends and Innovations Impacting the Procurement Function of the Future
Industry 4.0 Internet of Things
Digital Business
Toda
y
Business Value of Procurement
Tasks are operative,
tactical and strategic Key KPI: Savings
Paper based POs / Goods Receipt and
Invoices Scanning
Sequential Processing of
purchase requisitions and
POs
Tom
orro
w
Business value – ‘Value Creation
Officer’Supplier
innovationsSupplier Risk & Performance
3 D PrintingWarehouse
ordering automation
Lights out shared services with end-to-
end automationSpot buy integration
in catalogs
Networks & Marketplaces
B2C
B2B
connected commerce
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Procurement of the Future and Impact of Mega TrendsDigitalization will change Procurement Organization, Processes, Systems and require new skills for Buyers
Study Fraunhofer Institue and BME from 2016
Digitalization In Procurement
1Business Value
5Digital
Sourcing
2Organization
4Big Data
3Supplier
Collaboration
6Networks &
Marketplaces
x
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TRAVELConcur
LABORSAP Fieldglass
SUPPLYCHAINSAP Ariba
HEALTHCARE
BUSINESS
FINANCIAL SERVICES
8Customer
SAP’s Networks for Business simplify business collaboration
#MakeProcurementAwesome
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SAP Ariba in the SAP Context
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Open platform, Integration to SAP and Non SAP SolutionsBU
YERS
SELL
ERS
Fulfill SettleSell
SPEN
D CA
TEGO
RIES
Customer Management
Direct and Supply Chain
Indirect and MRO
Labor and Services
Travel
Procure SettleSourceSupplier Management
Network
Digital Core
Customer
Workforce
Assets
Enablement
& Internetof Things
ExperienceOmnichannel
SupplierCollaboration
Business Networks
SAP S/4HANA Platform
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One place to buy goods and services Smart guidance to direct users to the right items,
preferred suppliers, and the compliant policies Configurable policies to guide users to the right business
process Preferred supplier list integrated into the buying
experience User feedback on suppliers and items integrated into the
buying process Recommendation engine to achieve 3-bids and a buy
based on business policies In-context collaboration between users, procurement
experts, and suppliers Empowerment of spend owners/departments to manage
their policies, suppliers and drive compliance Same user experience on all devices
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Key 2016 innovation: Guided Buying
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Key 2016 innovation
Direct Material Sourcing and Contracts Supporting multi-level BOM’s, Product costing, Japanese
Auctions Advanced optimization options, Enhanced Material master
and ERP integration, 360° Material/Part and Category Report, Pricing Conditions – Volume/Time Breaks, What-if Analysis,
Simplified Quoting Interface for Suppliers
Predictive Maintenance and Scan to Order Automated ordering by IoT sensors indicating
maintenance services One click ordering by any device capable
capturing pictures
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Guided Invoicing new UI, with guidance for exceptions and resolution
handling persona-specific flows (for tax manager, accounting
and mass edit of invoices Enhanced queue management
Demand Aggregation With Ariba Sourcing integration
Service PO’s with SAP ERP integration Real-time budget checks and reservations
directly in SAP ERP Advanced Analytics
Graphical online reports for in-depth analysis of key metrics & KPIs, to identify patterns, bottlenecks & trends over longer periods of time
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Key 2016 innovation: Invoicing and Procure to Pay/Order
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GAP
Today’s State
75Internally Digitized
100End-to-End
DigitalEnterprise
0Paper
and Pen
25Basic Digital
Records
50Ad hoc
Digitization
Desired State
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13%More
Revenue
50%More
Profitable
19%Higher Market
Valuation
MIT Sloan Management Review and Deloitte’s 2015 Global Study of Digital Business
Organizations that rank high on digital maturity
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SAP runs Ariba
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SAP’s Procurement Function 2004 – 2011
SAP SRM 5.0 (with SRM Catalog) and SAP ERP 4.7Vendor Invoice Management
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Evolution and Transformation of SAP’s Procurement 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 Concur
Global Categories for all Spend (approx. 4bn in 2015)
Spend Visibility | eSourcing & eAuctions | Contract Management Supplier Management | Ariba Catalog & Spot Buy 2014ebay
Ariba Purchase Order & Invoice Automation | Discount Pro
Travel booking and reimbursement
Temp labor and SOW sourcing
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Achievements
Streamline Entire Source-to-Pay Process Achievements: Facts & Figures
3 MonthsImplementation Time
>5,000Suppliers on ARIBA Network
>400,000Documents transmitted
50%Increase in Automation
20%Productivity gain10.6 FTEs by migration25 FTEs by automation
>1.5bnPurchase Order value sourced
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
Source-to-Pay Automation, Business Networks and Shared Services
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Key Takeaways on Transforming Procurement
Transform Organization to fit future needsDevelop people and manage changeImplement end-to-end processes and cloud systems to automate transactional processes
Leverage the power of social, supplier, and business networks to get innovations and to deliver solutions to the lines of businesses
Transform to Run Simple
Get Linked to Stay Relevant
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Thank you
RUN BETTER WITH SAP
Dr. Marcell VollmerSVP and Chief Operating Officer