the future of the cpo - marcell vollmer, sap ariba

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HOW THE DIGITAL ECONOMY WILL CHANGE PROCUREMENT Dr. Marcell Vollmer, SVP and Chief Operating Officer June 23, 2016

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Page 1: The future of the CPO - Marcell Vollmer, SAP Ariba

HOW THE DIGITAL ECONOMY WILL CHANGE PROCUREMENT

Dr. Marcell Vollmer, SVP and Chief Operating OfficerJune 23, 2016

Page 2: The future of the CPO - Marcell Vollmer, SAP Ariba

Things havechanged.

Page 3: The future of the CPO - Marcell Vollmer, SAP Ariba

Services mash-up

Page 4: The future of the CPO - Marcell Vollmer, SAP Ariba

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 4

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

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Disruptive Trends for Procurement & Source-to-Pay

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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 6

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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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 7

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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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 8

TRAVELConcur

LABORSAP Fieldglass

SUPPLYCHAINSAP Ariba

HEALTHCARE

BUSINESS

FINANCIAL SERVICES

8Customer

SAP’s Networks for Business simplify business collaboration

Page 9: The future of the CPO - Marcell Vollmer, SAP Ariba

#MakeProcurementAwesome

Page 10: The future of the CPO - Marcell Vollmer, SAP Ariba

10© 2015 SAP SE or an SAP affiliate company. All rights reserved.

SAP Ariba in the SAP Context

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 4Internal

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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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 11

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

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 11

Key 2016 innovation: Guided Buying

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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 12© 2016 SAP SE or an SAP affiliate company. All rights reserved. 12

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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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 13

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

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 13

Key 2016 innovation: Invoicing and Procure to Pay/Order

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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 14

GAP

Today’s State

75Internally Digitized

100End-to-End

DigitalEnterprise

0Paper

and Pen

25Basic Digital

Records

50Ad hoc

Digitization

Desired State

Page 15: The future of the CPO - Marcell Vollmer, SAP Ariba

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 15

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

Page 16: The future of the CPO - Marcell Vollmer, SAP Ariba

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 16

SAP runs Ariba

Page 17: The future of the CPO - Marcell Vollmer, SAP Ariba

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 17

SAP’s Procurement Function 2004 – 2011

SAP SRM 5.0 (with SRM Catalog) and SAP ERP 4.7Vendor Invoice Management

Page 18: The future of the CPO - Marcell Vollmer, SAP Ariba

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 18

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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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 20

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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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 21

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

Page 21: The future of the CPO - Marcell Vollmer, SAP Ariba

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 22

Thank you

RUN BETTER WITH SAP

Dr. Marcell VollmerSVP and Chief Operating Officer