Welcome to our new template - CIPS Speaker... · Test & learn process automation ... Robotic Process Automation Big data & analytics tsunami ... Mobile Advanced Analytics Cloud IIoT

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PROCUREMENT IN

THE NEW

JUNE 2017

DIGITAL

PROCUREMENT

2

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PROCUREMENT NEEDS TO REIMAGINE ITS FUTURE

“TIME IS NOW”

3


“30 GUTENBERG MOMENTS HAPPENING IN PARALLEL” 1

LOST IN DIGITAL TRANSLATION

1 Salim Ismail - Singularity University

Ingredients for success

Where to start

Who owns it

Relevant Trends

4


Market intelligence 2.0

Open innovation beyond the buzz

Amazonization of Procurement

Welcome to the kingdom of Apps

Blockchain

From Products to Service

12 GAME CHANGERS LIKELY DISRUPT PROCUREMENT

THE DIGITAL LONG LIST

Make user experience as simple as amazon

Increase your start up IQ

Review your make/ buy strategy for category management

Nominate a Chief Data Officer

Move to real-time and predictive spend analytics

Switch to real time sourcing organization

Own the ecosystem

Test & learn process automation

Leverage Augmented Intelligence

Develop procurement social network strategy

Full Transparency to supply chains

Back to local sourcing

Savings Bermuda triangle is over

Robotic Process Automation

Big data & analytics tsunami

Cognitive procurement

Supplier networks war is on !

Clear is the new clever

5


NEW

APPLIED

NOW

6


WE ARE ARCHITECTING THE NEW IN PROCUREMENT

PROCUREMENT CAPABILITY MAP

Digital Enablers

Strategy

Core Processes

Workforce Strategy Digital Strategy Change StrategyVisioning Functional Strategy

Corp/Funct.

Strategy

Strategic

Roadmap

Change

Strategy

Knowledge

Strategy

Value

Realization

Ecosystem

Strategy

Digital

Workforce

Digital

Scouting

Digital

Roadmap

Social

Media

Cognitive

Computing

Mobile Advanced

Analytics

IIoTCloud

Receipt to

Pay

Category

Strategy

Contract

Administration

Innovation

Management

Manage

Relationships

Requisition to

Order

Ecosystem

Management

Sourcing

Management

Demand

Management

Category

Management

Supplier

Management

Contract

Management

Requisition

to Pay

Negotiation

Sourcing

Strategy

Contract

Development

Financial Asset

Mgmt.

SPM

Supplier

Development

Compliance

Management

Zero Based

Spend Mgmt.

Supply Base

Mgmt.

Intel

Management

Market

Analytics

Financial

Analytics

Price

Risk

Supply

Risk

Information

Security

Regulatory

Compliance Risk

Circular

Economy

Risk and

Regulation

Supplier

Collaboration

Supplier Life

Cycle Mgmt.

Supplier

Risk

Contract Life

Cycle Mgmt.

Spot

Buying

Buying Channel

Strategy

Collaborative

Supplier Mgmt.

Innovation

Realization

Strategic Spend

Evaluation

Collaborative

Financing

Collaborative

Sourcing

Commodity

Price Risk Mgmt.

Sustainability

Compliance

Internal

Analytics

Sourcing

Execution

Value Chain

Partner Mgmt.

Tail Spend

Purchasing

Supplier

Strategy

Operational

Strategic

Transactional

Workforce

Strategy

Foundation

Control Framework

Policies &

Standards

Governance

Business Process

Management

Process

Quality

Spend

Taxonomy

People Management

Performance

Mgmt.

Talent Life

Cycle Mgmt

Change Management

CommunicationsChange

Tracking

Business Performance

Management

CPO

Dashboard

Business

Reviews

Information

Management

Content

Provider Mgmt.

Master Data

Management

Core Processes

7


LET’S DEMYSTIFY ANALYTICS FIRST …

ANALYTICS CONSTRUCTION KIT

Degree of Intelligence

Competitive Advantage

Standard Reports: What happened ?

Ad Hoc Reports: How many, how often, where ?

Query Drilldown: Where exactly is the problem ?

Alerts: What actions needed ?

Statistical Analysis:

Why is this happening ?

Forecasting: What if

these trends continue ?

Predictive Modelling: What will happen next ?

Optimization: What’s the best that can happen ?

Information

Interpretation

Recommen-

dations

8


IT IS TAILORED & BASED ON EXPERIENCE

PROCUREMENT ANALYTICS IN REAL LIFE

Standard Reports:

What happened ?

Ad Hoc Reports:

How many, how often, where ?

Query Drilldown:

Where exactly is the problem ?

Alerts:

What actions needed ?



Forecasting:

What if these trends continue ?

Predictive Modelling:

What will happen next ?

Optimization:

What’s the best that can happen ?Tender

optimization

Spend

Analytics

Spend

Analysis

Fraud

Analytics

Compliance

Analytics

Procurement Dashboards

Parts Ratio-

nalization

Supply Base

Optimization

Supplier

Profiling

Price Quality

Correlation

Negotiation

Dashboard

Price De-

velopments

Social Media

Monitoring

Contract

Analytics

9


IT IS TAILORED & BASED ON EXPERIENCE

3RD

PARTY DIGITAL SOLUTIONS

Standard Reports:

What happened ?

Ad Hoc Reports:

How many, how often, where ?

Query Drilldown:

Where exactly is the problem ?

Alerts:

What actions needed ?



Forecasting:

What if these trends continue ?

Predictive Modelling:

What will happen next ?

Optimization:

What’s the best that can happen ?Tender

optimization

Spend

Analytics

Spend

Analysis

Fraud

Analytics

Compliance

Analytics

Procurement Dashboards

Parts Ratio-

nalization

Supply Base

Optimization

Supplier

Profiling

Price Quality

Correlation

Negotiation

Dashboard

Price De-

velopments

Social Media

Monitoring

Contract

Analytics

10


HOPEFULLY BY NOW WE HAVE DEMYSTIFIED ANALYTICS

ANALYTICS – CHEAT SHEET

Technology is NOT a limiting factor – All required components

are mature and available in multiple cost effective options1

Quality Data is important, we however don’t need 100 %

– the use cases build only on a subset of data – Technology helps to cleanse3

The start is a Question not a Dashboard – The ambition is to

generate new insights that drive value / improved decisions2

Ensure Skills don’t turn into a bottleneck - You won’t be the

only function looking for data scientist talent – be quick !!!6

Don’t reinvent the Wheel – Utilize what 3rd party solution providers

have built for you AND you can learn from your Ecosystem5

Journey to Value will be quick – 6 to 8 weeks is a typical time

horizon for a 5 use case Analytics initiative4

11


COGNITIVE CAPABILITIES CAN

COGNITIVE COMPUTING

Sense

recognize text,

speech, images, videos

Comprehend

interpret and

understand

Act

draw conclusions,

take actions

Learn

learn from experience,

increase knowledge

Capabilities

Process Complexitytransactional judgement-driven

Digital Options

Integrated

Desktop

Robotics Process

Automation (RPA)

Virtual

Assistance

Artificial

Intelligence

Kill repetition of

100% identical

processes

Advanced MACROS

perform process

replays in ONE

system

Take the robot

out of human

activities

TEACHABLE

solutions take over

E2E processes

across MULTIPLE

platforms

Drive full

coverage through

quality services

SELF LEARNING

solutions mimic

human interaction

across MULTIPLE

channels

Invent activities

beyond human

capabilities

AUTONOMIC

solutions analyse

information, take

decision & increase

their knowledge

12


BEYOND THE

DIGITAL

STRATEGY

13


DIGITAL DEFINES QUARTILE ZERO IN ZBS INITIATIVES

SHOULD COST MODELING FRAMEWORK

13

COGS

(62%)

SG&A

(26%)

Profit

(12%)

Raw materials (x%)

Direct Labor (x%)

Packaging (x%)

Maintenance (x%)

Logistics (x%)

Events (x%)

S&M (x%)

Travel (x%)

Facilities (5%)

…

Initiatives to close the

gap to Q0

1. Replace manned

security with

technology solutions

(ex. Intelligent Security

Systems)


gap to Q1

1. Rationalize areas that

require security

2. Rationalize

specifications

3. Centralized change

management programs

Utilities (x%)

…

Security - $100m (illustrative)

Cleaning & Gardening

Office Supply

Recycling

…

Q4 Q3 Q2 Q1 Q0

$120m $80m $60m

Client’s position today


gap to Q2

1. Optimize supplier base

2. Standardize rates &

burdens in alignment

with market

benchmarks

Raw materials (x%)

Direct Labor (x%)

Packaging (x%)

Maintenance (x%)

Logistics (x%)

Events (x%)

S&M (x%)

Travel (x%)

Facilities (2.5%)

…

Utilities (x%)

…

COGS

(x%)

SG&A

(x%)

Profit

(x%)

• Executive Diagnostic (financial benchmarks)

• Company vs peer group

• ZBS / ZBSC cost categories by industry

• Operational data collection (spend analysis)

• List of initiatives by category

• List of KPI by category & Operational Benchmarks

• Book 3 & Digital use cases

• Combinatorial technologies

• Should Cost Model by priority category & industry to

define initial targets

• Client innovation on ongoing basis

• Financial impact calculated based on economic

model

GAP

$30m$80m $50m $30m

-x% on

SG&A

-x% on

COGS

ZBS Initiatives Digital

Welcome to our new template - CIPS Speaker... · Test & learn process automation ... Robotic Process Automation Big data & analytics tsunami ... Mobile Advanced Analytics Cloud IIoT

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