The Future of Procurement: Why is Technology Lagging Behind?
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On September 25th 2018, IACCM and SirionLabs conducted this insightful webinar featuring experts from AT Kearney, Forbes Media, IACCM and SirionLabs. The discussion focuses on why traditional procurement technology strategies (primarily focused on deploying P2P and ERP suites) prove to be ineffective and how enterprises can leverage the emerging technology landscape to build a future-ready procurement eco-system.
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The Future of Procurement: Why is Technology Lagging Behind?
6. A different era, different
types of relationship
• Technologies: multitude of choice, but most
under-perform
• Relationships: increasingly complex portfolio
to be managed
• Procurement: inward, price-based focus is
transforming to outward, value-based view
Most Procurement groups are ill-equipped to
meet the needs of today
6
7. Redefining needs
• Technology to support the business, not the
function
• Integrated solutions facilitating data flows
and user adoption
• Expanding scope to drive performance, not
just report problems
The modern era requires technology
that oversees networks and empowers
human decision-making
7
8. Assessment &
Evaluation
✓Ease and speed of implementation
✓Integration with other systems
✓User benefits to drive adoption
✓Value to be generated
A whole-business solution, supporting
collaboration, eliminating value erosion
8
9. Managing in an
uncertain world
• Trading relationships lie at the heart of every
business
• Change is the only certainty
• Systems must monitor AND facilitate
performance
• Shared and actionable data is the critical
competitive advantage
Are you equipped for the emerging era?
9
10. Dr. Hugo Evans
September 25th, 2018
The Future of Procurement: Why is Technology Lagging
Behind?
11. 11
A.T. Kearney is a globally recognized consulting firm – offering scale in industries,
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and Africa
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Clients We work with more than two-thirds of the Fortune Global 500, the world’s
largest companies by revenues, as well as with the most influential
governmental and non-profit organizations.
Locations A.T. Kearney has 58 offices located in major business centers in 40
countries.
Team We are 3,500 people strong worldwide who
have broad industry experience and come from leading business schools.
We staff client teams with the best skills for each project from across
A.T. Kearney.
13. 13
The Future of Procurement series
(September 2018) (November 2018) (December 2018)
Procurement talent: It’s
time to panic!
(December 2018)
The Complete Future of
Procurement
(October 2018)
(October 2018)
The Future of DirectsThe Future of DirectsThe Future of Directs
(November 2018)
The Real Disruption
14. 14
Why now? What’s driving the change?
Key drivers
Traditional suite providers are changing dramatically and others are going out of business
Suite providers are
changing
1
Why isn’t corporate procurement like Amazon?Consumerization
2
To compete (and survive) today you must be continually improving, innovating, and delivering value
Good is no longer good
enough
4
New businesses offerings, more specific solutions, new technology, new approaches mean massive
disruption
Disruptive offerings
3
Most traditional procurement is being automated and the rest will be very soon
Automation, automation,
automation
5
15. 15
Requisition
Management
Requisition
Purchase Order
Workflow Mgt.
Catalog Mgt
Traditional procurement technology follows a linear flow
Source: A.T. Kearney
Procurement Process
Supplier Information
Management (SIM)
• Risk Assessment
• Supplier Portal
• Supplier Data
eSourcing
• eRFX
• Auctions
• TCO Analysis
• Optimization
Supplier
Performance/ Risk
Management
• Surveys/Scorecards
• KPI Tracking
• Compliance Mgmt.
Contract
Management
• Contract Warehouse
• Contract Authoring
• Dynamic Alerts
Spend Monitoring and Analytics
• Project In-Take / Pipeline
Management
• Initiative & Resource Mgt. • Spend Analytics • Benefits Tracking
Governance and Management
• Collaboration
Tools
• Benchmarking &
Industry Reports
• Best Practices • Master Data
Management
• Templates
Strategic Procurement Planning and Performance Management
“Upstream”
Operational Procurement
“Downstream”
Compliance Management
• Knowledge
Management
• Performance
Management
Payment Systems
Accounts Payable
SCF2 / eInvoicing
P-cards
Dynamic Discounting
16. 16
The traditional procurement technology vendor landscape does not effectively support
automation, innovation, and analytics
Non-exhaustive
Source: A.T. Kearney
Spend Analytics eSourcing Contract Mgmt. Supplier Info. Mgmt
Procure to
Pay
Supplier Perf. Mgmt. Knowledge Mgmt.
Suite Solutions
Functional Specialists
17. 17
The future will be a microservices (API) connected ecosystem of value
creating technologies
AI Hub
commodity
indirects
contract
management
services
sourcing
spend visibility
p2p
smart
contracts
esourcing
temp labor
travel
sourcing
analytics
bot sourcing
risk monitoring
cognitive buying
Illustrative
18. 18
The panacea of “one size fits all” is rapidly fading, as best-of-breed functionality
comes of age
Procurement Technology Journey
As-Is Blend Best of Breed
1. Full scale replacement with
new/upgraded end to end
procurement suite
2. Full scale replacement with
new/upgraded end to end procurement
suite and adoption of new technology
3. Agile enhancement of existing
procurement technology,
integrating and connecting to best
in class functional specialists
Benefits
• Single end to end procurement suite
(lower complexity)
• Best of breed back-end procurement tool, fully
customized to user journeys (highest benefits
potential)
• Agile adoption of new technology, enables short-term
benefits
• Modest investment over time and futureproof
• Accelerated delivery of benefits
• Tools can be chosen to customize the right
journeys
Trade-Offs
• Significant investment commitment over a
2-3 year roll-out
• Benefits realisation takes years as
opposed to months
• High level of investment over a 2-3 year roll-out
• Existing technology backbone remains (over-
time intelligent and automated technologies may
supersede the old systems)
Example
Technologies
Source: A.T. Kearney
30. The Rise of
the Social
Enterprise
Source: Deloitte Global Human Capital Trends survey, 2018. Deloitte Insights | deloitte.com/insights
The evolution of the social enterprise
31. What Skills
Are Needed
To Use AI
Effectively
Source: Deloitte Global Human Capital Trends survey, 2018. Deloitte Insights | deloitte.com/insights
Expected emphasis on workforce skills as AI/robotics
are integrated in the enterprise