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© 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
A WEBINAR BY IACCM AND SIRIONLABS FEATURING A.T. KEARNEY AND FORBES
SEPT 25, 2018
The Future of Procurement: Why is Technology Lagging Behind?
2© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.
THE HOUSEKEEPING ITEMS:
• Webinar slides and recording will be emailed
• Enter questions in chat on webinar panel
Before we get started
3© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.
A JAY AG RAWAL
Co-founder and Chairman
SirionLabs
D R . H UG O EVANS
Vice President
AT Kearney
Meet the speakers
SALLY H UG H ES
CEO
IACCM
PAUL MARTYN
Supply Chain Expert
Forbes Media
4© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.
New generation of specialized platforms that have the potential to transform procurement effectiveness
What will be covered today
Challenges and gaps in traditional procurement technology set-ups
Strategies for your organization’s transition to the procurement tech stack of the future
1 2 3
5© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.
The International Association for Contract & Commercial Management enables organizations and professionals to achieve world-class standards in their contracting and relationship management process and skills.
For more information, visit www.iaccm.com
SirionLabs is transforming the way buyers and suppliers engage with each other in complex contracts using its SaaS platform –Sirion. Leveraging automation and advanced analytics, Sirion helps enterprises create higher value and more successfulrelationships, while effectively managing cost and risk in strategic supplier engagements.
For more information, visit www.sirionlabs.com
About the organizers
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
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
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
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
Dr. Hugo Evans
September 25th, 2018
The Future of Procurement: Why is Technology Lagging Behind?
11
A.T. Kearney is a globally recognized consulting firm – offering scale in industries, functions, and geographies
Americas Atlanta
Bogotá
Boston
Calgary
Chicago
Dallas
Detroit
Houston
Mexico City
New York
San Francisco
São Paulo
Toronto
Washington, D.C.
Asia Pacific Bangkok
Beijing
Brisbane
Hong Kong
Jakarta
Kuala Lumpur
Melbourne
Mumbai
New Delhi
Perth
Seoul
Shanghai
Singapore
Sydney
Tokyo
Europe Amsterdam
Berlin
Brussels
Bucharest
Copenhagen
Düsseldorf
Frankfurt
Istanbul
Lisbon
Ljubljana
London
Madrid
Milan
Moscow
Munich
Oslo
Paris
Prague
Rome
Stockholm
Stuttgart
Vienna
Warsaw
Zurich
Middle East
and Africa
Abu Dhabi
Doha
Dubai
Johannesburg
Riyadh
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.
12
“A.T. Kearney is the clear market leader in the procurement space” – Forrester Research
Strategic SourcingAssessment of Excellence in Procurement (AEP)
The Purchasing Chessboard®
Return on Supply Management Assets (ROSMA©)
Holistic Procurement Transformation (HPTTM)
Invention on
demand
Core cost analysis
Vertical integration
Bottleneck managem
ent
Sourcing community
Procurement
outsourcing
Compliance
management
Leverage innovation network
Design for sourcing
Intelligent deal
structure
Political framework manageme
nt
Buying consortia
Mega supplier strategy
Closed loop spend
management
Functionality
assessment
Product teardown
Composite benchmark
Product benchmark
Cost data mining
Master data
management
Supplier consolidati
on
Specification
assessment
Design for manufactur
e
Process benchmark
Complexity reduction
Standardi-zation
Spend transparen
cy
Bundling across
generations
Value chain
reconfigu-ration
Supplier tiering
Collaborative
capacity managem
ent
Visible process
organization
RFI/RFP process
Supplier market
intelligence
Make or buy
Revenue sharing
Sustainability
management
Virtual inventory
management
Vendor managed inventory
Expressive bidding
Reverse auctions
Best shoring
Profit sharing
Project based
partnership
Total l ife cycle
concept
Supplier developme
nt
Total cost of ownership
Price benchmark
Cost regression analysis
Strategic alliance
Value based
sourcing
Collaborative cost
reduction
Supplier fitness
program
Leverage market
imbalances
Unbundled prices
Factor cost analysis
Demand reduction
Contract manageme
nt
Bundling across
product lines
Bundling across sites
Global sourcing
LCC sourcing
Cost based price
modeling
Linear performance pricing
• Introduced the idea of Strategic Sourcing
• Landmark global engagements
• Introduced 7-step sourcing, now a worldwide standard across industries
• Periodic global benchmarking to identify best practices based on the “House of Procurement”
• Hundreds of participants across all industries and regions with most recent update done 2018
• Toolbox to assign the right method to work with suppliers based on supply power and demand power
• Works for all industries
• Highly cross-functional
• Sustainable frame-work to assess Procurement Performance Management
• Illustrates value in “CFO resonating language”
• Benchmarks performance on a peer-to-peer basis
• Framework to chart a client's journey towards excellence in Purchasing
• Provides right combination of content and people focused tools
Sourcing-&
commodity
management
Human Resources Management
Supply
Management
Strategy
Organizational
Alignment
Supplier
Relationship
Management
Operating
Process
Management
Performance
management
Knowledge/Information
management
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
Why now? What’s driving the change?
Key drivers
Traditional suite providers are changing dramatically and others are going out of businessSuite 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 valueGood is no longer good enough
4
New businesses offerings, more specific solutions, new technology, new approaches mean massive
disruptionDisruptive offerings
3
Most traditional procurement is being automated and the rest will be very soonAutomation, automation, automation
5
15
Requisition Management
RequisitionPurchase OrderWorkflow 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 PayableSCF2 / eInvoicing
P-cardsDynamic Discounting
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. MgmtProcure to
PaySupplier Perf. Mgmt. Knowledge Mgmt.
Suite Solutions
Functional Specialists
17
The future will be a microservices (API) connected ecosystem of value creating technologies
AI Hub
commodityindirects
contractmanagement
servicessourcing
spend visibility
p2p
smartcontracts
esourcing
temp labor
travelsourcing
analytics
bot sourcing
risk monitoring
cognitive buying
Illustrative
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
19
What this looks like in practical terms
Source: A.T. Kearney
20© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Services dominate the enterprise sourcing spend across industries……
Source: Forrester Research
Purchased services as %age of aggregate procurement spend
21© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
…the typical services procured by enterprises vary in type, scale and complexity.
Certain service categories require more active governance than others(highlighted below in Green)
Global business purchases (2015)
$3.6TProfessional
$3.4TConstruction
& Infrastructure
$1.8TLogistics &
Transportation
$1.8TIT
$3.6TFinancial $2.6T
Real Estate
$1.6TTelecom
$1.3TFacilities Mgt. &
Other Business Services
$0.8TT&E
$0.8TRental
& Leasing
$0.5TStaffing
Global Spend on Services
22© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Services buying challenges - Pre and post-signature
The bulk of this group’s functionality is limited to contracts, e-invoicing, risk and catalog management.
Performance Risk
Contract Financial
The most crowded quadrant because the overwhelming majority of procurement technology is still being used to buy goods.
Ariba
BravoSolution
Zycus
Aravo
Coupa
2000 2005 2000
Jaggaer
Ariba
Zycus
Coupa
ISG
KPMG
Oracle
SAP
Hiperos
RSA Archer GRC
Servicenow
CA-Oblicore
Remedy ITSM
HPSM
PRE-SIGNATURE POST-SIGNATURE
SER
VIC
ESG
OO
DS
Deloitte
Mar
ket
Pen
etra
tio
n
SirionLabs
SirionLabs
The relatively small dot sizes in this quadrant indicates the fragmented nature of the post-signature technology landscape.
The lack of technology in this space is indicated by the fact that it is heavily dominated by sourcing advisory organizations.
23© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Evolution of the CLM landscape
Q3, 2018
24© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Supplier Governance
Procure-to-Pay eSOURCING, eRFX, AUCTIONS
PERFORMANCEMGT.
FINANCIALMGT.
CONTRACT MGT.
RELATIONSHIPMGT.
RISK MGT.
CONTRACT REPOSITORY
SPEND MONITORING &
ANALYTICS
REQ.GATHERING
CONTRACT AUTHORING
SUPPLIER INFO MGT. (SIM) & MDM
INVOICING & PAYMENT
PURCHASE ORDER/REQUISITION
INVENTORY/CATALOG
Traditional CLM
How contract management, supplier governance and P2P come together
P2P Solutions (Ariba/Coupa)
Sirion
DUE-DILIGENCE /ONBOARDING
BENEFITS/ COMPLIANCE
TRACKING
25© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
The radical insufficiency of P2P
P2P hygiene required for all suppliers
REGULATORY AND POLICY
COMPLIANCE
AI/NLP DRIVEN CONTRACT METADATA CAPTURE
(OBLIGATIONS, SL/KPIs,
PRICING, RESOURCE
UNITS)
CHANGE MANAGEMENT
OBLIGATIONCOMPLIANCE
AUTOMATED SERVICE LEVEL
MGT.
CREDITS & EARNBACKS
PREDICTIVE INVOICE
AUDITING FOR SERVICES
Deeper functionality required for strategic services suppliers
DYNAMIC RISK ASSESSMENT
AUTHORING OF COMPLEX
CONTRACTS (DOCUMENT
FAMILIES)
CAPTURE OF KEY CONTRACT DATA DURING AUTHORING
SUPPLIER PERFORMANCE
PxQ INVOICE AUDIT
RISK MANAGEMENT
eSOURCING/eRFX/
AUCTIONS
CONTRACT MANAGEMENT
REQ.GATHERING
SPEND ANALYSIS
PO/REQUISITION
INVENTORY /CATALOG
RELATIONSHIP MGT.
SUPPLIER INFORMATION/
MDM
CONTRACT AUTHORING
ISSUES, ACTIONS, DISPUTES
MGT.
GOVERNANCE FORUMS
© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
26© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
RELATIONSHIP MANAGEMENT
PERFORMANCE MANAGEMENT
FU
NC
TIO
NA
L
SIL
OS
TE
CH
NO
LO
GY
IS
LA
ND
S
FINANCIAL MANAGEMENT
FINANCIAL MANAGEMENT
S E R V I C E D E L I V E R Y
RISK MANAGEMENT
CORPORATE RISK
LEGAL / CONTRACTS
RELATIONSHIP MANAGEMENT
Strategic supplier lifecycle
PROCUREMENT
WHAT WAS PROMISED?
WHAT ACTUALLY HAPPENED?WHAT WAS INVOICED?
PR E - S IG N AT UR E PR OC UR EMEN T
PR OCESSES
CONTRACT MANAGEMENT
PRE -CONTRACT (6 -12 MONTHS)
SERVICE DELIVERY
INTEGRATION THROUGH REST API LAYER
F IN AN C IAL MAN AG EMEN T
PER FOR MAN C E MAN AG EMEN T
R ISK MAN AG EMEN T
C ON T R AC T MAN AG EMEN T
R ELAT ION SH IP MAN AG EMEN T
C ON T R AC T AUT H OR IN G
Sirion – Integrated Enterprise Platform for Supplier Governance
The enterprise procurement tool stack today
27© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Sirion’s end-to-end solution for managing complex contracts
CLAUSE LIBRARY
TEMPLATE LIBRARY
AUTHORING WORKFLOW
E‐SIGNATURE
DOCUMENT REPOSITORY
OBLIGATION CAPTURE
DOCUMENT CHANGE MANAGEMENT
CONTRACT INTERPRETATIONS
SERVICE LEVEL MANAGEMENT
OBLIGATION COMPLIANCE
SOW/WO/PO MANAGEMENT
CREDITS & EARNBACKS
INVOICE AUDITING
SPEND POOL MANAGEMENT
FINANCIAL ANALYSIS AND PLANNING
VALUE ASSURANCE
GOVERNANCE FORUMS
ISSUE/ACTION ITEM MANAGEMENT
GOVERNANCE PROCESS HEALTH
SURVEY MANAGEMENT
REGULATORY COMPLIANCE
POLICY COMPLIANCE
SUPPLIER AUDITS
28© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Sirion has successfully delivered hard savings of 9.78% through invoice reductions
$3.1BI N V O I C E A M O U N T
V A L I D A T E D
600,000+T O T A L O B L I G A T I O N S
M A N A G E D
$18B+T C V U N D E R M A N A G E M E N T
250,000+S U P P L I E R S O N S I R I O N
© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Hard savings of over $300M delivered by SirionHard savings = Invoice reductions
Hard Savings Achieved
$303M
Invoice Amount Validated
$3.1B
29© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
Sirion’s automation reduces manual governance effort by 45%
MANUAL GOVERNANCE MODE
POST-SIRION GOVERNANCE MODE
45%reduction in
manual effort
DISCIPLINE MANUAL EFFORT DELTA
Contract Management -42%
Performance Management -42%
Financial Management -49%
Relationship Management -47%
OVERALL GOVERNANCE -45%
Manual effort reduction distribution
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
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
Change Management is
Difficult
Only 12% of companies that launch major change initiatives
fully achieve their goals
Managing Change Is Critical
To Success
35© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.
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