Digitization of source-to-contract · Merger Acquisition 2017 . 12,70 12,70 12,70 12,70 5,70 7,70 7,00 5,70 7,70 ... Trend radar/ category intelligence monitioring 360° lever analysis,

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A presentation for

Frankfurt, April 26th 2018

Digitization of source-to-contract

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Slide 2 180426 BME FDL Vortrag S2C Digitization Handout.pptx

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Agenda for today

02 Digitization of plan-

to-strategy

01 From trends to

features to vendors

03 Digitization of

source-to-contract

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Use case driven digitization

Pain point driven digitization

Data and system architecture

Procurement digital transformation … building blocks and key requirements

Future digital eco-system

Automation Advanced analytics

“end-to-end”

“in-context collaboration”

“mobile first”

“user centricity - CUX”

“One task, one system”

“single point of truth”

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Beyond solving your Procurement core, AI pushes Procurement to another level

S2C P2P SLM

Procurement AI analytics

Procurement smart robotics

“less admin”, efficiency

“get insights”; effectiveness

BI

Advanced analytics

Machine learning Deep learning

Internal & external information

RPA

Procurement core

Text/ process mining

Patterns

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Technology impact

The technologies have a high impact across the procurement process landscape,

highest impact on purchase-to-pay

RPA

Workflow management

NLP (chat bots)

Data mining/ pattern recog.

Machine learning

BI/ analytics

Technology

High Impact Low impact no impact

Specification = Abstimmung mit cross-Funktionen Kosten-

Lastenheft-Abstimmung

Tender = Abstimmungsschleifen mit Lieferanten

Strategy Planning Tender Payment

Plan-to-Strategy Source-to-Contract Purchase-to-Pay

Analysis Specifi-cation

Awarding & contract

PR/PO

Au

tom

ati

on

A

I B

I

Use case: Clause check

Use case: Award planning

Use case: 360 supplier view

Use case: Automated eRfx

Out of scope today

Use case: guided contracting

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Eco-system

Procurement digitization needs a framework to discuss pain points, white

spots & best-of-breed market opportunities

Source-to-contract (tactical) Purchase-to-pay (operational)

eRfx Contract lifecycle mgmt.

PR/PO eAuction eCatalog/ eMarket-

place

2-/3-way check

payment

Supplier lifecycle management

Supplier portal

Spend Cube

Supplier evaluation

& risk

Supplier master

data

Application architecture

Data architecture

Reporting & analytics

Initiative mgmt.

BI = Business intelligence

Self-service BI

UX/ CUX Launch pad

Integration layer

BW Data lake

Cloud

BI (KPIs)

Plan-to-strategy

Best-of-breed

Core

Analytics

Proejct mgmt.

Core

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The vendor market in 2017 experiences a huge number of mergers and

acquisitions

July

January June

December

May April March February

November October September August

Merger Acquisition

2017

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Agenda for today


to-strategy

01 From trends to

features to vendors

03 Digitization of

source-to-contract

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Overview

Plan-to-strategy – what is it all about?

Plan-to-strategy (category management)

Process

Personas

Requestor Category

manager

Business

impact

Demand (internal) analysis

Market (external) analysis

Lever analysis

Strategy development

Action planning & tracking

Supply security

Innovation

Working capital optimi-zation

Purchase cost

reduction

Technology,

Quality

Sales Logistics/

SCM

Low impact High impact No impact

Process cost

reduction

Angepasst AB

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Plan-to-strategy: current industry pain points and use cases

Pain points

Selected use cases

Core P2S solution – guided

category strategy (analysis,

strategy, action plan)

Trend radar/ category

intelligence monitioring

360° lever analysis,

dynamic suggestion of

applicable levers

Category master data

cleansing

Spend analysis &

forecasting (MUST)

Dynamic sourcing calendar

(based on CLM and PLM

data)

Purchasing planning tool

(internal demand/ external

supply)

Prescriptive strategy

recommendations

Pain points & use cases

Demand (internal) analysis

Market (external) analysis

Lever analysis

Strategy development

Action planning

& tracking

Best-of-breed

Suite/ best-of-breed

Idea stage

Best-of-breed

Only existing

suppliers and Google

search

No/ limited

transparency on running

cost reduction initiatives

Limited data

available, only

retrospective

Prototype


OUTLOOK

Same levers over

and over again

Partly, done once

in a while, not

harmonized

Decisions on PPTs not

reflected in P2P system

Done partly/

only per Email

and in Excel

Manual

analysis

No link to SLM

data

No access to

CRM solution

Supplier KPIs not

automatically,

manual analysis

WHITE SPOT

Pre SOP

ramp-up

mgmt. missing

SLM = Supplier Lifecycle Management, CLM = Contract Lifecycle Management, PLM = Product Lifecycle Management, SOP = Start of production

Basics

Überarbeitet AB

Catalog/ configurator

readiness

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Agenda for today


to-strategy

01 From trends to

features to vendors

03 Digitization of

source-to-contract

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Overview

Source-to-contract – what is it all about?

Source-to-contract

Requester Strategic

Buyer

Approver Legal &

Compliance

Supplier

Specification management

Bidders list E-auctions, negotiations

Tender/ RfX Awarding decision,

contracting

Supply security &

risk reduction

Inno-vation


Purchase cost

reduction

Process

Business

impact

Personas

Low impact High impact no impact

Process cost

reduction

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Source-to-contract: current industry pain points and use cases

Pain points

Selected use cases

Rfx template (generation)

Automated Rfx (free text

requisitions)

Committee mgmt. Awarding simulation/

combinatorial awarding

Software for behavioral

negotiation

Core S2C solution (MUST) 360 supplier view


Specification management

Bidders list

Tender/ RfX

E-auctions, negotiations

Awarding decision,

contracting


Suites/ best-of-breed

Prototype


Prototype

Suite standard Best-of-breed

Bill of material not

digital, only in Excel

High effort to create

and align tenders

with internal

functions

Bidders list not

linked to up-to-

date KPI (SLM)

Negotiations not well

prepared due to lack of

data and time

Only simple offer

comparison possible

overreliance on price

Emails and calls

instead of online

workflow/ approvals

Integrated sourcing plan &

award planning solution


No visibility on

suppliers

negotiation tactic

Little visibility of

new suppliers

High manual effort in

getting current

suppliers` situation

(financial, operation)

Überarbeitet AB

Basics

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Overview

Contract lifecycle management – what is it all about?

Contract Lifecycle Management

Process

Personas

Requestor Strategic

Buyer

Business

impact

Draft contract Negotiate &

approve Archive

Manage compliance

Renew/ terminate

Supply security


Purchase cost

reduction

Sales

Low impact High impact No impact

Process cost

reduction

Approver Legal &

Compliance

Supplier

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Contract lifecycle management: current industry pain points and use cases

Pain points

Selected use cases

Contract repository with

role-based dashboards,

advanced search, alerts

(MUST)

Integration in purchase-to-

pay process to track

compliance

Collaborative authoring and

approval workflow, incl. MS

word plug-in

E-signature

Guided contracting -

contract templates and

clause library integrated in

S2C process/ lifecycle

AI-driven clause checks

RPA to copy legacy

contracts from different

repositories to target

repository

Blockchain / smart contracts


Draft contract

Negotiate & approve

Archive

Manage compliance

Renew/ terminate

Suite standard

Suite standard

Best-of-Breed

Custom development

Email, Paper based

workflows, limited

oversight on status

No visibility of

which clause is in which

contract (in case of

regulations change)

No audit trail

Suite standard

Best-of-Breed / suite

Prototype

No company wide

contract search

Negotiated terms not

applied in P2P process

(e.g. discounts)

De-central storage of

contracts

“black box” of which

contracts are due for

renewal

Lack of standards

and controls Long cycle

times

No version

management

Suite standard

SLM = Supplier Lifecycle Management, CLM = Contract Lifecycle Management, PLM = Product Lifecycle Management, SOP = Start of production

Missing link

between MSA and

sub agreements

Regulatory compliance

issues due to missing/

outdated contract terms

Multiple owners

Überarbeitet AB

Basics

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>10 years Procurement

consulting

Head of the h&z Procurement

Practice

Expert for Procurement

digitization

Dr. Alexander Batran

Procurement 4.0

A survival guide

in a digital,

disruptive world

Documents

Digitization of source-to-contract · Merger Acquisition 2017 . 12,70 12,70 12,70 12,70 5,70 7,70 7,00 5,70 7,70 ... Trend radar/ category intelligence monitioring 360° lever analysis,