The Future of Procurement: Why is Technology Lagging Behind? · 2019-08-28 · Procurement Technology Journey As-Is Blend Best of Breed 1. Full scale replacement with new/upgraded

© 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


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


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


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

http://www.iaccm.com/

http://www.sirionlabs.com/

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


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


19

What this looks like in practical terms


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


…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


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.


Evolution of the CLM landscape

Q3, 2018


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


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



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


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


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


Hard savings of over $300M delivered by SirionHard savings = Invoice reductions

Hard Savings Achieved

$303M

Invoice Amount Validated

$3.1B


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


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What’s next?

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THANK YOU

@SirionLabs

Documents

The Future of Procurement: Why is Technology Lagging Behind? · 2019-08-28 · Procurement Technology Journey As-Is Blend Best of Breed 1. Full scale replacement with new/upgraded