Vice President Procurement & Business Network · Transforming The Procurement Organization Optimize...

A World Gone Digital

SAP Ariba

John McGurrinVice President – Procurement & Business Network

Global Summit Spring 2018Digital, Cognitive, Blockchain and IoT

John McGurrin – Vice President - SAP Business Networks

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Internal

Discussion Topics for Today

Digital

Transformation for

Procurement

Cognitive

Procurement

BlockChain

IoT


4 Reasons for Transforming Procurement…


Changing business environment increases pressure on companies

Increasing Globalization• Expansion into new markets

• Global process standardization

• International supply chains

• Increased off/near shoring

Economic Volatility• Volatility in markets

• Decreased stock valuation

• Slow economic growth

• High expense ratio

More Competition • Pricing pressures

• New sources of competition

• Decreased budgets and spending

Greater Risk• Supply chain disruption

• Financial risk and fraud

• Commodity risk

Accelerating Technological

Change• Changing business models

• Faster innovation cycles

• Expanding partnerships and channels

• Leveraging big data for decisions

Regulatory Changes• Increasing disclosure requirements

• Country-specific regulations

• Industry-specific disclosures


CPOs are navigating a changing environment…

• Fragmented supply base

• Volatile markets

• Intricate costing and

pricing structures

• Detailed specs and design

requirements

• Extensive supplier

qualification

• Many line items and pricing

variances

• Existing strategic supplier

relationships

• Supplier contingency plans

• Regulatory and environmental

requirements

Market complexity Category complexity Strategic constraints


Transforming The Procurement Organization

Optimize evolving procurement model and deliver value

across a range of corporate goals

Risk, sustainability and brand | Value management and

reporting | Strategic partnership development | Supplier

performance management

Partner and “embed” with business teams to drive value beyond cost

savings

Category spend management | Supplier management | Contract

management | Innovation | Sourcing

Perform highly automated and autonomous activities to optimize

cost, accuracy and cycle time

Transactional procurement (order and invoice processing, goods

receipt, audits, tactical sourcing) | Master data management |

Analytics |Support

Shared

Centers Service

Business Unit

Procurement

Corporate

Procurement

World-class procurement

organizations have 22% lower labor

costs and 29% fewer FTEs2

60% of source-to-pay processes have

the potential to be fully or largely

automated, yielding up to 3.5% of

overall spend savings3

84% of procurement organizations

believe that digital transformation will

fundamentally change the way their

services are delivered over the next three

to five years4

© 2017 SAP SE or an SAP affiliate company. All rights reserved. 8Customer

Digital Core

APIs

SECURITY

MACHINE LEARNING

BLOCKCHAIN

INDUSTRIES

Business

Transactions

Intelligent

Insights

Workforce

Management

Business

Networks

Customer

Experience

IoT

and Assets

Framework for Digital Business


Emerging Technologies

9

Data transformed into powerful

insights to drive proactive strategy and

smarter actions

Step-change in productivity with

autonomous systems

These four technologies have the greatest potential impact on procurement

and together, will drive business innovation and customer value while

improving productivity.

AUTOMATION AND

MACHINE LEARNING

PREDICTIVE

ANALYTICSHUMAN ENGAGEMENT

& AUGMENTED SENSES

BLOCKCHAIN AND THE

INTERNET OF THINGS

Bridging the physical and digital

worlds for well-guided and faster

execution

Secure, transparent, and efficient

exchange of assets and value without

intermediaries


Cognitive Capabilities – Insights and Intelligence

Intelligent Sourcing

BlockChain

Instant Contract Analyzer

Cognitive Buying Assistant

Intelligent Network

Use Cases for Cognitive Sourcing


Cognitive Procurement - Throughout the Contract Continuum

11

Scan non-text contracts –convert to

contract clauses and sections

% match with reference to

template contracts

% match to specific

reference contracts

Contract CreationContract

Authoring

Contract

Negotiation/Award

Contract

Compliance

Predetermine clauses based on commodity,

region/legal regulatory needs

Recommend critical clauses

based on contracting

history

Analyze frequently modifiedclauses,

suggests library additions

Suggest missing sections,

clauses, sub clauses

Recommend the optimal team members to

engage

Minimizes risk exposure by

ongoing checks of document compliance

Extract executable

terms and link them to

compliance tracking and Performance

Assess terms and pricing

against benchmarks

Digital Assistant

Leverage machine learning to understand

relevant entities (e.g. news,

commodities, etc)


Cognitive Procurement - Throughout the Sourcing Continuum

12

Uncover pricing pressures and

demand trends for selected products

Recommendation of sourcing event

initiation based on trends

Environmental

Monitoring

Sourcing Event

Initiation

Sourcing

Execution

Recommend RFI/RFP/RFQ

event type based on

commodity type, region and

history.

Sourcing Intelligence provides buyers with the right knowledge to execute the right event at the right time, with the right suppliers, for

the right duration.

Assess results against

benchmark prices

Recommend number of

suppliers to engage based on commodity, history and for optimal results

Recommend duration of

sourcing event for optimal

results

Automatically populate

sourcing event data using

unstructured data

Guide selection of sourcing

template based on unstructured

data

Configure template search,

identification, and mapping

Award Recommend-

ations

Incorporate missing data into

the model

CONFIDENTIAL

Guide selection of sourcing template

Digital Assistant


Blockchain – Trusted and secured transactions/processesUse Cases by Industry


Blockchain and IoT Across Procurement

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SAP Ariba

John McGurrin

Vice President - SAP Ariba Strategic Accounts

215.630.4285

[email protected]

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Vice President Procurement & Business Network · Transforming The Procurement Organization Optimize...

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