Procurement s Next Frontier A New Digitally Driven, Strategically Focused Procurement Organization

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1 Procurement s Next Frontier A New Digitally Driven, Strategically Focused Procurement Organization Giovanni Giacchetti Accenture Strategy Sourcing & Procurement Lead Italy SAP Forum 2015 Milano, 29 ottobre

2 10 Things that are cheaper than Whatsapp Channel tunnel: $7.44 billion A colony on Mars: $6 billion Large Hadron Collider: $11 billion London 2012 Olympics: $14.6 billion Cost of providing safe, clean water to entire globe: $10 billion/year Cost of Hurricane Sandy: $8.3 billion World s tallest building (Burj Kahalifa): $1.5 billion Entire world music industry: $16.8 billion Hubble space telescope: $10 billion And finally Jamaica: $14.84 billion!! Copyright 2015 Accenture All rights reserved. 2

3 A sobering fact Copyright 2015 Accenture All rights reserved. 3

4 Digital Business results in new challenges and new roles for Corporate Leaders Competitor can reduce their operating costs by 10 15% through digitalized operations New competitors are emerging from previously unrelated industries The skills required by leaders and organizations to compete are different CEO What should I do about digital disruptions in my industry? How does digital help me grow the business, enter new markets or strengthen the position? How does it threaten my value chain ecosystem of customers, suppliers, business partners? COO / CIO / CFO / CMO / CPO What is the new CPO mandate in a Digital Business? How will Digital change the Procurement organization? How will supply markets change through Digital? What historic challenges will disappear through Digital? What needs to be done to be ready for Digital? Copyright 2015 Accenture All rights reserved. 4

5 From the traditional Procurement operating model X-functional Teams Strategic Procurement (Front Office) Internal Stakeholders Business Users Innovators Strategic s! Non-Strategic s Tactical Procurement (Middle Office) Transactional Procurement (Back Office) Logistic Providers INTERNAL EXTERNAL Other Buying Companies Copyright 2015 Accenture All rights reserved. 5

6 to Procurement operating model of the future Internal Stakeholders X-functional Teams Business Users Innovators INTERNAL EXTERNAL Strategic s! Other Buying Companies Non-Strategic s Logistic Providers Copyright 2015 Accenture All rights reserved. 6

7 Many digital capabilities exist already, while some still need to evolve in the market e-procurement Self Service Spot Buy Tools Procurement Portal Online Catalogues e-buying Channels Traditional Fully embedded content (internal / external) Company Mall Knowledge Exchange (powered by SharePoint) e-enabled access to relevant systems Reporting Solution Category Room Category Management Portal DIGITIZED EDI Category Management Platform (powered by social media) Single Purchasing Interface (Mall) DIGITAL Room Agent technology Buying Networks (powered by social media) Open Innovation network Collaboration Network (powered by social media) Analytics Service Function e-marketplaces Discovery Collaboration Analytics Platform Repository Transactional Network Network E-Invoicing solution Analytics Solution Portal Supply Spend Procurement Analytics Reporting Dashboard On market roadmap Spend Analytics Already available Copyright 2015 Accenture All rights reserved. 7

8 A Network connects companies seamlessly with the supply market Tendering e-sourcing Auctioning Spot Buying Discovery Directory with ready to use data Performance Assessment X-company supplier performance feedback interaction Purchase Order and Invoice exchange Powered By Portal Connector Service Performance etendering Repository Transaction engine Mgmt. as a Service Onboarding as a Service Company Mall integration Category Room Integration Room Integration Copyright 2015 Accenture All rights reserved. 8 operating model component Digital Human

9 Supply Analytics transforms reporting into guided decision making KPI dashboard Pre-defined repository of levers required to steer procurement Do it yourself Analytics Easy to use Self Service Opportunity advisor Recommendations (rules & self learning) Scenarios predictions Forecasting & What if analysis Powered By Dashboard Scenario Modelling Text Mining Process Analytics Use case repository KPI repository Data Collector Self Service analysis Predictive Analytics Rules engine Data Mart Value Engineering Use Case development Copyright 2015 Accenture All rights reserved. 9 operating model component Digital Human

10 A Real Case: Procurement as Ecosystem Orchestrator in a digitally enabled environment Internal Stakeholders Logistic Control Tower Spot Buy Desk $ 1 Global Procurement Team Embedded resources in Functions 3 rd party for non core categories Global P2P Platform to channel effectively demand from Internal Stakeholders Compliance Analytics to monitor effectiveness of Procurement results Collaboration Platform to improve internal visibility on Value Generation activities Supply Network to leverage segmentation and focus on Strategic s $ MRO Consolidator Powered by: Copyright 2015 Accenture All rights reserved. 10

11 Thank you! 11