Procurement s Next Frontier. The Future Will Give Rise to an Organization of One

Transcription

1 Procurement s Next Frontier The Future Will Give Rise to an Organization of One

2 Introduction Accenture Sourcing & Procurement Research Accenture Sourcing & Procurement Research Background High Performance through Procurement 1 Procurement Masters saved 10 times what it costs to run procurement It pays to be good. Compulsive Contributors 2 Procurement Masters expanded their focus to generating value beyond cost savings More is asked and more is delivered Procurement s Next Frontier The Future Will Give Rise to an Organization of One A New Digitally Driven, Strategically Focused Procurement Organization Copyright 2014 Accenture All rights reserved. 2

3 Introduction Accenture Sourcing & Procurement Research Our research was designed to understand the business and procurement trends that would substantially affect procurement organization globally in the next 5 to 7 years. 52 executive interviews Future of Procurement PoV Copyright 2014 Accenture All rights reserved. 3

4 Introduction Accenture Sourcing & Procurement Research Digital platforms and technologies are expected to totally transform the way most procurement organizations do business Cost of Procurement (as % of spend) 1,0% 0,7% 0,6% 0,2% Smaller, more cost-efficient procurement organization supported by digital platforms and technologies Controlled Suppliers (as % of suppliers) 40% 50% 80% internal 100% Full control through close cooperation with strategic suppliers in the virtually integrated enterprise external Contract/Policy Compliance (as % of spend) 40% 50% 70% 98% Cognitive systems to support procurement professionals increasing compliance, automation and quality Insightful Spend Understanding (as % of spend) 10% 20% 60% 100% Extended use of advanced analytics together with the industrial internet of things leading to meaningful spend insights Copyright 2014 Accenture All rights reserved. 4

5 Executive Summary The Procurement Organization of One Four key digital technologies will give rise to a procurement organization of one: cognitive systems, analytics, cloud computing and the industrial internet of things Key trends leading to the future of procurement: Companies will establish a more intimate relationship with a small group of strategic suppliers, creating a virtually integrated company, boosting top line growth through more effective innovation The future procurement organization will consist of a group of procurement professionals embedded in the business connected back to a smaller, core-decision making team supported by technology Future procurement cloud s advantage will go beyond process and technology standardization and low cost to enhanced usability and more effective use of content The industrial internet of things will reshape the procurement function offering increased traceability, enhanced use of analytics and challenging the status-quo of key procurement processes 3 5 The expanded use of advanced analytics will benefit the procurement function on different domains 6 Cognitive systems will take over routine, manual work resulting in cost savings through automation, increased quality, consistency & compliance and augmenting faster and better decision making Copyright 2014 Accenture All rights reserved. 5

6 Virtually Integrated Enterprise The Three-Tier Supplier Ecosystem Supported by digital technologies a more intimate relationship will be established with the company s strategic suppliers, creating a virtually integrated enterprise Uncharted Suppliers Suppliers that are currently unknown but may provide relevant products, services and innovation Strategic Suppliers Key suppliers that will be treated as part of the company Transactional Suppliers Focus on operational efficiency through a high degree of automation Virtual Supplier Room Virtual Supplier Room, Analytics Virtual Supplier Room, Cognitive Agents, Analytics Company VIRTUAL INTEGRATED ENTERPRISE Companies will rely more heavily on a small group of strategic suppliers in order to significantly boost top line growth through more effective innovation Copyright 2014 Accenture All rights reserved. 6

7 Virtually Integrated Enterprise The Virtual Supplier Room The virtual supplier room will serve as a virtual gathering place for the company and its suppliers to connect and exchange ideas Copyright 2014 Accenture All rights reserved. 7

8 Organization of One The Procurement Organization of the Future The future procurement organization consists of a group of procurement professionals embedded in the business and connected back to a smaller, core-decision making team A small, central, decisionmaking core team supported by advanced technology (e.g. cognitive computing, the 5 apps, ) focusing on higher-level cross-business unit procurement requirements. Procurement professionals fully embedded in the business, addressing business issues while applying procurement knowledge. Non-strategically differentiating activities will be conducted by technology (virtual agents) and/or the virtually integrated enterprise. Copyright 2014 Accenture All rights reserved. 8

9 Organization of One Five Procurement Apps of the Future The 5 apps will serve as the technology foundation of procurement: Virtual Company Mall Supply Analytics Virtual Supplier Room Virtual Category Room Supplier Network A cloud-based set of pre-approved privat and public shops from which the internal customer can select goods and services, in lign with company policies, preferred suppliers and contracts. A standard dashboard bringing together a wide variety of data and enabling both procurement and business users to solve specific problems or answer questions. A virtual collaboration room enabling the company to interact with its strategic suppliers and to foster innovation through the virtually integrated enterprise. A central place, driven by social media, where the category managers will find category specific and relevant market intelligence. App connecting the company with the supply market and supporting tendering, performance assessment, supplier discovery and supplier interaction. Copyright 2014 Accenture All rights reserved. 9

10 Cloud Computing Focus on Usability and Content Future procurement cloud s advantage will go beyond process and technology standardization and low cost to enhanced usability and more effective use of content Cloud computing is key to become virtually connected with the external world: Historcial benefits: Lower oprational costs (SaaS) Process and technology standardization Faster access to new functionalities Future competitive advantages: Amazon like Usability resulting in increased productivity and engagement Google like Enriched content paired with analytics leading to better insights Copyright 2014 Accenture All rights reserved. 10

11 Industrial Internet of Things Fundamentally Transforming Key Aspects of Procurement Today s mobile device-driven market will shift to an interconnected Industrial Internet of Things reshaping the procurement function INDUSTRIAL INTERNET OF THINGS (IIOT) Impact on Procurement: Increased traceability of products & materials Enhanced use of analytics to improve decision-making Combining sensor-driven computing, industrial analytics and intelligent machine applications into a single universe of connected intelligent industrial products, processes and services. Challenging the statusquo of key processes Copyright 2014 Accenture All rights reserved. 11

12 Riding the Analytics Wave Analytics within the Procurement Function An Accenture survey shows procurement as the least likely corporate function to use advanced analytics In order to benefit from the use of analytics and improve business decision-making, procurement organizations need to: Structurally align with the corporate analytics center of excellence Invest in the proper supporting technologies (including machine learning!) Tackle analytics of highest value given maturity and industry Copyright 2014 Accenture All rights reserved. 12

13 Riding the Analytics Wave 5 Analytics Impacts to Procurement Five procurement areas, in particular, look set to benefit the most from the expanded use of advanced procurement analytics Copyright 2014 Accenture All rights reserved. 13

14 Cognitive Computing From Augmentation to Automation Intelligent and self-learning computers will become trusted expert advisors, augmenting complex decisions and operating autonomously under human supervision What exactly is Cognitive Computing? Accenture defines Cognitive Computing as a combination of multiple technologies that enable computers to: Perceive the world (e.g. computer vision, audio processing or sensor processing) Analyze and understand the collected information (e.g. natural language or knowledge representation) Make informed decisions and take action (e.g. inference engines, machine learning or expert systems) Copyright 2014 Accenture All rights reserved. 14

15 Cognitive Computing Use and Benefits for Procurement Accenture research indicates that in the next five to seven years, an organization s routine, manual work will become increasingly handled by intelligent virtual agents Potential target activities for Virtual Agents within the Requisition-to-Pay cycle: Setting up and conducting requests for proposals Finding relevant suppliers Evaluating suppliers performance Creating cost models and industry cost curves Analytics and advanced modeling Compliance Order fulfillment, report generation, reporting and catalog maintenance Logistics, picking and packing Benefits for Procurement Cost savings through automation Increased quality, consistency and compliance Augmenting faster and better decision making Copyright 2014 Accenture All rights reserved. 15

16 Conclusion Future of Procurement A new digitally driven, strategically focused procurement organization The future will give rise to a Procurement organization of one, collaborating closely with Virtually Integrated Enterprise Business Stakeholders Embedded Procurement Teams and supported by 4 key digital technologies Cloud Computing Analytics Industrial Internet of Things Cognitive Computing Copyright 2014 Accenture All rights reserved. 16

17 About the Research The research was designed to understand the business and procurement trends that would substantially affect procurement organizations globally in the next five to seven years. We conducted a total of 52 one-hour, one-to-one interviews during which we tested several research hypotheses. Interviews were conducted with executives across a variety of industries and geographies. The majority of executives represent large global multinational organizations with revenues of up to $130 billion. Research insights represent the views of current chief procurement officers, chief supply chain officers, chief financial officers, chief technology officers, a chief executive officer and a chief strategy officer, as well as other senior-level executives in procurement and supply chain. We also spoke with senior executive-level digital and technology experts. Copyright 2015 Accenture. All rights reserved. 17