Why do you need enhanced Procurement Technology?

Transcription

1 Why do you need enhanced Procurement Technology? 3D

2 Why do you need enhanced Procurement Technology? Procurement Technology provides the background functionality to support a company s entire source to pay process, primarily focusing on the Source-to-Contract (Strategic) through Procure-to- Pay (Tactical) process elements. A best in class S2P process includes a defined technology strategy that aligns procurement needs with the overall strategy of the business. Historically, companies have adopted fragmented technology strategies that often include multiple systems and tools. Today, there is a heightened focus on maximizing potential functionality within a more strategic subset of tools to reduce internal complexity and leverage economies of scale. People and the internet Computing, Communications and storage everywhere The internet of things Artificial intelligence and big data The sharing economy and distributed trust Procurement function will have to set a consistent path to using digital technologies and methods. Transform your ability to make better, faster sourcing decisions and intelligently manage, negotiate and buy from your suppliers. Technology speeds up the end to end strategic sourcing process, helps access to wider pool of suppliers, and provides transparency of information inside and outside of an organisation. Analytics can help procurement offer more to the business strategically, consolidate and connect all forms of supplier data across an organisation. P2P Technologies enhance collaboration with vendors, reduce cost, and increase staff productivity. 3D The digitization of matter 2 PwC

3 Example Savings Area Sample Category Typical % Savings Indirect Products & Services Direct Products Professional Services 8-10% Professional Services 7-9% IT Equipment 15-20% Transportation 10-15% Travel 12-15% Sales & Marketing 5-7% Office Supplies & Paper 18-20% Mobile Telecom 10-15% Temporary Staff 13-15% Chemicals & Compounds 2-4% Fabrication Materials 5-10% Food Products 10% Fuel 1% Metals 10% Procurement Technology is the key enabler to improving performance. New systems improve performance through having intuitive user experience and automating non value-added work. On the other hand, near real time access to data will improve supplier analysis enabling better management of suppliers. Adopting a single solution extensively can enhance process security and compliance rates across different territories. Cost of failure risk is another concern where current systems are out of date and inefficient. A fragmented landscape increases the risk of failed processes presenting a major operational risk. Enhanced Automation Improved Transparency Excellent User Experience Integrated Processes and Consolidated Systems Accurate and Up-to- Date Data Better use of ERP Systems Why do you need enhanced Procurement Technology? 3

4 Procurement Technology addresses many challenges Accessing reliable spend data is only one of the challenges in addition to managing contracts, enabling your employees to be cost effective, ensuring cost savings are achieved, reducing risk, and enhancing control. Procurement Technology enables optimal Procurement operating model to meet business objectives. Understanding the levels of complexity within the range of source to pay tools will enable stronger focus on the solutions that make sense for particular business needs Configured optimally in your system architecture, data and information can drive fast, accurate processes and enhance business insights. Core functionalities such as P2P are embedded in the companies digital environment next to their on premise core ERP. Many organisations are looking beyond P2P at S2P solutions encompassing elements such as e-procurement, e-invoicing, AP automation. 90% + of new procurement solution implementations are cloud based, considering the benefits around agility, upgrades, collaboration and innovation. The User experience is no longer a nice to have in the digital age. Integrating sourcing, contracting and ordering into a single interface for buyers and suppliers to interact adds a significant amount of value for all parties. Deployment considerations Every company has to decide whether to base their technology structure within their own firewall or on the cloud; SaaS / cloud solutions are quickly gaining traction in the market due to quicker implementations and improving security capabilities. There are many industry sector specific systems (e.g., ERP, EAM, POS, WMS) that will have unique requirements in order to integrate with an S2P solution. S2P technology sits at the center of a company s technology architecture and can be the super connector between operations and financials. Considering a hybrid solution may be most cost-effective and have a quicker ROI, faster implementation, best-in-breed capabilities and higher usability. There is no one size fits all in developing and implementing an optimal technology program. Organizations needs to be willing to consider hybrid approaches in order to realize the full scope of savings and process benefit opportunities. 4 PwC

5 Procurement function will have to set a consistent path to using digital technologies & methods in the transformation. Procurement enabling technologies and potential prioritization Impact Bets for the future Must Have Very High Supply base management E-invoicing Strategic sourcing suites Data Science P2P for indirect spending Spend analysis Sourcing Optimization Data analytics for suppliers Consider Service Procurement Solutions Contract life cycle mgmt. e-signatures High Source-to-pay BPO Multiple-workstream solutions Procurement networks Parts & materials search and selection Single workstream solutions Wait & See Social procurement apps Third-party risk mgmt. Procurement e-catalog mgmt. solutions Sustainable procurement Mobile procurement apps Services e-proc outsourced services personnel tracking Medium Source-to-settle solutions Supplier quality mgmt. apps Services e-proc: vendor mgmt. systems Info exchanges and global data synch. Indirect procurement BPO Supplier portals Low Medium High Maturity Source: Gartner, Strategy& analysis Technology / Method Selection There will be a need to identify the most relevant procurement digital technologies and methods With the growing cost imperative on procurement, prioritization of digital initiative is critical to deliver value Prioritization should also factor current digital capabilities to focus on delivering benefits in the near term Why do you need enhanced Procurement Technology? 5

6 Case Studies Case Study 1 A large industrial products company implemented sourcing process two years earlier but leaders were not seeing the benefits. Regulation can limit the company s sources of supply. Few spend reports were utilized which hindered the ability to make key decisions. The client outsourced indirect sourcing without a clear plan to manage the outsourcer and realized benefits. PwC identified several opportunities to improve processes and systems, leveraging PwC procurement framework. Standard system reports were not being used to manage the process and show the benefit just spend savings. PwC also identified where text based requisitions, no item used, could be eliminated and leverage the system s procurement content module. Advised both IT and the business on how to leverage their system s configuration to provide additional governance and controls. PwC s scorecard identified several areas to be explored including the material master (reduce text based requisitions) and contract integration (creating a catalog from the contract content) to increase contract compliance. Additionally, PwC identified KPIs for the sourcing and contracting process to be reported from the system to minimize the time to begin contracting in a category and moving supplier data into the contract template. Finally, PwC helped the company develop category and contract meta data that considered more than expiring contracts. Case Study 2 The Procurement team at a large media company oversees both the technology and business processes surrounding Procurement for 85 separate business units, each operating as independent entities. The current procurement system was hindering productivity and increasing training & customer support costs, the front-line departments that were spending money, and Accounts Payable (AP). The Procurement team was looking for an intuitive and streamlined Procurement platform to enable the future state. PwC led the client in Procurement automation design, toolset selection and integration. PwC worked collaboratively as a partner with the system integrator team to implement a cloud technology platform to support the rationalized Procurement processes. In addition to business process rationalization and global template design, PwC helped the company with security and risk management, tax design, master data management, system process integration. Value was created through technology implementation of rationalized business processes and the back end ERP system was seamlessly integrated with the Procurement processes. 6 PwC

7 How PwC can help? Deep understanding of how Technology impact on people, process and data across an organisation Appreciation of the complexities within Technology landscapes and the impacts of change Use of global network to bring specialist knowledge on ERP solution implementation and refresh In depth knowledge in Source to Pay, Contract Management and Supplier Management Insight into how investment in Technology ensures that Procurement can meet the needs of its customers Extensive experience in requirements gathering, process design and business case development Our Approach Assisting our clients from strategy through execution Understanding current operating models and the transformation journey Applying our extensive global procurement experience across all sectors Combining procurement, finance, digital and technology experience Understanding the impact of change on different stakeholders Discovery Design Develop Deploy Why do you need enhanced Procurement Technology? 7

8 Contact us to discuss further: Ayşegül Tüfekçioğlu, Director Dr. İsmail Karakış, Senior Manager PwC Turkey 2017 PwC Turkey. All rights reserved. In this document, «PwC» refers to PwC Turkey, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. «PwC Turkey» refers to PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş., PwC Yeminli Mali Müşavirlik A.Ş. and PwC Danışmanlık Hizmetleri A.Ş. which are separate legal entities incorporated in Turkey within the PwC Turkey organisation