Future-Proof Procurement - A Digital Journey

Transcription

1 Future-Proof Procurement - A Digital Journey Edward van Kuijk, Vodafone Procurement Company John Tros, Partner, Consulting, KPMG NL Michael Pleuger, Partner, Consulting, KPMG Germany

2 Introduction 2

3 KPMG Thought Leadership Future Proof Procurement Total foresight Visionary scenarios Opportunities Principles of future-proofing First extensive future studies with long-term scenarios and wild cards. Four scenarios for procurement based on out-of-the-box thinking. Identification of short-term to longterm opportunities for procurement. Checklist with ten principles included in the study KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss legal entity. All rights reserved 3

4 Scenarios 2035 Plus Overview of potential scenarios for procurement Age of algorithms Scenario I: R.I.P. Procurement Scenario II: Primacy of Procurement Era of decentralism Scenario III: World of Project Economy Scenario IV: The Creative Agency Primacy of centralism Age of human centricity 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss legal entity. All rights reserved 4

5 Scenarios 2035 Plus R.I.P. Procurement Scenario I: Era of decentralism Traditional procurement department gradually self-destructed Algorithms replace humans (e.g., office jobs) The only jobs left are either elitist top management or system supervisors We live in a machine-operated world with decentralized fab-shops Remaining procurement activities are strategic but procurement is not in the driver seat any more Focus lies on strategic partnerships and system stability, not cost reduction Primacy of centralism Age of human centricity 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss legal entity. All rights reserved 5

6 Scenarios 2035 Plus Primacy of procurement Scenario II: Era of decentralism Age of quantified enterprise (Humans/ robots = democracy) Value chain data converges in procurement data sovereignty and internal knowledge lead Supplier audits, workshops, etc. in the virtual worlds Era of SC / cloud integrators From CPO to CEO procurement makes leaders Re-industrialization: Procurement selects, connects, manages virtual factories Focus on cost savings and data insights Primacy of centralism Age of human centricity 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss legal entity. All rights reserved 6

7 Scenarios 2035 Plus World of project economy Age of algorithms Scenario III: Era of decentralism Procurement department dissolved and replaced by fluid structures Freelance work, entrepreneurship boom, project economy Social media is the key platform for clickworkers, e.g. freelance category management Production follows local for local, frugal engineering is key Operating costs for (professional) services drastically increased compared to material costs Focus lies on personnel costs, savings, negotiations Primacy of centralism 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss legal entity. All rights reserved 7

8 Scenarios 2035 Plus The creative agency Age of algorithms Scenario IV: Era of decentralism From knowledge to human economy boom of creative class Procurement develops into agency for creativity new business and finance models, research and trend management Innovation, individualism, service orientation Strong integration of living & working environment Shareconomy: less production, but high durability Technology supports, but Shy-tech -only Employee retention and IP security are key Primacy of centralism 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss legal entity. All rights reserved 8

9 The Challenge 9

10 The Challenge Starting Point Value Sourcing Excellence Global Procurement SCM 5.0 (IoT) Capability Spend Analytics Buy Sell Model To be determined Category Management 3rd Party Services Supplier Management Contract Management esourcing, B2B, etc. 10

11 The Challenge Digital Procurement? IoT? 11

12 The Challenge Like this? 12

13 The Challenge Like this? 13

14 The Challenge Future-proof procurement thought leadership R.I.P. procurement Age of algorithms Primacy of procurement Era of decentralism World of project economy The creative agency Primacy of centralism Age of human centricity 14

15 The Challenge Insight All the experts, are experts in what was. There are no experts in what will be. David Ben-Gurion Israel s First Prime Minister For us to become experts in the Internet of Things (IoT), vision, leadership and collaboration must replace experience. 15

16 The Approach 16

17 The Approach Case study Design thinking workshop in the spirit of vision, leadership and collaboration replacing experience HEUREKA! R.I.P. Procurement Pay-by-Output Predictive Maintenance Heiko von der Gracht Mike Phillips Erich Barnstedt 17

18 The Approach Business modelling Break Out Sessions Customers and markets Clients Telco OpCos Partner Markets 3rd party Customers Revenue Model Revenue Model Performance based Transfer fees from clients Value chain Value proposition Leverage scale and scope Realise savings Drive compliance Drive continuity of supply Drive harmonisation Product Categories IT Networks Services Terminals Category Management Supplier relationship Management Operation management Risk management Customer operations Enablers 18

19 The Approach Results 19

20 The Approach High level target picture design Corporate capability cycles Value Future Vision SCM 5.0 Workshop results Connectivity to capability & Transparency Access to VPC services and value proposition Transition into information broker Social Network / Relationship management as key human function Current state Procurement via customer analytics Collaborative Workflow Skills to systems Central market place for TelCo products Interested Cloud Consumer data analytics for service design Innovation broker driving co-innovation Orchestration of highly fragmented strategic sourcing process Smart Customer Network for retention & signals Strategic procurement automation (e.g. IBM Watson and D&A) for optimized human IT capabilities interplay Scenario planning and strategic sourcing services for 3 rd clients Capability Excellence Globalization Digitalisation 20

21 The Approach Technology Scouting & Validation Workshop 21

22 The Approach Minimum viable product lean start up Key challenge: Initiate a digital procurement platform by connecting the people network with value driving applications. How to manage access and knowledge leverage on the platform? VPC Digital Platform Value Chain Strategy Change Planning Sourcing Supplier Management Demand Management Delivery Applications Co-Innovation Network Value Current state Customers Expert Network Suppliers Future State Virtual Integration process automation Cognitive systems Failing forward attitude and approach Digitally enabled procurement managers Capability Excellence Globalization Digitalisation 22

23 The Result 23

24 The Result The Procurement Platform captures all relevant data and combines artificial with network intelligence in an integrated system leveraging insights for value creation. Procurement Strategy Category Strategy Source to Contract Purchase to Pay Supplier Management Insight >>> Alignment >>> Collaboration >>> Approval >>> Action I. ANALYSE II. DEVELOP III. FINALIZE CONTRACT I.1. SPEND ANALYTICS I.3. CATEGORY INTELLIGENCE II.2 LEVER WORKSHOP III.5. AGREED ACTIONPLAN VPC VPC Webcrawler VPC VPC VPC Business School Opcos Partner Markets Third Parties Opcos Partner Markets Third Parties Supplier Opcos Partner Markets Third Supplier Parties Opcos Partner Markets Third Parties Opcos Partner Markets Third Parties Aggregated Auto-classified Aggregated Automated Learning Collaborative Virtual Workflow Roles & Reponsibilitue Process Controls Collaborative Integrated 24

25 Level 3 Process Level 2 Process Group The Approach Source to pay process decomposition: Type of opportunity for automation & robotics Sourcing & Contracting 1.0 Sourcing Strategy 1.1 Maintain Supplier Strategies (Legal, Risk, Tax) 1.2 Develop Procurement Plan 2.0 Supplier & Contract Management 2.1 Gather Market & Supplier Intelligence 2.2 Supplier Selection 3.0 Requisitioning 3.1 Process & Review Requisitions 3.2 Approve Requisitions Requisition & Procurement 4.0 Purchasing 4.1 Solicit/Track Supplier Quotes 4.2 Create/ Distribute Purchase Orders Receiving & Storage 5.0 Receive Order 5.1 Order Exception 5.2 Delivery Acceptance P-Card Administration 6.0 P-Card Administration 6.1 P-Card Set-up 6.2 P-Card Purchase Approval 7.0 Time & Reimbursable Expense Admin. 7.1 Employee T&E Set Up 7.2 Credit Card Administration Payment 8.0 Invoice Processing 8.1 Receive Invoices 8.2 Validate, Approve and Post Invoices Reporting 9.0 Reporting & Analysis 9.1 Spend Reporting & Analysis 9.2 SLA Reporting & Analysis Process Governance 10.0 Manage Process 10.1 Maintain Policies & Procedures 10.2 Manage Non- Invoice Inquiries 11.0 System Maintenance 11.1 Maintain System Interfaces 11.2 Perform Master Data Maintenance 1.3 Gather Supplier Requirements 2.3 Contract Negotiation & Management 5.3 Record Receipt of Goods 6.3 P-Card Reconciliation 7.3 T&E Report/System Admin 8.3 Manage Exceptions 9.3 Operations Reporting & Analysis 10.3 Perform Audit Activities 11.3 Perform System Updates 1.4 Match Needs to Supply Capability 2.4 Supplier Onboarding and Master Data Management 5.4 Research/ Resolve Exceptions 6.4 P-Card Vendor Payment 7.4 T&E Report Audit & Approval 8.4 Generate Payment File 9.4 Working Capital Reporting & Analysis 10.4 Develop & Maintain Internal Controls 1.5 Set Inventory Strategy 2.4 Create & Measure Supplier KPIs 5.5 Monitor Quality of product/ services 7.5 T&E Exceptions Follow up/resolution 8.5 Support Invoice Inquiries 9.5 Inventory Reporting & Analysis 10.5 Evaluate & Implement Improvement Opportunities 1.6 Analyze Company Spend Profile 2.4 Evaluate Supplier Performance 5.6 Support Inventory & Production Processes 7.6 T&E Payments 8.6 Close Accounts Payable 9.6 P-Card Reporting & Analysis 10.6 Retain Records Not Applicable Rule Based Automation Machine Learning Cognitive Learning 25

26 The Result Key attributes and value proposition Cognitive Automated Amazon-like Connected Social-media Mobile Strategy Become a leader in Digital Procurement strategy and enablers Effectiveness Improved business partner alignment resulting in higher compliance and purchasing power Efficiency Reduced effort in communication and administration will free up category manager time. 26

27 Contact Michael Pleuger Partner, Management Consulting KPMG in Germany Tel Mobile kpmg.com/operations The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a The KPMG name and logo are registered trademarks or trademarks of KPMG International. Document Classification: KPMG Confidential