Digitization of source-to-contract · Merger Acquisition 2017 . 12,70 12,70 12,70 12,70 5,70 7,70...
Transcript of Digitization of source-to-contract · Merger Acquisition 2017 . 12,70 12,70 12,70 12,70 5,70 7,70...
A member of
A presentation for
Frankfurt, April 26th 2018
Digitization of source-to-contract
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Agenda for today
02 Digitization of plan-
to-strategy
01 From trends to
features to vendors
03 Digitization of
source-to-contract
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Use case driven digitization
Pain point driven digitization
Data and system architecture
Procurement digital transformation … building blocks and key requirements
Future digital eco-system
Automation Advanced analytics
“end-to-end”
“in-context collaboration”
“mobile first”
“user centricity - CUX”
“One task, one system”
“single point of truth”
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Beyond solving your Procurement core, AI pushes Procurement to another level
S2C P2P SLM
Procurement AI analytics
Procurement smart robotics
“less admin”, efficiency
“get insights”; effectiveness
BI
Advanced analytics
Machine learning Deep learning
Internal & external information
RPA
Procurement core
Text/ process mining
Patterns
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Technology impact
The technologies have a high impact across the procurement process landscape,
highest impact on purchase-to-pay
RPA
Workflow management
NLP (chat bots)
Data mining/ pattern recog.
Machine learning
BI/ analytics
Technology
High Impact Low impact no impact
Specification = Abstimmung mit cross-Funktionen Kosten-
Lastenheft-Abstimmung
Tender = Abstimmungsschleifen mit Lieferanten
Strategy Planning Tender Payment
Plan-to-Strategy Source-to-Contract Purchase-to-Pay
Analysis Specifi-cation
Awarding & contract
PR/PO
Au
tom
ati
on
A
I B
I
Use case: Clause check
Use case: Award planning
Use case: 360 supplier view
Use case: Automated eRfx
Out of scope today
Use case: guided contracting
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Eco-system
Procurement digitization needs a framework to discuss pain points, white
spots & best-of-breed market opportunities
Source-to-contract (tactical) Purchase-to-pay (operational)
eRfx Contract lifecycle mgmt.
PR/PO eAuction eCatalog/ eMarket-
place
2-/3-way check
payment
Supplier lifecycle management
Supplier portal
Spend Cube
Supplier evaluation
& risk
Supplier master
data
Application architecture
Data architecture
Reporting & analytics
Initiative mgmt.
BI = Business intelligence
Self-service BI
UX/ CUX Launch pad
Integration layer
BW Data lake
Cloud
BI (KPIs)
Plan-to-strategy
Best-of-breed
Core
Analytics
Proejct mgmt.
Core
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The vendor market in 2017 experiences a huge number of mergers and
acquisitions
July
January June
December
May April March February
November October September August
Merger Acquisition
2017
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Agenda for today
02 Digitization of plan-
to-strategy
01 From trends to
features to vendors
03 Digitization of
source-to-contract
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Overview
Plan-to-strategy – what is it all about?
Plan-to-strategy (category management)
Process
Personas
Requestor Category
manager
Business
impact
Demand (internal) analysis
Market (external) analysis
Lever analysis
Strategy development
Action planning & tracking
Supply security
Innovation
Working capital optimi-zation
Purchase cost
reduction
Technology,
Quality
Sales Logistics/
SCM
Low impact High impact No impact
Process cost
reduction
Angepasst AB
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Plan-to-strategy: current industry pain points and use cases
Pain points
Selected use cases
Core P2S solution – guided
category strategy (analysis,
strategy, action plan)
Trend radar/ category
intelligence monitioring
360° lever analysis,
dynamic suggestion of
applicable levers
Category master data
cleansing
Spend analysis &
forecasting (MUST)
Dynamic sourcing calendar
(based on CLM and PLM
data)
Purchasing planning tool
(internal demand/ external
supply)
Prescriptive strategy
recommendations
Pain points & use cases
Demand (internal) analysis
Market (external) analysis
Lever analysis
Strategy development
Action planning
& tracking
Best-of-breed
Suite/ best-of-breed
Idea stage
Best-of-breed
Only existing
suppliers and Google
search
No/ limited
transparency on running
cost reduction initiatives
Limited data
available, only
retrospective
Prototype
Suite/ best-of-breed
OUTLOOK
Same levers over
and over again
Partly, done once
in a while, not
harmonized
Decisions on PPTs not
reflected in P2P system
Done partly/
only per Email
and in Excel
Manual
analysis
No link to SLM
data
No access to
CRM solution
Supplier KPIs not
automatically,
manual analysis
WHITE SPOT
Pre SOP
ramp-up
mgmt. missing
SLM = Supplier Lifecycle Management, CLM = Contract Lifecycle Management, PLM = Product Lifecycle Management, SOP = Start of production
Basics
Überarbeitet AB
Catalog/ configurator
readiness
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Agenda for today
02 Digitization of plan-
to-strategy
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03 Digitization of
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Overview
Source-to-contract – what is it all about?
Source-to-contract
Requester Strategic
Buyer
Approver Legal &
Compliance
Supplier
Specification management
Bidders list E-auctions, negotiations
Tender/ RfX Awarding decision,
contracting
Supply security &
risk reduction
Inno-vation
Working capital optimi-zation
Purchase cost
reduction
Process
Business
impact
Personas
Low impact High impact no impact
Process cost
reduction
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Source-to-contract: current industry pain points and use cases
Pain points
Selected use cases
Rfx template (generation)
Automated Rfx (free text
requisitions)
Committee mgmt. Awarding simulation/
combinatorial awarding
Software for behavioral
negotiation
Core S2C solution (MUST) 360 supplier view
Pain points & use cases
Specification management
Bidders list
Tender/ RfX
E-auctions, negotiations
Awarding decision,
contracting
Suite/ best-of-breed
Suites/ best-of-breed
Prototype
Suites/ best-of-breed
Prototype
Suite standard Best-of-breed
Bill of material not
digital, only in Excel
High effort to create
and align tenders
with internal
functions
Bidders list not
linked to up-to-
date KPI (SLM)
Negotiations not well
prepared due to lack of
data and time
Only simple offer
comparison possible
overreliance on price
Emails and calls
instead of online
workflow/ approvals
Integrated sourcing plan &
award planning solution
Suites/ best-of-breed
No visibility on
suppliers
negotiation tactic
Little visibility of
new suppliers
High manual effort in
getting current
suppliers` situation
(financial, operation)
Überarbeitet AB
Basics
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Overview
Contract lifecycle management – what is it all about?
Contract Lifecycle Management
Process
Personas
Requestor Strategic
Buyer
Business
impact
Draft contract Negotiate &
approve Archive
Manage compliance
Renew/ terminate
Supply security
Working capital optimi-zation
Purchase cost
reduction
Sales
Low impact High impact No impact
Process cost
reduction
Approver Legal &
Compliance
Supplier
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Contract lifecycle management: current industry pain points and use cases
Pain points
Selected use cases
Contract repository with
role-based dashboards,
advanced search, alerts
(MUST)
Integration in purchase-to-
pay process to track
compliance
Collaborative authoring and
approval workflow, incl. MS
word plug-in
E-signature
Guided contracting -
contract templates and
clause library integrated in
S2C process/ lifecycle
AI-driven clause checks
RPA to copy legacy
contracts from different
repositories to target
repository
Blockchain / smart contracts
Pain points & use cases
Draft contract
Negotiate & approve
Archive
Manage compliance
Renew/ terminate
Suite standard
Suite standard
Best-of-Breed
Custom development
Email, Paper based
workflows, limited
oversight on status
No visibility of
which clause is in which
contract (in case of
regulations change)
No audit trail
Suite standard
Best-of-Breed / suite
Prototype
No company wide
contract search
Negotiated terms not
applied in P2P process
(e.g. discounts)
De-central storage of
contracts
“black box” of which
contracts are due for
renewal
Lack of standards
and controls Long cycle
times
No version
management
Suite standard
SLM = Supplier Lifecycle Management, CLM = Contract Lifecycle Management, PLM = Product Lifecycle Management, SOP = Start of production
Missing link
between MSA and
sub agreements
Regulatory compliance
issues due to missing/
outdated contract terms
Multiple owners
Überarbeitet AB
Basics
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>10 years Procurement
consulting
Head of the h&z Procurement
Practice
Expert for Procurement
digitization
Dr. Alexander Batran
Procurement 4.0
A survival guide
in a digital,
disruptive world