Reimagine Business for the Digital Economy How the Digital ... · 26/07/2016 · How the Digital Economy will change Procurement, ... How the Digital Economy will change Procurement,

Reimagine Business for the Digital Economy

How the Digital Economy will change Procurement,

Finance and Shared Services

Dr. Marcell Vollmer, COO SAP Ariba

SAP Forum Hong Kong

How the Digital Economy will change Procurement, Finance and Shared Services

…and how SAP Ariba will provide an answer to the transformation needs

Dr. Marcell Vollmer

SVP and Chief Operating Officer July 26, 2016

Agenda

• Disruptive Trends in Technology

• Trends for Procurement & Source-to-Pay

• SAP Digital Core and Innovations

• SAP runs Cloud

Disruptive Trends

in Technology

Things havechanged.

Services mash-up

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 9

Today, four trends are dramatically reshaping the economy

Cloud Computing

Technology infrastructure is now rented to

eliminate barriers to entry. Project timelines

are dramatically shortened, and customer

relationships are becoming increasingly direct.

Big Data

The limits of 20th century computing power are gone.

Networking and in-memory computing allow for the

creation of new business opportunities previously

unimaginable.

Industry 4.0

Sensors, robotics, 3D printing, and artificial

intelligence are the new normal, driving an

outcome-based economy.

Hyper-connectivity

Every supplier, consumer and machine is

connected, disrupting established business

channels, processes, and relationships.

Networks

Trends for Procurement &

Source-to-Pay

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 11© 2016 SAP SE or an SAP affiliate company. All rights reserved. 11

Mega Trends and Innovations Impacting the

Procurement Function of the Future

Industry 4.0

Internet of Things

Digital

Business

To

da

y

Business Value of

Procurement

Tasks are

operative,

tactical and

strategic

Key KPI:

Savings

Paper based

POs / Goods

Receipt and

Invoices

Scanning

Sequential

Processing of

purchase

requisitions and

POs

To

mo

rro

w

Business value –

‘Value Creation

Officer’

Supplier

innovations

Supplier Risk &

Performance

3 D

PrintingWarehouse

ordering

automation

Lights out shared

services with end-to-

end automation

Spot buy integration

in catalogs

Networks &

Marketplaces

B2C

B2B

connected

commerce


Procurement of the Future and Impact of Mega Trends

Digitalization will change Procurement Organization, Processes,

Systems and require new skills for Buyers

Study Fraunhofer Institue and BME from 2016

Digitalization

In Procurement

1Business Value

5Digital

Sourcing

2Organization

4Big Data

3Supplier

Collaboration

6Networks &

Marketplaces

x


TRAVELConcur

LABORSAP Fieldglass

SUPPLYCHAINSAP Ariba

HEALTHCARE

BUSINESS

FINANCIAL SERVICES

SAP’s Networks for Business simplify business collaboration


SAP Digital Core and

Innovations

16© 2016 SAP SE or an SAP affiliate company. All rights reserved.

SAP Ariba in the SAP Context

Open platform, Integration to SAP and Non SAP SolutionsB

UY

ER

SS

EL

LE

RS

Fulfill SettleSell

SP

EN

D C

AT

EG

OR

IES

Customer Management

Direct and Supply Chain

Indirect and MRO

Labor and Services

Travel

Procure SettleSource

Supplier Management

Network

Digital Core

Customer

Workforce

Assets

Enablement

& Internetof Things

ExperienceOmnichannel

SupplierCollaboration

Business Networks

SAP S/4HANA Platform


#MakeProcurementAwesome


Source-to-Pay Application Suite Roadmap

Discover Connect Collaborate

Ariba Network

BUY SELL

MANAGECASH

Direct Material

Sourcing

Supplier Risk

Management

Supplier

Management 2.0

Total User

Experience

Spot Buy Seller

Direct

Guided Buying

External Data

Providers Open

API

Glo

baliz

ation A

naly

tics

IntegrationPlatform

Invoice Pro

2.0

Demand

Aggregation

Total Landed

Cost


One place to buy goods and services

Smart guidance to direct users to the right items, preferred suppliers, and the compliant policies

Configurable policies to guide users to the right business process

Preferred supplier list integrated into the buying experience

User feedback on suppliers and items integrated into the buying process

Recommendation engine to achieve 3-bids and a buy based on business policies

In-context collaboration between users, procurement experts, and suppliers

Empowerment of spend owners/departments to manage their policies, suppliers and drive compliance

Same user experience on all devices


Key 2016 innovation: Guided Buying


Key 2016 innovation

Direct Material Sourcing and Contracts

Supporting multi-level BOM’s, Product costing, Japanese Auctions

Advanced optimization options, Enhanced Material master and ERP integration, 360° Material/Part and Category Report, Pricing Conditions – Volume/Time Breaks, What-if Analysis,

Simplified Quoting Interface for Suppliers

Predictive Maintenance and Scan to Order

Automated ordering by IoT sensors indicating maintenance services

One click ordering by any device capable capturing pictures


Guided Invoicing

new UI, with guidance for exceptions and resolution handling

persona-specific flows (for tax manager, accounting and mass edit of invoices

Enhanced queue management

Demand Aggregation

With Ariba Sourcing integration

Service PO’s with SAP ERP integration

Real-time budget checks and reservations directly in SAP ERP

Advanced Analytics

Graphical online reports for in-depth analysis of key metrics & KPIs, to identify patterns, bottlenecks & trends over longer periods of time


Key 2016 innovation: Invoicing and Procure to Pay/Order


Supplier risk management challenges

Large number of suppliers

Out-of-date and duplicate vendor data

Fragmented vendor risk processes across organization

Multiple data sources for supplier risk data

Manual process for risk identification and assessment

No active monitoring of suppliers

Risk scores calculated manually for a handful of suppliers

Vision for handling supplier risk

Deliver a scalable solution that can help manage risk across supplier base:

Supplier self-service portal for managing parts of vendor information

Cloud solution tightly integrated with ERP vendor master

Extensible 360-degree supplier profile, with up-to-date risk insights

Monitoring risk on all suppliers automatically based on usage and external data

Supplier engagement based on shared accountability for risk

Policy and risk exposure-based risk assessment triggers

Key 2016 innovation: Supplier Risk Management


Key 2016 innovation: Mobile Supplier App


Today’s State

75Internally Digitized

100End-to-End

DigitalEnterprise

0Paper

and Pen

25Basic Digital

Records

50Ad hoc

Digitization

Desired State


13%More

Revenue

50%More

Profitable

19%Higher Market

Valuation

MIT Sloan Management Review and Deloitte’s 2015 Global Study of Digital Business

Organizations that rank high on digital maturity


SAP runs Cloud


SAP’s Procurement Function 2004 – 2011

SAP SRM 5.0 (with SRM Catalog) and SAP ERP 4.7Vendor Invoice Management


Evolution and Transformation of SAP’s Procurement Function 2012 - 2015

SAP SRM 7.02 integrated (only workflows in use) into SAP ERP on HANAVendor Invoice Management

2011 Upgrade SRM 7.02

2011 Global Categories and

Procurement SSC

2013 SAP Ariba

2014 SAP Fieldglass

2015 Concur

Global Categories for all Spend (approx. 4bn in 2015)

Spend Visibility | eSourcing & eAuctions | Contract Management

Supplier Management | Ariba Catalog & Spot Buy 2014ebay

Ariba Purchase Order & Invoice Automation | Discount Pro

Travel booking and reimbursement

Temp labor and SOW sourcing


Achievements

Streamline Entire Source-to-Pay Process Achievements: Facts & Figures

3 MonthsImplementation Time

>5,000Suppliers on ARIBA

Network

>400,000Documents transmitted

50%Increase in Automation

20%Productivity gain

10.6 FTEs by migration

25 FTEs by automation

>1.5bnPurchase Order

value sourced

Leverage economies of scale and control through shared

services

Cut costs through automated data extraction and process

automation

Create workforce efficiency through streamlined processes

including mobile approvals

Reduce errors at the source

Improve working capital management through better visibility

to cash requirements

Optimize cash discount utilization including dynamic

discounting

Source-to-Pay Automation, Business Networks and Shared Services


Key Takeaways on Transforming Procurement

Transform Organization to fit future needs

Develop people and manage change

Implement end-to-end processes and cloud

systems to automate transactional processes

Leverage the power of

social, supplier, and business networks

to get innovations and to deliver solutions

to the lines of businesses

Transform

to Run Simple

Get Linked

to Stay Relevant


Thank you

Dr. Marcell Vollmer

SVP and Chief Operating Officer