Driving End-to-End Procurement Excellence with Integrating SAP and Ariba (Customer Session)
1 like1,879 views
The document discusses the transformation of procurement towards enabling business value through integrated and automated processes using technologies like the Ariba Network. Key trends include focusing on supplier innovations rather than price reductions, leveraging cloud networks for spend consolidation, and utilizing predictive analytics for improved decision-making. Achievements highlighted include significant increases in automation, productivity, and cost reductions across procurement functions.
Driving End-to-End Procurement Excellence with Integrating SAP and Ariba (Customer Session)
- 1. #AribaLIVE @ariba Driving End-to-End Procurement Excellence with Integrating SAP and Ariba Martin Vajdl Managing Director SAP BSCE Head of Procurement Solutions Excellence SAP SE © 2015 Ariba – an SAP company. All rights reserved.
- 2. #AribaLIVE @ariba Business Landscape Transformation 2020 Business landscape is increasingly digital, networked and complex 1 ScienceDaily. ScienceDaily, 22 May 2013 2 Technology Adoption Report: Business Networks, Ardent Partners, 2014 3 Internet of Things (IoT) 2013 to 2020 Market Analysis: Billions of Things, Trillions of Dollars, IDC, 2013 4 Statista, 2014 © 2015 Ariba – an SAP company. All rights reserved.2
- 3. #AribaLIVE @ariba Future Trends for Procurement 2020 Three Trends in the Market – From Service to Function Value Creation for Supporting Business Functions – Procurement as Business Value Enabler Value creation is more important than procurement savings, which are not hitting the bottom line. Focus on implementing new innovations to deliver business value and drive transition to source services instead of goods. 1 2 3 Leveraging Shared Services Concepts – Sourcing Factory Intelligent managed service concepts to discover untapped spend (like for small countries) and to increase compliance. Networked Economy – Business Networks to Revolutionize Sourcing for Procurement Use cloud networks to link various platforms and consolidate spend while achieving real-time collaboration. Enable the function to harness the power of predictive analytics to be first to get competitive market insights and drive better business decisions. Leverage network and analytics to improve working capital and reduce transactional costs by end-to-end process automation. © 2015 Ariba – an SAP company. All rights reserved.3
- 4. #AribaLIVE @ariba Supplier innovations are essential for the transition and to optimize spend • Price reductions are becoming extinct making supplier innovations and support for the R&D function key to create real value • If you hit the bottom line of the production costs, you simply cannot further reduce the price Example Supplier-driven innovation Streamline the organization and automate operational tasks freeing resources for the LOB • Understand the business, drive business from aggregation to execution for all sourcing events • Buyers will have a new role as an invested advisor with a shifted focus to purchasing services Example It’s not the coating, but the ready painted car Run Simple Drive Innovations Future Trends for Procurement 2020 Transition of Procurement to Business Value Enabling – Company Examples © 2015 Ariba – an SAP company. All rights reserved.4
- 5. #AribaLIVE @ariba Transition to fully integrated and automated purchase-order to invoice process will be a must in the future to reduce transactional costs and free up resources to focus on value adding activities in the end-to-end process. The social media capabilities of -like shopping market place End-to-end automation for all transactions Ariba Network will be THE B2B Network of the future Ariba Network Combines 11% Travel & Other Services 28% Contingent Labor & SOW 27% Direct & Logistics 11%Capex 23% Indirect What is next for the Future of Procurement? Procurement is in a Transformation from Service to Function 5
- 6. #AribaLIVE @ariba Ariba Network provides benefits for both CPO – to leverage purchasing power and reduce transactional costs CFO – to reduce transactional costs by invoice automation Automation Increase in invoice automation within short timeframe SAP: +50% in 12 months Productivity Increase in overall productivity for procurement SAP: +20% in 18 months Invoicing Reduction in procurement costs using cloud solutions from Ariba, an SAP company, and the Ariba Network (from €11.5 to €6.7 per invoice) Example: SAP CFO ValueCPO Value Spend Will be leveraged to a high extend to realize additional savings (Margin impact) PO Increase in overall productivity for procurement to automate purchase orders 100% Compliance and capturing of all information / knowledge on the Ariba Network Ariba Cloud for Goods Fieldglass for Services Concur for Travel Transaction automation on the combined network of Ariba, Fieldglass and Concur Evolution of Procurement towards a Strategic Function CPO and CFO Value Proposition on Ariba Network & Catalog of Catalogs
- 7. #AribaLIVE @ariba Problem: Strategic spend is managed by global categories or on regional level with strategic and/or preferred suppliers. Tail spend and spend for small countries (tier 3 countries) are not or partly managed which leads to missed savings opportunity and non-compliance risk. Solution: Sourcing Factory model is an answer to better manage not globally/regionally covered spend. Sourcing on Business Networks or based on global supply database to ensure fast and compliant processing of non-strategic spend. Intelligent managed organizational concepts are required to manage untapped spend areas or serve very small countries in a compliant way. A sourcing factory model – captive or as managed (outsourced) service – will expand the reach of procurement organizations in the future. Sourcing Factory Leverage Organizational Capabilities 1 2 3 Remaining spend Low-value spend for which clear buying channels still to be defined Tail spend Global managed spend Significant spend per supplier that is currently managed Spot buying spend One-off requests with no current Procurement involvement, but opportunity to establish a bidding process Totalspend (bysupplier) Managed spend Sourcing factory scope Business Networks © 2015 Ariba – an SAP company. All rights reserved.7
- 8. #AribaLIVE @ariba Process & Systems Overview: Hybrid Model Source-to-Pay Process and Systems: On-premise and cloud-based solutions for upstream and downstream processes Ariba for Goods, Fieldglass for Services and Concur for Travel to-Pay Accounts Payable and Travel & Expenses Source-to-Purchase Strategic and Tactical Procurement Purchase- Operational Procurement Processes & Systems E2E P2P & Cloud Systems, Networks, Mobile Organization & People Globalization Category Managements SAP SRM & SAP ERP on HANA © 2015 Ariba – an SAP company. All rights reserved.8
- 9. #AribaLIVE @ariba Achievements Transformation Global Procurement@SAP Source-to-Pay Automation, Business Networks and Shared Services Streamline entire Source-to-Pay Process 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 Achievements: Facts & Figures 3 months implementation time >4,000 suppliers on Ariba Network 140,000 invoices transmitted 50% increase in automation 20% productivity gain >1.0bn Purchase Order value sourced © 2015 Ariba – an SAP company. All rights reserved.9
- 10. #AribaLIVE @ariba RUN BETTER WITH Many Thanks and Q&As © 2015 Ariba – an SAP company. All rights reserved.10