Both Oxford Economics and Accenture recently completed compelling studies on the Future of Procurement – one surveyed 1000 executives and practitioners in the function (and they didn’t always agree!), and the other interviewed CPOs directly. You’ll get an insider’s peak at the preliminary findings of both studies, and leave inspired to talk more with colleagues about what you think the future—and present day—looks like for procurement.

1. Future of Procurement
Presented with Accenture
Munich, Germany
June 2015

2. Building on a strong foundation
 Outsourcing explodes
 Strategy scope widens
 Talent competition heats up
 Innovation comes from
without
 Suppliers gain power

3. Going boldly where no procurement study has gone before
 How have executives responded
to the trends outlined in Vision
2020 in the years since?
 What new challenges and
opportunities do executives and
practitioners consider most
important?
 Where are there gaps in
understanding between
executives and practitioners?

4. A global survey of executives and practitioners
In collaboration with SAP, Oxford Economics conducted a large-scale global study to
discover emerging and enduring trends in the procurement function. We surveyed 500
procurement executives and 500 procurement employees in the following countries:
Australia
Austria
Brazil
Canada
China
Denmark
Finland
France
Germany
India
Italy
Japan
Mexico
Netherlands
Spain
Switzerland
UK
US

5. 5Copyright © 2015 Accenture. All rights reserved.
About the Accenture Research
The research was designed to understand the business and procurement trends that would
substantially affect procurement organizations globally in the next five to seven years.
We conducted a total of 52 one-hour, one-to-one interviews during which we tested
several research hypotheses. Interviews were conducted with executives across a variety
of industries and geographies. The majority of executives represent large global
multinational organizations with revenues of up to $130 billion.
Research insights represent the views of current chief procurement officers, chief supply
chain officers, chief financial officers, chief technology officers, a chief executive officer and
a chief strategy officer, as well as other senior-level executives in procurement and supply
chain. We also spoke with senior executive-level digital and technology experts.

6. Key findings of the Oxford study
 From here to where? Changes in the procurement function drive sharply different views of what the
future will look like.
 Procurement gets collaborative. Executives and practitioners are spending more time collaborating
with other lines of business and external partners.
 Goodbye to business as usual. These new ways of working are forcing change on the way
procurement operates—and on the way success is measured.
 The technology agenda. Procurement today is focused on automation and collaboration though social
platforms and networks—but executives and practitioners do not see eye to eye on every issue.
 The human challenge. As the nature of work changes and technology advances faster than most
workers can keep up, attracting and recruiting the right workers is a challenge for the procurement
function.

7. From here to where?

8. 32%
33%
30%
32%
27%
35%
30%
38%
44%
26%
27%
28%
29%
32%
34%
35%
44%
46%
Geopolitical issues
Big Data
Regulation
Cloud computing
Talent/Skills shortages
Mobile technology
Business networks
Commodity pricing
Globalization
Executives Practitioners
Macro concerns still dominate
Which economic and
technology trends do
you expect to have
the most significant
impact on the
procurement function
over the next three
years?Choose top 3.

9. Procurement operates across functional boundaries
Procurement is becoming embedded in
other parts of the organization.
Procurement is playing a more strategic
role in the organization.
European executives say…
Agree /Strongly agree
64 55

10. Differing views on procurement’s future
Procurement will maintain its current structure while
becoming more strategic and absorbing other functions.
Procurement will consist of a smaller team performing
only core functions.
Procurement will maintain its current structure and level
of strategic influence.
Procurement will be completely absorbed into other
areas of the organization.
Choose 1.
Executives
40%
23%
25%
12%
Total
46%
26%
20%
8%
Europe
Practitioners
28%
21%
33%
17%
Total
34%
19%
29%
15%
Europe

11. Copyright © 2015 Accenture. All rights reserved. 11
The Procurement Organization of the future will be smaller
in size and heavier in impact

12. Copyright © 2015 Accenture. All rights reserved. 12
Embedded resources will wear the
same stripes as the business,
making a strategic impact by
working closely with product
development, R&D, or other
departments.
André Le Lerre, VP of Ericsson sees a
“thin front line” of procurement
professionals
embedded in the business, focused on
strategically differentiating activities.

13. Copyright © 2015 Accenture. All rights reserved. 13
Capabilities have to evolve to support the journey, new
solutions, and organization models are emerging

14. Procurement gets collaborative

15. Internal collaboration is a given
63%
of European executives say
procurement at their
company is becoming more
collaborative with other parts
of the business.
49%
of European executives say
procurement data is being
used strategically by other
parts of the business.
Agree /Strongly agree

16. Reaching beyond the firewall
On which of the following areas
would you like your organization to
be most focused today?
Global executives say…
Choose up to 3.
41%
38%
35% 35%
31% 30% 29%
26%
46%
34% 35%
42%
31%
37%
30% 30%
Working one-
on-one with
suppliers in a
strategic way
Managing
supply risk
Optimizing the
procure-to-pay
process
Implementing
and training on
new technology
Working on
sustainability
and CSR
initiatives
Conducting
category
management
and sourcing
Working with
lines of
business on
new initiatives
Analyzing
spend
Today In two years

17. The cost of collaboration is time
Thinking of a typical day at work, which of
the following activities take up the majority
of your time?
Practitioners say…
Choose up to 3.

18. Copyright © 2015 Accenture. All rights reserved. 18
Innovation will be the key benefit
driven out of collaboration with
the Virtually Integrated Enterprise
“We created a team with one of our
suppliers to develop a totally new
product that could solve some of the
problems and issues that our
customers had…This new product
was first on the market...”
Eva Andrén
Vice President & Head of
Group Sourcing, Ericsson

19. Copyright © 2015 Accenture. All rights reserved. 19
Strategic Harmony
 Ensure tight alignment between buyer and seller strategies, business plans,
goals and targets through strong formal governance, joint metrics, appropriate
contractual components and supplier incentives that include profit sharing.
Transparency
through Technology
 Use technology as a driver of complete transparency in order to foster trust
and enable a seamless flow of innovation ideas across company and supplier.
Cohesive Talent
Planning
 Companies and strategic suppliers need to consider conducting joint recruiting
and job rotation across companies in order to ensure the quality of talent.
Motivated Alliance
Manager
 Install an ‘alliance manager’, i.e. a senior executive within the company
responsible for building and nurturing the relationship with each
strategic supplier.
Staying Sharp in the
Supplier Ecosystem
 Keeping the supplier ecosystem robust and sharp through ongoing
supplier scouting.
In order to create a virtually integrated enterprise, the
following five prerequisites need to be in place

20. Goodbye to business as usual

21. It’s all about relationships
To what extent
are the
following
trends
affecting the
way your
procurement
function
operates?
To quite an extent/To a great extent
40%
46%
49%
52%
53%
60%
63%
43%
51%
56%
55%
56%
67%
64%
The use of contingent workers
within the procurement function
An increase in services
purchasing, including…
The use of contingent workers
across the business
Procurement managing
accounts payable
Suppliers providing more end-
to-end solutions
Procurement owning the
supplier relationship
Increased competition for high-
performing suppliers
European executives European practitioners

22. Cost savings are table stakes
EUROPEAN
EXECUTIVES
EUROPEAN
PRACTITIONERS
1
2
3
1
2
3
Cost savings and cost
avoidance (70%)
Inventory turnover/
inventory activity (46%)
Supplier quality/
performance (44%)
Cost savings and cost
avoidance (56%)
Procurement ROI (55%)
Supplier quality/
performance (52%)
Which of the
following KPIs
does your
organization
use to measure
procurement's
success?
Top 3
responses

23. A disconnect between usage and value
European executives say…
Only respondents who say their company used a particular KPIs were asked to rate its value.
How valuable are the
following KPIs?

24. Practitioners measure themselves on cost
77%
Cost savings/
cost avoidance
51%
Supplier quality/
supplier performance
51%
Procurement
ROI
44%
Percent of total spend
under management
41%
Risk mitigation
Which of these corporate-level KPIs do you feel
you contribute to the most in your day-to-day job?
Top 6 responses
Choose up to 3 or none of the above.
European
practitioners say…
59%
Percent of compliant
purchasing

25. Copyright © 2015 Accenture. All rights reserved. 25
This new organization will define value far beyond savings,
linked to corporate KPIs

EBITDA
EPS
Reduction in function’s budget
Supplier innovation
Time to market
Other
“I think [value] is going to be broader in terms of how we
align to the company’s strategy.”1
1. Bill Mangen, Vice President of Strategic Sourcing and Procurement, Cox Communications






26. Copyright © 2015 Accenture. All rights reserved. 26
Many procurement organizations
are already involved in key
strategic activities, expanding
value beyond savings
At ASML, the Dutch high-tech
company’s chief procurement officer
has a seat at the executive committee
level—he’s one of ASML’s top 10
executives—and, as such, has
significant input in shaping the
company’s strategy.
Paul van Attekum, Vice President responsible for
Strategic Sourcing and Procurement, ASML

27. Copyright © 2015 Accenture. All rights reserved. 27
Digital
Procurement
Value
Proposition
Digital will push the “art of the possible” further out
in terms of procurement value contribution

28. The technology agenda

29. The tech imperative
Mobile
technology
34%
Business
networks
40%
Cloud
computing
30%
Big data
24%28% 36% 31%
Executives
36%
PractitionersExecutives Practitioners Executives Practitioners Executives Practitioners
Which economic and technology trends
do you expect to have the most significant
impact on the procurement function over
the next three years?
Choose top 3
European respondents say…

30. Collaboration technologies drive the business
B2B commerce
networks
Social media
60% 55%
Internet of Things
50% 45%
Mobile apps and devices
51% 49%
Analytics
43% 57%
Cloud
42% 49%
Knowledge exchange/
collaboration platforms
53% 63%
46% 51%
How important
are the
following
technologies
important to
the progress of
your
procurement
organization?
Quite important/Very important

31. Copyright © 2015 Accenture. All rights reserved. 31
The tremendous changes in procurement’s organization and
in the VIE will be driven by digital technologies

32. Automation today… To what extent are you automating the
following processes today?
Mostly automated/Completely automated
73%
61%
55%
52%
59%
53%
59%
53%
50%
53% 53%
64%
58%
49%
53% 55%
45%
53%
44%
55%
45%
49%
European Executives European Practitioners

33. …uncertainty tomorrow To what extent will you be automating the
following process in two years?
Mostly automated/Completely automated
81% 78%
73% 71%
77%
61%
79%
67% 70% 67%
76%
69%
63%
55%
61% 63%
53%
60%
48%
61%
51% 53%
European Executives European Practitioners

34. Copyright © 2015 Accenture. All rights reserved. 34
The Operating Model will benefit in terms of additional
automation, improved collaboration & better insights
Automation
Collaboration
Meaningful
Insights
 Powered by Robotics
 Activity driven
 Service Center owned
 Powered by Social Media
 Scenario & App driven
 Community owned
 Powered by Analytics
 Use case driven
 Center of expertise owned
 Efficiency to the max (Middle
/ Back Office services
disappear)
 Change in Focus
 Relevant Information and
Contacts pushed to
community
 Increased Productivity
 Relevant recommendations
instead of reports
 Different Skillset

35. Copyright © 2015 Accenture. All rights reserved. 35
The majority of required digital capabilities already exist in
the market while some still need to evolve

36. The human challenge

37. People are a priority
European executive investment
priorities
1 – Recruiting new talent
2 – Training/Upskilling programs
3 – Procurement/Supply chain
technology
4 – Hiring consultants
5 – Funding supplier innovation
programs
6 – Outsourcing
7 – Acquiring third-party data
Global executives and
practitioners alike say
recruiting new talent and
investing in
training/upskilling are the
top investment priorities.
48%
of global executives and
practitioners say the use of
contingent workers is changing
the way procurement operates.

38. Business skills most difficult to acquire
European executives say…
How difficult is it to find and recruit talent
with the following skills to meet the
changing demands on the procurement
function?
31%
Supply chain
management
knowledge
30%
Risk
management
32%
Data analysis
and critical
thinking
20%
Soft/People
skills
28%
Negotiation
30%
Strategy/
Business
acumen
36%
Technology
Difficult/Very difficult

39. Luring workers to the procurement function
Promoting
procurement as a
training ground
for other functions
30%
Defining clear
career paths within
procurement/
supply chain
20%
Recruiting out of
business/
graduate
programs
21%
Offering
competitive
compensation
19%
Recruiting out of
college
10%
Executives say…
Most important strategy
23% 21% 17%24% 16%
European
Global total

40. Practitioners are recruited early
I wanted to use
procurement as a
training ground for
another area of the
business.
29%
Procurement
offered me a
defined career path.
43%
I was recruited out
of business
school/a graduate
program.
55%
I was offered
competitive
compensation.
52%
I was recruited
out of college.
44%
Practitioners say…
Choose all that apply.
European
Global total
52% 37% 45%52% 29%

41. Job satisfaction is high
They plan to stay in the procurement function
for the long term.
They are satisfied or very satisfied with their jobs.
Procurement is a training ground for
employees moving to other areas of
the business.
European practitioners say…
68%
55%
38%

42. Surprises in the data?
 The flexible workforce is having an impact on
the way procurement works. More than half
(56%) of European executives say the use of
non-payroll workers across the business is
changing the way procurement operates.
Procurement is also increasingly automating
contingent workforce management, pointing to
its growing importance.
 Social collaboration powers procurement.
60% of European executives and 55% of
European practitioners cite social media as
important to the progress of their organization.
 Working with other lines of business
ranks low on European executives’ list
of priorities for their employees. Just
28% list it among the top three areas of
focus for practitioners.

43. Next steps

44. Stay tuned for our reports and graphics
Look out for:
 An executive summary
 A provocative
Think Piece
 Infographics and
fact sheets
 Social media updates

45. OXFORD ECONOMICS
Pre-Register for the Executive Summary and get a copy of the Vision 2020 Report:
Ari.ba/futureofprocurement
Procurement Leaders Webinar – Thursday June 25th, 15:00 GTM
Featuring:
• James Vespoli, CPO of The PNC Financial Services Group, Inc.
• Ed Cone, Deputy Director of Thought Leadership, of Oxford Economics
• PLUS Two procurement practitioners from PNC
Register today
www.ari.ba/plwebinar
Emily Rakowski, Ariba / SAP – emily.rakowski@sap.com
Kai Nowosel, Accenture – kai.nowosel@accenture.com