Vision 2030 for Procurement & SCM Results from the Discussion about future role and task set of procurement (bme executive talk 2016)

1. BME Symposium – Executive Talk
Vision 2030 for Procurement & SCM
Berlin, Nov. 10th, 2016
M. Meissner, F. Theisinger

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 1954 Diebold, 1977 DETECON
 2002 Detecon International GmbH
(Shareholder: Deutsche Telekom Group)
 1.200 associates in our offices worldwide
Detecon is the leading consulting company that unites management
with digital technology expertise.
Brief Introduction of Detecon
We merge business &
technology perspectives
into a consistent digital change
journey for our clients.
Industry | Services | Telco

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The achieved
evolution and
transformation of
Procurement is a
success story.
But what is the
vision 2030 and
strategic
direction of
Procurement?

4. 4
Procurement has
played a key role
in former
strategic topics
but this is not
certain with the
digitalization.
1990 2000 2010 2020
Top Strategic Trends
Globalization World Wide
Web
Compliance Outsourcing
Shared Services
Digital
Transformation &
Industry 4.0
Procurements‘ StakeSustainable
ProcurementGlobal Sourcing Savings CPO

5. 5
Technological development is the driver of changes in customer
requirements, market roles, and added value.
Digital Transformation
New Perception,
Behavior & Demand
Businesses Transformation,
New Players & Competition
Life Changing
Opportunities
increasing efficiency ‒ reducing costs benefiting from shifted market needs developing new products & services
handling complexity ‒ staying on edge misunderstanding new demands getting disrupted by digital champions
Chances
Risks
Competition
Changes
Technological
Progress
Demand
Changes

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The digital transformation not only impacts the way of working but also the
role and strategic positioning of the Procurement function.
Digital Transformation – Impact on Procurement
Digital
Transformation
Impact on
Procurement
Next level of Procurement process efficiency
and exploitation of new technologies
1
Changed Purchasing portfolio:
Digital charged products and new suppliers
2
Different role, objectives, value proposition
and strategic positioning of Procurement
3
Internet of Things
BIGDATA
DIGITAL LEADERS
SupplierNetworksV2.0
innovate

7. Digitization theses discussed

8. 8
Procurement
operations will be
fully automated.
*
* incl. less strategic
activities of so-called
strategic Procurement

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Big data analytics
will become a vital
competence field
of Procurement.

10. 10
With IoT and
digitally charged
products nearly
all Procurement
professionals
will be IT buyers.

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Access to
innovations will
be more important
than bargaining
for best prices.

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Still, most employees work on basic activities within Procurement…
Basic activities1
Strategic activities2
Complexity /
Strategic meaning
Number of involved employees
Requirements management
Order management
Commodity management Supplier management
Procurement strategies
Procurement engineering
P2P Management
Sourcing
Catalog management
Master data management
Demand management
Digital Transformation – Impact on Procurement

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… where the digital efficiency potential is the biggest…
Basic activities1
Strategic activities2
Complexity /
Strategic meaning
Requirements management
Order management
Commodities management Suppliers management
Procurement strategies
Procurement engineering
P2P Management
Sourcing
Demand management
Catalog management
Master data management
Automation
Self-service Market place
Robotics
Outsourcing
Number of involved employees
Potentials
• Up to 100% for indirect spend
• Up to 60% for direct spend
Digital Transformation – Impact on Procurement
AI

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Strategic activities2
Procurement strategies
Procurement engineering
Demand management
… hence, Procurement could shrink to a very small strategic unit…
Complexity /
Strategic meaning
Number of involved employees
Sourcing
Digital Transformation – Impact on Procurement

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Strategic activities2
Innovative activities3
Procurement strategies
Procurement engineering
Smart analytics
Scouting
Innovation management
Network management
Demand management
… unless it develops itself into a more innovation-driving role.
Complexity /
Strategic meaning
Number of involved employees
Sourcing
Digital Transformation – Impact on Procurement

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Which direction
do we want to
head for?
Sourcing Boutique
 Few FTE
 Sourcing focus
 Added value limited to
savings (TCO)
 Medium-sized FTE
 Focus on supply network
management
 Added value as digital
innovation incubator
Innovation Center
incl. Sourcing Boutique
Digital Transformation –
Impact on Procurement
& SCM

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Risk, security
and compliance
gate keeping
Cross-functional
cooperation
Market intelligence
Business case and
value chain orientation
Deal-making and
contract closing
Partnering and
network management
Procurement‘s capabilities
for digital business
transformation
1
2
3
4
5
6
How can Procurement leverage its capabilities to become the
driver of the digital transformation in its company?
Procurement
inherently has
capabilities which
are essential for
the digital trans-
formation.

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A two-speed
Procurement
is worth
considering.

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Is your Procurement ready for the digital world?
Detecon Best Practice Approach
Strategic
Impact
Digital
Dimensions
Digital
Business
Capabilities
The “Digital Navigator” provides information about the digital transformation of your Procurement.
It reveals whether the required degree of maturity is available, and which fields of action are recommendable.

20. Real-Time „mentimeter“– Survey Results
BME 51. Symposium – Executive Talk

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23%
18%
15%
40%
29%
32%
15%
30%
43%
56%
7%
11%
14%
7% 61%
DisagreeAgree Partly agreeFully agree
Thinking about 2030 – Procurement Operations will be
fully automated.
Big data analytics will become a vital competence field
of Procurement.
Nearly all procurement professionals will need IT
sourcing skills in the future.
Access to innovations will be more important than
bargaining for best prices.
Perspective of the Procurement function by 2025 – 2030REAL-TIMESURVEY
Source: Real-Time „mentimeter“– Survey Results
BME 51. Symposium – Executive Talk

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10% 40% 47%
Mainly decentral Only decentralMainly centralOnly central
Perspective of the Procurement function by 2025 – 2030
Thinking about 2030 – Will analytics still be done
by a central „BI function“ or decentrally by all
Procurement professionals?
13%
87%
Specialize in Procurement
New Role
Will Procurement
enter a new role in
the digital
transformation, or
will it specialize in its
core competencies –
sourcing and
generating savings?
5%
59%
27%
9%
Strongly
Very stronglySlightly
Not at all
Do you think that
existing skills and
capabilities of
Procurement
organizations enable
to drive digitization in
the company?
REAL-TIMESURVEY
Source: Real-Time „mentimeter“– Survey Results
BME 51. Symposium – Executive Talk

23. Pre-Event Survey: Results

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General Facts regarding the participants
8%
15%
15%
8%
8%23%
15%
8%
8%
46%
15%
31%
> 50.000
1.000 - 5.000
10.000 - 50.000
100 - 1.000
Automotive
ManufacturingEnergy & Utilities
Public Services
Financial Services Others
Retail
Health Care
What is the size of your company
concerning number of employees?
Keyresultsoutof
theonlinesurvey
What is the industry of your company?
Source: Pre-Event Survey Results
BME 51. Symposium – Executive Talk

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Perspective of the procurement function by 2025 – 2030
33%
46%
30%
58%
38%
62%
8%
16%
8%
Very StronglyStronglySlightly
Will the skill requirements of procurement
professionals change?
Is there a need for a transformation and
repositioning of procurement?
23% 8% 69%
Will procurement’s objectives, roles and
responsibilities change
Will the number of procurement professionals
in your company grow or shrink?
Grow slightlyShrink StronglyShrink slightly
77% 23%Will the strategic relevance of the procurement
function change?
Increase stronglyIncrease
Keyresultsoutof
theonlinesurvey
Source: Pre-Event Survey Results
BME 51. Symposium – Executive Talk

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Impact of the digitalization (incl. Industrie 4.0)
54%
16%
16%
62%
23%
54%
54%
8%
15%
15%
23%
15%
15%
8%
23%Will the digitalization improve procurement’s efficiency?
Should procurement be a key driver of the digital
transformation of your company?
How strongly is your company’s business affected by the
digitalization?
Will the digitalization change procurement’s objectives and
role?
Very StronglyStronglySlightly
Keyresultsoutof
theonlinesurvey
Source: Pre-Event Survey Results
BME 51. Symposium – Executive Talk

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Detecon International GmbH
Sternengasse 14 - 16
D-50676 Cologne (Germany)
Phone: +49 221 9161-0
www.detecon.com
info@detecon.com
Supervisory Board:
Christian Till Roga (Chair)
Executive Committee:
Dr. Jens Nebendahl
Commercial Register:
Cologne Local Court HRB 76144,
Corporate Headquarters: Cologne
Thank you for your participation!
Thanks!

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Contacts
Please feel free to contact us for further details!
Felix Theisinger
Partner
Detecon International GmbH
Sternengasse 14-16
50676 Cologne (Germany)
Mobile: +49 160 3651212
Felix.Theisinger@detecon.com
Michael Meissner
Partner
Detecon International GmbH
Sternengasse 14-16
50676 Cologne (Germany)
Mobile: +49 160 3655507
Michael.Meissner@detecon.com