Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
1
PROCUREMENT IN 2017:
THE ROAD AHEAD
Andrew Bartolini
Chief Research Officer
Ardent Partners
January 25, 2017
2
Copyright © 2017 - Ardent Partners Ltd.
ANDREW BARTOLINI
Chief Research Officer, Ardent Partners
Publisher, CPO Rising
...
3
Copyright © 2017 - Ardent Partners Ltd.
AGENDA
 Introduction
 The State of Procurement
 Improving Performance in 2017...
4
Copyright © 2017 - Ardent Partners Ltd.
ARDENT PARTNERS: RESEARCH WITH RESULTS
5
Copyright © 2017 - Ardent Partners Ltd.
Visit www.cporising.com today!
CPO RISING: THE SITE FOR GLOBAL CPOS
6
Copyright © 2017 - Ardent Partners Ltd.
TODAY’S PRESENTATION
Report Demographics
331 Respondents
o 68% VP or Director-le...
7
THE STATE OF PROCUREMENT
8
Copyright © 2017 - Ardent Partners Ltd.
THE CPO’S MANIFEST DESTINY
“The path we have taken isn’t the one I
intended. Eve...
9
Copyright © 2017 - Ardent Partners Ltd.
2016 WAS MORE CHALLENGING
10
Copyright © 2017 - Ardent Partners Ltd.
THE CPO’S TOP TWO PRESSURES IN 2016
11
Copyright © 2017 - Ardent Partners Ltd.
REDUCED PRESSURE TO DELIVER MORE SAVINGS
(2009 – 2016)
12
Copyright © 2017 - Ardent Partners Ltd.
ALIGNMENT BETWEEN PROCUREMENT’S FOCUS AND
OVERALL BUSINESS OBJECTIVES
13
Copyright © 2017 - Ardent Partners Ltd.
VISIBILITY INTO SAVINGS & SPEND
14
Copyright © 2017 - Ardent Partners Ltd.
PROCUREMENT WITHOUT SPEND ANALYSIS
 CPOs who manage their
operations without s...
15
Copyright © 2017 - Ardent Partners Ltd.
PROCUREMENT TECHNOLOGY ADOPTION IN 2016
26%
66%
34%
56%
33%
19%
29%
46%
58%
31%...
16
Copyright © 2017 - Ardent Partners Ltd.
IS PROCUREMENT AN ART OR A SCIENCE?
“Procurement is a blend of art and
science,...
17
Copyright © 2017 - Ardent Partners Ltd.
MODERN PROCUREMENT COMPETENCY MATRIX
 Goal: To help CPOs and their staffs unde...
18
Copyright © 2017 - Ardent Partners Ltd.
19
IMPROVING PERFORMANCE IN 2017
20
Copyright © 2017 - Ardent Partners Ltd.
SUPPLIER COLLABORATION AND INNOVATION
“It’s amazing what we have been able to
a...
21
Copyright © 2017 - Ardent Partners Ltd.
AFTER SAVINGS, TOP METRICS USED BY EXECUTIVES
TO MEASURE PROCUREMENT PERFORMANCE
22
Copyright © 2017 - Ardent Partners Ltd.
THE 2016 PROCUREMENT BENCHMARKS
23
Copyright © 2017 - Ardent Partners Ltd.
2016 BEST-IN-CLASS PROCUREMENT PERFORMANCE
24
Copyright © 2017 - Ardent Partners Ltd.
STRATEGIES TO IMPROVE PERFORMANCE IN 2017
People, Process, & Knowledge Levers:
...
25
Copyright © 2017 - Ardent Partners Ltd.
THE TECHNOLOGY ADVANTAGE
26
2017: THE ROAD AHEAD
27
Copyright © 2017 - Ardent Partners Ltd.
THE CPO’S TOP PRIORITIES (2016 – 2019)
28
Copyright © 2017 - Ardent Partners Ltd.
TOP CPO HURDLES OVER THE NEXT 2-3 YEARS
39% - STAFFING &
TALENT
CONSTRAINTS
33%...
29
Copyright © 2017 - Ardent Partners Ltd.
PROCUREMENT TECHNOLOGY IN 2017
 Major advances in supply management technology...
30
Copyright © 2017 - Ardent Partners Ltd.
TOP PROCUREMENT TECHNOLOGY TRENDS
34%
40%
55%
Integrated Strategic Sourcing
Sui...
31
Copyright © 2017 - Ardent Partners Ltd.
PROCUREMENT TECH ADOPTION (2017-2018)
39%
26%
44%
29%
52%
46%
38%
35%
19%
31%
B...
32
Copyright © 2017 - Ardent Partners Ltd.
BIG DATA FOR PROCUREMENT
DEFINITIONS
 Wikipedia Definition: A term for data se...
33
Copyright © 2017 - Ardent Partners Ltd.
“MONEYBALL FOR PROCUREMENT”
 Data-driven, scientifically-based approach
 Unde...
34
Copyright © 2017 - Ardent Partners Ltd.
PREDICTIVE ANALYTICS
 Developing algorithms, data models to better anticipate
...
35
Copyright © 2017 - Ardent Partners Ltd.
BIG DATA STRATEGIES FOR 2017
 BIG Data represents an opportunity to unlock BIG...
36
STRATEGIES FOR SUCCESS IN 2017
37
Copyright © 2017 - Ardent Partners Ltd.
STRATEGIES FOR SUCCESS
 Ensure that department objectives are mapped to the
pr...
38
Copyright © 2017 - Ardent Partners Ltd.
STRATEGIES FOR SUCCESS
 Stay focused and vigilant throughout 2017
 Weave agil...
39
Copyright © 2017 - Ardent Partners Ltd.
For more information please visit:
www.ardentpartners.com & www.cporising.com
Q...
40
THANK YOU!
Upcoming SlideShare
Loading in …5
×

Procurement in 2017: The Road Ahead

Andrew Bartolini, Chief Research Officer at Ardent Partners, reflects back on the past year and presents a clear directive for procurement organizations looking to improve outcomes in 2017, providing benchmark data based on an annual survey to over 330 procurement executives.

Procurement in 2017: The Road Ahead

  1. 1. 1 PROCUREMENT IN 2017: THE ROAD AHEAD Andrew Bartolini Chief Research Officer Ardent Partners January 25, 2017
  2. 2. 2 Copyright © 2017 - Ardent Partners Ltd. ANDREW BARTOLINI Chief Research Officer, Ardent Partners Publisher, CPO Rising  11+ years as an industry analyst • Researched and published extensively across all aspects of supply management • Benchmarked thousands of distinct procurement and AP departments  6+ years at Ariba and Commerce One • Rich experience in product marketing/management and systems implementation, strategic sourcing, business process transformation  Prior work history in consulting and investment banking  MBA, Finance – Indiana University  BA, Economics – College of the Holy Cross
  3. 3. 3 Copyright © 2017 - Ardent Partners Ltd. AGENDA  Introduction  The State of Procurement  Improving Performance in 2017  2017: The Road Ahead  Strategies for Success
  4. 4. 4 Copyright © 2017 - Ardent Partners Ltd. ARDENT PARTNERS: RESEARCH WITH RESULTS
  5. 5. 5 Copyright © 2017 - Ardent Partners Ltd. Visit www.cporising.com today! CPO RISING: THE SITE FOR GLOBAL CPOS
  6. 6. 6 Copyright © 2017 - Ardent Partners Ltd. TODAY’S PRESENTATION Report Demographics 331 Respondents o 68% VP or Director-level o 89% work in procurement o 77% from large enterprises o 65% North America; 27% EMEA o 25 industries o Interviewed 30 CPOs
  7. 7. 7 THE STATE OF PROCUREMENT
  8. 8. 8 Copyright © 2017 - Ardent Partners Ltd. THE CPO’S MANIFEST DESTINY “The path we have taken isn’t the one I intended. Every time we reach a new platform, we realize that the next journey is out there.” ~ Global CPO, CPG company
  9. 9. 9 Copyright © 2017 - Ardent Partners Ltd. 2016 WAS MORE CHALLENGING
  10. 10. 10 Copyright © 2017 - Ardent Partners Ltd. THE CPO’S TOP TWO PRESSURES IN 2016
  11. 11. 11 Copyright © 2017 - Ardent Partners Ltd. REDUCED PRESSURE TO DELIVER MORE SAVINGS (2009 – 2016)
  12. 12. 12 Copyright © 2017 - Ardent Partners Ltd. ALIGNMENT BETWEEN PROCUREMENT’S FOCUS AND OVERALL BUSINESS OBJECTIVES
  13. 13. 13 Copyright © 2017 - Ardent Partners Ltd. VISIBILITY INTO SAVINGS & SPEND
  14. 14. 14 Copyright © 2017 - Ardent Partners Ltd. PROCUREMENT WITHOUT SPEND ANALYSIS  CPOs who manage their operations without spend analysis….  Sourcing leaders who build strategic sourcing pipelines and run sourcing projects without spend visibility…. Are Committing Procurement Malpractice
  15. 15. 15 Copyright © 2017 - Ardent Partners Ltd. PROCUREMENT TECHNOLOGY ADOPTION IN 2016 26% 66% 34% 56% 33% 19% 29% 46% 58% 31% Business Networks ePayments ePayables (AP Automation) eProcurement Supplier Performance Mgmt Supplier Information Mgmt Contract Authoring Contract Repository eSourcing Automated Spend Analysis Currently Use © Ardent Partners - 2016
  16. 16. 16 Copyright © 2017 - Ardent Partners Ltd. IS PROCUREMENT AN ART OR A SCIENCE? “Procurement is a blend of art and science, combining business, category, and supply expertise with leading technology, data analytics, and associated value-based decision support capabilities.” ~ CPO Rising 2016: The Art and Science of Procurement
  17. 17. 17 Copyright © 2017 - Ardent Partners Ltd. MODERN PROCUREMENT COMPETENCY MATRIX  Goal: To help CPOs and their staffs understand the needed skills to execute well and how to improve • Define each skill • Discuss its importance to procurement and career • Highlight the “CPO Grade” for each skill • Suggest ways to improve in these areas
  18. 18. 18 Copyright © 2017 - Ardent Partners Ltd.
  19. 19. 19 IMPROVING PERFORMANCE IN 2017
  20. 20. 20 Copyright © 2017 - Ardent Partners Ltd. SUPPLIER COLLABORATION AND INNOVATION “It’s amazing what we have been able to achieve through competition and our new strategy. Right now we’re working on deep space travel programs that would not be possible without tight supplier collaboration.” ~ – Bill McNally, Deputy Chief Acquisition Officer (“CPO”), NASA
  21. 21. 21 Copyright © 2017 - Ardent Partners Ltd. AFTER SAVINGS, TOP METRICS USED BY EXECUTIVES TO MEASURE PROCUREMENT PERFORMANCE
  22. 22. 22 Copyright © 2017 - Ardent Partners Ltd. THE 2016 PROCUREMENT BENCHMARKS
  23. 23. 23 Copyright © 2017 - Ardent Partners Ltd. 2016 BEST-IN-CLASS PROCUREMENT PERFORMANCE
  24. 24. 24 Copyright © 2017 - Ardent Partners Ltd. STRATEGIES TO IMPROVE PERFORMANCE IN 2017 People, Process, & Knowledge Levers:  Agility - better-equipped to adapt to change  Tight alignment to executives and enterprise objectives  Fluid resource allocation  Superior competencies across all areas but esp. sourcing process, category management, and supply risk  Strong collaboration with line of business and functional peers  Holistic Source-to-Settle process  Supplier management programs that make a direct impact on supplier performance
  25. 25. 25 Copyright © 2017 - Ardent Partners Ltd. THE TECHNOLOGY ADVANTAGE
  26. 26. 26 2017: THE ROAD AHEAD
  27. 27. 27 Copyright © 2017 - Ardent Partners Ltd. THE CPO’S TOP PRIORITIES (2016 – 2019)
  28. 28. 28 Copyright © 2017 - Ardent Partners Ltd. TOP CPO HURDLES OVER THE NEXT 2-3 YEARS 39% - STAFFING & TALENT CONSTRAINTS 33% - ALIGNING PROCESSES & SYSTEMS 43% - BUDGET CONSTRAINTS
  29. 29. 29 Copyright © 2017 - Ardent Partners Ltd. PROCUREMENT TECHNOLOGY IN 2017  Major advances in supply management technology past 5 years, but procurement excellence still starts and ends with visibility  The need to improve, scale and collaborate makes the CPO’s technology strategy is more important than ever  The future of procurement technology is emerging today  CPOs need a “procurement CTO” to track innovations and stay abreast of the market
  30. 30. 30 Copyright © 2017 - Ardent Partners Ltd. TOP PROCUREMENT TECHNOLOGY TRENDS 34% 40% 55% Integrated Strategic Sourcing Suite (Spend Analysis, eSourcing, and Contract Management) Integrated Procure-to-Pay (eProcurement with ePayables) Deployed Cloud/SaaS/On- Demand Solutions © Ardent Partners - 2016
  31. 31. 31 Copyright © 2017 - Ardent Partners Ltd. PROCUREMENT TECH ADOPTION (2017-2018) 39% 26% 44% 29% 52% 46% 38% 35% 19% 31% Business Networks ePayments ePayables (AP Automation) eProcurement Supplier Performance Mgmt Supplier Information Mgmt Contract Authoring Contract Repository eSourcing Automated Spend Analysis Plan to Use © Ardent Partners - 2016
  32. 32. 32 Copyright © 2017 - Ardent Partners Ltd. BIG DATA FOR PROCUREMENT DEFINITIONS  Wikipedia Definition: A term for data sets that are so large or complex that traditional data processing applications are inadequate. The term often refers simply to the use of advanced methods to extract value from data. Accuracy in big data may lead to more confident decision making, and better decisions can result in greater operational efficiency, cost reduction and reduced risk.  Big Data for Procurement: All of the spend, sourcing, contract, and supplier information, plus process and transactional information, in structured and unstructured formats, that must be similarly managed in order to drive business value.
  33. 33. 33 Copyright © 2017 - Ardent Partners Ltd. “MONEYBALL FOR PROCUREMENT”  Data-driven, scientifically-based approach  Understand the drivers of procurement performance  Improve efficiencies and make smarter business decisions
  34. 34. 34 Copyright © 2017 - Ardent Partners Ltd. PREDICTIVE ANALYTICS  Developing algorithms, data models to better anticipate future events – like risk events  Leveraging pricing, 3rd-party data to analyze commodity markets and find ideal days, times, markets, and suppliers to purchase goods and services
  35. 35. 35 Copyright © 2017 - Ardent Partners Ltd. BIG DATA STRATEGIES FOR 2017  BIG Data represents an opportunity to unlock BIG value and to make procurement more relevant and agile.  Technology/analytics are critical to help to manage and leverage BIG Data  The future of procurement analytics is emerging now  CPOs need a BIG Data strategy including technology, resources, and organizational capabilities
  36. 36. 36 STRATEGIES FOR SUCCESS IN 2017
  37. 37. 37 Copyright © 2017 - Ardent Partners Ltd. STRATEGIES FOR SUCCESS  Ensure that department objectives are mapped to the primary goals and objectives of the enterprise  Develop and foster the skills that enable staff to accomplish the things that support primary business objectives  Demand greater investment in people and technology  Regularly assess the strengths and weaknesses of the organization’s capabilities
  38. 38. 38 Copyright © 2017 - Ardent Partners Ltd. STRATEGIES FOR SUCCESS  Stay focused and vigilant throughout 2017  Weave agility into the organization’s fabric  Expand and automate the sourcing program  Develop and maintain a spend under management “pipeline”  Cross-pollinate skills and staff
  39. 39. 39 Copyright © 2017 - Ardent Partners Ltd. For more information please visit: www.ardentpartners.com & www.cporising.com Q&A / Discussion (Contact Info) Andrew Bartolini Chief Research Officer Ardent Partners abartolini@ardentpartners.com @andrewbartolini
  40. 40. 40 THANK YOU!

×