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Strategies to Future-Proof Procurement: Are you ready? Webinar Slides

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What you'll learn:

Get insight from James Vespoli, the CPO of PNC, and Ed Cone, Deputy Director of Thought Leadership, of Oxford Economics as they explore the results of recent Oxford research on the future of procurement. Discuss how perspectives differ between roles, see signs of concrete changes in progress, and take back ideas on how to future-proof your team. You’ll discover:

• Whether the organisational structure of procurement will develop as it becomes more strategic.
• How procurement talent can be developed and what capabilities will drive change in the function.
• How technology and a collaborative mindset are transforming procurement.
• Why our KPIs and time investments are not always mirroring our vision and goals.

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Strategies to Future-Proof Procurement: Are you ready? Webinar Slides

  1. 1. The Future of Procurement One survey, two perspectives
  2. 2. Building on a strong foundation  Outsourcing explodes  Strategy scope widens  Talent competition heats up  Innovation comes from without  Suppliers gain power
  3. 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. 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. 5. Key findings  From here to where?  Procurement gets collaborative.  Goodbye to business as usual.  The technology agenda.  The human challenge.
  6. 6. From here to where?
  7. 7. Differing views on procurement’s future 40% 23% 25% 12% 28% 21% 33% 17% Choose 1.
  8. 8. Collaboration
  9. 9. Internal collaboration is a given 68% of executives say procurement at their company is becoming more collaborative with other parts of the business. 56% of executives say procurement data is being used strategically by other parts of the business. Agree /Strongly agree
  10. 10. Reaching beyond the firewall On which of the following areas would you like your organization to be most focused today? 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
  11. 11. 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. 55% 55% 46% 41% 36% 32% 32% Working one-on-one with suppliers on strategic initiatives Working one-on-one with suppliers and others on administrative issues Conducting sourcing/ contracting category- management activities Working on operational procure-to-pay tasks Training/Upskilling programs Recruitment of new talent Conducting spend analysis activities
  12. 12. KPIs and time investments
  13. 13. 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 47% 48% 54% 48% 53% 56% 55% 46% 48% 50% 53% 54% 58% 61% The use of contingent workers within the procurement function The use of contingent workers across the business Suppliers providing more end-to-end solutions, instead of just materials or… An increase in services purchasing, including statement-of-work contracts Procurement managing accounts payable Increased competition for high-performing suppliers Procurement owning the supplier relationship Executives Practitioners
  14. 14. 65% 54% 53% 52% 52% 50% 49% 48% 48% 46% 45% 45% Cost savings and cost avoidance Number or percent of touchless transactions Inventory turnover/ inventory activity Risk mitigation Order cycle time Number of suppliers with automated collaboration Procurement ROI Percent of total spend under management Impact on revenue from innovation Supplier quality/ performance Percent of compliant purchasing Stakeholder satisfaction results A disconnect between usage and value Executives say… Only respondents who say their company used a particular KPIs were asked to rate its value. How valuable are the following KPIs?
  15. 15. Practitioners measure themselves on cost 80% Cost savings/ cost avoidance 52% Supplier quality/ supplier performance 49% Procurement ROI 47% Percent of total spend under management 45% Inventory turnover/ Inventory activity 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. Practitioners say… 49% Percent of compliant purchasing
  16. 16. Technology
  17. 17. The tech imperative Mobile technology 34% Business networks 35% Cloud computing 29% Big data 27%30% 32% 33% Executives 35% 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.
  18. 18. Collaboration technologies drive the business B2B commerce networks Social media 58% 48% Internet of Things 52% 46% Mobile apps and devices 49% 42% Analytics 46% 47% Cloud 45% 43% Knowledge exchange/ collaboration platforms 54% 57% 44% 47% How important are the following technologies important to the progress of your procurement organization? Quite important/Very important
  19. 19. Talent
  20. 20. People are a priority Executive investment priorities 1 – Recruiting new talent 2 – Training/Upskilling programs 3 – Procurement/Supply chain technology 4 – Outsourcing 5 – Funding supplier innovation programs 6 – Hiring consultants 7 – Acquiring third-party data Executives and practitioners alike say recruiting new talent and investing in training/upskilling are the top investment priorities. 48% of executives and practitioners say the use of contingent workers is changing the way procurement operates.
  21. 21. Business skills most difficult to acquire Executives say… How difficult is it to find and recruit talent with the following skills to meet the changing demands on the procurement function? 24% Supply chain management knowledge 24% Risk management 24% Data analysis and critical thinking 20% Soft/People skills 28% Negotiation 34% Strategy/ Business acumen 28% Technology Difficult/Very difficult
  22. 22. Next steps
  23. 23. Stay tuned for more on the following themes  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 through 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—and one of the biggest opportunities to rise above the competition.
  24. 24. Executive overview ari.ba/future-overview
  25. 25. OXFORD ECONOMICS

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