The survey of over 450 procurement and operational leaders found that: - While 83% believe digital transformation will impact procurement, only 5% have highly automated processes - Analytics/data quality and budget restrictions are the top roadblocks to efficiency - IOT is most used currently but organizations plan to invest more in RPA and AI over the next year - 63% see automation as important but lack talent strategies to develop necessary skills - Hard savings, cost avoidance, and compliance are the top KPIs but purpose objectives are also a priority - The CPO role is seen evolving into a more strategic role, especially in emerging markets like Asia and Latin America

1. PUBLIC
CPO Survey 2018
What’s the Next Big Thing in Procurement
&
Dr. Marcell Vollmer Prof. Karsten Machholz
Chief Digital Officer, SAP Ariba Strategic Procurement & Supply Chain Management

2. 2PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
About the research
GEOGRAPHY SENIORITY
30.7%
2.2%
44.6%
24.2%
INDUSTRY SIZE
CPO, SVP, VP of
Procurement
CFO, SVP, VP of
Finance, Shared
Services, Treasury
Director, Manager,
Buyer, Shared
Services Expert
Other
Welcome to the SAP Ariba & University of
Wurzburg-Schweinfurt “What’s the Next Big
Thing in Procurement” survey. This year’s survey
provides new and groundbreaking insights on
trends and challenges that are shaping the future
of procurement, as well as opinions/sentiments
that are shaping the function.
This year’s survey received 452 number of responses* from Procurement and
Operational Leaders across the globe.
In this report, you will find:
• Challenges that procurement leaders face in creating a more efficient
function
• Trends in organization structure
• Application of emerging technologies and the road ahead
• How leaders think and track procurement risk
We hope you find this report insightful.
Finally, we’d like to thank the executives who contributed to this study.
*in total 2,419 people have been approached to respond
DEMOGRAPHICS OF SURVEY
US / Canada
Latin America
Europe/Middle East/Africa
Asia
Australia
43.4%
24.4%
16.3%
10.0%
5.9%
24.9%
23.9%
12.7%
11.0%
10.7%
7.3%
5.4%4.2%
Automotive
High Tech, IT, Telecom
Discrete
Manufacturing
Consumer
Products & Retail
Financial Services,
Insurance
Chemicals,
Healthcare, Life
Sciences
Other
Utilities
28.6%
21.9%16.7%
13.4%
12.2%
7.2%
$750 - $999M
$1 - $5B
$5.1 - $10B
$10.1 - $20B
>$20B
N/A

3. 3PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Key Findings
83% of respondents believe Digital
Transformation will be impactful but only
5% of respondents have highly automated
processes
30% of participants recognize talent
management as a roadblock but 63% don’t
have a talent management strategy to
address it
IOT is the largest current technology
trend but RPA & AI are the future
Procurement most commonly reports into
CFO, CPO or COOs but organizational
reporting structure varies and is fragmented
The CPO role will continue to evolve
into a more strategic role, especially in
emerging markets
88% of respondents have purpose
objectives defined for procurement and see
the value
Analytics / data quality & budget
restrictions are the largest roadblocks to
achieving functional efficiency
Hard savings, cost avoidance and
compliance are the top KPIs to measure
procurement performance
Corruption and child labor are the largest
purpose driven risks managed

4. 4PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
83% of participants
think Digital
Transformation will
impact procurement,
supply chain, finance
more in 2018, than in
2017
Question: Do you think the Digital Transformation will
impact procurement, supply chain, finance more in 2018
compared to last year?

5. 5PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Only 5% of
respondents
have highly
automated
systems /
processes within
the function..
While 83% of respondents think Digital
Transformation will impact procurement,
supply chain, finance more in 2018, only 5%
of respondents have highly automated
systems / processes…
Highly
automated
5%
Very automated
18%
Somewhat
automated
54%
Not automated
mostly manual
21%
32%
23%
30%
20%
18%
17%
17%
55%
58%
48%
58%
59%
57%
53%
14%
19%
22%
22%
24%
26%
29%
Automotive
Chemicals, Health Care, Life
Sciences
Others
Manufacturing, Disrecte
Utilities
Consumer Products & Retail
Financial Services, Insurance,
Private Equity
Financial Services, Consumer Products and
Retail have the least automation
AI
Legend
Highly
automated
Somewhat
automated
Not
automated

6. 6PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
But, 63% of participants
think automation is
important and have
automation on the
roadmap
63%
31%
2%
On the roadmap
Undecided
Will never
implement
Question: In your opinion, how important is self-service
automation in your Procurement/ SCM/ Finance function?

7. 7PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
IOT is most
common technology
used; but,
organizations plan
to invest in RPA and
AI over the next 12
months…
TECHNOLOGY CURRENTLY USED PLANNED FUTURE USE
Robotic
Process
Automation
(RPA), 20%
Artificial
Intelligence /
Cognitive
Computing,
17%
Machine
Learning, 15%
Internet of
Things /
Industry 4.0,
15%
Others, 12%
Chatbots, 9%
Blockchain,
8%
3D Printing,
4%
Internet of
Things/
Industry 4.0,
22%
Robotic
Process
Automation
(RPA), 19%
Artificial
Intelligence /
Cognitive
Computing,
9%
Machine
Learning, 8%
Chatbots, 8%
3D Printing,
6%
Blockchain,
3%
Others, 26%

8. 8PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Asian-based
companies plan on
investing heavier in
machine learning,
while Australia-based
organizations plan on
investing more in AI
TECHNOLOGY CURRENTLY USED (CU) VS PLANNED
FUTURE USE (PFU)
United States / Canada
Latin America
Europe / Middle
East / Africa
Australia
Asia
9%
10%
11%
5%
3%
6%
19%
14%
18%
16%
23%
21%
16%
29%
16%
11%
10%
3%
5% 17%
11%
17%
11%
22%
29%
13%
34%
10%
10%
9%
4%
6%
12%
20%
12%
15%
10%
23%
27%
17%
25%
21%
6%
8% 3% 23%
13%
18%
6%
21%
38%
8%
38%
7%
10%
9%
7%
5%
3%
17%
7%
22%
10%
19%
21%
21%
41%
PFU
CU
PFU
CU
PFU
CU
PFU
CU
PFU
CU
Chatbots Blockchain 3D Printing AI
Machine
Learning
Robotic Process
Automation
IOT
Legend

9. 9PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Analytics /
insights and
master data
quality are the
largest inhibitors
for function
efficiency
Lack of internal
talent / know-how’s
TOP INHIBITORS BY REGION
Analytics / Data
Insights / Master
Data quality
Analytics / Data
Insights / Master
Data quality
Analytics / Data
Insights / Master
Data quality
Lack of internal
talent / know-how’s
Question: What are your roadblocks in
making your organization/function more
efficient?
4%
11%
13%
13%
17%
19%
23%
Other
Regulatory requirements
and Compliance
Speed of Technology
Change
Talent shortage (external)
Lack of internal
talents/know-how
Budget Restrictions
Analytics / Data Insights /
Master Data quality

10. 10PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Talent management
and a lack of talent
strategy are
roadblocks for future
success
30%Participants indicate lack
of internal know-how and
talent shortage as
roadblocks for making the
organization more efficient
63%Participants do not have a talent
management strategy or are in-process of
developing one
Question: Do you have a dedicated talent
management strategy in place for your
function?

11. 11PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Procurement most
commonly reports to
CFO, CPO or COO but
the structure is still
fragmented
Chief Financial
Officer
Chief
Procurement
Office
Chief Executive
Officer
Chief Operating
Officer
Chief Supply
Chain Officer
Other
PROCUREMENT
20.7% 8%17%34.4% 8.3%
11.5%
Question: Where does procurement report into? (% of respondents)

12. 12PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Hard savings, cost
avoidance and
compliance are the top
KPI’s to measure
Procurement’s
performance
Question: Which KPIs do you use to measure your procurement performance?
23%
28%
24%
24%
22%
16%
15%
18%
24%
16%
16%
15%
15%
13%
14%
Asia
Australia
Europe / Middle East / Africa
Latin America
United States / Canada
23%
28%
24%
17%
19%
18%
15%
14%
15%
CPO or SVP, VP Procurement
CFO or SVP, VP Finance, Shared Services,
Treasury
Director, Manager, Buyer, Shared Services expert
Hard
Savings
Cost
Avoidance
Ensuring
Compliance
Soft
Savings
Supplier
Innovation
Reduction
in Maverick
Buying
Mitigating
Risk
Legend
RESPONSES BY REGION
RESPONSES BY TITLE

13. 13PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
The majority of
respondents have
purpose objectives for
procurement and see
the value of doing so.
They also most closely
monitor corruption &
child labor risks
Do you have CSR, sustainability
and diversity objectives
established for your suppliers?
7%
16%
77%
Not sure No Yes
Do you see Creating Purpose for
Procurement/Supply Chain/ Finance as a
huge differentiator and priority?
7%
5%
88%
What risks do you monitor?
7%
9%
13%
13%
16%
17%
25%
Others
Poverty in your supply chain
Human trafficking
Conflict minerals
Slavery/ forced labor
Child labor
Corruption

14. 14PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Most see the CPO role
evolving, especially in
emerging markets like
Asia & Latin America
Do you think that the CPO will evolve into a more strategic role in the
future, such as Chief Value Officer or Chief Collaboration Officer?
29%
16%
55%
Not sure No Yes
66%
48%
32%
65%
GLOBALLY
% OF RESPONSES THAT THINK CPO ROLE WILL EVOLVE
57%

15. 15PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
9
Evaluate opportunities to automate processes by embracing the
wave of Digital Transformation
Develop a talent management strategy to advance roles, skills and
knowledge
Invest in technology of the future: RPA and AI
Regardless of reporting structure, an adaptive and agile operating
model is necessary to meet business requirements
CPO’s should embrace complexity and new challenges –
their role will continue to evolve
Organizations that do good, do well. Create purpose beyond
traditional procurement objectives
Consider making investments in data quality and collaborating with
Finance on annual budget discussions
Success measurement with a focus on value beyond cost savings
is key to measuring progress
Active risk management will ensure business and operations
continuity
1
2
3
4
5
6
7
8
9
Key
Elements of
the Next Big
Thing in
Procurement