Business Commerce Innovation [Boston]

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Commerce Innovation: 2014
Andrew Bartolini, Chief Research Officer
Christopher J. Dwyer, Research Director
Ardent Partners
October 2, 2014

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CO-PRESENTERS
Copyright © 2014 - Ardent Partners Ltd.
Andrew Bartolini
Chief Research Officer
Ardent Partners
Christopher J. Dwyer
Research Director
Ardent Partners

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AGENDA
Introduction
Commerce Innovation
Convergence on the Network

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Ardent Partners is a research and advisory firm focused on defining and advancing the supply management strategies, processes, and technologies that drive business value and accelerate organizational transformation within the enterprise.
ARDENT PARTNERS

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CPO Rising: The site for CPOs and other supply management executives
www.cporising.com
ARDENT’S NETWORK OF SITES
Payables Place: Global source for ePayables news, research, & analysis
www.payablesplace.com

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ARDENT’S’ RESEARCH COVERAGE: SUPPLY MANAGEMENT
Commercial Cards
Supply Risk & Supplier Information/Performance Management
Contingent Workforce Management
Other Complex Categories (T&E , Meetings and Events, Print, etc.)
Spend Analysis
eSourcing
Contract
Management
eProcurement
ePayables
Procurement Outsourcing

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WHAT IS BUSINESS COMMERCE?
Commercial Cards
Supply Risk & Supplier Information/Performance Management
Contingent Workforce Management
Other Complex Categories (T&E , Meetings and Events, Print, etc.)
Spend Analysis
eSourcing
Contract
Management
eProcurement
ePayables
Procurement Outsourcing

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WHAT IS BUSINESS COMMERCE?
BUY
PAY
MANAGE

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BUSINESS COMMERCE INNOVATION
BUY
PAY
MANAGE
22%
4%
2006
2011
Motorola Market Share:
Mobile Phones
Key Takeaways:
 Joy’s Law: “Innovation will happen, and it will happen elsewhere.”
 Innovation extends to all supply markets
 A ‘static “supply base is now a red flag
 No company can risk going it alone
 Increasing reliance on suppliers
 Suppliers are partners assets

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CPO’S AGENDA: THEN AND NOW
CPO View 2009
"There has been a change in context, speed, and risk. It's time for procurement to be the hero.“
Christina DeLuca
CPO - BP
CPO View 2014
"The minute you get complacent, people will begin to offer other opinions. You must stay sharp.“
Chris Shanahan
CPO - BD

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TOP CPO PRIORITIES (NEXT THREE YEARS)
©Ardent Partners - 2014
Innovation

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TOP STRATEGIES FOR SOURCING TEAMS IN 2014
55%
47%
42%
32%
31%
31%
Improve
collaboration
with business
Improve
collaboration
with suppliers
Improve use of
technology (buy
new systems /
improve current
ones)
Implement
stronger
policies and
processes
Improve
collaboration
with the CFO
and other
executives
Optimize current
systems and
processes
© Ardent Partners - 2014
Collaboration

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THE CPO ROLE IN 2014
Purchasing
Sourcing
Cash
Risk
Innovation
Sales
M&A
New Products
New Markets
Joint Ventures
Travel
Outsourcing
Contingent Workers
Trusted Advisor / Influencer / Special Projects
Accounts Payable
Convergence

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BUY
PAY
MANAGE
Key Takeaways:
 No company wants to “slow the line”
 ePayments are easier
 ePayments are cheaper
 ePayments are more accurate
 ePayments are more secure

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AP’S TOP PRIORITIES IN 2014
23%
25%
27%
31%
37%
63%
Generate discounts on spend
Better link P2P processes and systems
Improve collaboration/communication with
procurement
Improve visibility into invoice and payment
data
Improve reporting and analytics around AP
Reduce processing costs

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THAT PERSISTENT PAPER PROBLEM
Copyright © 2014- Ardent Partners Ltd.
70%
30%
Manual
Electronic
Invoice Formats
Payment Formats
44%
56%
Manual
Electronic

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THE BENEFITS OF ELECTRONIC PAYMENTS
24% of all AP groups report increased accuracy and control of payment delivery
24%
45%
51%
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45% of AP groups say that electronic payments enable more efficient and streamlined processing (e.g., review, approval, execution).
51% of enterprises rate cost savings as the top benefit seen from electronic payments

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19
Greater involvement in working capital optimization
Skill set required within AP will change
Stronger AP & Procurement partnership
AP process will be largely automated
AP TRENDS & PREDICTIONS (“LIKELY” IN NEXT 2-3 YEARS)
83%
69%
66%
57%

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BUY
PAY
MANAGE
Job Stats
 4.4 years = Average job tenure in US (US Dept. of Labor - 2014)
 91% of Millenials expected to stay at current job less than 3 years
Key Takeaways:
 The “rules of employment” have changed
 Work will continue to migrate to where it can best be done
 Geography will not be a talent constraint
Job hopping is now a trend
 Outside talent can offer great value and agility
 There is a talent war
 New strategies and approaches are needed

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CURRENT CONTINGENT WORKFORCE CHALLENGES

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THE EVOLVING CONTINGENT WORKFORCE
Ardent Partners predicts that the average contingent workforce will rise by 30% over the next three years
92% of enterprises cite non-traditional talent as a moderate-to-vital aspect of their overall corporate strategy
The “war for talent” now outweighs “cost savings” as the top driver of contingent workforce management

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Traditional
Complex
Independent Contractors
Comprised of SOW- based projects and services Purpose: Unique talents and expertise
Freelancers, consultants and contractors
Purpose: High-level talent and specialized skillsets
“Temps” sourced via staffing suppliers and agencies
Purpose: Low-to- mid-level talent
ARDENT PARTNERS CWM FRAMEWORK

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THE FUTURE OF CONTINGENT WORKFORCE MANAGEMENT

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CONVERGENCE ON THE NETWORK

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THE EVOLUTION OF TALENT SOURCES

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BUSINESS NETWORKS’ IMPACT ON TRANSACTIONS

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BUSINESS NETWORKS’ IMPACT ON SUPPLIER COMMUNICATION / COLLABORATION

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THE NEW “COMMERCE” DYNAMIC
Speed and complexity continue to accelerate
Compliance, control, efficiency are table stakes
This is the “Age of Innovation and Collaboration“
Winners will be the agile organizations that can tap into expertise and find value wherever it exists in the market
Selecting the right partners and platforms has never been more important

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For more information please visit:
www.ardentpartners.com
THANK YOU!
Andrew Bartolini
Managing Partner &
Chief Research Officer
617.752.1620 abartolini@ardentpartners.com @andrewbartolini
Contact Info:
Ardent’s Media Sites:
Copyright© 2014 - Ardent Partners Ltd.
Christopher J. Dwyer
Research Director &
VP, Operations
617.752.1624
cdwyer@ardentpartners.com
@cjd_ardent

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