An interactive panel discussion on how procurement is changing and why old ways of working and measuring performance may not get the job done. Featuring Edward Cone, Oxford Economics’ Deputy Director of Thought Leadership and Jennifer Roberts, Senior Manager, Center of Excellence for Sonoco – a $5B global consumer packaging company. Gain insight into: • Sonoco’s real-world perspectives, including a look at their supplier measurement program • Your peer’s views on operations and KPIs from the Oxford global study of more than 1,000 procurement executives and practitioners • Proven strategies and tactics to measure your success

1. Goodbye to Business as Usual:
Transforming Operations, Measuring Value
Webinar Series on the Future of Procurement, by Oxford Economics
October 28, 2015
The future of procurement
One survey, two perspectives

2. © 2015 SAP SE or an SAP affiliate company. All rights reserved.
Today’s Presenters:
Edward Cone
Technology Practice Lead & Deputy Director,
Thought Leadership
Jennifer Roberts
Senior Manager, Center of Excellence
Sonoco
Michael Koch
Director, Solution Marketing
Ariba, an SAP Company
Panelists:
Moderator:

3. The Future
of Procurement
Goodbye to Business as Usual:
Transforming Operations,
Measuring Value
October 28, 2015

4. Building on a strong foundation
 Outsourcing explodes
 Strategy scope widens
 Talent competition heats up
 Innovation comes from without
 Suppliers gain power

5. 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?

6. A global survey of executives and practitioners
In collaboration with Ariba, 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

7. Key findings
 From here to where?
 Procurement gets collaborative.
 Goodbye to business as usual.
 The technology agenda.
 The human challenge.

8. Transforming Operations

9. “You’re going to have some
companies that are going to
continue to evolve and other
companies that frankly will
just keep cutting the POs.”
–Mike Merlin, Vice President of
Procurement, Las Vegas Sands Corp.

10. The shifting role of the procurement function
Executives say, at their company…
Procurement is
becoming
embedded in
other parts of the
organization.
Procurement is
becoming more
collaborative with
other parts of the
business.
58% 68% 56%
Procurement data
is being used
across the
company to drive
strategic
decision-making.
“Agree” and “Strongly agree” responses

11. Key sources of change
Executives Practitioners
54% 53%
Procurement
managing accounts
payable
“To quite an extent” and “to a great extent” responses
53% 48%
An increase in
services purchasing,
including statement-
of-work contracts
49% 54%
Suppliers providing
more end-to-end
solutions, instead of
just materials or parts
of a solution
To what extent are the following trends affecting
the way your procurement function operates?

12. Day-to-day work is expanding to cover more strategic tasks
Executives say… On which of the following areas would you like
your organization to be most focused today?
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
Executive respondents chose up to 3 areas

13. New responsibilities for procurement demand new tools…
Executives Practitioners
Social media
Knowledge exchange platforms
B2B commerce networks
58% 22%
58% 29%
48% 27%
54% 25%
44% 32% 47% 31%
Quite or very important to procurement’s progress
Moderately important
Quite or very important to procurement’s progress
Moderately important

14. …and the right people to get the job done
How difficult is it to find and recruit
talent with the following skills to
meet the changing demands on the
procurement function?
Executives say…
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” and “Very difficult” responses

15. Measuring Value

16. “If the head of procurement has a good,
strong vision, and the team understands
what that vision is, there would be more
common ground.”
–Chief Procurement Officer,
major financial institution

17. Differing views on KPIs
46%
41%
45%
46%
44%
37%
44%
46%
50%
46%
51%
58%
14%
19%
31%
33%
33%
34%
35%
36%
44%
49%
49%
70%
Number or percent of touchless transactions
Order cycle time
Stakeholder satisfaction results
Percent of compliant purchasing
Impact on revenue from innovation
Number of suppliers with automated collaboration
Percent of total spend under management
Risk mitigation
Procurement ROI
Inventory turnover/inventory activity
Supplier quality/performance
Cost savings and cost avoidance
Which of the
following KPIs
does your
organization
use to
measure
procurement's
success?
Executives Practitioners

18. The KPI imbalance
How
executives
see KPI
usage and
value

19. Practitioners still 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
49%
Percent of compliant
purchasing

20. Reporting strategies can be just as important as KPIs themselves
51%
41%
Automation of key
processes
49%
54%
Determining cost-
avoidance value with
finance department
47%
45%
Tracking performance
on products and
services that
procurement played a
role in developing
45%
56%
Using strong spend
category-level analytics
to gain influence and
bring more spend under
management
What strategies are you using to achieve and report on your KPIs?

21. The transformation imperative
Whatever the high-level changes may be, the processes, tools, and people behind them must also
transform. Procurement’s strategic future depends on getting operations right.

22. Next steps

23. Download our reports and infographics
Visit the Future of Procurement resource
center today for the executive overview,
infographics, think pieces, and more.
Download here > http://ari.ba/2K0

24. OXFORD ECONOMICS

25. Thank you for joining us today!
Ariba Contact:
Michael Koch
Solutions Marketing
Ariba, an SAP Company
Michael.koch04@sap.com
Oxford Economics Contact:
Edward Cone
Deputy Directory, Thought Leadership
Oxford Economics
edcone@oxfordeconomics.com