Find out what happened when a small group of CPOs got together to share their bold 10-year vision for the future of procurement—and then five years later had that vision checked against what 1,000 executives and practitioners are actually experiencing. In this session, you’ll hear why Ariba and Oxford Economics embarked on “another future of procurement” study, and see what makes this survey so different from all the others. You’ll get an insider’s peak at the preliminary findings, and leave inspired to talk more with colleagues about what you think the future—and present day—looks like for procurement.

1. The Future of Procurement:
Ongoing and Emerging Trends from Oxford Economics
Customer
Dr. Martin Kotula, Director, Industry Value Engineering, Procurement & Business Network, Ariba, an
SAP Company
17 November, 2015 - Ariba Commerce Summit, Stockholm

2. © 2015 Ariba – an SAP company. All rights reserved. 2Public
Future of Procurement
How executives and practitioners
around the world view a fast-
changing function
Dr. Martin Kotula
Director, Industry Value Engineering
Ariba an SAP Company

3. © 2015 Ariba – an SAP company. All rights reserved. 3Public
Key findings
 From here to where? Changes in the procurement function drive sharply different views of what the
future will look like.
 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 though social
platforms—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.

4. © 2015 Ariba – an SAP company. All rights reserved. 4Public
From here to where?

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32%
33%
30%
32%
27%
35%
30%
38%
44%
26%
27%
28%
29%
32%
34%
35%
44%
46%
Geopolitical issues
Big Data
Regulation
Cloud computing
Talent/Skills shortages
Mobile technology
Business networks
Commodity pricing
Globalization
Executives Practitioners
Macro concerns still dominate
Which economic and
technology trends do
you expect to have
the most significant
impact on the
procurement
function over the
next three years?

6. © 2015 Ariba – an SAP company. All rights reserved. 6Public
Differing views on procurement’s future –
Leaders need to drive a clearer vision
23%
25%
12%
28%
33%
17%
Significant Change Limited Change

7. © 2015 Ariba – an SAP company. All rights reserved. 7Public
Procurement gets collaborative

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Internal collaboration is a given
70%
Procurement is becoming
more collaborative with
other parts of the business.
65%
Procurement data is being
used strategically by other
parts of the business.
Agree /Strongly agree
Practitioners say, at their company…

9. © 2015 Ariba – an SAP company. All rights reserved. 9Public
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

10. © 2015 Ariba – an SAP company. All rights reserved. 10Public
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

11. © 2015 Ariba – an SAP company. All rights reserved. 11Public
Goodbye to business as usual

12. © 2015 Ariba – an SAP company. All rights reserved. 12Public
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 parts of a solution
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

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The KPI imbalance: How Executives see usage and value
Usage: Which of the following KPIs does
your organization use? Select all that
apply.
Value: How valuable are the following
KPIs? “Valuable” and “Highly valuable”
responses.

14. © 2015 Ariba – an SAP company. All rights reserved. 14Public
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

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The technology agenda

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The tech imperative
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. Ranks listed here from the technology-related responses
EXECUTIVES PRACTITIONERS
2
1 1
2
3
Business networks
Mobile technology
Cloud computing
Mobile technology
Big data
Cloud computing3

17. © 2015 Ariba – an SAP company. All rights reserved. 17Public
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

18. © 2015 Ariba – an SAP company. All rights reserved. 18Public
Practitioners see sharp differences in automation value
14%
19%
23%
25%
26%
33%
35%
37%
46%
51%
56%
0% 10% 20% 30% 40% 50% 60%
Invoice management
Procurement performance analytics
Transactional collaboration with suppliers
Supplier performance management
Contingent workforce management
Supplier risk management
Contract management
Strategic sourcing
Services procurement
Operational procurement
Spend analysis
Q24 P: Which of your current process automations provide the greatest
value—e.g., by saving you time, increasing efficiency, or enhancing
insight?
 While invoice management is a top choice
among executives, it ranks low for
practitioners—just 14% say it is among the most
valuable automations.
 Practitioners in Europe are more likely to say
spend analysis provides substantial value
(69%).
 Asia Pacific practitioners are more likely to say
supplier risk management automations provide
the most value (44%).

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The human challenge

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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.

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Job satisfaction is high
They plan to stay in the procurement function
for the long term.
They are satisfied or very satisfied with their jobs.
Procurement is a training ground for
employees moving to other areas of the
business.
Practitioners say…
56%
54%
40%

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Next steps

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OXFORD ECONOMICS
Download the Executive Summary and get
a copy of the Vision 2020 Report:
Ari.ba/futureofprocurement

24. Thank You!
Dr. Martin Kotula
SAP Deutschland SE & Co. KG
Director
Industry Value Engineering
Procurement & Business Network
+49 173 7399 120
martin.kotula@sap.com