The Future of Procurement: Why is Technology Lagging Behind?

© 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential.
A WEBINAR BY IACCM AND SIRIONLABS FEATURING A.T. KEARNEY AND FORBES
SEPT 25, 2018
The Future of Procurement: Why
is Technology Lagging Behind?

2
© 2012-18 SirionLabs Pte. Ltd. The contents of this presentation are proprietary.
THE HOUSEKEEPING ITEMS:
• Webinar slides and recording will be emailed
• Enter questions in chat on webinar panel
Before we get started

3
AJAY AGRAWAL
Co-founder and Chairman
SirionLabs
DR. HUGO EVANS
Vice President
AT Kearney
Meet the speakers
SALLY HUGHES
CEO
IACCM
PAUL MARTYN
Supply Chain Expert
Forbes Media

4
New generation of
specialized platforms
that have the potential to
transform procurement
effectiveness
What will be covered today
Challenges and gaps
in traditional
procurement
technology set-ups
Strategies for your
organization’s
transition to the
procurement tech
stack of the future
1 2 3

5
The International Association for Contract & Commercial Management enables organizations and professionals to achieve world-
class standards in their contracting and relationship management process and skills.
For more information, visit www.iaccm.com
SirionLabs is transforming the way buyers and suppliers engage with each other in complex contracts using its SaaS platform –
Sirion. Leveraging automation and advanced analytics, Sirion helps enterprises create higher value and more successful
relationships, while effectively managing cost and risk in strategic supplier engagements.
For more information, visit www.sirionlabs.com
About the organizers

A different era, different
types of relationship
• Technologies: multitude of choice, but most
under-perform
• Relationships: increasingly complex portfolio
to be managed
• Procurement: inward, price-based focus is
transforming to outward, value-based view
Most Procurement groups are ill-equipped to
meet the needs of today
6

Redefining needs
• Technology to support the business, not the
function
• Integrated solutions facilitating data flows
and user adoption
• Expanding scope to drive performance, not
just report problems
The modern era requires technology
that oversees networks and empowers
human decision-making
7

Assessment &
Evaluation
✓Ease and speed of implementation
✓Integration with other systems
✓User benefits to drive adoption
✓Value to be generated
A whole-business solution, supporting
collaboration, eliminating value erosion
8

Managing in an
uncertain world
• Trading relationships lie at the heart of every
business
• Change is the only certainty
• Systems must monitor AND facilitate
performance
• Shared and actionable data is the critical
competitive advantage
Are you equipped for the emerging era?
9

Dr. Hugo Evans
September 25th, 2018
The Future of Procurement: Why is Technology Lagging
Behind?

11
A.T. Kearney is a globally recognized consulting firm – offering scale in industries,
functions, and geographies
Americas Atlanta
Bogotá
Boston
Calgary
Chicago
Dallas
Detroit
Houston
Mexico City
New York
San Francisco
São Paulo
Toronto
Washington, D.C.
Asia Pacific Bangkok
Beijing
Brisbane
Hong Kong
Jakarta
Kuala Lumpur
Melbourne
Mumbai
New Delhi
Perth
Seoul
Shanghai
Singapore
Sydney
Tokyo
Europe Amsterdam
Berlin
Brussels
Bucharest
Copenhagen
Düsseldorf
Frankfurt
Istanbul
Lisbon
Ljubljana
London
Madrid
Milan
Moscow
Munich
Oslo
Paris
Prague
Rome
Stockholm
Stuttgart
Vienna
Warsaw
Zurich
Middle East
and Africa
Abu Dhabi
Doha
Dubai
Johannesburg
Riyadh
Clients We work with more than two-thirds of the Fortune Global 500, the world’s
largest companies by revenues, as well as with the most influential
governmental and non-profit organizations.
Locations A.T. Kearney has 58 offices located in major business centers in 40
countries.
Team We are 3,500 people strong worldwide who
have broad industry experience and come from leading business schools.
We staff client teams with the best skills for each project from across
A.T. Kearney.

12
“A.T. Kearney is the clear market leader in the procurement space”
– Forrester Research
Strategic Sourcing
Assessment of
Excellence in
Procurement (AEP)
The Purchasing
Chessboard®
Return on Supply
Management Assets
(ROSMA©)
Holistic Procurement
Transformation
(HPTTM)
Invention
on
demand
Core cost
analysis
Vertical
integration
Bottleneck
managem
ent
Sourcing
community
Procureme
nt
outsourcing
Complianc
e
managem
ent
Leverage
innovation
network
Design for
sourcing
Intelligent
deal
structure
Political
framework
manageme
nt
Buying
consortia
Mega
supplier
strategy
Closed loop
spend
manageme
nt
Functionalit
y
assessment
Product
teardown
Composite
benchmark
Product
benchmark
Cost data
mining
Master
data
managem
ent
Supplier
consolidati
on
Specificatio
n
assessment
Design for
manufactur
e
Process
benchmark
Complexity
reduction
Standardi-
zation
Spend
transparen
cy
Bundling
across
generations
Value
chain
reconfigu-
ration
Supplier
tiering
Collaborati
ve
capacity
managem
ent
Visible
process
organizatio
n
RFI/RFP
process
Supplier
market
intelligence
Make or
buy
Revenue
sharing
Sustainabilit
y
managem
ent
Virtual
inventory
managem
ent
Vendor
managed
inventory
Expressive
bidding
Reverse
auctions
Best shoring
Profit
sharing
Project
based
partnership
Total life
cycle
concept
Supplier
developme
nt
Total cost of
ownership
Price
benchmark
Cost
regression
analysis
Strategic
alliance
Value
based
sourcing
Collaborati
ve cost
reduction
Supplier
fitness
program
Leverage
market
imbalances
Unbundled
prices
Factor cost
analysis
Demand
reduction
Contract
manageme
nt
Bundling
across
product
lines
Bundling
across sites
Global
sourcing
LCC
sourcing
Cost based
price
modeling
Linear
performan
ce pricing
• Introduced the idea of
Strategic Sourcing
• Landmark global
engagements
• Introduced 7-step
sourcing, now a worldwide
standard across industries
• Periodic global
benchmarking to identify
best practices based on
the “House of
Procurement”
• Hundreds of participants
across all industries and
regions with most recent
update done 2018
• Toolbox to assign the right
method to work with
suppliers based on supply
power and demand
power
• Works for all industries
• Highly cross-functional
• Sustainable frame-work to
assess Procurement
Performance
Management
• Illustrates value in “CFO
resonating language”
• Benchmarks performance
on a peer-to-peer basis
• Framework to chart a
client's journey towards
excellence in Purchasing
• Provides right combination
of content and people
focused tools
Sourcing-&
commodity
management
Human Resources Management
Supply
Management
Strategy
Organizational
Alignment
Supplier
Relationship
Management
Operating
Process
Management
Performance
management
Knowledge/Information
management

13
The Future of Procurement series
(September 2018) (November 2018) (December 2018)
Procurement talent: It’s
time to panic!
(December 2018)
The Complete Future of
Procurement
(October 2018)
(October 2018)
The Future of DirectsThe Future of DirectsThe Future of Directs
(November 2018)
The Real Disruption

14
Why now? What’s driving the change?
Key drivers
Traditional suite providers are changing dramatically and others are going out of business
Suite providers are
changing
1
Why isn’t corporate procurement like Amazon?Consumerization
2
To compete (and survive) today you must be continually improving, innovating, and delivering value
Good is no longer good
enough
4
New businesses offerings, more specific solutions, new technology, new approaches mean massive
disruption
Disruptive offerings
3
Most traditional procurement is being automated and the rest will be very soon
Automation, automation,
automation
5

15
Requisition
Management
Requisition
Purchase Order
Workflow Mgt.
Catalog Mgt
Traditional procurement technology follows a linear flow
Source: A.T. Kearney
Procurement Process
Supplier Information
Management (SIM)
• Risk Assessment
• Supplier Portal
• Supplier Data
eSourcing
• eRFX
• Auctions
• TCO Analysis
• Optimization
Supplier
Performance/ Risk
Management
• Surveys/Scorecards
• KPI Tracking
• Compliance Mgmt.
Contract
Management
• Contract Warehouse
• Contract Authoring
• Dynamic Alerts
Spend Monitoring and Analytics
• Project In-Take / Pipeline
Management
• Initiative & Resource Mgt. • Spend Analytics • Benefits Tracking
Governance and Management
• Collaboration
Tools
• Benchmarking &
Industry Reports
• Best Practices • Master Data
Management
• Templates
Strategic Procurement Planning and Performance Management
“Upstream”
Operational Procurement
“Downstream”
Compliance Management
• Knowledge
Management
• Performance
Management
Payment Systems
Accounts Payable
SCF2 / eInvoicing
P-cards
Dynamic Discounting

16
The traditional procurement technology vendor landscape does not effectively support
automation, innovation, and analytics
Non-exhaustive
Spend Analytics eSourcing Contract Mgmt. Supplier Info. Mgmt
Procure to
Pay
Supplier Perf. Mgmt. Knowledge Mgmt.
Suite Solutions
Functional Specialists

17
The future will be a microservices (API) connected ecosystem of value
creating technologies
AI Hub
commodity
indirects
contract
management
services
sourcing
spend visibility
p2p
smart
contracts
esourcing
temp labor
travel
sourcing
analytics
bot sourcing
risk monitoring
cognitive buying
Illustrative

18
The panacea of “one size fits all” is rapidly fading, as best-of-breed functionality
comes of age
Procurement Technology Journey
As-Is Blend Best of Breed
1. Full scale replacement with
new/upgraded end to end
procurement suite
2. Full scale replacement with
new/upgraded end to end procurement
suite and adoption of new technology
3. Agile enhancement of existing
procurement technology,
integrating and connecting to best
in class functional specialists
Benefits
• Single end to end procurement suite
(lower complexity)
• Best of breed back-end procurement tool, fully
customized to user journeys (highest benefits
potential)
• Agile adoption of new technology, enables short-term
benefits
• Modest investment over time and futureproof
• Accelerated delivery of benefits
• Tools can be chosen to customize the right
journeys
Trade-Offs
• Significant investment commitment over a
2-3 year roll-out
• Benefits realisation takes years as
opposed to months
• High level of investment over a 2-3 year roll-out
• Existing technology backbone remains (over-
time intelligent and automated technologies may
supersede the old systems)
Example
Technologies

19
What this looks like in practical terms

20
Services dominate the enterprise sourcing spend across industries……
Source: Forrester Research
Purchased services as %age of aggregate procurement spend

21
…the typical services procured by enterprises vary in type, scale and complexity.
Certain service categories require more active governance than others
(highlighted below in Green)
Global business purchases (2015)
$3.6T
Professional
$3.4T
Construction
& Infrastructure
$1.8T
Logistics &
Transportation
$1.8T
IT
$3.6T
Financial $2.6T
Real Estate
$1.6T
Telecom
$1.3T
Facilities
Mgt. &
Other
Business
Services
$0.8T
T&E
$0.8T
Rental
&
Leasing
$0.5T
Staffing
Global Spend on Services

22
Services buying challenges - Pre and post-signature
The bulk of this group’s
functionality is limited to
contracts, e-invoicing, risk
and catalog management.
Performance Risk
Contract Financial
The most crowded
quadrant because the
overwhelming majority of
procurement technology is
still being used to buy
goods.
Ariba
BravoSolution
Zycus
Aravo
Coupa
2000 2005 2000
Jaggaer
Ariba
Zycus
Coupa
ISG
KPMG
Oracle
SAP
Hiperos
RSA Archer GRC
Servicenow
CA-Oblicore
Remedy ITSM
HPSM
PRE-SIGNATURE POST-SIGNATURE
SERVICESGOODS
Deloitte
MarketPenetration
SirionLabs
SirionLabs
The relatively small dot
sizes in this quadrant
indicates the fragmented
nature of the post-
signature technology
landscape.
The lack of technology in
this space is indicated by
the fact that it is heavily
dominated by sourcing
advisory organizations.

23
Evolution of the CLM landscape
Q3, 2018

24
Supplier Governance
Procure-to-Pay eSOURCING,
eRFX, AUCTIONS
PERFORMANCE
MGT.
FINANCIAL
MGT.
CONTRACT
MGT.
RELATIONSHIP
MGT.
RISK
MGT.
CONTRACT
REPOSITORY
SPEND
MONITORING &
ANALYTICS
REQ.
GATHERING
CONTRACT
AUTHORING
SUPPLIER INFO MGT.
(SIM) & MDM
INVOICING &
PAYMENT
PURCHASE
ORDER/REQUISITION
INVENTORY/
CATALOG
Traditional CLM
How contract management, supplier governance and P2P come together
P2P Solutions (Ariba/Coupa)
Sirion
DUE-DILIGENCE
/ONBOARDING
BENEFITS/
COMPLIANCE
TRACKING

25
The radical insufficiency of P2P
P2P hygiene required for all suppliers
REGULATORY
AND POLICY
COMPLIANCE
AI/NLP DRIVEN
CONTRACT
METADATA
CAPTURE
(OBLIGATIONS,
SL/KPIs,
PRICING,
RESOURCE
UNITS)
CHANGE
MANAGEMENT
OBLIGATION
COMPLIANCE
AUTOMATED
SERVICE LEVEL
MGT.
CREDITS &
EARNBACKS
PREDICTIVE
INVOICE
AUDITING FOR
SERVICES
Deeper functionality required
for strategic services suppliers
DYNAMIC RISK
ASSESSMENT
AUTHORING OF
COMPLEX
CONTRACTS
(DOCUMENT
FAMILIES)
CAPTURE OF
KEY CONTRACT
DATA DURING
AUTHORING
SUPPLIER
PERFORMANCE
PxQ
INVOICE
AUDIT
RISK
MANAGEMENT
eSOURCING
/eRFX/
AUCTIONS
CONTRACT
MANAGEMENT
REQ.
GATHERING
SPEND
ANALYSIS
PO/
REQUISITION
INVENTORY
/CATALOG
RELATIONSHIP
MGT.
SUPPLIER
INFORMATION/
MDM
CONTRACT
AUTHORING
ISSUES,
ACTIONS,
DISPUTES
MGT.
GOVERNANCE
FORUMS

26
RELATIONSHIP
MANAGEMENT
PERFORMANCE
MANAGEMENT
FUNCTIONAL
SILOS
TECHNOLOGY
ISLANDS
FINANCIAL
MANAGEMENT
FINANCIAL
MANAGEMENT
S E RVIC E
DE LIVE RY
RISK
MANAGEMENT
CORPORATE
RISK
LEGAL /
CONTRACTS
RELATIONSHIP
MANAGEMENT
Strategic supplier lifecycle
PROCUREMENT
WHAT WAS
PROMISED?
WHAT ACTUALLY HAPPENED?
WHAT WAS
INVOICED?
PRE-SIGNATURE
PROCUREMENT
PROCESSES
CONTRACT
MANAGEMENT
PRE-CONTRACT
(6-12 MONTHS)
SERVICE
DELIVERY
INTEGRATION THROUGH REST API LAYER
FINANCIAL
MANAGEMENT
PERFORMANCE
MANAGEMENT
RISK
MANAGEMENT
CONTRACT
MANAGEMENT
RELATIONSHIP
MANAGEMENT
CONTRACT
AUTHORING
Sirion – Integrated Enterprise Platform for Supplier Governance
The enterprise procurement tool stack today

27
Sirion’s end-to-end solution for managing complex contracts
CLAUSE LIBRARY
TEMPLATE LIBRARY
AUTHORING WORKFLOW
E‐SIGNATURE
DOCUMENT REPOSITORY
OBLIGATION CAPTURE
DOCUMENT CHANGE MANAGEMENT
CONTRACT INTERPRETATIONS
SERVICE LEVEL MANAGEMENT
OBLIGATION COMPLIANCE
SOW/WO/PO MANAGEMENT
CREDITS & EARNBACKS
INVOICE AUDITING
SPEND POOL MANAGEMENT
FINANCIAL ANALYSIS AND PLANNING
VALUE ASSURANCE
GOVERNANCE FORUMS
ISSUE/ACTION ITEM MANAGEMENT
GOVERNANCE PROCESS HEALTH
SURVEY MANAGEMENT
REGULATORY COMPLIANCE
POLICY COMPLIANCE
SUPPLIER AUDITS

28
Sirion has successfully delivered hard savings of 9.78% through invoice reductions
$3.1B
INVOICE AMOUNT
VALIDATED
600,000+
TOTAL OBLIGATIONS
MANAGED
$18B+
TCV UNDER MANAGEMENT
250,000+
SUPPLIERS ON SIRION
Hard savings of over $300M delivered by Sirion
Hard savings = Invoice reductions
Hard Savings
Achieved
$303M
Invoice Amount
Validated
$3.1B

29
Sirion’s automation reduces manual governance effort by 45%
MANUAL GOVERNANCE
MODE
POST-SIRION
GOVERNANCE MODE
45%
reduction in
manual effort
DISCIPLINE MANUAL EFFORT DELTA
Contract Management -42%
Performance Management -42%
Financial Management -49%
Relationship Management -47%
OVERALL GOVERNANCE -45%
Manual effort reduction distribution

The Rise of
the Social
Enterprise
Source: Deloitte Global Human Capital Trends survey, 2018. Deloitte Insights | deloitte.com/insights
The evolution of the social enterprise

What Skills
Are Needed
To Use AI
Effectively
Source: Deloitte Global Human Capital Trends survey, 2018. Deloitte Insights | deloitte.com/insights
Expected emphasis on workforce skills as AI/robotics
are integrated in the enterprise

Change
Management is
Difficult
Only 12% of companies that
launch major change initiatives
fully achieve their goals

Managing
Change Is Critical
To Success

35
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marketing@sirionlabs.comwww.sirionlabs.com
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@SirionLabs

The Future of Procurement: Why is Technology Lagging Behind?

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