In response to recent global business disruption SAP has made a substantial effort to address the emerging commercial landscape of procurement and supply chains. Recent appointments to the SAP executive and new SAP social initiatives are demonstrating a commitment to a proactive method to deal with the upheaval of the business community and beyond. The SAP ‘Procurement Reimagined’ series of events is a part of this over-arching strategy
On the 1st of October this year SAP announced the appointment of their president of the new department of Intelligent Spend and Business Network, John Wookey. His previous roles as executive vice president of Industry Applications and Platform Technology teams at Salesforce, senior leadership roles at Oracle and as executive vice president for Development at SAP from 2008 to 2011 mark him out as an industry veteran.
Thomas Saueressig, SAP CEO said: “John is a recognised development expert with a proven track record of leading ERP, CRM and industry-specific application and platform technology teams”.
Dana Gardner (principal analyst at Interarbor solutions) when commenting on Wookey’s appointment as head of Intelligent Spend and Business network, remarked “SAP has an enormous opportunity to take its cloud-first, intelligent spend business to the next level as businesses the world over seek digital transformation, actionable insights and further automation across these essential business functions”
The multi-faceted procurement solutions of SAP Ariba, SAP Fieldglass and the SAP S/4HANA database are constantly evolving as new challenges come to the fore of global business, and new applications of these technologies become apparent to SAP users.
SAP recently launched the “5&5 by ’25” initiative at the SAP ‘Procurement Reimagined’ event in Singapore which aims to “inspire organisations around the world to buy more goods and services from purposeful suppliers, making a positive collective impact on the societies they operate in.”
Adaire Fox-Martin, SAP’s new Global Buy Social Ambassador for Social Enterprise UK, illustrated the benefits to society of utilising 5% of the 14 trillion USD global procurement spend to purchase the goods and services of social enterprises and more diverse businesses, ‘culturally and operationally focussed on changing the world’:
“Every company in every industry needs to procure… We all need soap in our washrooms, landscaping for our offices, food and drink in our cafeterias, marketing services and office supplies… This is money we are spending anyway. Why not spend it with suppliers who are delivering social impact as well?”
This article from IgniteSAP will discuss the content of the SAP Procurement Reimagined Virtual Event held on October the 13th 2020 for the Europe, Middle East and Africa (EMEA) region for those who were unable to set aside the time on the day. It is an overview of the state of play for SAP Ariba and business procurement practices.
The Procurement Reimagined event was kicked off with a welcome by Jason Wolf, Senior Vice President & General Manager Customer Success for Intelligent Spend. He said that the lesson they had learned at SAP from working with customers and partners this year was that “visibility, agility, experience and digital collaboration with our diverse supply groups is essential in these uncertain times and that is why SAP is creating this brand new virtual event.. together day by day we are reimagining procurement in all categories of spend: be it direct, indirect, MRO or workforce management. This starts with a deep understanding of your specific industry challenges and leveraging the great power of our networks, our partner ecosystem, and extended communities.”
This was followed by a further introduction to Procurement Reimagined by Daniel Laumayer, VP and GM for SAP Procurement Solutions for the Europe, Middle East & Africa region. He began by saying “Procurement leaders are being asked to adjust the way they work, where they work, and adapt to impacts on demand at a rapid pace.”
He highlighted this by showing that recently conducted SAP research demonstrated that half of procurement and supply chain executives have had to find alternative sources of supply due to Covid-19.
“Procurement’s role is more vital than ever: helping organisations boost agility and foster business continuity. Today we will hear about the challenges that are impacting you most, and how your peers are adapting to the disruption and reimagining for the future. We will take a look at how procurement drives strategic value for Lloyds Banking Group through their digital transformation, which is enabling agility and business resilience and driving sustainability in their supply chain. We will also hear from Philips about how their truly forward thinking approach to total workforce management has enabled them to pivot rapidly in this challenging business environment.
Many companies have accelerated their digitisation journey this year to help create lean, automated processes and get data and insights to enable better, faster decision making… and… integration is critical [so] we are working hard to build stronger integrations within our solutions portfolio, which you will hear more about in our product strategy session… When procurement and supply chain leaders come together, act with agility, rethink their processes, reimagine their roles and the impact they can make, the sky is the limit.”
Lloyds Banking Group’s CPO George Booth then joined a session with Lindsey Cook (SAP Senior Engagement executive, Procurement Solutions) and Catherine Hills (VP for Customer First EMEA North) to talk about the imperatives for procurement, as well as to share insights from the Lloyds procurement transformation initiative.
George began by describing the breath of the Lloyds Banking Group and it’s activities as roughly 30 million customers in the areas of Personal banking, retail and commercial banking, and insurance and wealth management. George said his role as CPO was to oversee the supply chain lifecycle, helping the business source technical and commercial innovation advantage in the market, and ensuring value and security in the contracts, managing supply chain risk and driving environmental sustainability, and general ensuring the functioning of as diverse and capable a global supply chain as possible.
He was asked what were the most valuable contributions that procurement brings to organisations today and why agility was important. He replied “You need to have a channel through which your voice is heard… Unless you’re getting through to the executive and board level it’s not going to be heard… Key to that is understanding the business… what problems are we trying to solve for them and what is the global, macro-economic, geopolitical environment. Whilst maintaining supply chain risk assurance… we need to help the organisation discover new advantage…”
He pointed out that he saw part of his role was to onboard fintech (financial technology companies) because if they did not help them to grow and onboard them then they very quickly become a competitor.
“Agility kicks in there… We have to show agility, flexibility, proactiveness and revise our risk appetite on how we attract, onboard and grow some of the best ideas in the financial world.”
Catherine Hills then asked George Booth why he choose the Ariba Platform and what were the benefits he had seen. George replied there were a number of things that were important to consider.
He said Lloyds knew SAP and the transition risks were better understood (over competitors), but much more important was the promise of the investment in the technology roadmap, the more SAP built on their existing ecosystem and brought it to bear on the “Procure Tech” solutions the stronger the proposition was going to be.
“We’ve implemented sourcing, contracts, supplier life-cycle… the risk module… and… guided buying… The big thing for me is the link between the contract and the buying community… we’re raising a purchase order now automatically [which] cuts out a massive amount of admin, ensures value throughout the contract life-cycle and ensures transparency for us and the supplier… and we can reach many more suppliers in the network… no more so than in the last six months as we searched the world for laptops and PPE and everything in between… For me as a CPO scouting the world for loads of things its been hugely helpful.”
George was then asked to give a glimpse into the road ahead for LLoyds as well as the journey going forward with SAP.
“If I look at the CPO role of the past versus how it’s evolving, we used to get credit for driving value.. saving money… managing risk… but we need to get much more proactive… You’re only as good as the risk you’ve mitigated [for] tomorrow… What I need from the [SAP] solution is the insight… risk-vector monitoring… to tell me what’s going on with global markets and what’s going on with my customers… who’s got my data, who’s trying to get my data, who’s underpinning my key business processes and in doing that … with the extended business partner ecosystem I think they [SAP] have got a winning proposition… The recipe is in that partnership together…us with you, you with other customers and that extended supply base… there’s a great quote I use… ‘Don’t wait for the storm to pass. Learn to dance in the rain, because the rain comes.’”
Tamara Braun, Chief Customer Officer and SVP for SAP Procurement Solutions then led a discussion with Salvatore Lombardo (Chief Product Officer and SVP of SAP Procurement Solutions) and Baber Farooq (SVP and Head of Product Strategy for SAP Procurement Solutions)
Baber Farooq began with a summary of how SAP is working to ensure customers are clear on their procurement product strategy:
“We have a very clear strategy in terms of where we are heading… grounded in the idea of making sure we drive maximum efficiency for our customers… that helps them drive productivity for their customers. There are four key pillars… autonomous procurement: making sure we remove professional from repetitive mundane tasks, allow humans to act as the gateway for their professional organisations so that suppliers become an arm for co-innovation. The third pillar is this idea that as companies are exiting this Covid induced economy the demand for skills will increase but that does not mean an increase in hiring and tapping into external workforce management will become critical. Our strategy will provide the maximum capability for our customers to do that in a digital fashion. The fourth point is that rounds off our strategy is the idea of purpose. Throughout your procurement process the idea of realising purpose-led initiatives really becomes a reality.”
Salvatore Lombardo was then asked what SAP is doing in the area of procurement to help businesses deal with the uncertainty, which is too prevalent in today’s business environment.
“[We are ensuring] the product direction is hand-in-hand with solving the customer’s problems… bringing [out] at the same time the customer’s values… One of the main problems we solve with our products… is the end-to-end integration. The three pillars we are [concentrating] on are the source-to-contract pillar, the one-operational engine…and one-invoicing. So the solution goes hand-in-hand with the integration… so we will cover all the relevant procurement market scenarios like category management… like our ‘one entry point’ for all spend channels… like the bundling of the invoicing… getting our capabilities into one box and delivering them in one direction. All of that not solely in one product environment but included in the business network… we can build the procurement network of logistics and build the network out to our intelligent enterprises and connect them so if this is all in line we have transparency.
He went on to give examples of tailoring solutions specific to different industries such as the chemical and automotive industries which have different hierarchies and different sourcing cycles, methods for building out the business network to take account of new partners in the future, and also described new contract life-cycle management capabilities. These developments were described as fully realised and just on the point of packaging.
Following this discussion Molly Spatara, the Global VP of Brand Experience of SAP Procurement Solutions explored topics regarding workforce procurement, particularly of how companies could actively manage their total (internal) workforce with agility, and how an MSP (managed service provider) can add to an organisation in terms of managing their external workforce.
The two other contributors to the discussion were Martin Thomas, Head of Workforce Management for Royal Philips, and Joanne Estrada, Global Head of Workforce Solutions at Randstad Sourceright.
Martin Thomas was asked to begin the conversation with a description of the holistic workforce strategy at Philips which includes contingent workers as well as services providers.
“We have a total workforce management view and when we are planning how to get work done and we try to approach it from a ‘zero base’, so we plan our workforce from zero, looking at what needs to be done first and then deciding: Is it best to hire an employee or engage a contingent worker or use a service provider and hire an outsource… we always consider all sources of skill… different capabilities… we look at the location, and consider changes in the labour market so we can deliver the work we need, and in particular thinking about the workforce of the future…getting the work done, in the right place, at the right cost.”
Molly Spatara described the zero-base workforce as a paradigm shift in workforce planning and continued by asking “How are you making that vision a reality? Can you share a bit more about your progress?”
“One of the first things we did was put ownership of our contingent labour program… from procurement to HR talent acquisition and that was so that we could have that holistic view on all the different ways of getting work done and we could have an aligned strategy. We then took away the focus on headcount and we now look at cost… to do that we have to have really good visibility of those different elements of the workforce so that we can compare, understand the cost… compare the cost of different ways of getting the work done… we use our partners in the MSP and we use SAP Fieldglass vendor management system in running our contingent workforce program and that has allowed us by extending that to get that visibility of the workforce. That means we’ve got coverage of 97% of our contingent workforce and 100% of our employee workforce. [It] also allows us to compare the two workforces, aligning them and mapping them so we can judge like for like… We understand the skills… the capability… the cost, and critically we understand the availability in the marketplace.”
He went on to describe how working with Randstad Sourceright allowed Philips to set up a three-way partnership between talent acquisition, procurement and the MSP which was critical to their success: ‘We consciously make the effort to treat it as a partnership and not as a client/supplier relationship.”
Joanne Estrada then gave a description of the contribution of the Managed Service Provider to contribute to the tripartite collaboration between Philips, Randstad Sourceright and SAP.
“As an MSP we have the ability to manage for our customers the entire contingent, or flexible talent, the entire life-cycle from requisitioning, through invoicing and payment as well as all the reporting that is required for companies to understand what types of decisions they need to make because of the visibility we allow them to have. We also allow our customers to stay compliant on all labour regulations…”
The conversation then moved on to services procurement which are considered more complex than procuring goods and materials, and Martin Thomas said that Philips recognised that services procurement was a large element of spend and because it is not managed through a single system like SAP Fieldglass it presents some challenges around visibility, audit, security and access.
“How do we know who’s accessing our systems? Do we know who’s accessing our buildings for… remote working? How do we know we are providing the right access to the people who need it?”
He concluded by saying that Philips had run a pilot in this area with Randstad Sourceright and explained they were developing a system for services procurement which would address those concerns.
This discussion was then followed by an exploration of digital procurement transformation with Henkel, another large SAP customer working in the area of chemical and consumer goods, with sales of over 20 billion Euros and an overall procurement spend of 14 billion Euros.
Maria Eckervogt, Customer Engagement Executive with SAP Procurement Solutions introduced Bertrand Conqueret, the Chief Procurement Officer of Henkel, and asked him to share some of his insights for driving a successful procurement transformation.
Henkel chose Ariba as the solution to deliver a Source-to-Pay process loop across their procurement network, including sourcing, purchasing and contracting.
“It is a transformation which we have initiated in Source-to-Pay fully imbedded in systems and processes where we aim to simplify our work with a strategy to focus on everything which really matters. This transformation [is putting] our customers, and our markets, in the centre of what we do, and through this journey we [are enhancing] new technology to embrace the digital opportunity and [in our] mindset and processes to stay on the pulse of tomorrow… and through this… to enhance operational excellence, innovation, strategic supplier relationship management, sustainability… so the entire ecosystem.”
After looking at all available options to carry out this transformation Henkel resolved to use SAP Ariba solutions.
“We have two strong pillars of change with which we are currently driving change around Source-to-Pay. One that we call the Simple Sourcing Suite which is a part of the strategic sourcing. The source-to-purchase [partners] were all invited and involved: procurement, buyers… suppliers engaging together to get the contracting to onboard to manage the different tenders properly. Another key component is the purchase-to-pay. We call it the buy-simple part… in particular in the indirect buying of services and materials and enhancing… the guided buying, the supplier networks associated and the simplification of the supplier experience… In the two parts I just mentioned, in the source-to-pay and the source-to-purchase [they] are engaging with the digital experience: creating the backbone, the avenues, the understandings, the know-how in order to be able to manage these end-to-end processes in a lean, simplified, and also in-depth management [network]… this ecosystem is completed with the supplier enablement processes where suppliers get involved and engaged with the supplier life-cycles and performance… [This strategy] is embedded into an overall picture of procurement and end-care, looking at the commercial aspect, risk management, the innovations, but also the system ability and the enhancement of our operational excellence.”
The program finished with a thank you from Daniel Laumayer for the day’s contributors for their insights into how they are reimagining the future and a summary of the content of the program.
“Procurement leaders will continue to pave the way and make it possible by doing what it takes to adapt to future disruption using technology and data to help them make more informed decisions. By leveraging the power of the community in both times of change and times of calm it is a strong community network that will allow you and your business to thrive. by staying on the leading edge of change those companies that are truly able to leapfrog their competition are the ones that think about how they can do good, by doing good business and finally by redefining the way in which they work with there suppliers to create a better future, embracing new ideas and new business practices.”
The Procurement Reimagined Virtual Event includes a series of eleven half-hour breakout sessions involving case studies and deep dives into future procurement best practice as business emerges from lockdown, which we will list below for your convenience. Register your email for access.
Breakout Sessions Available
1 Architecting Your Procurement Landscape – SAP Offers You a Choice
2 Building Supply Chains at Velux That Are Agile, Resilient, and Crisis-Proof
3 Centralise Procurement Without Disruption
4 Direct Material Procurement – 2020 Customer Success Story Highlights
5 Drive Intelligent Collaboration with Stakeholders and Business Partners
6 How to Future-Proof Your Operations
7 Insight-Driven Procurement/ Predict Outcomes and Deliver Savings
8 Mind the Gap Within Your External Workforce and Services Procurement
9 A Practical Conversation on the S2P Vision for Intelligent Enterprises
10 Ready for SAP Fieldglass Solutions? Gain Buy-In from Your Stakeholders
11 An Example of Resilience Through Digit