With our next selection from the SAP Sapphire Now 2021 online event, IgniteSAP has created another transcription of this presentation for those in our community who were unable to attend virtually, or may have missed out on some of the wealth of information contained in this presentation.
“Propel Your Business with Intelligent Spend And a Unified Business Network” is taken from the procurement content track and offers a selection of interviews with SAP partners and those with implementation stories to share.
The presentation begins with a detailed introduction to the current state of play for procurement in 2021 by Thomas Saueressig and John Wookey and other SAP executives and then goes on to feature SAP partner stories from companies and organisations like PepsiCo, HCL Technologies, XPO Logistics, Infosys, and more.
More coverage from Sapphire Now 2021:
[Melissa Chan]
Hello and welcome. We’re live in the SAPPHIRE NOW studio. This is the procurement show and I’m Melissa Chan.
The role of procurement leaders has never been more critical. Think about it. In any organisation no one can manufacture or sell anything, render service or even write an email until procurement has been involved. When you widen the view a little to include managing all spend, or even hiring contingent labour, you can clearly see the vital role leaders in procurement and spend management play in keeping businesses running.
So let’s go straight to the top here is the member of the SAP Executive Board Thomas Saueressig, to tell us how interconnected technology will be essential to making the future work.
[Thomas Saueressig]
Few could have predicted that the pandemic would shake up the global economy. It’s something none of us has ever seen in our lifetime. Suddenly, supply chain issues were top of mind. Like all of you, I saw for myself, how quickly the shelves emptied. But while this change was sudden, consumer behaviour has been steadily changing.
Today’s consumers want details about how products are sourced, produced and delivered. And it goes well beyond just checking the labels for ingredients. In a recent study, 73% of consumers said traceability to prove sustainability of products is important to them, and they would even pay a premium for it.
Ladies and gentlemen, welcome to this year SAPPHIRE NOW, my name is Thomas Saueressig. And as executive board member responsible for all SAP business applications. It’s my key goal to help you succeed in this environment. And as such, I know that all of your procurement decisions, and all of your interactions with suppliers have a strategic impact on your business because they also impact your customers.
Procurement is the beating heart of a business. It can mean the difference between growing a business or shattering the business. This is where we want to support. Our solutions help align every single spend decision to your business strategy. Whether you focus on direct or indirect procurement, service procurement, contingent labour, or maintenance, repair and operations, we have a holistic set of solutions. We help you extend your processes beyond the four walls of your company. The combined power of our integrated solutions from Intelligent Spend, SAP S/4HANA and Experience Management, enables you to reimagine procurement.
This is what the vision of the intelligent enterprise is all about. Most companies are hindered by enterprise-centric systems that are not designed for cross-company visibility and collaboration for all spend types. Many like visibility, collaboration, and accessibility to business networks. That lowers the ability to drive change quickly, we see the need to move beyond org-centric approaches to network approaches.
We leverage SAP HANA natively to deliver new scenarios which were not thinkable before, but also being able to simplify the application and data model. We embed artificial intelligence and machine learning in all of our processes and provide active guidance and recommendations to end users on how to solve a business problem. The prerequisite for all of this is fully digital end-to-end processes that allow a continuous flow of data in real-time.
Our SAP Business Technology Platform is the foundation ensuring one semantical data model. We are combining the strengths of our portfolio and deliver one procurement for one buying experience across all channels enabled through our seamless integration and our solutions are leading the way.
According to IDC, we had 33% market share in the procurement market last year. That’s the top spot. We have more market share than the next nine vendors combined. We are constantly thinking about how we can evolve procurement practices. Offering innovative solutions but also helping to reduce the risks you face every single day. For instance with SAP Ariba Supplier Risk, we are already experienced in risk management for fair labour practices including the prevention of child labour, but now we are also going to further tackle your sustainable sourcing challenges.
SAP’s new responsible sourcing solution is a differentiator enables comprehensive material traceability including the impact on people and the planet. The solution builds on integrations between products like SAP Role Sourcing Management, … token by SAP, and the SAP Logistics Business Network. And we are thinking bigger about the interconnected world. As the first step in our execution on our mission for the SAP Business Network, I’m happy to introduce our new Trading Partner Portal, which brings together all of SAP’s networks. It connects millions of suppliers, asset manufacturers, and logistics providers through a centralised platform, buyers and suppliers can collaborate using a unified data model, and workflows. This enables them to use network wide intelligence for their decisions. Because when all networks become one network, collaboration becomes synchronous.
Discover more: SAP jobs in Germany
To sum it up, we help you understand your complete spend in real-time. We reimagined processes leveraging AI and data treasure to increase effectiveness and efficiency. We provide market leading solutions to run seamless end-to-end business processes. And we take it higher with our SAP Business Network to connect a global network of suppliers, manufacturers and logistic providers. And we support customers in reaching Sustainable Development Goals. That’s how we help push beyond the traditional borders that defines plant management. And over the next couple of hours, you will hear much more enjoy the rest of the event.
[Melissa Chan]
Let’s join John Wookey now, president of Intelligent Spend and Business Network at SAP to hear more about how the intimate connection Thomas just talked about works in the procurement space. John?
[John Wookey]
Well thank you, Melissa. And thanks to everyone who’s joining us today. My name is John Wookey and I lead the product team for Spend Management and Business Network here at SAP.
Well, the last 18 months has certainly been unprecedented. The role of the chief procurement officer and the purchasing team has really been changing dramatically for years. It’s no longer just about the three C’s of cost, control and compliance. Companies are looking to purchasing organisations to ensure that every euro, dollar, pound and yen that they spend is having real business impact.
And companies are not just focusing on costs. They’re balancing cost and operational objectives with environmental and social objectives. In fact, to me, one of the most interesting and surprising aspects of the last 18 months is that companies, despite being under tremendous financial pressure, did not retreat from focus in these other areas. You know, forward looking companies have recognised the need for a holistic approach to adopting a digital platform for spend management.
Successful companies like PepsiCo and Natura, who we’ll be hearing from in just a little bit, have recognised the role that technology plays in transforming their business models, their operating models, even their mindset. From my perspective, they provide a perfect view into how the world can come together when companies are connected in an intelligent networked economy.
Now our recent research with Oxford economics has revealed that organisations face many challenges on the path to procurement digital transformation. For instance, only 23% say that they have a clear view of all of their spend in real time. And only 54% use procurement technology to make data-driven decisions about spend. It takes constant reinvention and transformation to keep your business viable, which puts tremendous pressure on critical operations functions like spend management. Spend management has become a strategic element of long term company success. And SAP’s commitment is to provide the technology necessary to make that transformation possible.
Our mission is to help you align every spend decision with your business strategy in the new networked economy. Now, we do this in three ways. First, transformation through our one procurement vision, a single platform delivering best in spend category capabilities. Second, delivering the SAP Business Network connecting trading partners for mutual benefit, innovation and success, and helping you manage employee discretionary spend and next generation travel with SAP concur. Together we can turn business spend into a key part of your business transformation.
Now that means pushing beyond the traditional boundaries of spend management to creating a buying experience that reimagines the user experience, the business process, one that deepens collaboration with your trading partners and helps you embed spend management intelligently throughout all of your business operations.
In our SAPPHIRE NOW keynote end sessions, we’ll be highlighting some of the great innovation that we’ve been building and delivering, including things like SAP Ariba guided sourcing, with capabilities that help you support single page event creation, enhanced item management, multi-round bidding, embedded learning with Enable Now and many more capabilities, SAP Fieldglass assignment management, which helps you manage large contract workforces, working against multiple contracts and multiple projects. SAP Concur Detect which uses AI machine learning to review expense and receive data to help you identify mistakes, policy violations, and even fraud.
And, of course, our announcement on SAP Business Network with the ability to transform today’s fragmented supply chains into unified, collaborative and intelligent networks. At the centre is our new Unified Trading Partner Portal. That’s the foundation for true collaboration between businesses. Joining me now is Stuart Van Houten, North America General Manager for SAP intelligence, spend management to talk more about what these innovations mean to all of you.
Stuart, welcome to the programme. So Stuart, I talked a lot about the role of data in visibility and supply chain. What do you think this means for procurement and supply chain professionals?
[Stuart Van Houten]
Yeah, John, it’s great question. So as you know, our procurement supply chain clients are looking for insights along multiple dimensions. So perhaps I’ll speak to a handful of those as the most glaring examples, first, insights to mitigate supply chain risks and disruptions.
We obviously saw a tonne of this during the global pandemic. But these insights assist our clients and helping to determine if their direct material suppliers ,as an example, are able to meet their production schedules and provide goods and services on time. If not, do they need to look for alternative sources of supply to support their global supply chains? This is incredibly important stuff.
Second, insights to spend management compliance is top of mind. For instance: Is the organisation complying with the preferred suppliers and contractual pricing and business policies that were so hard won across all spending categories? And finally John, insights to procurement experience. Experience management for sourcing and procurement leaders. I mean, it goes hand in hand with our two primary constituents, suppliers externally, and internal stakeholders. As you know, everything is experiential today, john.
[John Wookey]
Yeah. So Stuart, when you talk to our customers, what are the things that are top of mind to them?
[Stuart Van Houten]
Yeah, well, as you can imagine, it runs the gamut. But if I had to synthesise the conversation, some of it is largely consistent with some comments you made a moment ago and that’s around the recognition that while CPOs must still be focused on more traditional requirements, like cost savings and supplier relationships, they’re also evolving, and it’s modernising. It’s becoming a vital component in the digital transformation that many companies are undertaking.
It’s not just about cost savings and operating efficiencies anymore. The procurement organisation’s agility and flexibility in response to supply shocks and demand can make the difference between let’s say, commercial success, and some level of unwanted volatility. So above and beyond the normal conversations with customers, it’s about “Am I resilient as a procuring organisation? Largely again, along the comments I had prior about insight. “Can I reduce supply chain disruptions? Can I deal with global economic and geopolitical events? And can I get visibility into supplier risk well before it becomes destabilising?
The only other thing I would say, John, is, I’d be remiss if I didn’t mention the intensifying focus around intelligent technologies around AI, ML and IoT. It’s here and it’s growing. So perhaps a question for you, John: customers are looking to further engage with their trading partners, which is why our announcement about SAP Business Network is so exciting. Can you please share with us our customers’ benefits from SAP Business Network and how it impacts their business?
[John Wookey]
Yeah, of course Stuart. So, SAP Business Network is really going to replace all the disconnectedness with a single open platform that brings together all your interaction points with trading partners. The business network will connect our existing procurement, logistics and asset networks in a unified collaborative, an intelligent network of networks and when procurements connected not just at the surface, but to the depth of the data, your business can truly benefit from a network of intelligent enterprises. Collaboration becomes singular and synchronous. Your systems can connect once and then the data and processes are able to flow freely and securely across functions and workflows across your partners and all of your people. And when trading partners connect through a business network, even supplier finance takes on whole new possibilities. Using the supplier’s unique digital footprint through the business network can help identify a suppliers financial services needs and match it with suitable working capital financiers.
Well, thanks for joining the programme. And thanks to everybody for joining us today. Have a great rest of your day and a great programme with the procurement network.
[Melissa Chan]
Now let’s go to Salvatore Lombardo, SAP’s Chief Product officer and head of engineering for procurement. Welcome to the studio Salvatore. Okay, so what do you think CPO’s need to think about when it comes to spend management moving forward?
[Salvatore Lombardo]
Yeah, I’ve been meeting a lot of CPOs in the last months and listening very carefully. I think there are three really main areas where you can sum it up.
One is the flexibility. CPOs really need the flexible way of reacting to market situations. Not only always pandemics, but to market situations in general. And I think the product is essential to react and to really support that.
The second is the transparency. And this is what is really, on top of the mind of many CPOs on looking into supply chains, and looking into sourcing chains, and looking into how business is running operationally, from an operational point of view and from an invoice point of view.
So all of those aspects, and they need transparency. And there the tool is essential also to provide this to them. And then basically, you know, sustainable actions, how can really a CPO run and decide sustainable activities down the road [and say] Yeah, I’m reacting for the business on this.
And I would say these are the three main stuff. And in all of this is then coming together on one platform. So that’s what basically CPOs want to have: common data sets. And in all combined, that the data and the analytical data on top are really bringing all this aspects together.
[Melissa Chan]
And they need to be brought together because they’re related. Yeah. So what has your team been working on in terms of innovation?
[Salvatore Lombardo]
Yeah, we were working behind the scenes on many things, especially the one procurement vision, which we rolled out a month ago. We were working together, building new innovations on top of it and I think the baseline on the Northstar architecture which we were rolling out: this is what was driving our decisions down for the product, and one main product just to mention one of it on delivering innovation into the customer base and customers adapting it. This is a central invoice management.
Central invoice management is one of those topics which will help combining all invoices of company: be it non-purchase related, or purchase related ones, and triggering them through the business network in turn into an ERP agnostic way where you can, be it S/4HANA, be it ERP, really a book it and get them into the system.
So I I think that’s an innovation which customers can immediately consume and get innovations on top. Part of the one procurement, innovation stream and with that immediately to have benefits on their business guided sourcing being a second one, and so on and so forth.
[Melissa Chan]
You talked about flexibility, so have to ask over the past 12 to 18 months of the pandemic, how has that challenged your goals?
[Salvatore Lombardo]
Yeah, that’s the pandemic challenge, especially the CPO goals.
I have an interesting story, because one of the customers really called me and was telling me “look with both your systems, we could react very quickly to the pandemic situation by reducing spend, especially in the indirect world by reducing the threshold on work where employees of this corporate were allowed to order, which immediately brought down the spend of this category.”
And he was really saying thank you because he could react from one to the other day on adjusting workflows and adjusting the rules on what is allowed to be ordered. And I think that these are the relevant things where quickly you can do and check and decide and react. And I think that helped a lot. And I was really happy hearing that “Thank you”. Just as an example.
[Melissa Chan]
I’m sure you couldn’t have predicted the pandemic but having that flexibility in place really helped customers. So what would you recommend for those who want to learn more?
[Salvatore Lombardo]
Yeah, we will have a session later with Baba Farok. And we will deep dive a little bit more into the Northstar, into One Procurement, into all the innovations, and of course also on sustainability topics, on what will come there and so join the session later. That’s what I can recommend.
[Melissa Chan]
Awesome. Thank you so much for joining us in the studio Salvatore.
All right. Before we go any further, I wanted to take the time to thank our Platinum sponsors HCL Technologies, and Infosys for helping to make SAPPHIRE NOW a truly memorable event. Don’t forget to visit our partner showcase at SapphireNow.com.
Once you’ve made the big decision to commit to digital transformation, most people want to get their organisation there as quickly as they can. There is a way to step on the gas, if you will. Business networks can accelerate that transformation.
Let’s delve further into this topic with SAP’s Jeff Collier. He’s joined by Richard Martin, PepsiCo senior IT Director for global procurement and SAP’s Paige Cox, who joins us in the studio.
[Jeff Collier]
Hey Melissa. Thank you. Well the height of COVID. We in the procurement and supply chain world, witnessed some amazing successes given all the disruption of the time, but we also saw some pretty incredible setbacks.
Those who had success had a lot of the factors that Sal and John just talked about earlier: visibility across the value chain, resilience, collaboration among the trading partners. And those factors are no stranger to Pepsi Co. which is the leading food and beverage company in over 200 countries around the world. The company of course is known for their excellence in supply chain management across the globe. So with that, it’s a privilege actually, for me to welcome to SAPPHIRE NOW, Richard Martin who is Pepsi Co.’s senior director and global IT leader for procurement, real estate and agriculture, as well as my colleague Paige Cox, who’s Senior Vice President and Global Head of SAP Business Network.
I appreciate both of you joining us. Well, Rich and Paige. Let me actually start with Rich today and ask let’s start with what Pepsi Co.’s experience has been so far with digital procurement transformation.
[Richard Martin]
Jeff, good to see you again. And thanks for having me today. So, our digital transformation of procurement at PepsiCo kind of started in the indirect purchasing process. You know to date we’ve largely globalised that process. Standardised that and digitised that. Additionally, we’ve digitised key activities in the e-sourcing platform as well, our effects activities and increasingly so our e-auction capabilities.
You know, at PepsiCo, having a single process on a single platform has really proven helpful in terms of driving things like higher contract compliance, making sure essentially, we’re buying the right things from the right people at the right prices, as well as added some key digital controls around our purchasing process in general.
Last when it comes to you know, procurement, digital transformation is the additional spend visibility we’ve gotten through some of these programmes. You know, the platform capabilities have really allowed us to get our arms better around things like tail spend in the indirect space in ways that we couldn’t do prior to this transformation.
[Jeff Collier]
Got it. It makes complete sense and it’s certainly where we see a lot of companies start for the return on investment or initial value. Well, let me ask them, where do you go from here? Where does PepsiCo headed next on that journey?
[Richard Martin]
Yeah, it’s an exciting journey. And thanks for the question. You know, where we’re going next, we’re going to have a few more chapters ahead of us in terms of our transformation. The next chapter is really coupled with PepsiCo is moved to an SAP S/4 platform.
So bundling our procurement transformation, with that S/4 journey allows us to get the indirect solution that I was talking about initially into some nooks and crannies of the company that we haven’t been able to, to date. And also lets us turn the corner so to speak and start looking at direct procurement. We have an exciting programme, there underway to digitise directs through the Ariba SCC platform and generate some good supplier collaboration there.
Separate from our p2p transformation, source-to-contract is also something that we’re, heavily interested in and have really bested in. So we’re looking to up our game there in terms of digital capabilities. I spoke about Ariba e-sourcing before, but our next kind of stop on the tour, so to speak is Ariba contracts. We have an important programme kicking off later this year to transition us or start to transition us to the Ariba contracts platform.
[Jeff Collier]
Got it. The thought that you’d provoked with me was you mentioned supply chain collaboration. I’m curious with digital business networks, which were focused on today. What were your objectives? And how might you or are you using the SAP network?
[Richard Martin]
Yeah, no, it’s a great question. The network is, is awesome. So, before our transformation, we had different processes in different parts of our business. We were conducting business with our suppliers and in different ways all over the world. Like most we’re trying to get out of the EDI game and move to, business networks.
So, we had a fair bit of data entry, we had a fair bit of manual processes. The network helped us digitise and in that respect. Getting a common process with common principles on a common platform, helped simplify our supplier connectivity, and drove a single communication standard.
Jeff, if there were three things that I’d say that the network has done for us: one, it’s digitising manual invoice reconciliation, which was huge, to, you know, through the quality rules inherent in the network, it really increased the quality of the documents that we were getting from our suppliers, and three, based on its architecture it gave us, you know, one connection to manage as opposed to point to points across all of our supply base.
[Jeff Collier]
Thank you. Well, I like that: “common principles on a common platform”.
Rich, thank you. It’s been incredibly helpful and informative. Paige. Let me turn to you. Now I look forward to the day when you, Rich and I can sit down and enjoy a nice, cold Pepsi or Gatorade together, but in the meantime, I want to ask you about the SAP Business Network. Rich talked about the importance of communication and connections with suppliers. How do you see that importance today? Both with communication and visibility?
[Paige Wei-Cox]
Sure, thanks, Jeff. And nice seeing you Rich and well, the global economy has really evolved into a network economy. If we would learn anything from the past 18 months with our pandemic its that the no business can do business alone. As companies that have focused on their core competencies. They also heavily rely on their partners to be able to provide complimentary business processes, services and capabilities.
So as we all hear here over the week from our customers and everyone, the traditional linear supply chains are often point-to-point and can be fragmented. And that work economy calls for network to supply chain that is resilient, agile and flexible. So I mean, Rich highlighted the priorities of PepsiCo as a digital transformation. Most companies today are quite challenged by managing their complex relationships, whether it’s between buyers or suppliers, or shippers, logistic providers, operator manufacturers and service providers.
All these relationships are often very static: one-to-one relations and connections. And that makes it super difficult for us to have that joint visibility, that joint data-sharing, and that process flow across inter-company functions. So I think that COVID already showed us how critical and crucial it is to have that real time transparency across the entire supply chain. So yeah, I think the Business Network is that central platform to be able to unite everyone and create such transparency and collaboration.
[Jeff Collier]
Alright, well, let me ask you, if that’s where it is today, where is it going? Where you see this technology going?
[Paige Wei-Cox]
That’s a very good question. I mean, we all know technology has held our communities and families together over the decades and also can help companies really adapt to changes and disruptions quickly.
So at SAP we have been working hand-in-hand and are super blessed that we have the ability to work with the customers like PepsiCo and others across the globe. Together, we will really transform those fragmented supply chains into these resilient, agile and collaborative networks.
If you followed us earlier, last week, we have launched our SAP Business Network, our CEO, Christian Klein also announced our strategy. That is, to really create the world’s largest and most comprehensive business network. Here, we really just want to be able to connect every company, every enterprise across the multiple enterprise supply chains. And in doing so, the buyers and suppliers, logistic providers, manufacturers and service providers, the banks, you mentioned it. We’re able to respond together to any disruptions in real-time through that connection in our network.
As we talked a lot about the Ariba network today, that is the core of where we start this journey. We will bring together asset intelligence network, logistics, business network, and also industry networks and third-party networks into this one single engine: the Integrated Global Business Network.
Our unified, collaborative and intelligent network of networks really will help us reinvent the multi-enterprise commerce flow by connecting procurement, manufacturing operations, and logistics all under one umbrella for ultimate end-tier supply chain visibility and agility.
[Jeff Collier]
Paige its an exciting future. Thank you so much for sharing Rich, thank you for being with us and sharing what PepsiCo has done so far and where you’re headed in the future, the bright future for all. Thank you.
[Melissa Chan]
Thank you, Jeff and Richard. And thank you so much Paige for joining us in the studio. We’ll have more on smarter procurement in a moment, but first an SAP partner story from our sponsor, HCL Technologies.
[Abadesi Onsunsada]
Thank you. I’m so delighted to be joined by two amazing leaders from HCL Technologies today.
First of all, Shawn Brodersen, Senior Vice President and Global Head of SAP practice. And Nick McFetrich, SAP digital transformation director.
Shawn, my first question for you. What key digital transformation trends are you seeing being considered as part of a business transformation agenda?
[Shawn Brodersen]
Abadesi, what your question highlights is the fragility we’ve witnessed in the global supply chain over the last year, which was built in as a result of decades of focus on lean manufacturing, just-in-time inventory, and also the impact of technology on today’s products where oftentimes the raw materials are sourced from from far flung areas, and the components only have one or maybe two suppliers in the world that actually can deliver on that.
So today’s supply chain leaders are now pivoting from rapid response capabilities into how do they avoid this next year? How do they build agility, resiliency and transparency into the supply chain. And I would argue that there’s probably two primary ways that they’re going to look at doing this one is through forecasting with a better use of AI and ML. And the second is through an application of, you know, some elbow grease around identifying beyond tier one, what the risk is within the supply chain, what options they have for identifying that risk, real-time, which is the resiliency component, which will allows them to have that transparency and then therefore make decisions which link the physical supply chain with the financial supply chain. And this should allow us to have better response to future events: pandemics, global weather events, pan-political instability, and so forth, allowing us to learn the lessons that we needed to from this event and bring them forward for the next decade.
[Abadesi Onsunsada]
Thanks, Shawn. That was a fantastic forward looking overview of the trends. Nick, how can SAP procurement customers embrace these trends to deliver value?
[Nick McFetrich]
Yes, great question. So in the area of directs and supply chain, definitely, the recommendation is to look at the Ariba network collaborations and the resiliency and agility benefits that that can bring, as we’ve discussed.
Secondly, I think that all organisations should look at their process, using process analysis and mining tools, to look where there’s inefficiencies, and to look where there’s bottlenecks, and they can then be addressed either through process change or through RPA adoption. And if RPA is the right option, then we have dozens of bots that can help in procurement. I’m especially excited about a purchasing assistant bot, which we believe will shave off 40% of effort on behalf of buyers when they’re looking through their approval inbox.
The next area is around the Ariba API framework, which is really a game changer because it’s allowing customers and partners to reimagine the end-to-end procurement processes and extend and enhance them beyond the traditional boundaries that software solutions have put in place previously. So this gives them the ability to create their own best-of-breed solutions adapted for their specific needs if needed. And a great example of this was an MVP we built with a customer which addressed tail spend issues.
So we integrated an intelligent vendor search tool within the freetext prep requisitioning process within Ariba to allow the requisitioners to see previous vendors and pricing that other users had used, to allow them to make a quick and easy decision on reusing a vendor and price that had historically already been used. So it saves the requisitioner time and also the buyer. So I guess those are the main recommendations that we have.
[Abadesi Onsunsada]
That sounds brilliant. My final question Nick. How do you see trends affecting procurement teams that run their operations on SAP?
[Nick McFetrich]
So I think these trends are going to have a double whammy positive impact on procurement organisations and operations. Because firstly, the amount of operational tasks they have will be reduced through better processes more automation. So they shouldn’t be having to do as many sort of day-to-day administrative-type tasks and be able to focus more strategically.
But also the business will be more self sufficient. So business users will have access to embedded analytics to give them the right data at the right time to help them with their decision making. So they shouldn’t need to involve procurement. So I do think that overall procurement teams will become smaller, leaner, and more focused on strategic thinking.
[Abadesi Onsunsada]
Well, that sounds exciting. It’s been a real treat learning from you both today. Thanks for your time.
[Melissa Chan]
If we can make the procurement experience smarter, guided and more autonomous, you can get a lot more done and do it faster with less effort. Let’s take a look inside the Innovation Lab at Guided Sourcing.
[Pre-recorded presentation on Ariba Guided Sourcing]
If you work in procurement, you know the vital function you serve. We believe it’s time to fundamentally change the procurement experience: to make it smarter, guided and more autonomous, to enable you to focus on value driven strategic activities to spend less time on managing processes.
More than ever before procurement organisations are playing a very strategic role: in determining the right source of supply, in assessing demand, and increasing the company’s savings and overall financial results in a sustainable and ethical manner. You have to move with speed and simplify creating, delivering, monitoring and awarding tenders work sourcing events, and you also need easy access to all the necessary information to make better decisions. Fortunately, the new guided sourcing capabilities imbedded in the SAP Ariba sourcing solution can help you solve all these challenges.
Guided sourcing was developed to be intuitive, efficient and simple to use. Logically walking users through the e-sourcing process flow. Let’s say you receive a request to issue a tender for a needed good or service. All you have to do to start the process is go to a single screen: no need for multiple tabs. That’s right, everything’s available on one page.
A tender or a request for a proposal document starts with defining what your company needs. And with guided sourcing, you can do it by using one of the most adopted tools in the market, Microsoft Excel. Here’s a spreadsheet our marketing team put together defining the requirements needed to get bids on print materials, in this case brochures. Not only does it include details about what they’re looking for, but also questions for potential suppliers. Creating a new request for proposal or RFP is as simple as naming it and dragging and dropping the Excel spreadsheet right here.
Using artificial intelligence and machine learning, guided sourcing takes the information from the spreadsheet to automatically generate the questions and the details being sent to the supplier. Guided sourcing also recommends which suppliers should be invited based on past RFPs and contracts.
For example, here are seven previously qualified suppliers suggested by guided sourcing. We’re selecting three suppliers from this list, but if you want, you can include all of them and increase your chances of saving more money by driving greater competition. Looking for additional suppliers? Just go to your supplier database and check their qualification status.
At this point, you’re ready, send your tender to the suppliers and wait for their bids. Whenever you want. You can go back to the tender to see which suppliers have offered their services and monitor their bids side by side. Once the bids are all in, you can review them and decide which suppliers you want. Wow, looks like you have a bit of a dilemma. All the suppliers can do what you need. So now the challenge is getting the best price. This should help.
Guided sourcing automatically creates a number of scenarios based on the cost. When you decide which one appeals to you the most click award. Once the business is awarded, begin the contracting process and lock down the pricing and other related terms with the selected supplier. And there you have it. Now you know how easy it is to create a tender, send it to suppliers, get bids, analyse results and select the business that will give you the most quality for the best price all because of Guided sourcing.
SAP enhances the SAP Ariba sourcing solution with innovative guided sourcing capabilities to provide not only comprehensive e-sourcing functionality, but also an intuitive interface that will drive adoption and results. All of this in a fully integrated environment, leveraging one of the world’s largest digital business systems: SAP Business Network, guided sourcing is not the future guided sourcing is available to you right now. Check it out today.
[Melissa Chan]
Now, procurement professionals are always looking for new ways to save money and we found an innovative method for cutting costs on maintenance projects. How? Take a look.
[Pre-recorded presentation on SAP Fieldglass assignment management]
Complexity, you’re probably used to it. On any given day. A project may require plumbers, welders, electricians, different people, different skills, different hours, and it is changing all the time.
Although a single master agreement may set the pay rate for each task that doesn’t stop the chaos and avoid cost overruns. How do you keep track of all that while still managing timesheets, billing and accounting?
For many companies, it seems jumping from system to system and trying solutions that simply can’t keep up time-tracking, billing schedules, and workloads. These projects can represent 1000s or even millions of dollars in spending.
SAP Fieldglass assignment management enables you to assign workers to the right jobs from one set of screens. Those workers can have multiple assignments and track them on a single timecard. your organisation has a variety of service contracts with multiple suppliers and different negotiated rates in place by skill set.
With SAP Fieldglass assignment management. Operations managers can quickly deploy external labour from pre-qualified resource pools. Those workers can be assigned immediately keeping operations moving while minimising costly downtime and disruptions. Before any of these workers are engaged. They’re on-boarded into a central system using a digital checklist to verify they have the right qualifications and certifications for the job. Onboarding occurs before work even starts. It’s good for everyone involved, because the workers all get timely access to the facilities where they’ll be assigned.
Once a purchase order is approved, work begins right away in any situation is manageable. Workers can have multiple assignments and assignments can have multiple workers. The assignments can vary, covering different types of work and different roles within a day even different supplier contracts. After the assignments are underway, everything is centred around time capture. As workers badge or clock in and out. The entire process is integrated with gate pass systems capturing accurate start and end times and smart logic. Addressing the rounding rules and badge read errors. Over billing is eliminated through accurate and validated gate hours. Because time is captured and processed according to existing contracts. SAP Fieldglass assignment management can automatically calculate working hours, meals, shift differentials, overtime per diems and more. And this process time can then be applied by the timekeeper and allocated to the appropriate work order, purchase order, or cost collector. Once the hours are approved by the supervisor, they can all be consolidated into a service receipt capturing all approved hours and costs.
You can be confident in knowing your invoices are compliant and accurate. Any customer who chooses this solution can expect cost savings from a variety of process improvements, achieving different results depending on the implementation. SAP Fieldglass assignment management provides an elegant solution to a complex problem. Learn more at fieldglass.com
[Melissa Chan]
As we’ve seen external labour is a surprisingly large category of business spend and managing it well can be extremely important especially during and after a crisis. For more on that let’s bring in SAP is Danny Sack and Mary-Claire Hammond, Senior Vice President Human Resources supply chain logistics Americas and Asia Pacific XPO Logistics. Danny, take it away.
[Danny Sack]
Thanks Melissa. So, as businesses emerge from the pandemic, workforce flexibility becomes increasingly vital to drive the strategies you need to succeed. SAP conducted a recent study of both public and proprietary data and found that external workers were heavily impacted in 2020, but have seen hiring increase significantly since then. I’m here with Mary-Claire Hammond, the SVP of HR at XPO logistics, to talk about how they’ve used the external workforce as a strategic asset for their business. Mary-Claire, let’s start with a brief overview of XPO Logistics, and a little more detail on the challenges you faced in the last year.
[Mary-Claire Hammond]
Yeah, absolutely. Danny, thank you. And it’s so good to be here. So let me tell you a little about bit about XPO Logistics. We are a global leader in transport and logistics. In fact, we’re the second largest contract logistics provider in the world, second largest freight broker globally. And we are also in the top three in our less-than truckload provider in the North America market. So we’re a global company, 140,000 team members, across 30 countries, and of that 32,000 are temporary workers. And in my world, across Asia, Pacific and Americas, I have about 300 warehouses. When we think about the challenges, oh, my goodness, they have been multiple, just like the rest of the world. And I know I’m not alone. But the really, kind of main things I would say is in three buckets, three buckets of challenges.
The first one was really all about safety, and in a pandemic, mitigating, you know, how do we get in workers? How do we bring them in safely? How do we keep them into our warehouses? The other was supply and demand. Supply and demand has been completely out of whack and switched, completely to a different angle.
At the beginning of the pandemic, no one knew really what was quite going to happen. And people were cloistering in their homes. And then very shortly thereafter, we had an absolutely commerce boom. And the other thing, the other challenge, I would say is we implemented Fieldglass. We implemented it during 2019 and early 2020, headed in place, and February of 2020. And it was really a strategic programme to help us better manage the contingent workforce. What we didn’t know at the time is that, boy, we needed that. If we had not had that implementation, I think we would have been somewhere stuck down in the mud.
[Danny Sack]
That’s super interesting. And I think that your personal experience is reflected in the research that we saw, where many companies were dealing with the same challenges to their business. The impact created a real focus on worker safety, but then also meant there were just huge structural changes to how consumers were buying and selling goods. But it sounds like you had a strategy to deal with this. And these challenges. Why don’t we can you talk a little bit more about what you did the actual things that you did for those three pillars?
[Mary-Claire Hammond]
Yeah, sure. Absolutely. I think the first thing was safety. And when we felt like the pandemic was coming in, I have a lot of experience in the oil and gas energy, energy world. And the first thing I thought about was emergency response team. So I put together a team of people focused solely on the pandemic, and solely on how do we bring workers into our warehouses and keep them safe.
We created a process for daily at a station, we put temperature checks in all 300 warehouses, we put in a tracking and tracing system with a quarantine kind of programme. And behind all of that we also put in for our employees, pandemic sick pay for all employees who qualified under the pandemic.
If we had not done those things, and if we had not gotten the word out to all of our suppliers, that we are very, very safety conscious company, and that was our absolute number one value and our number one focus, I don’t think we would have been able to attract employees.
Additionally, we actually put in a white paper in July of 2020. And just put that out showing all of the activity that we did in XPO Logistics, when looking back I think was actually benchmark and all of those things I just talked about, we’re still running today.
I would say the second area was really that supply and demand imbalance. We generally fill any gaps. We have peaks and troughs through the year we fill those gaps with our contingent workforce. So the relationships with our suppliers is absolutely critical. We put in place you know supplier councils to stay very, very close, we put in competitive incentives and we actually had heat maps where literally I can go from a kind of competitive rate for each market, each area, almost each neighbourhood: are we green, yellow, red in terms of how we actually pay our people? People very close eye on that.
And then the third thing was the Fieldglass implementation. As I said earlier, that is a key system that helps us to onboard employees quickly, manage all of the payments. And the best thing is it’s integrated with our Kronos, Successfactors and Oracle systems. So we have kind of an end-to-end interaction with Kronos, with Fieldglass. Like I said earlier, if we had not had that in place, I think we would have been dead in the water.
[Danny Sack]
That that end-to-end integration is certainly a powerful way to run your business. And it sounds like XPO Logistics use their actual workforce as really a strategic spend category. What do you think that that’s meant for the business? And how, how will you see it as we see the economy recovering?
[Mary-Claire Hammond]
Yeah, absolutely. Our business is all about people. So that is what we do. We bring people in, we run warehouses, we are recruiting machine, we are competing, Fieldglass really helped save us: we are still in the game. I mean, right now, I still have about 4000 open roles. So that recruiting machine is just chugging along and just moving as fast as it possibly can. Our business will keep growing, we need to keep the strong talent strategy. We need high quality suppliers, supplier council is very important. And we need to just keep people focused approach to what we actually do.
[Danny Sack]
Mary-Claire, thank you for describing your experience in 2020. And how XPO use the external workforce as a strategic asset through all this uncertainty for the audience. If you’d like to hear more about how XPO Logistics use Fieldglass as part of their talent strategy, join our session this afternoon. And if you’d like to read some of the research, you can find it on fieldglass.com under the title “Ramping up Resilience.” Thank you.
[Melissa Chan]
And thank you. Well, do you want to know how procurement can help with sustainability? It’s a cool concept you might not have thought about before. But first in SAP partner story from our sponsor, Infosys.
[Abadesi Onsunsada]
Thank you. And I’m excited to talk today to Dinesh Rao, Executive Vice President and Global Head of Enterprise Application Services at Infosys limited. So: my first question for you. What is Infosys strategy to help clients with their digital transformation journey?
[Dinesh Rao]
Enterprises across the industry sectors today are challenged with rapid digitisation, as well as changing customer preferences and needs. Organisations today have looked at trying to make sure that they go through a digital transformation, and then move towards an enterprise-wide cloud adoption that would enable them scale, innovation, introduce newer services into the market, and importantly bringing the organisation, resilience, and security to their entire estate. Towards this, procurement is one of the most important digital processes that we’re going to talk about today.
At Infosys today, we are working with organisations to move them towards live enterprise. What would this mean? Essentially, we want to reimagine the entire user experiences, reimagine the business processes to bring in sentient principles, and then bring in rapid agility in terms of how the processes are getting digitised, and then really look at the entire ecosystem and enable that with AI into their enterprise core to make sure that the experiences across all the key stakeholders enhances.
Discover more: SAP jobs in the UK
To augment this bit we also have Infosys Cobalt, which is a set of services, solutions, and platforms powered by our community of cloud developers and experts. And I think we have a lot to offer as we transition and help our customers navigate to this entire digital transformation.
[Abadesi Onsunsada]
Incredible Dinesh, some great examples there. Let’s stay focused on procurement because over the last few years, this function is getting a lot of attention. And chief procurement officers everywhere are looking for that next leap in digitisation. So my second question for you: Can you tell us how is Infosys enabling the next generation of procurement systems for its clients?
[Dinesh Rao]
With the pandemic we all knew how the supply chain was the core and in a lot of sense, it was in a disarray. So the key tenets for having a very successful supply chain is: number one, showing resilience, two flexibility. The third aspect is a constant innovation of the product, and importantly, rapid time to market.
If you look at all these four core principles in the heart of it is the procurement function, so then unless a customer really invests time in terms of going through a transformation, you won’t be able to fix your core supply chain.
As we continue to enhance or gone through the digital transformation of some of our customers, let me share with you the one that we have currently undergoing with one of the auto majors, where we are going through a digital transformation bringing SAP S/4HANA, SRM, and unified Fiori to bear to help navigate the transformation. And what we did in this entire transformation journey number one was we took a mobile first approach a one stop solution, which is persona based, which had guided navigation, be it a buyer, be it a manager, be it a controller, to make sure that we run through the complex structural processes to help them do the procurement process faster, and hence speed up the entire time.
Second, we brought in a unified 360 degree view of, be it a supplier performance cost contract be it anything and embedded analytics as well as scenario-based billing to ensure that they do the right decision at the right time.
We looked at automating the processes can we really make sure that 80% of the purchase order goes through without any human intervention. We linked up the entire chain of functions all the way from engineering down to the finance so that there is… visibility in terms of cost, as well as in terms of inventory.
And also enable bringing in additional suppliers to make sure that new lines can be started and new products can be introduced into the market to this entire journey. We were enabled with very strong processes, very strong solutions, and very strong tool sets that came from Infosys Cobalt, we really look forward to help our customers navigate the journey as I really look forward to the entire digitisation and transformation of the procurement process.
[Abadesi Onsunsada]
Incredible. Thank you for sharing such an inspiring digital transformation journey. It really feels like the future of procurement is bright. Thank you Dinesh.
[Melissa Chan]
We’ve heard a lot today about procurement in general as well as the use of external labour. But what we haven’t discussed is direct spend: the purchases of goods and services directly involved in manufacturing products.
Like every other aspect of procurement that poses specific challenges. If we’ve learned anything here, we know there’s a way to use technology to solve those challenges. Our customers are doing it every day. Here’s SAP’s Tonatiuh Barradas to tell us more.
[Tonatiuh Barradas]
As organisations are evolving into the digital world, they tell us new relationships with their suppliers are essential. The new reality of direct spend means everybody needs more visibility into the supply chain, upcoming changes in demand, in where the products are coming from.
That visibility, it not only makes everybody’s business run better, but it’s especially important when a company is as committed to sustainability as our customers are. None else more than Natura.
Natura tell us technology connects them deeply with their suppliers, making them much more efficient, and helping them and their customers to know that their cosmetic products are sustainable.
I am delighted today we can present Natura’s story and hope it gives you some more details on how to use technology to make your procurement run better.
[Melissa Chan]
Natura’s supply chain planning director Rodrigo Bria recently spoke with Gregory Mekjian, Global Vice President and General Manager of the Business Network centre of excellence at SAP. The theme? How technology can make to direct spend work better for a company, it’s suppliers and the planet.
[Gregory Mekjian]
Thank you for joining us today and sharing your insights. What has been happening in the beauty industry in the past few years that compelled Natura to look at its direct materials supply chain and decide to embark on his digital journey?
[Rodrigo Bria]
Well thanks Greg for having me. Very good to be here. Natura and Company is the parent company for some iconic brands. So we’re talking The Body Shop, Avon, … and Natura. And we’ve been on an incredible journey in terms of growth in terms of transformation of our business. And within the beauty company. We’ve been seen an amazing and exciting times. With a huge shift in demands, huge shifts in consumer preference, and that for a global companies such as ours supply chain visibility and flexibility is key. So this is the adaptation that we’re doing to meet all of these changes in the in the industry.
[Gregory Mekjian]
We know many of the use cases you were planning on deploying pertaining to supply chain visibility. How is that being achieved?
[Rodrigo Bria]
We’ve been working in this last several years in getting that flexibility to reducing lead times, making sure that we have double-sourcing of our products, but we saw in collaboration in an integration supplier, a possibility to radically change that scenario. So the idea is that we’ll be able to reduce a lot of our response time with our suppliers through the integration and cooperation.
I usually say that nobody knows the suppliers supply chain better than supplier right. So the idea behind these initiative is how can we give all the visibility to the to the suppliers, so they can manage better their supply chain. So given their visibility of demand, capacity, inventory, all those elements connecting our operation to their operations as suppliers was the idea behind it, and then we tackle that project.
[Gregory Mekjian]
When we first got together, and we began to partner together, we were able to understand the vision of Natura and what you were trying to get accomplished. Many of the attributes you just mentioned on on your previous response, to our knowledge, you’re collaborating on one of the most comprehensive sets of business processes that we in the field has seen. And we appreciate that. We want you to use our software, we want you to use it effectively. But what role is my company playing in your transformation?
[Rodrigo Bria]
SAP has been a partner of Natura for many, many years. So when we started to look into alternatives and options to embark on this journey, it seemed natural that we studied and understood in depth, the solution of SAP. How you guys can help us today and going forward. And in our future challenges. We wanted to really pursued integration in several processes.
So forecasting, supplier management, inventory, quality issues, manufacturing visibility. So the idea is really to have a broad scope to integrate with our key suppliers. So currently, we have approximately 80% of our Natura in Brazil spend processing through the tool. It’s a huge number of suppliers that are transactioning with us.
[Gregory Mekjian]
Having made the choice to go with SAP. What can you do now that you couldn’t do before?
[Rodrigo Bria]
We’re still on the journey. But early results shows that we’ve been able to get much faster results from our suppliers. Integrating b2b has also been an important strategy. So the idea is that to be able to get the response faster, and to be able to connect inventory from our suppliers into our tools.
Basically, what we have seen already in terms of benefits was a reduction in response time from our suppliers, and the integration of the systems have enabled us to really be more efficient, right. So the idea is that we can leverage that: what we’ve collected as benefits so far, in our in a much broader scale, and as we advanced in terms of scope, that we be able to connect even deeper with the suppliers.
[Gregory Mekjian]
We also know that Natura is a leader in the areas of sustainability and that your customers are keen to know that the products that you manufacture are sustainable, how does the technology that’s been developed from an SAP point of view help you to support the values of sustainability to
your customers?
[Rodrigo Bria]
That ability is a key part of our of our business. It is embedded in everything that we do. What comes to mind on this particular subject, which is very important to our strategy is product traceability. So our customers more and more. They want to know the product where they come from the ingredients, what’s the impact that that product has on the society. So are our challenge is: How can we integrate ate all of these parts of the supply chain and delivered these information to the customer?. We’re not there yet. But there is that is the ambition.
[Gregory Mekjian]
Rodrigo, we are humbled to be a partner with you on your journey. You’re a great client, you push the technology, we congratulate you on your success to date. Back to you.
[Melissa Chan]
Thank you guys. It’s interesting how transparency and integration can be the missing pieces of the puzzle and organisation needs to be both more resilient and innovative. And as we consider the role each of us plays in this ecosystem, I want to express our gratitude to all the SAPPHIRE NOW sponsors, and remind you once more to visit our partner showcase at SAPPHIRE NOW calm. There’s much more of SAPPHIRE NOW to come this week. But if you’ve seen something this hour that makes you want to start your transformation. There’s no need to wait. Just go to SAP.com and check out the Rise with SAP offering.
I’m Melissa Chan and thanks for watching.
