emerging trends in procurement technology

Emerging

Procurement Trends(CPO Round Table Meet)

Krishan K. BatraPresident & CEO

ISM-INDIA

Introduction: Krishan K. Batra• Education:

– MBA from Syracuse University (USA)

– PGDIM (Bombay University)

– DCM (Bombay University)

– M.Tech (IIT, Delhi)

• Professional Certification:

– ERP Certification

• Recognition: Hind Ratna

• Experience:

– President, ISM-India, www.ism-india.org

– Chairman: UNDP/ACP, New York(Overseeing 166 Countries)

– Senior Executive Director: NSIC Ltd, India

– GM, TRTC and many other senior positions in various companies including Voltas.

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Today’s Agenda: Key Takeaways

• Overview of Emerging Procurement Trends

• Technology Landscape

• Trends in Technology & Tools

• Why focus on Technology Trends?

• Sharing best practices in procuring technology and tools.

• Driving Value to the enterprise

Key TrendsWhat is happening and what could happen out there in Procurement? We see 2015 as a potentially pivotal year in the overall Indian Economy. Survey was undertaken.

• Cost cutting remains the top priority.

• Nearly 60% wish to invest in Technology & Tools to improve procurement capability to achieve cost reduction.

• Move from Tactical to Strategic Sourcing

• Talent Gap

Procurement Trends

Strategy

Technology

ProcessesPeople

Technology Trends• Technology is now the greatest change agent and

driving force in today’s socially and digitally connected world.

• Few trends are emerging in the procurement technology space.

• All of them have effectively the same goal of delivering more, long-term savings but each approach the problem from a different angle.

• The focus is on better insight to empowered suppliers to analytics to cost savings.

Technology & Tools Trends

• Mobile Procurement

• Secure Cloud Technology

• Data Accuracy

(Spend Management)

• Social Media

• Intelligent Reporting

• Artificial Intelligence

The Procurement ProcessProcurement technology—largely divided into Source-to-Contract and

Procure-to-Pay—has become a de facto platform for purchase teams to

manage their procurement of goods and services, suppliers & budget.

Technology CanvasS2C & P2P

Technology Journey

• Procurement has come a long way from

systems of record for purchase order

creation and invoice payment to systems

of differentiation facilitating sourcing,

supplier evaluation and contract

management activities.

Technology Journey

E-procurement is the electronic implementation of the procurement cycle that covers steps from spend analysis, identifying requisitions and setting up contracts with suppliers to the actual purchasing of products and evaluation of these suppliers

Traditionally focus was on P2P and developing specific tools to cover various stages of cycle.

Bigger Picture• Due to rising stature and role of procurement

in the past it is is no longer a purchasing silo of its own. As a result, procurement – both teams and systems – is interfacing with more systems as it expands its role and reach across the enterprise.

• Usability of the software for stakeholders

• P2P systems integration is a topic of interest that is rising to the surface as one of the top enablers (and requirements) for driving lasting

e-Procurement impact and change.

Technology Scenario1. Existing legacy systems are often efficient in the business process support for which they are designed.

2. They lack what today's end users expect in usability, self-service, or mobile device support. 3. Instead of either replacing or re-architecting the end-to-end in-house solution, companies integrate cloud applications to reach existing (and many new) business users with web-native, multi-device front-end support.

Mobile Procurement1. Mobile apps are a powerful way to conduct many business

operations, including procurement and supply chain functions

2. Procurement systems have started to break out of the desktop PC/large application model and become much more mobile (Tablets) - both for the search/order/approve cycle and analytics on-the-go.

3. Many senior staff are frequently on

the road or out of the office and the

ability to perform all workflow, approval

and purchasing without being at their

Desks, would remove more excuses as

to why processes aren't being followed.

Migrating to Cloud• Cloud Computing is the internet-based storage for files,

applications, and infrastructure. One could say cloud computing has been around for many years, but now a company may buy or rent space for their daily operations.

• The advent of Cloud technology has driven procurement software providers to adapt their products to web-based applications.

• As mentioned before, in the case of packaged solutions, off-the-shelf programs are rigid in capabilities, and are not readily upgradable.

• Since products on the Internet are expected to be more flexible, to allow for easy access and frequent updates, some of these ready-made applications are having a hard time keeping up.

What is Cloud Computing

• Shared pool of configurable computing resources

• On-demand network access

• Provisioned by the Service Provider

Cloud Computing

• Seamless B2B integration between buyers and their supply chain partners

• Buyers and suppliers have the opportunity to connect to a common platform

• B2B communication with its original form of EDI messages is least flexible form of integration.

• Cloud based supplier collaboration (One connection, endless possibilities)

Cloud Computing

Types of Cloud Computing

• Public Cloud: Computing infrastructure is hosted at the vendor’s premises.

• Private Cloud: Computing architecture is dedicated to the customer and is not shared with other organizations.

• Hybrid Cloud: Organizations host some critical, secure applications in private clouds. The not so critical applications are hosted in the public cloud– Cloud bursting: the organization uses its own infrastructure for normal

usage, but cloud is used for peak loads.

Social Media• Procurement as a profession is not an early adopter of

social media.• Procurement is one of the most outward facing

functions – or should be anyway – and SM tools are all about being outward facing.

• Traditional attitude of procurement is very much to control the inputs and the communication routes that give access to us and our attention. We are scared of being bombarded by prospective suppliers, who always want to talk to us. So we don’t accept calls from suppliers, we only meet the people we want to see, we don’t give too much away.

• Need to get out, to meet people, to communicate, to collaborate – and not just with your regular stable of suppliers.

Spend Analytics• Spend Analysis gives a detailed, categorized

view of company expenditures organized in a way that can be used by Procurement to achieve cost savings.

• It provides valuable analysis and insight to help you see exactly who in your organization buys what and from whom. (Spend Taxonomy-UNSPSC)

Spend Analytics

• The ERP & source-to-pay landscape has spent the last decade transforming itself from a blank canvas to a partially complete montage, with varying degrees of elegance and execution.

• Greatly evolved their solution sets in this time,

• Both acknowledge that gaps remain

Data Quality

• Spend BI practices are evolving as firms move from department to enterprise, batch to real-time operations, from data profiling to quality monitoring, from country-centric to global, and so on. All these trends boil down to the fact that procurement data quality is broadening beyond its departmental roots into enterprise-scope usage. While this broadening is good for the data, it’s challenging for the organization, which must adjust its business processes to adapt to enterprise spend management.

Key Drivers to Propel Technology into Future

• Procurement-as-a-Platform: The entire procurement process is driven from a platform where every user has access to all features and processes without having to manage multiple silo modules

• Native mobility: The entire procurement platform will be conceived, designed and operated as mobile. The platform will be backward compatible with the web and not other way round

• Built-in social collaboration: Our view is that tomorrow’s procurement technology will include social intelligence that will bring suppliers and buyers closer, with higher efficiency and transparency

• Creative Features: Tomorrow’s procurement platform will have creative features such as sourcing workbench, supplier enabled innovation, knowledge management, market intelligence among other things

• Intuitive intelligence: The complex analytics and dashboards of today will become intuitive alert-and-report mechanisms for tomorrow, proactively delivering actionable information to users using big data and newly developed analytical Tools

Krishan K. BatraPresident & CEOISM-India

Phone: (91) 124-4221353Mobile: (91)9650745582Email: krishan.batra@ism-india.org

www.ism-india.org

Thank You!

Big Data

• What is Big Data? Big data refer to data scenarios that grow so large (petabytes and more) that they become awkward to work with using traditional database management tools. The challenge stems from data volume + flow velocity + noise to signal conversion. Big data is spawning new tools that are m

The Model Has Changed…

• The Model of Generating/Consuming Data has Changed

Old Model: Few companies are generating data, all others are consuming data

New Model: all of us are generating data, and all of us are consuming data

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