The four walls of your office. They probably feel familiar. They form the foundation of your organization. But to grow, you need to think beyond these walls. Procurement has become so complex that tackling it alone is no longer feasible. The SAP Spend Connect Innovation Day 2024 on Thursday 11 April showed procurement professionals the path to the future.
The SAP Spend Connect Innovation Day 2024 took place at DeFabrique, in Utrecht. This unique venue, situated along the Merwedekanaal, was once an oil mill for decades, then shifted its focus to the production of animal feeds. The entire process happened in-house. Within the walls of the factory. Raw materials arrived by boat or truck, and the finished product left the premises in the same manner shortly after. Neat and efficient. But after a while, the walls proved to be too much of a limitation. A merger was necessary, and soon after, production moved to other locations. By looking beyond their own walls, a new future emerged.
“Procurement is more complex than ever”
The history of DeFabrique resonates with the challenges many organizations face today. Vicky Revis, Head of SAP Fieldglass, remarks, “Every organization, and every director, sets certain goals. Nowadays, there are quite a few. Such as increasing profits, reducing costs, improving sustainability, making the supply chain more transparent and stable, implementing artificial intelligence and machine learning, and ensuring the future readiness of your workforce.”
Procurement nowadays is so comprehensive that it is central to many of these objectives. “Procurement is more complex than ever,” says Michiel Junge, Partner Sourcing & Development at Deloitte. “This is evident from a recent survey of 350 experienced Chief Procurement Officers worldwide. We asked these CPOs which topics are currently highest on the agenda. In addition to sustainability and innovation, they also mentioned higher customer expectations and evolving laws and regulations. These are all challenges.”
These challenges aren’t necessarily a problem, Junge explains. “The beauty of it is: as a procurement professional, you can really make a difference for your organization. More than ever before. But you can’t do it alone. The work has become too much and too complex. You need to collaborate. Internally, but especially externally. With the right partners.”
Low performers versus high performers
Pasi Tervo, Head of SAP Business Network, echoes the sentiments of Revis and Junge. According to him, organizations are at a crucial juncture. “It’s all about collaboration. The difference between low performers and high performers is how these organizations operate within their own ecosystem. Low performers remain confined within the four walls of their company. They rely on their own resources and familiar processes. These organizations are less agile and struggle to deal with trends and disruptions. While high performers, thanks to their ecosystem, quickly turn these challenges into opportunities.”
Software as a building block
Digitalization plays a crucial role. Smart software helps improve processes and enables more efficient utilization of your workforce. “In the past, it was often the case that a certain process resided solely in the mind of someone in procurement,” says Junge. “That information needs to transition from someone’s mind to your system. SAP Business AI converts all this knowledge into analyses, processes, concrete actions, and recommendations. Even in case of disruptions. This not only provides valuable insights but also reduces the amount of manual work you need to do. This allows you to focus on tasks that add value to your organization.”
Business vision as a starting point
It’s important for an organization to reinvent itself, says Revis. “Working greener may not immediately lead to higher profits. And an investment in your supply chain may not immediately result in lower costs. But it’s all important. You need to rethink the complete picture of your organization. The focus should be on the long term. Your entire organization is undergoing a transformation. For that transformation, you need the right building blocks.”
The first building block is a plan, Junge indicates. “As a CPO, you need to have a certain vision. Formulate your goal. Where do you want to go? What do you need to achieve that? And how can you execute it? Once you have that vision, you can start extracting more value from your organization. And what you definitely shouldn’t do is wait and look around.”
Don’t miss the boat
On this note, Salvatore Lombardo, Chief Product Officer of SAP Ariba, fully agrees. He provided some concrete examples of SAP software that can help organizations. Such as SAP Spend Control Tower, SAP Ariba Category Management, Buying 360, SAP Business Network for Procurement, SAP Business Network for Supply Chain, and SAP Fieldglass.
“For example, SAP Spend Control Tower helps to visualize all expenses of your entire company. And SAP Ariba Category Management enables streamlining tasks and thus working much more efficiently. These are all solutions that can help your organization. It’s important to look into them and take steps.”
He concludes with a compelling metaphor. “My main message is: don’t miss the boat. Don’t wait for people to tell you what’s happening around you. If you want to jump on the train while it’s already moving, you’re too late. You need to embrace the future. By proactively leveraging the opportunities available. Today and tomorrow.”
