Procurement 2015: Benchmarking the Best-in-Class

#AribaLIVE
@ariba
Procurement 2015:
Benchmarking the Best-in-Class
Andrew Bartolini, Chief Research Officer, Ardent Partners
Richard Vermersch, E Procurement Manager, Auchan Group
Thiery Bourany, Purchasing Transformation Director, Nexans
10 June 2015
© 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini
@ardentpartners

#AribaLIVE
@ariba
Procurement 2015:
Benchmarking the Best-in-Class
Andrew Bartolini,
Chief Research Officer
Ardent Partners
10 June 2015
@andrewbartolini
@ardentpartners

#AribaLIVE @ariba@andrewbartolini @ardentpartners
Agenda
• Introduction
• The State of the CPO
• The State of Procurement
• Procurement Performance
• Strategies for Success
© 2015 Ariba – an SAP company. All rights reserved.3

Andrew Bartolini
• This is a content bullet
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 Chief Research Officer, Ardent Partners
 Publisher, CPO Rising & Payables Place
Summary
 Recognized expert in sourcing, procurement, AP, and supply management
 Advisor to solution providers & CPOs alike around the world
 Presented more than 200 times in seven countries
 Benchmarked 10,000+ enterprises across all facets of their supply management operations
 Published 1000+ research reports, analyst insights, articles, and other briefs
 Named a “Pro to Know” by Supply and Demand Chain Executive three times
Experience
Decade plus as Industry analyst. Leadership roles in sales, marketing, and services at Ariba and Commerce One. Rich
experience in strategic sourcing, business process transformation, and software implementation. Background also
includes consulting and investment banking.
Education
 MBA – Indiana University
 BA – College of the Holy Cross

Ardent Partners - Introduction
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Ardent Partners is a research and advisory firm
focused on defining and advancing the supply
management strategies, processes, and
technologies that drive business value and
accelerate organizational transformation within
the enterprise.

CPO Rising: Global Research & Analysis
for CPOs

Research Process
• Research Report
• Goal (I): Capture the strategies, performance, and intentions of Chief Procurement
Officers in 2015 (and beyond)
• Goal (II): Present a clear and comprehensive view of the “State of Procurement”
• Goal (III): Identify the strategies and levers that drive Best-in-Class results
• Approach
• Utilize a web-based survey to capture responses from 318 CPOs and other
procurement executives
• Interview 26 leading CPOs (and ex-CPOs) to add context and understand
critical and emerging trends
• Leverage experience and orientation of a leading analyst team

Today’s Presentation
Report Demographics
318 Respondents
• 72% VP or Director-level
• 82% work in procurement
• 63% from large enterprises
• 61% North America; 26% EMEA
• 28 industries
• Interviewed 26 CPOs

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The State of Procurement
and the CPO
@andrewbartolini
@ardentpartners

The CEO’s View of Procurement
“Procurement is an incredibly important part of the business. You
need to get that right.”
~ Sam Walsh, CEO, Rio Tinto

CPO Reporting

The CPO’s Top Two Pressures in 2015

The CPO’s Top Priorities (Next 3 Years)

But Should Your Procurement Dept. Be
Doing Better?
90%
3%
7%
Yes
No
Not Sure
© Ardent Partners - 2015

What’s Holding Procurement Back?

What Will Drive Procurement Forward?

The CPO’s Top Drivers for Future
Success

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Procurement Performance
Benchmarks
@andrewbartolini
@ardentpartners

EMEA: 2015 Procurement Benchmarks

Best-in-Class Procurement Definition

Procurement Metrics
(Best-in-Class v. All Others)

Best-in-Class Technology Advantage

Best-in-Class Characteristics
Copyright © 2015 - Ardent Partners Ltd.
© Ardent Partners - 2015
26

Andrew Bartolini
Chief Research Officer
abartolini@ardentpartners.com
@andrewbartolini
Contact Info

#AribaLIVE
@ariba
Procurement 2015: Benchmarking
the Best-in-Class
Richard Vermersch, E Procurement Manager, Auchan group
10 june 2015

Some Key Figures about AUCHAN …
• 11th largest food retailer in the world* present in 16 countries
• 330,700 employees
• 89.8 % of the capital held by the Mulliez family and 10.2 % held by
163,000 employee shareholders
• € 53.5 billion in revenue before tax
• 2.6 billion till receipts (hypermarkets + supermarkets)
• 5 autonomous and complementary activities
 Hypermarket, Supermarket, Bank, Real Estate, E commerce

Indirect Purchasing Organization
• Setup of the Indirect Purchasing Office of Auchan Group (2010)
• The intent is to set up a “light” structure at Corporate level with
the mission statement
 Governance, monitoring, setting principles, defining solution
and coordination
• At country level, a local office dedicated to all businesses has
been defined to act on
• Selection of Ariba tool for indirect purchases (2010)

Ariba Deployment Priorities
• Firstly, P2P solution deployment  10 000 users
 Put under control the expenses (PR validation)  3 billions euros
 Use the referencement of buyers 15 000 suppliers
• Secondly, Sourcing deployment  50 buyers  1 000 events
 Creation of a purchasing process with 5 mandatory levels in the tool
 Our slogan is “No Ariba, no business”

Few Positive Tips on the Deployment
• Drive & Define the program by the goals to be attained
• The organization must be sponsored by the top management
 The support and follow-through of Management is critical
• Think BIG, and start by small goals
 To design the core model solution for the company
 Use multiple prototyping to show the value and feasibility
• Never underestimate the implementation and deployment workloads
 Be realistic on the real capacity of each member to deliver on the program
• Work on the minimum process for maximum gain
(20% of effort for 80% of gain)

Difficulties in the Deployment
• Why change, it works well !
 Meetings in all countries to explain :
– the global view
– the return of investment for the group
– advantages for end users
 A corporate follow up of all deployments
• Difficulties to deploy some commodities
 Construction (in progress), temporary labor

Timeline
DAI
organization
2011 2012 2013 2014 2015
Ariba
selection
2016
P2O pilot
2010
P2O deployment
Sourcing
pilot
P2P pilot
P2P deployment
Sourcing deployment
On Demand Migration
study
E orders / invoices

Next Steps
• Finish the commodities deployment  1 billion
• Study a migration  P2P On premise to P2P on demand
• Deploying the electronic transactions (orders, invoices) with suppliers
to simplify processes

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Procurement 2015: Benchmarking
the Best-in-Class
Thiery Bourany, Purchasing Transformation Director, Nexans
10 June 2015

A Worldwide Leading Expert in the Cable Industry
 Sales in 2014 of about 6.4 billion Euro (1)
 Industrial presence in 40 countries
 26,000 local experts
 Listed on the NYSE Euronext Paris
(1) At current metal prices

Nexans Is Serving Essential Needs
Demographic growth, urbanization, industrialization in emerging markets, global trade, digitization and massively
increasing volumes of data exchange are all generating huge needs for energy, infrastructure, transport and buildings.
As a result, these factors are driving demand for energy and data cables in the four main markets we serve.
ENERGY RESOURCES
 On- and off-shore oil and gas
 Renewable energies:
On- and off-shore wind farms,
solar power
 Thermal and nuclear power plants
 Mining
TRANSPORT
 Aeronautical and spatial
 Automotive
 Shipbuilding
 Rolling stock and railway
networks
 Airports, railway stations
and ports
BUILDING
 Industrial, logistics,
tertiary and commercial buildings
 Collective buildings
 Housing
 Data centers
ENERGY
AND DATA INFRASTRUCTURE
 High-, medium- and low-voltage
submarine, underground and
overhead electricity transmission
and distribution networks
 Land-based and submarine
telecommunication networks, using
copper and optical fiber cables

Story of E-Procurement in Nexans
• Nexans uses an e-procurement solution in France since 2005
for its indirect purchases
• In 2011, Ariba is selected to replace the existing system
as core model for Nexans
• After a 5-month project, Ariba is live in June 2012
replacing the old system
 Higher functionalities and greater ergonomy

Nexans E-Procurement Today
• 1,000 users, over 25 sites in France and Germany
• 25,000 orders per year
• 2,500 vendors of which more than 1,000 on the Ariba Network
• 70% electronic invoices with 200 suppliers

Main Benefits
• Compliance on purchasing process and traceability
• Savings on catalog orders (+10%)
• Rationalization of supplier panel
• Productivity for purchasers
• Productivity for accountants (90% matching on electronic invoices)

What to Learn
• Tool is not sufficient, compliance is a daily work for
purchasers to reduce non-catalog orders and concentrate
on preferred supplier
• Explain, explain, explain…Change management is key
• Convincing suppliers takes time

The Future for Us
• A new global Purchasing organization is set up in 2014
• A transformation program is launched within the purchasing
community where the improvement of our tools is key:
 A new BI
 A new sourcing/SRM tool for purchasers
 Deployment of Eproc in all main units of Nexans
in next two years

Procurement 2015: Benchmarking the Best-in-Class

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Procurement 2015: Benchmarking the Best-in-Class