Solving procurement’s agility challenge

All right, good morning, everybody. My name is Toby Yu, I'm with KPMG. I'm a recovering procurement technology consultant, and I've got some stuff to share with you on how we like to help our customers to really enhance their procurement function and drive adoption levels that never have been seen with the traditional tech stack, leveraging ServiceNow source-to-pay capabilities and also their low code capabilities. I'm accompanied by my colleague, Piyush Anand. Piyush? - Awesome, thanks, Toby. Good morning, everyone, my name is Piyush Anand. I'm part of our KPMG team in the ServiceNow ecosystem from last 10 plus years. I'm helping with the recovery that Toby is going through from a procurement standpoint, so we've been partnering together on bringing latest technology from ServiceNow and other low-code platforms on how to solve for the procurement challenges that the CPO and their office is going through. - So great, thanks, Piyush. So where is procurement today? So KPMG recently conducted a survey of global CPOs, about 400 respondents last year, just to help us to get a little better context of how things are happening within their functions across the globe. Interestingly enough, 25% of procurement organizations rated themselves, you know, as excellent, providing an excellent service today. Now that's a staggering, you know, number that I found, you know, in the sense that over the past 10 years there's been so much technology, there's so much digital transformation. Over to the right, CPOs also have said that they have limited data and insights as top internal challenges, and I believe that those are related. I think with bad data or poor data quality, it really slows the process down, prevents collaboration across the departments within the function and outside of the function, and as a result, we're also seeing a drive to look to technology to be able to solve those problems. So 91% of folks are actually looking for technology to go and alleviate that, and then in addition, you can see where it's headed. 34% believe that there's gonna be a focus on reducing the operational activity so that they can elevate, you know, their performance within procurement, which really is to drive savings, work on supplier relationships, and manage their risk, and then tackle on some other big things such as sustainability, which is top of everyone's list at this point, not surprisingly as well, GenAI, right? So GenAI is also a big topic within the survey, but the question is going to be how do we actually capitalize and exploit GenAI? And we're gonna be talking a little bit about that in a bit. Now, at the end of the day, what does this really all mean is that with this changing environment as it always is, and the faster environment and the faster pace of business, procurement professionals are gonna be a lot more agile, and more athletic, so to speak, in order to meet the demands of the business. So let's talk a little bit more about why that's a bit of a challenge. So over the years, we talked a bit about the procurement transformations and digital transformations that I've personally been a part of. It's very difficult to be able to drive full transformation when you have siloed departments, and within the function, you have sourcing, contracting, procurement operations, there's finance, and you branch into legal, and branching into risk management and compliance. From an end user's perspective, all those things are one process, but from a back office perspective, those competing priorities and bringing all those things together is a challenge. Disparate technology and disparate processes supporting all of those processes, and data silos, all of those things make these types of digital transformations extremely difficult, and as a result, we talked a bit about the challenge of reducing the operational activities. It's costly as we think about this. A lot of the business cases that were, you know, that these digital transformation programs were based off of was to really drive efficiency and lower headcount, you know, in many cases. And as a result of the siloed nature of how these transformations happen, it's actually increased for many of our clients. Headcount has increased as the tickets are coming into procurement and having to answer tons of emails and phone calls and Teams chats to be able to figure out where to go to get your stuff. And as a result, even though there have been sourcing transformations, procurement operations with source-to-pay, contract management transformations, risk management transformations, the overall impact has not been as great as everyone is expected, right? I think we get pulled into a lot of our maturity assessments and say, "Hey, I've got the world class tech stack, I've got all these mature policies and processes, but my business partners tell me I suck, why is that?" Well, there's a bit of an explanation to that. So then the big question is how, how do we simplify the intake and procurement experience? How do we decrease cycle times? How do we increase spend and risk compliance? How do we manage by exception? How do we drive a workflow that doesn't have everyone reviewing every single transaction that comes through the door? And how do we bring transparency to the end users so that they can truly self-service and not have that anxiety of calling procurement, legal, chasing things down by themselves? And ultimately, now that's a lot of procurement's goals, but ultimately, how do we become a better business partner to everyone else that needs to use our services within procurement and finance? So with that, I said I was a recovering procurement I was seeking the answers for 20 plus years, and then I found Piyush. Yeah. - And Piyush brings a different, you know, tool set and a different way of thinking to what we had traditionally done within the procurement, you know, consulting service, and Piyush, I'm going to send it over to you and have you share a little bit more about our collaboration together internally and how we went to go tackle these problems. - Absolutely, thanks, Toby. So as Toby was talking about, in terms of the procurement challenges that we've been seeing over the past several years, I think the approach that we've been taking together within KPMG for our clients is to design, build, and operate differently. So when you talk about design, you're talking about a more human-centered design. You're talking about thinking about humans first, rather than designing your technology and then putting it in front of people for them to adopt, versus taking their inputs, making sure that you are looking at it from a lifecycle perspective as to what do they do on the day-to-day basis, and then you're designing the system like that, from a build differently perspective, using modern tools, so tools like ServiceNow from a source-to-pay technology standpoint, integrating with multiple tools, using modern technology, using generative AI as you can. I mean, the whole keynote that all of you are part of was all about AI, so how can you bring some of those elements, whether it's machine learning, whether it's AI, to automate some of those tasks that a lot of the employees are forced to do on a day-to-day basis. And then from a operate differently perspective, it's about analytics and data generation to make sure that you are making informed decisions based on what data is showing you. I mean, a lot of the surveys that Toby was talking about, right? Taking those into account, building dashboards so that organizations are kind of going through that and making informed decisions. So that's what we've been doing in the past two to three years, working closely with our clients. I think one of the main things from a agility perspective, if you look at today's organizations, a lot of the procurement work or even other shared services departments, right? Is happening either by Excel files, via emails. No matter what tool you put, people are still sending you email saying that, "Hey, what's the status of my invoice? What is the status of my particular case? I asked the procurement team about this, have I got this or not?" So there is not a set way of you to take the demand, how do you take the intake from your users and then traverse through the usage of the tool to various departments as to where it should be going. So if you look at the today on the left side on the screen here, it is very confusing for users, really. If I'm submitting something, I'm not getting any status of what I have submitted, whether this has already been approved. As a result of that, multiple requests are submitted for the same thing that the user was looking for, because they don't have really a status of whether it was fulfilled or not. It is a very ad hoc process to say, "Hey, am I going to involve sourcing first? Am I going to involve legal first? Am I going to involve IT team, procurement team, things like that?" But I mean, in a more structured format, you can actually automate, create a central intake from a demand perspective, making sure that all of this is coming through a great form through a virtual agent, through a very guided buying experience, like things like, I mean, all of us are used to filling our taxes through TurboTax or H&R Block or other organizations like that, right? So what that front end interface kind of looks like, creating that guided buying experience for users so that the guesswork is taken out. They're not guessing every time saying, "Oh, is my request going to need an approval? Is my request going to have to go through legal? Is my request going to be involving the risk management team or not?" And then similarly on the fulfiller side, really, on the procurement team side, making sure that these requests are coming in, and then they're able to kind of serve them as and when they come in. So I think it's about creating that human-centered procurement approach with a very structured data set. And the other thing that we are seeing from a tool like ServiceNow, right? From a platform perspective, a lot of the question comes in, "Oh, I've already got procurement tools that exist in my environment that users are using. I just invested a lot in that. Why do I need ServiceNow, or why do I need a low code platform like ServiceNow?" So it's about making sure that you are able to create that layer of action, layer of engagement orchestration, right? In the system of records that already exist within your organization. So you're looking at that demand central intake that has been created, you are integrating with backend tools from a integration perspective for either sourcing contracting, third party risk management, things like that, so that the experience is pretty seamless. You're taking the guesswork out as I was talking about in terms of when I submitted my request, now I know the status of that request. It is with this particular team, it has gone through and a sourcing request has been created in a backend system, and then both that sourcing request has been completed. Now I can go through my contracting process until the PO is generated completely. So I think the seamless integration capability of a platform like ServiceNow kind of comes in really, really handy as you build these experiences. - Yeah, I go back to the end user's point of view, and the more time we spend with the end users, especially the infrequent users, and a lot of our use cases are based on indirect procurement, so they have many different buying channels, as we like to call it. And the more we spend time with them, the more we built a view around what the end-to-end process really was. And historically, we've been implementing PO systems, sourcing systems, or contract systems, and we've not had a really good opportunity to string everything together except via manual processes or email. And ServiceNow's platform allows us to do that no matter what level of the maturity that you're in, whether you're a new function, getting, you know, getting started within procurement, or you're a mature function and you have a lot of technical debt that you need to build a common experience around, all of those things, you know, we are allowed to go and build within their out of the box source-to-pay as well as low code to be able to drive that experience that we need, and ultimately, and we'll talk a little bit about the business case associated with these, that reduces the noise. That allows you to be more agile, that allows you to be focused on, you know, the core value proposition of the procurement function. So why don't you tell us a little bit about a use case? - Absolutely. So for one of our clients, Toby and I worked together a couple of years back where the source-to-pay application from ServiceNow was just coming out in the market. So we helped them build a centralized intake process. I mean, the challenges that they were facing, right? Like were around insufficient order of process steps. They had the lack of visibility that we were talking about earlier, incremental risk exposure, so for certain type of requests, they were not really requesting risk-based approval, so there was a lot of risk-based exposure that they have. The outcomes that we achieved with this client were, it was a centralized intake process, great dashboards for their teams to kind of make informed decisions, much greater process visibility, right? Like where am I at from a process standpoint? And then overall, the benefits that the customer kind of realized were reduced R&D times, making sure that their requests were not taking as much time as they wanted, or that they were kind of tracking earlier, and the risk penalty avoidance, like in certain cases you are working with vendors, third parties in terms of enabling them without onboarding them successfully. So taking all of that, I mean, making the system very predictable from our supplier data and all of that quality standpoint as well. - Yeah, I thought that was a great example of being more strategic, driving and reduction in R&D cycle times, you know, gets products to market fast. And if you can be that partner, I think you're you're winning, you're winning. So with that, we're gonna start to, you know, we're nearing the end here, but at the end of the day, I know that you guys are here, there's a lot to learn around source-to-pay, and it's budget season, so this is a good time to go and think about if you've got this challenge and you ultimately want to invest in this platform to help you to bridge those gaps between those functions, those technologies, those data sources to drive that self-service user experience, it ultimately comes down to these things, visibility, spend control. Visibility, everyone touts visibility, but visibility across the entire process from intake all the way to pay and including sourcing. They want to see the status of their events. They wanna see where in the contract negotiation is this contracted, where is it hung up, is it with legal, so on and so forth. Source-to-pay tools out on the market today do not provide that level of visibility, so that's what we mean. Spend control, because of our environment, we miss a lot of deals, we get called in late. This allows us to build a user experience that people can plan for their projects way early. They put the demand into a system that we can monitor and manage the projects. That allows us to influence the spend, You may have already invested in a sourcing tool, but you're missing deals, they're coming in late, you don't have the opportunity to source, so this maximizes the value of your eSourcing tools. Performance management, contract terms, if you can bubble up contract details and empower the people within the workflow upstream and downstream, everyone needs contracts data to manage their supplier performance. This is what we're talking about. Risk avoidance, now there's always a big challenge in certain industries, financial services, life sciences, healthcare. When you need to bridge the gap, especially in the indirect world, you have a contract or a supplier you wanna onboard, but the risk management process with 15 different risk teams, how do you bring that together to bring that information from risk assessments and sync it up with contracting? That is a very difficult challenge that we have helped clients to solve, and that's the one that Piyush was talking about. Sourcing productivity and reduced cycle times, these are the types of things that will help you to drive your business case for an investment in the, you know, in improving that overall experience, that drive the adoption that you need in order for you to impact and drive the value proposition for the function. - Piyush, anything to add? - I think, Toby, one thing to add, right? Is as you start to expand your usage of the platform outside of IT, it's about thinking from an employee's perspective to make sure that they are not going into 20 different tools for doing specific things, versus they have a centralized layer, right? Where I mean, if you're just thinking from a procurement perspective, to Toby's point earlier, there might be plethora of tools in the market, but when you're talking about from a CTO organization standpoint or from a CEO perspective, right? It's looking at how can I provide my employees a better experience? They're already going to ServiceNow for IT, they're using it for HR. How can I like create a layer which encompasses the whole procurement experience on top of the platform and then kind of integrating to the backend systems? I think one thing we all need to do is we all are living like the Jetsons in our personal lives, but then we need to stop living like Flintstones in our professional life in terms of all the technology, like all the backward technology that we have. So that's a very important aspect from a CTO organization perspective to consolidate your user experience. - Yeah, I got a son that's graduating high school and headed into college, and so in a few years he'll be in the workforce, and I've shown him some of my interfaces that I work with, and I think it's just, it blows his mind, right? It's like what do you guys have to do? You have to use that, download spreadsheets? I don't have time for that. They're in a robotics team. They use GenAI every day to be able to code their robots, help them to make videos, do social media, and that is the reality. And I think what is being said on stage is absolutely true, it's a matter of time, and we are gonna have a bigger adoption challenge 'cause they are a mobile first generation, and we are still in many cases living in the Stone Age, especially within the procurement function because you know, as a procurement team, we're kind of at the bowels of the back office sometimes, right? We don't always get all the sexy tools, but I think it's time to change. I think this is, especially if you're a platform customer today, this is just an extension outside of IT into, you know, like you've heard the stories about HR, and into finance, you know, accounts payable, the supplier onboarding. There's just so much possibility here for us to drive a lot more efficiency, you know, within the procurement function. So with that, I've got a minute left. If anyone is interested, the procurement survey, here's the QR code. If you guys want to go and actually get some more background or information, I'll leave that up there for about 30 seconds. Please let us know what you think, and if there's absolutely anything that Piyush and I can do to help you guys out on your journey, our booth is right there, and we've got custom T-shirts, and what else have we got? Oh, we've got a new virtual AI. - We do, and we've got the truck right there, KPMG, which is providing custom T-shirts, Toby's point. The whole experience for that is powered by the S2P platform of ServiceNow. So right from ordering of your T-shirt to all the way the fulfillment that is happening behind the scenes in the truck, all powered by S2P, so come have a look over there. If you have any questions, come find Toby and I over there as well. - Yeah, that's a great point, I'll end with that. We are going through our own transformation, so we would love to share a story with you guys on our implementation of ServiceNow. - Yeah. - Within our own procurement function here in the US. So with that, thank you very much. - Thank you. - We are outta time, and I really appreciate it. - Yeah, thanks so much. (participants applauding)