The 2023 Intelligent Spend Management Award, presented by Roland Berger and SAP.
Winners of the Intelligent Spend Management Award 2023
Roland Berger and SAP crown the best projects in digital procurement
Demands on procurement have increased enormously. Broken supply chains and supply shortages, alongside the intensified focus on sustainability, are some of today's issues that are impossible to master without consistent digitalization. With the projects they have undertaken, the winners of this year's Intelligent Spend Management Award (ISM) not only demonstrate considerable willingness to innovate but also show that digitalization still harbors plenty of potential in procurement. Recognizing outstanding digitalization projects in procurement, the award has been presented jointly by Roland Berger and SAP since last year.
Today, it is evident that procurement and spend management deliver value far beyond just cost savings. They also achieve risk and crisis management, sustainability goals and enhanced decision making through digitalization and visualization. Many companies are already industry and technology leaders in these fields, regularly implementing innovative projects that transform their procurement.
Presented by Roland Berger and SAP, the ISM Award is THE digitalization award in procurement. As last year, many companies from the DACH region (Germany, Switzerland and Austria) submitted their latest use cases. At the end of April, the expert jury panel selected four category winners and one overall winner from among the ten finalists. The Sustainability and Integrity category did not attract enough high-quality submissions this year and was suspended – clear evidence, in our view, that much more needs to be done here.
Each winner is truly transforming the procurement and spend management landscape.
Managing fluctuating prices with transparency
Automotive supplier Brose was crowned the overall winner of this year's award, impressing the jury across all categories with their integrated end-to-end spend & revenue management.
The impetus for the award-winning project came from the frequent changes in raw material prices that the company was experiencing among its production material suppliers, who number more than a thousand. These had a noticeable impact on earnings in 2022. Up until that point, data entry was largely manual and not based on the ERP system, and costings were performed in Excel. All of this was not only time consuming but also error prone and lacking in transparency. Moreover, one of the consequences of the lack of coordination between Procurement and Sales was that it took far too long before the company was able to pass through additional costs to their customers.
Introducing detailed information on price changes, fully digitalizing and automating data entry in the ERP system and creating a shared database between Procurement and Sales were the steps taken to remedy the situation – and that they did. The manual work involved in inputting price changes has been reduced by 80%, checking the accuracy of raw material and underage costs now takes half the time, and the number of queries from customer teams and product controllers is down significantly.
Integrated end-to-end spend & revenue management, winner of this year's ISM Award, has also won over Brose employees with its reliability and the availability of the system-based data, alongside the fact that sales agents have the relevant data at their fingertips during negotiations – resulting in significantly more plausibility for their sales argumentation.
Common data model for 100 national companies
Swiss industrial group Sulzer won the award in the Business Insight & Foresights category for their procurement digitalization. The company defined a common data model with a shared, ERP-independent process that enables procurement staff in some 100 national companies to work in a way that is highly data-based and efficient.
The solution comprises four pillars: the ERP system, a supplier portal, a global procurement dashboard and a procurement bot specially developed by Sulzer. All of the pillars have now been running for two years: Fully integrated, they form the basis for all of the company's procurement activity. They are managed by a four-person digital procurement team covering all global activities.
The three-year project has achieved some impressive successes: Everyone in procurement benefits from maximum transparency across the entire ERP system in a dashboard that fully visualizes all procurement and financial data. Purchase orders can now be sent and confirmed in just three clicks. Nine out of ten global suppliers follow a guided onboarding process.
A graph database makes knowledge usable
Like many other globally operating corporations, ALTANA previously had to consolidate and analyze every single procurement activity of all its legal entities. The data used in this process came from more than 30 different ERP systems, which the procurement team had to consolidate in numerous manual and time-consuming steps.
One of the disadvantages was that the knowledge hidden in this huge volume of data could not really be used to make supply chains more resilient and to exploit market synergies. EMPOWER, the AI-powered graph platform that won the 2023 ISM Award in the Business Network category, has changed that.
EMPOWER is a database for sustainable knowledge engineering within ALTANA's global procurement network. The platform unifies existing data sets such as master data, meta data, as well as market, supplier and logistics data, and it also visualizes data sets. As a result, it gives complete transparency over corporate spend and helps stakeholders gain new insights. The database stores relationships and offers a high degree of flexibility to add new relationships to respond to changing requirements. With 60-70% of use cases already covered by the database today, the aim is for all knowledge-based use cases in procurement to be incorporated eventually.
Reaching Procurement 4.0 with best practices
The internationally operating Vaillant Group redefined their entire process and IT landscape in supplier management, strategic procurement, and direct and indirect procurement between 2019 and 2022, implementing Procurement 4.0 as their own strategic priority even before the first S/4HANA went live.
The processing of quotations and orders by e-mail and Excel, which was then partly manual, alongside complex manual approval processes, were restructured based on best practices, and an IT landscape deeply integrated with SAP ECC & S/4HANA was implemented largely as standard. Various self-programmed tools for demand planning and spend analysis/forecasting were replaced as a result. In addition to around 100 best-practice processes, seven new IT solutions were successfully rolled out in various countries. In another element of the revamp, the global approval and signature policy was adjusted to improve the speed of tools and processes.
The company, singled out by the ISM jury for the award in the Operational Excellence category for their new Demand Source Pay process, thereby reduced throughput times in the order workflow from purchase requisition to sending it to the supplier in indirect procurement from as many as ten days to 3.5 days on average. The automation rate rose to over 85% through the introduction of 185 new catalogs in indirect procurement.
Greater sustainability and transparency through end-to-end digitalized procurement
IT service provider Atruvia was declared the winner in the Organizational Agility & 21st Century Skills category. The company successfully digitalized their procurement process for materials and services across the board, including on sustainability and compliance aspects. Before the project, procurement featured some very diverse processes, such as in service management, and a lack of insight into the make-or-buy decisions that were made.
Not only does end-to-end digitalization allow the company to further professionalize their external workforce management as well as risk management for their service providers and increase their service offerings, it also facilitates 100% automated purchase-to-pay processes.
The new level of transparency enables Atruvia to make extensive savings, not only by standardizing tariffs and bundling requirements but also by renegotiating contracts. Another benefit of digitalization is that the company is able to implement the Supply Chain Due Diligence Act.
Intelligent Spend Management Award 2023 Jury
Expert jury members for the 2023 Intelligent Spend Management Award.