SAP’s recently held virtual event Procurement Reimagined showcased how SAP partners and customers leverage technology, including SAP Ariba procurement software, in responding to unprecedented change and in reimagining the future of procurement.
Following last year’s massive transformation dubbed as 1SAP that standardised core processes and systems worldwide on SAP, BHP, a leading global resources company, shared in the recently held virtual conference Procurement Reimagined how it leverages SAP Ariba procurement software today.
Speaking at the digital event by SAP Ariba, SAP Fieldglass, and SAP S/4HANA, BHP’sGroup Procurement Officer Sundeep Singh highlighted that BHP is looking deeper into its $20 billion annual procurement spend with the aid of SAP Ariba software. The strategy is part of the ongoing transformation of the Anglo-Australian multinational mining, metals, and petroleum dual-listed public company that has been running for four years now.
By utilising SAP Ariba software in the process of BHP’s procurement overhaul, the company was able to achieve executive visibility along with a centralised procurement system that gives it an elevated role in the business strategy execution.
“Transforming and coming together as a global function really created a great opportunity to lay foundations for functional excellence directly to our frontline operations that not only reduced the bureaucracy and returned great cost-out by ensuring that we could supply a part to a maintainer to get the truck out of the pit on time, but it actually freed us up to connect to our organisation’s strategy,”
He explained that as a decentralised function, procurement was perceived “layers down” in the organisation, making it difficult to demonstrate any aggregate value.
BHP’s global procurement function runs off a suite of SAP Ariba modules. Now with a centralised procurement function, Singh exclaimed:
“We really now have that capacity to expand our scope to execute BHP’s purpose, rather than just transacting on behalf of BHP.”
Banking on 1SAP
The previous massive project 1SAP, also referred to as the company’s enterprise-wide business operations system, is one example of how BHP is embracing transformation. Singh emphasised that BHP solutions are now vast and wide.
“We’ve got Ariba sourcing, guided buying, catalog, the Ariba network and contract invoicing, and with SAP more broadly, we’ve got the cloud platform and SAP cloud analytics as well,” he added.
According to Singh, the global mining company is also utilising Ariba spend analysis in advancing spend visibility and performance management.
“We’re starting to see machine learning take us from that level 2 visibility now really into that level 4 visibility of our spend,” shared Singh.
Currently, BHP is considering onboarding and vendor registration to improve vendors’ experiences.
Working on BHP’s Spend
As with any other companies that go through the process of change, BHP embarked on the procurement transformation to meet organisational goals. For BHP, one of which is to be able to channel more spend around mine sites to local suppliers, with preferential payment terms offered to small, indigenous, or local businesses.
Singh mentioned some ways on how BHP can meet diversity and inclusion objectives with proper spending allocation. He cited allocating spend to mining equipment makers that “design equipment that’s inclusive for all genders” or to equipment makers that align with BHP’s climate strategy as examples.
“It’s really about enabling procurement to drive the innovation agenda,” he said.
“I really think that procurement, as it heads into the future, is the window for companies into the outside world.
“We can’t just transact. We need to … provide a meaningful interface that brings that outside world in,” expressed Singh.
Procurement Reimagined has also featured Australia and New Zealand partners and customers who shared their expertise in the session entitled “Being Game-Ready for the Next Decade: Procurement’s New Horizon”.
To access more Procurement Reimagined on-demand sessions, click here.