- 4 days ago
"For the average company, the majority of enterprise value is shaped by an ecosystem of suppliers, partners, and third parties. AI is giving companies unprecedented visibility into their supplier ecosystems and enabling smarter, faster decisions at scale, transforming procurement from a support function into a strategic driver of enterprise value.
The evidence is compelling: organizations with leading procurement capabilities powered by AI achieve EBITDA margins that average five percentage points higher than their peers, and the gap between leaders and laggards continues to widen.
AI is creating a new generation of capabilities across the value chain: improving resilience and risk detection, uncovering new sources of value, sharpening sourcing decisions, strengthening supplier collaboration, and unlocking higher supplier performance.
Yet very few organizations are capturing this value at scale. Most remain stuck in experimentation.
In this keynote, Theano Liakopoulou, Senior Partner at McKinsey & Company, will explore how AI is reshaping procurement, how leading organizations are building the hybrid human-AI procurement team of tomorrow, what it takes to scale impact, and how companies can turn procurement into a competitive advantage."
The evidence is compelling: organizations with leading procurement capabilities powered by AI achieve EBITDA margins that average five percentage points higher than their peers, and the gap between leaders and laggards continues to widen.
AI is creating a new generation of capabilities across the value chain: improving resilience and risk detection, uncovering new sources of value, sharpening sourcing decisions, strengthening supplier collaboration, and unlocking higher supplier performance.
Yet very few organizations are capturing this value at scale. Most remain stuck in experimentation.
In this keynote, Theano Liakopoulou, Senior Partner at McKinsey & Company, will explore how AI is reshaping procurement, how leading organizations are building the hybrid human-AI procurement team of tomorrow, what it takes to scale impact, and how companies can turn procurement into a competitive advantage."
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00:00Leonardo Silva Reviewer
00:24What if I tell you that for most companies
00:28the biggest source of enterprise value
00:30sits outside the company walls?
00:33During this session, we're going to talk about
00:36how orchestrating external ecosystems
00:38creates a competitive advantage for corporations.
00:42We're going to talk about what it takes to get there
00:45and how AI is the way to make it happen faster.
00:49My name is Tianna Lekopoulou.
00:51I'm a senior partner at McKinsey
00:53and I lead our global AI procurement service line.
00:56I'm looking forward to the next few minutes.
00:58I would like to share with you
00:59why I think we're facing one of the most significant shifts
01:02in how enterprise value is created today.
01:09What do these companies have in common?
01:13Maybe at the first glance, not much, but let's have a look.
01:17Take Toyota.
01:18During the semiconductor crisis,
01:21Toyota doubled their earnings forecast
01:23when their competitors, at the same time,
01:26were shutting down production lines.
01:28Why did that happen?
01:30They had created transparency
01:32beyond their first-tier suppliers.
01:35When things were calm, they created options.
01:38So when the crisis hit,
01:39they had options and they could navigate extremely well.
01:43Take Procter & Gamble.
01:45Half of their product innovation
01:47comes from outside the company.
01:49And this is based on a fundamental principle
01:52that the best ideas are not always inside your walls.
01:56Another great example is ASML.
01:59Their competitive advantage
02:01comes from orchestrating an extremely complex network
02:05of thousands of partners
02:06who operate as if they're part of a single company.
02:11Different companies, different sectors, different outcomes,
02:14but one underlying capability that is common,
02:18the capability to manage
02:19their external ecosystems extremely well.
02:22These companies do not ask,
02:24how do I squeeze cost out of my suppliers?
02:27They're actually asking,
02:28how do I shape my ecosystem
02:30so that they give me a competitive advantage?
02:33And that's why the concept of orchestrating,
02:37shaping and orchestrating your external ecosystems
02:39is a strategic lever.
02:41It's not just about buying better.
02:45To understand the opportunity better,
02:48let's take a step back
02:49to see how value chains evolved.
02:52A century ago,
02:54companies were integrated end-to-end.
02:57Take Ford, for example.
02:58Ford built a city in the Amazon
03:00called Fordlandia
03:02to grow rubber for their tires.
03:04And the boundaries of companies were huge
03:07because value chains were being created.
03:09Since then, the world externalized.
03:13I'll give you one number, 70%.
03:15This is the typical share of a company's cost
03:19that is sitting outside its walls.
03:22And a big share of the enterprise value
03:25is also determined outside the company.
03:29So when value is created outside the company,
03:32the influence should be focused
03:33outside the company as well.
03:36And that's why enterprise value creation
03:39is such an important lever.
03:41And the question is,
03:43why would companies not do it so well
03:45if it's so important?
03:47And there are different reasons
03:49that we'll come to in a minute.
03:51The evidence of impact is there.
03:54During McKinsey research,
03:56we have confirmed time and time again
03:58that the companies that manage
04:00their external ecosystems well
04:01outperform their peers
04:03by five percentage points of EBITDA.
04:06So as we said,
04:07why is it not happening at scale
04:09if it's so compelling?
04:10Many reasons.
04:11One reason is that companies
04:12are often internally focused.
04:14They focus on resolving the challenges
04:16within their borders
04:17and they often form transactional relationships
04:20with suppliers.
04:22Another reason is
04:23when you take the ecosystem lens,
04:25it's just very, very complex.
04:27It's very difficult,
04:28especially in today's world.
04:31Look at the world in the last six years.
04:34The pace of change accelerated significantly.
04:37Disruption and volatility
04:39has been higher than ever.
04:40And this is not going to change.
04:42It's not a phase that will pass.
04:43It is actually the new normal.
04:46Take the last four weeks alone.
04:48In the last four weeks,
04:49we had a geopolitical conflict
04:51that threatened one of the world's
04:53most important energy corridors.
04:56Global trade rules changed again.
04:58And AI became the subject
05:01of national security negotiations
05:04just in the last four weeks.
05:06How do we expect humans
05:08to monitor, understand,
05:11analyze, anticipate,
05:13and handle all this complexity?
05:15Such capability doesn't exist
05:17in any human team alone.
05:19And that's where AI comes in.
05:24AI, for the first time,
05:26allows us to manage supplier ecosystems
05:28in a very different way.
05:30It's not about periodically monitoring
05:32our ecosystem of third parties,
05:34but it's actually continuously orchestrating it
05:38for better results.
05:39And what does it unlock?
05:41Resilience.
05:42Continuous visibility
05:43beyond your tier one suppliers.
05:45Early detection of risks.
05:46Smart mitigation.
05:49Productivity.
05:50Expertise available all the time.
05:53An always-on approach
05:54to identify value
05:57and pursue opportunities
05:58and capture the value.
06:00Margin enhancement.
06:02A unique capability
06:04to inform commercial decisions
06:06using foresight
06:08of what's happening upstream
06:09in your value chain
06:10and change your product mix
06:12or adjust your recipes
06:14or hedge better.
06:17And if we look at it together,
06:19the companies that really manage
06:21to scale AI in their operations,
06:23in their supply chains,
06:24end-to-end,
06:26deliver five times better returns
06:28than their peers.
06:29Five times.
06:33So what does that look like in practice?
06:36Imagine an authentic operating system
06:39running across your value chain
06:41and there are six families of agents
06:43that are already operating at scale
06:44and delivering results.
06:46Sourcing strategy agents
06:48that come up with the best plans
06:50on how to use the opportunities of today
06:52to drive value.
06:54Identify opportunities,
06:55come up with the next actions,
06:57and help procurement teams
06:59drive value better.
07:01Sourcing agents
07:02that identify new suppliers,
07:04run events to engage them,
07:06including managing tailspin
07:08that usually we have no bandwidth
07:10to even touch.
07:12Negotiation agents
07:13that get you the best
07:14commercial arrangements
07:15that deliver against your objectives
07:18in the best way possible,
07:19align your supplier's objectives to yours.
07:21Performance management agents
07:23that ensure that delivery
07:24is in line with plan.
07:26Value preservation agents
07:28that look at what's happening externally,
07:31look at your systems,
07:32your contracts invoices,
07:33ensure there's no leakage
07:34risk agents anywhere,
07:35and risk agents.
07:37All these agents
07:39ingest huge amounts
07:40of complex data,
07:42look at the market continuously,
07:44reason through trade-offs,
07:45generate options,
07:47produce recommendations,
07:49and in the end,
07:50are autonomous
07:51in doing all of that.
07:52And this is not about
07:53replacing humans.
07:55This is about working together
07:57with people in your teams
07:58to deliver better outcomes
08:01in a symbiotic way.
08:02The agents focus on leveraging
08:05huge amounts of information
08:06at scale,
08:08with speed,
08:08synthesizing.
08:10Humans focus on relationships,
08:12judgment,
08:14and creative thinking.
08:16So while the opportunity
08:18of mastering,
08:19of managing external ecosystems
08:21has always been there,
08:23authentic AI
08:24brings it to a different level
08:26and allows to really generate
08:28a competitive advantage
08:29in the complex world
08:30of today.
08:32And this is an enterprise
08:34topic.
08:35It is not a functional topic.
08:37Yet the procurement function
08:38sits in the center of this.
08:40And here's the uncomfortable truth.
08:45We ask chief procurement officers
08:47what they think about AI.
08:4990% of them see the value.
08:52They are also certain
08:53that AI will disrupt
08:55the way they work.
08:56Only 10% of companies
08:58have implemented AI
09:00in their procurement organizations.
09:03And unfortunately,
09:04less than 5%
09:05see impact in their business results
09:08from AI in procurement.
09:10And why is that?
09:13One reason is that
09:14this is treated
09:15as a functional challenge.
09:16It's a procurement function
09:17to figure it out.
09:18Another reason is that
09:19there's too much focus
09:20on technology.
09:21Technology is important,
09:23but AI alone
09:24is not enough.
09:25We actually see
09:26that the companies
09:27that get most value
09:28out of AI
09:29are the ones
09:30who are excellent operators.
09:32So the winners
09:33are not the ones
09:34who have most of AI.
09:37They're the ones
09:38who have the best
09:39operating systems.
09:40So what do the winners do?
09:44Let me take you
09:44through the playbook.
09:45They start,
09:47and that's very important,
09:48they start
09:50with value in mind.
09:52They lead with value.
09:53They identify
09:54a bold ambition.
09:55They do not ask
09:56what are the two,
09:57three use cases
09:58we will go pilot tomorrow.
10:00They ask
10:01what are the enterprise
10:02outcomes we're looking
10:03to achieve,
10:03and they work backwards
10:04from that.
10:05and they align that
10:06at the board level.
10:07As we said,
10:08it's not a functional challenge.
10:09It is an enterprise topic.
10:12Once they're clear
10:13of what they're looking
10:14to achieve,
10:15they put the capabilities
10:16and capacity in place
10:17to make that happen,
10:19not just once
10:21or twice
10:21or three times,
10:22but hundreds
10:23and hundreds of times,
10:24every time consistently.
10:26And within that,
10:27in terms of technology,
10:29they don't look
10:30at buying software.
10:31Hundreds of millions
10:32have been spent
10:33on solutions
10:34in procurement
10:35that haven't delivered
10:36impact and haven't scaled.
10:37This is not about
10:38buying the next solution.
10:40You need to own
10:41your tech architecture.
10:42You need to own
10:44and build
10:44your authentic platforms.
10:46Data.
10:47This is not about
10:48perfect data.
10:49Data,
10:50clean data,
10:50fuels everything.
10:51But it's about
10:52connected data,
10:53access to data
10:54that you need,
10:56and that you consume
10:57to deliver the results
10:58now,
10:59not waiting for perfection.
11:01And then operating model.
11:03The operating model
11:04needs to be rewired.
11:0560% of the companies
11:07go and try
11:07to implement
11:08AI solutions
11:09in the existing workflows.
11:12But it's the workflows
11:13themselves
11:14that need to change
11:15in order for this
11:16to be successful.
11:18And then comes adoption,
11:19the most critical
11:20success factor
11:21and the biggest mistake
11:24that companies
11:25usually make.
11:26They treat adoption
11:27as the last step
11:28in the transformation.
11:30But it's too late.
11:31Then it's too late
11:32because adoption
11:33needs to be a design
11:34principle for the beginning
11:35for it to work.
11:41So,
11:41if we take a step back,
11:44the ambition is bold
11:45and the impact is real
11:47and it's actually
11:48happening now.
11:49Competitive advantage
11:50can come
11:51and does come
11:52from outside
11:53the walls of a company.
11:55And AI makes
11:56a real difference
11:56on how much
11:58of that companies
11:59can access.
12:00The recipe is there.
12:02It's not easy
12:03and it's not obvious.
12:05You have a procurement
12:06function,
12:07but it needs
12:07to be rewired
12:08into an orchestrator
12:11of your value chain
12:12powered by AI
12:13and designed
12:14for the modern
12:15complex world.
12:17And when that
12:18is done well,
12:19the returns
12:20are spectacular
12:21and the impact
12:22is fast.
12:23You can go
12:24from prototype
12:25to pilot
12:25within weeks,
12:27from pilot
12:28to full scale
12:29within a year.
12:31So,
12:32the opportunity
12:32is there
12:33and now
12:34is the time
12:35to capture it.
12:36it takes courage
12:37and it takes
12:38leadership,
12:39not just
12:40investment.
12:43So,
12:44that's why
12:44I'm excited
12:45about this
12:45very important
12:46pivotal moment,
12:47I would say,
12:48in enterprise
12:48value creation
12:49and the role
12:50that external
12:50ecosystems can play.
12:52And that's the reason
12:53why with a few
12:54colleagues,
12:55we took the time
12:56in the last couple
12:56of years
12:57to write a book.
12:58If you're interested
12:59to go deeper,
12:59the book is coming
13:00out in the fall
13:02and it's not
13:04a book about
13:05procurement.
13:06It is a book
13:07about leadership,
13:08about transformation
13:09and about the notion
13:11that value
13:12is generated
13:13outside the enterprise
13:14walls
13:15and about
13:16what it takes
13:17for companies
13:18to capture it.
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