2019 ipsm conference_procurement_transformation_workshop_richard beaumont
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Як успішно трансформувати функцію закупівель / Procurement transformation workshop by Richard Beaumont
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2019 ipsm conference_procurement_transformation_workshop_richard beaumont
- 1. Enabling Transformation: Getting the right help Richard Beaumont 5 June 2019
- 2. www.ip-sm.com Your vision is to transform through embracing change… Busy buying with lots of process Change Transform to strategic sourcing 2
- 3. www.ip-sm.com We are told we can just go buy tools, use them and deliver… 3
- 4. www.ip-sm.com You invest time, resources, money and what do you get…? Cost Time Labour Systems 4
- 5. www.ip-sm.com Change is not about adopting tools… …it’s about transforming capabilities Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 5
- 6. www.ip-sm.com Do we really do “Category Management”? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 6
- 7. www.ip-sm.com Let’s remind ourselves what “Category Management” is “Category Management is a strategic approach which organises procurement resources to focus on specific areas of spends. This enables category managers to focus their time and conduct in depth market analysis to fully leverage their procurement decisions on behalf of the whole organisation” • Category strategy is a systematic approach to guarantee initial significant improvements and a long term sustainable guideline on how to create value within the category • A category strategy should include a holistic cross-functional analysis on how a category can increase value and reduce waste. • A successful category strategy should be aligned to the company's priorities CIPS McKinsey 7
- 8. www.ip-sm.com Why does Category Management matter? 8 100% Idea/ Concept 20% 80% 40% 0% 60% Cost impact Function definition Specification defintion Supplier pre- selection Sourcing? Contract & Ordering Cost Reduction Opportunities Here you win! Here you try not to lose!
- 9. www.ip-sm.com What should we be thinking about? Establish –Spend Analysis, Requirements, Suppliers, Market Evolve – Strategy, Ideas, Options, Innovation, Risks Elect – Decide on chosen Initiatives Execute – Negotiate, Contract, Implement, get Results Review – Manage KPIs, SRM, Risk Management, Initiatives Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 9
- 10. www.ip-sm.com Your turn… Establish –Spend Analysis, Requirements, Suppliers, Market Evolve – Strategy, Ideas, Options, Innovation, Risks Elect – Decide on chosen Initiatives Execute – Negotiate, Contract, Implement, get Results Review – Manage KPIs, SRM, Risk Management, Initiatives Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 10 Discussion and Review - Discuss on your table whether you do Category Management or Buying - Record the 3 things you believe you could improve - Record what you need to do to start doing these 3 things
- 11. www.ip-sm.com Have we developed our team’s capability? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 11
- 12. www.ip-sm.com • How will you prepare your team for the future? • What is the current skill level of your team? Building capability relies on assessment and development Assessment Development 12
- 13. www.ip-sm.com What should we be thinking about? Organisation – Are there clear roles and responsibilities? Skills Gap Analysis – Strengths and areas for improvement? Procurement Knowledge – Do the team have the hard skills? Wider Skills – Do we have the soft skills? Communication, Influencing, Negotiation? Support & Mentoring – How are we supporting our team? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 13
- 14. www.ip-sm.com Your turn… Organisation – Are there clear roles and responsibilities? Skills Gap Analysis – Strengths and areas for improvement? Procurement Knowledge – Do the team have the hard skills? Wider Skills – Do we have the soft skills? Communication, Influencing, Negotiation? Support & Mentoring – How are we supporting our team? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 14 Discussion and Review - Discuss on your table: what are your teams strengths & weaknesses? - Record the 3 things you believe you could improve - Record what you need to do to start doing these 3 things
- 15. www.ip-sm.com Have we really thought about our Suppliers? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 15
- 16. www.ip-sm.com What should we be thinking about? Supplier Categorisation – Which suppliers are critical? Approach – What systems/process do we use? Communication – What methods, timing and technology? Performance Management – Is robust and effective? Innovation – Are we working with suppliers to improve our business? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 16
- 17. www.ip-sm.com Your turn… Supplier Categorisation – Which suppliers are critical? Approach – What systems/process do we use? Communication – What methods, timing and technology? Performance Management – Is robust and effective? Innovation – Are we working with suppliers to improve our business? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 17 Discussion and Review - Discuss on your table: How do you manage your suppliers? - Record the 3 things you believe you could improve - Record what you need to do to start doing these 3 things
- 18. www.ip-sm.com Have we assessed and managed our risks? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 18
- 19. www.ip-sm.com What should we be thinking about? Risk Assessment – Do we understand our risks? How do they map to our categories? Risk Process – How do we manage risks? Risk Ownership – Do we have clear risk owners? Risk Mitigation – How are we actively mitigating risks? Continuous Improvement – Can we demonstrate good outcomes? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 19
- 20. www.ip-sm.com Your turn… Risk Assessment – Do we understand our risks? How do they map to our categories? Risk Process – How do we manage risks? Risk Ownership – Do we have clear risk owners? Risk Mitigation – How are we actively mitigating risks? Continuous Improvement – Can we demonstrate good outcomes? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 20 Discussion and Review - Discuss on your table: How do you manage your Risks? Do you have a process? - Record the 3 things you believe you could improve - Record what you need to do to start doing these 3 things
- 21. www.ip-sm.com Do we really manage our Contracts? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 21
- 22. www.ip-sm.com What should we be thinking about? Contract review – What contract do we have? Contract Storage – How do we manage contracts? Key commercial terms – Do we understand them? Review & Renewal – Do we have a structured approach? Best Practice contracting – Are we building in data protection, innovation, risk? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 22
- 23. www.ip-sm.com Your turn… Contract review – What contract do we have? Contract Storage – How do we manage contracts? Key commercial terms – Do we understand them? Review & Renewal – Do we have a structured approach? Best Practice contracting – Are we building in data protection, innovation, risk? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 23 Discussion and Review - Discuss on your table: How well do you manage your contracts? - Record the 3 things you believe you could improve - Record what you need to do to start doing these 3 things
- 24. www.ip-sm.com …and after all this; how could digitisation help us? Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement /Digitisation 24
- 25. www.ip-sm.com What should we be thinking about? Source to Contract Knowledge Management e.g. Commodities Supplier Relationship Management Contract Management Procure to Pay (P2P)) Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement /Digitisation 25
- 26. www.ip-sm.com Your turn… Source to Contract Knowledge Management e.g. Commodities Supplier Relationship Management Contract Management Procure to Pay (P2P)) Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement /Digitisation 26 Discussion and Review - Discuss on your table: Have you started to digitise? How? With what? Is it working? - Record: what do you believe is the most important thing to do next?
- 27. www.ip-sm.com Getting things done is a challenge Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 27
- 28. www.ip-sm.com With support you can transform successfully… Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation 28
- 29. www.ip-sm.com Your turn… 29 Strategic Procurement Category Management People Capability Supplier Relationship Management Risk Management Contract Management Process/ eProcurement/ Digitisation Discussion and Review - What do you need to start your transformation journey?
- 31. Backup Slides 31
- 32. www.ip-sm.com Training is designed to be delivered to support end-to-end sourcing project delivery… Establish Evolve Elect Execute Review • 2 Days onsite training • Weekly 2 hour mentoring session per team (on-site or via Skype) • 2 Days onsite training • Weekly 2 hour mentoring session per team (on-site or via Skype) • 2 Days onsite training • Weekly 2 hour mentoring session per team (on-site or via Skype) • 2 Days onsite training • Weekly 2 hour mentoring session per team (on-site or via Skype) • As required support, typically 1 day per month for 3 months via telephone or Skype 32
- 33. www.ip-sm.com We use the “E4R” model for Procurement Delivery Establish Evolve Elect Execute Review • … the scope, team, stakeholders, governance, project milestones and the ‘as-is’ spend/ suppliers/ process/ initiatives • … ideas, options, opportunities, potential implementation plans, possible outcomes • … the solution(s) to be implemented • … the selected solution(s) • … whether the solution is working as intended 33
- 34. www.ip-sm.com Each stage is supported by structured modules backed by training Establish Evolve Elect Execute Review • Agree Scope • Form Team • Map Stakeholders • Build Communication plan • Identify cost drivers • Agree first Hypothesis and problem solve • Establish baseline through structured data gathering • Conduct Analysis • Map market dynamics • Map supplier dynamics • Understand Financials • Understand Risks then… • Evolve options through structured workshops • Review and rank options • Develop outline implementation plan(s) • Elect options to be implemented • Fully develop implementation plan(s) for selected option(s) including performance KPIs • Form implementation team • Execute selected options • Agree review schedule • Review performance against KPIs • Take action as required to maintain performance 34
- 35. www.ip-sm.com … but many can be delivered as stand-alone modules Establish Evolve Elect Execute Review Module Full E4R Standalone? Agree Scope ✓ Form Team ✓ Map Stakeholders ✓ ✓ Build Communication plan ✓ ✓ Identify cost drivers ✓ Agree first Hypothesis and problem solve ✓ Establish baseline through structured data gathering ✓ 35
- 36. www.ip-sm.com … but many can be delivered as stand-alone modules Establish Evolve Elect Execute Review Module Full E4R Standalone? Conduct Analysis ✓ ✓ Map market dynamics ✓ ✓ Map supplier dynamics ✓ ✓ Understand Financials ✓ ✓ Understand Risks ✓ ✓ Evolve options through structured workshops • Communication • Influencing • Facilitating workshops ✓ ✓ 36
- 37. www.ip-sm.com … but many can be delivered as stand-alone modules Establish Evolve Elect Execute Review Module Full E4R Standalone? Review and rank options ✓ Develop outline implementation plan(s) ✓ ✓ Elect options to be implemented ✓ 37
- 38. www.ip-sm.com … but many can be delivered as stand-alone modules Establish Evolve Elect Execute Review Module Full E4R Standalone? Fully develop implementation plan(s) for selected option(s) including performance KPIs ✓ ✓ Form implementation team ✓ Execute selected options • Negotiation • Communication • Influencing ✓ ✓ 38
- 39. www.ip-sm.com … but many can be delivered as stand-alone modules Establish Evolve Elect Execute Review Module Full E4R Standalone? Agree review schedule ✓ Review performance against KPIs ✓ Take action as required to maintain performance ✓ 39
- 40. www.ip-sm.com Qualifications MCIPS, BSc Engineering, MEng Engineering, MSc Defence Technology, MA Defence & International Affairs Key Skills • Procurement Transformation • Process Design • Procurement Project Implementation • Strategy and Operating Model Design • Strategic Sourcing • Category Management • Savings Delivery • Outsourcing • Procurement Training • SRM & Risk Management Overview Since leaving the Army in 2003, Richard has spent 14 years working across a diverse set of public, private and consulting companies, leading business process improvement and cost reduction programmes. Richard is a dynamic, results-driven leader who cuts through complexity with clear and innovative thinking. Richard has proven capability in transformation across business services including Procurement and Supply Chain operations and strategy, Process Improvement, eBusiness transformation, Training, Health & Safety, Product Development and Turnaround. He combines a strong technical and detail orientation with a passion for building and leading successful teams. Richard brings extensive operational experience developed within the Consulting, IT, Financial Services, Apprenticeship, Engineering, Defence and Construction sectors. Experience • In the past 18 months, Richard has acted as Interim Head of Procurement at Prudential Global Digital Services driving cost reduction across the full set of IT sub-categories as well as implementing Process and Organisational change. This included transformation of the Software Asset Management process and team. Richard is currently delivering training and mentoring to 20 students in the automotive sector and supporting 4 category transformations for a global pharmaceutical company. • Prior to this, Richard spent 18 months driving the commercial turnaround of the Co-operative Bank focused on rationalizing over 1100 suppliers, implementing processes and eProcurement tools in procurement, SRM and supplier risk as well as negotiating 6 major outsource deals, including IT, HR, Procurement and Business Processes. • As VP Global Procurement for Rolls-Royce, Richard was charged with simplifying and improving global purchasing process and eProcurement systems alongside the company wide ERP systems. During this time, Richard employed a unique approach to supplier engagement to ensure the development of truly collaborative processes in which suppliers played a key role in delivering the right outcomes, including design of our eProcurement transformation. This role followed work Richard undertook for Rolls-Royce while working as a consultant for McKinsey in which a rapid repricing programme for Global Indirect spend yielded 43% savings on £43m of spend in under 10weeks. • During his time at McKinsey, Richard supported several international clients across the pharmaceutical, aerospace, defence, public sector and media sectors, delivering both strategy and cost reduction programmes across most categories. This support included the delivery of world-class procurement training to develop teams. • Before McKinsey, Richard developed his procurement and business process skillset while working as Supply Chain Director for RMD Kwikform (an internal construction support division of Interserve). • Richard is a strong supporter of professional engagement and development and is regular chair of the ProcureCon international Procurement Conferences. 40 Richard Beaumont