Future Proof Your Procurement Organization Tracy Stephenson Former JC Penney CPO Infosys Rajiv Gupta Practice Engagement Manager www.sig.org/eval
Future Proof Your Procurement
Organization
Tracy Stephenson
Former JC Penney CPO
Infosys
Rajiv GuptaPractice Engagement Manager
www.sig.org/eval
Tracy Stephenson & Rajiv Gupta
2
Why Future Proof Procurement
5 Steps to Future Proof
Quick Steps You Can Do Now
Q&A
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3
Procurement Seen
As A Strategic
Partner/World
Class
By Industry
Aerospace
51%
Pharma
54%
Auto/Other
57%
Publlic
Sector
44%
CPG
55%
Hospitality
50%
Retail
64%
Call to Action
Procurement and Supply Chain should be a strategic partner in a company across all industries
Results In
• Incremental 10-20%+ Value• Risk Mitigation• A Sustainable Competitive Advantage• Innovation• Increased Talent
• 10% or Less of Companies are considered World Class
Why Future Proof?
Source Data: Infosys
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1 2 3 4 5
Strategy Marketing Talent Governance
Best In Class Process, Technology
and Data
• World Class Roadmap• Refine with External
Best Practices• ROI• Innovation and Risk• Timelines/Milestones
5 Pillars to Future Proof Procurement
To Huge Success!
• Aign Procurement +Company Goals
• Executive Alignment• Customer Alignment• Metrics /Scorecards• Communicate Success• Leadership Council
• Talent Development• ROI/Benchmarking• Training• Organizational Structure• Rotate Talent• Performance Process • Change management
• Centralize Procurement
• Board Approved Policy
• Structured Approach to Risk and Continous Risk Monitoring
• Integrate P2P Modules• Visibiility to Spend, Value
Add Tracking, Contracts• Best in Class Processes,
Robotics and automation,• Strategic Category
Management and Market Intelligence
Keep Simple and Take People With You
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World Class Procurement
0.50
1.00
1.50
2.00
2.50
3.00
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Inhibiting Performing Enabling Optimizing Best In Class World Class
N/A Feb-13 Nov-13 Feb-14 Oct-14
Procurement Maturity
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Procurement Roadmap2-3 Year Plan
7
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Policy and Centralization
Vision/Mission/Goals/Roles and Responsibility
CRM: Planning and Align Goals
Training/Process/Tools
Strategic Category Management
E-Sourcing
Procure To Pay
Procurement Leadership Council
Score Cards, Value Add Tracker, Metrics Aligned to Customer/Company Goals
Supplier Risk Program/ID SC Blind Spots
SRM
High Degree of Customer Engagement and Strategic Function
TALENT DEVELOPMENT
ROI($, MM) on $1B Spend
$ 5 0 $75 $100
2015 2016 2017
1
4
1
3
2
2
1
1
1
2
1
3
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TALENT Assign to Key Leaders on Your Team Develops Talent and Grows Results FasterBuilds Capability, Trust, Capability --- And FUN!Report on Progress to CPO/Director/Leadership Team weekly/monthly
Strategy Initiatives Owner Measure Due Date2015
Results Target Status
Savings
Metrics (and Scorecard vs. World Class)Sr. Sourcing
Manager Scorecard; 3.0 of 4.0 World Class Q2 Green
Procurement Leadership Council Sourcing Manager Kick Off Q1; Quartelry Meeting Results Q1 Yellow
Work w/Finance on Process Reduce Fcst/Re-invest Savings
Sr. Sourcing Manager Quarterly Scorecard/Customer Feedback Q3 Yellow
Process Improvement
Strategic Category Management Sourcing Manager 2 Done Well; 50 completed EOY Q2/Q4 Red
7 Step Process/e-SourcingSr. Sourcing
Manager 50 e-sourcing initiatives Q3 Yellow
SRM Sourcing Manager New Program in Place; Report Progress Mo Q1 Green
Risk Management
Establish a framework to assess risk & identify blind spots Sourcing Manager Complete Q1; Ongoing Monthly Scorecard Q1 Yellow
Global/IT Compliance Sr. Sourcing
Manager Complete Q1; Ongoing Monthly Scorecard Q1 Green
Ongoing Recertification of Suppliers andContingency Planning Sourcing Manager Improved Process and Monthy Scorecard Q1 Yellow
Talent Development
Training Sourcing ManagerQuarterly Training Completed with Survey Results/Action Steps Q2 Green
Development ProcessSr. Sourcing
Manager Qtly Discussions/Progres vs. Develop Plans Q1-Q4 Yellow
Recognition Sourcing Manager Dept Meeting; Peer to Peer; Leadership Q1 Red
Technology
P2P Contracts Sourcing Manager 30/60/90 Day Expiring Report Q1 Yellow
P2P ServicesSr. Sourcing
Manager Contract Leakage Improvement of 10%+ Q4 Green
Ongoing Training (Policy and Process) Sourcing Manager Training Survey Results with Action Steps Q1-Q4 Green
Suppliers
Innovation Meetings with Top 20 suppliers Sourcing Manager Lunch Meetings with Action Steps Q2 Yellow
Increase Supplier Diversity SpendSr. Sourcing
Manager From 3% to 10% of Spend Q3 Yellow
Sustainability Sourcing Manager 30% contracts with sustainability programs Q3 Green
Customer Relationship
Understand your customers goals for 2015 Sourcing Manager Scores Reported (A/B) with Solutions Q2 Yellow
Up-Front Planning with CustomersSr. Sourcing
Manager Q1: Aligned Goals Completed with Metrics Q1 Green
Develop feedback methodology and standard scorecard for communicating with customers Sourcing Manager Report Scorecard Results Monthly Q1 Yellow
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Develop feedback
methodlogy and a standard
scorecard for comunicating
with cusotmers
Strategic
Partnerships
with customers
and suppliers
(cross-
functional
teams)
Marketing
Execute Internal Customer Marketing and Gain Alignment
Understand and
align with your
customer’s goals
for 2015
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Value Add
• Acheived $70MM of
$100MM Goal YTD
Compliance
• 10% Spend w/o A PO or a
Contract (Maverick)
• 5% Bid Waivers YTD
• 90% Contracts in System
• 1 Expired
• 10 Expiring 30 days
• 20 Expiring 60 days
• 50 Expiring 90 days
Suplier/Operational
Communicate Success Metrics
$70M 10%
Align on Metrics with Executive Team Define 3 Metrics by Customer
• SRM and Supplier Performance
• Continuous Risk Monitoring:
• Brand/Global/Social/Reputational/Geog
raphic/QA
• Suppiier Re-Qualification (Annual)
• ID Sole Source/Secondary Supply
Options
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Training
• Sourcing Boot Camp• 7 Step Process/E-sourcing• Contracts• Customer Engagement• Category Management• SRM• Ongoing...
Succession Planning
• 6 Box Reviews• Bench Planning for all levels• Rotate Talent • Hi Potentials
• Ability • Engagement• Aspiration• Learing Agility
Review Process
• Skill Matrix• Defines skills required at all
levels Specialist to Director• Self Assessment• Personal Development Plan• Build A Team
• Reward /Address Top/Bottom• Internal/External Talent
• In-Source vs. Out-Source (based on core competencies)
• Performance Management
TALENT
The Power of Developing World Class Sourcing Talent
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• Executive/Board Approved• Communicate To Employees• Employee signature • Address non compliance
Centralize
• Present Fact Based Data to CF Leaders• Why it makes sense to centralize:
• Expert Resources to support BU’s• Checks and balances• Improved Savings/Contract terms• Risk to BU’s to sign own contracts• Proper expertise in right area to
safeguard the company
• Synergies: Learning, Tools, Processes
Ongoing Risk
2 Key Elements:• All negotiations triple
bid unless bid waiver by CPO/BU/CFO/CEO
• All contracts signed by procurement
Governance
Put Strong Base and Visibility In Place
Procurement Policy
• Structured Approach to Risk• Approval by CPO for
anything with Brand, Global Component
• Social Compliance• Geographic• QA• Legal
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18PROCESS, TECHNOLOGY, AND DATA
Procurement InsightsAdvanced Spend Classification & Analytics
tool to identify savings opportunities
Procurement CloudProcure-to-Pay “Enablement”
Platform with a B2C Experience
Infrastructure & Hosting
Expert Consulting Services
Implementation Services
Infosys IP/Products
Partner Products
Ecosystem
Multitenant
Cloud based
SMART Tech.
Pay as per use
• Product Discovery
• Guided Buying
• Purchase Request
• Approvals
• Action Center
• Order Management
• Catalog Management
• Supplier Portal
• Spend Classification
• Spend Analysis
• Collaboration
One SearchExternal
MarketplaceGuided Buying
Channels
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19Proven Managed Services in Sourcing and Procurement
• 70+ Global clients in
Managed Sourcing &
Procurement
Services
• 14 Global Delivery
Centers
• 10-15 X ROI in
Managed Sourcing &
Procurement
Services
• 150 + Bn Spend
Under Management
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Now2015
Our success story
Putting 5 Key Pillars in Place Built World Class Results:• $180MM Value Add• $200MM+ Risk Mitigation• Built People Capability• Innovation
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Session #14
Future Proof Your Procurement Organization
Rajiv Gupta
Infosys510-284-9354
www.sig.org/eval