Click to edit Master title style

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1 Click to edit Master title style

2 Click Category to edit Management: Master title style Transformational Change in Federal Procurement Breakout Third Session level #G13 Eric Heffernan, Principal, Grant Thornton Meredith Barnard, Manager, Grant Thornton Date: Wednesday, July 29, 2015 Time: 9:45am 11:00 am 1

3 Click Who We to edit Are Master title style Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd (GTIL), one of the world s leading organizations of independent audit, tax and advisory firms. Through member firms in 113 countries, including over 50 offices in the United States, Grant Thornton partners and employees provide personalized attention and the highest quality Click service to to clients edit around Master the globe. text styles Our Global Public Sector (GPS), based in Alexandria, Virginia, is a global management consulting practice providing responsive and innovative solutions to government and international organizations. GPS consists of over 600 professionals with certified subject matter experts in strategic planning, financial management, acquisition management, business and process transformation, performance measurement, and project management. Financial Management & Assurance Performance Transformation Information Technology Governance, Risk and Compliance Financial Management Operations Transaction Valuation Services Audit and Attest Services Information Assurance Audit Readiness/Remediation Strategy and Organizational Transformation Budget and Planning Cost and Performance Measurement and Management Business Process Improvement Acquisition Management Human Capital Management IT Program and Project Management Office IT Strategy and Governance Data Management and Analysis Cybersecurity and Information Assurance Systems Development and Sustainment 2

4 Click GPS Acquisition to edit Master Community title style of Practice Comprised of a dedicated team of more than 30 acquisition experts Click and to over edit 200 practitioners Master text styles Provide innovative acquisition services and comprehensive solutions Second to our clients level Promote knowledge sharing on a range of acquisition topics through thought leadership and training events 3

5 Click Objectives to edit Master title style Define category management and understand its Click to edit Master text styles benefits Summarize key components of category management Explore how Fourth category level management enhances the traditional» Fifth approach level to procurement operations Describe the actions and alternatives for implementing category management 4

6 Click What to is Category edit Master Management? title style A process-based, data-driven approach to sourcing that focuses Second the majority level of spend on products and services from third-party Third providers level to reduce cost, improve Fourth organizational level performance, and add value 5

7 Click Applied to edit Category Master Management title style Click to Consider edit Master Breakfast text styles 6

8 Click Applied to edit Category Master Management title style Click to Breakfast edit Master Category text Hierarchy styles Drinks Fourth Pastries level Cereal Protein 7

9 Click Applied to edit Category Master Management title style IT Category Hierarchy Hardware Outsourcing Security Software Consulting Telecom 8

10 Click Acquisition to edit Challenges Master title style 9

11 Click Why Implement to edit Master Category title style Management? There is a need for new sources of sustainable value delivery because traditional cost-cutting initiatives yield diminishing returns. Category management helps achieve: A balanced portfolio of initiatives that transform cost structures, improve Fourth level products and services, and impact brand Application of supplier ideas and modern sourcing techniques to improve innovation Stronger workforce capabilities in supplier management, internal relationship management, and category management drive the greatest improvements 10

12 Click Public to vs. edit Private Master Sector title style Application 11

13 Click Change to edit to Traditional Master title Roles style Contract Supervisor Manages one or more contracts for the same program or organizational unit Project Manager Possesses technical knowledge and experience needed to define business requirements to meet project objectives Category Manager Manages a suite of category solutions through various contracts across organizational units Solutions Architect Designs scalable solutions around business requirements using appropriate set of available contracts Contracting Officer (CO) Category CO Holds authority to enter into, administer, and terminate contracts and make related determinations and findings Specializes in category-specific contract techniques, including service level agreements and terms & conditions Contracting Officer's Representative (COR) Ensures contractual compliance and reports vendor performance Vendor Manager Manages relationships with strategic suppliers and identifies opportunities to build mutual value 12

14 Click What to are edit the Master Public title Sector style Benefits? Improved transparency, knowledge, and management of spend data and market trends Consolidated programs, contracts, and suppliers that achieve government-wide savings Improved supplier Fourth level management, portfolio management, and governance» Fifth of government-wide level acquisitions Monitored and prioritized spending based on market trends and developments Increased collaboration with government stakeholders and industry Establishment of common business requirements Focused, streamlined procurement operations Tracked and reported quantitative benefits 13

15 Click Category to edit Management Master title in style Action 14

16 Click Key Components to edit Master of title Category style Management Click Spend to edit Master text styles Analysis Category Planning Market Research Third level Analyze spend across buyers and suppliers to identify buying trends and identify upcoming demand. Analyze market developments in order to shape future vehicles ahead of demand. Prioritize improvement ideas and develop a business case for strategic opportunities in a multi-year category plan. Account Management Strategically manage buyers through regular engagement in category and sourcing activities to promote category offerings and solicit feedback. Supplier Management Strategically manage supplier relationships, apply supplier innovation, and monitor supplier performance. Performance Measurement Track category performance against metrics aligned with the organization's strategy and compare against benchmarks to gauge operating maturity. 15

17 Click to edit Master Implementation Lifecycle title style Category Hierarchy Category Boundaries Spend Taxonomy 1 2 Define Category Boundaries Performance Metrics Industry Benchmarks Supplier Scorecards Improvement Plans Conduct Spend Analysis 4 3 Measure Performance Align Operating Model Spend Analysis Process Spend Analysis Reports Spend Analysis Dashboards Category Plans Concept of Operations Implementation Plan Communications Plan 16

18 Click Supplier to edit Analysis Master title style 17

19 Click Open to Market edit Master Analysis title style 18

20 Click Category to edit Plan Master Components title style 19

21 Click Implementation to edit Master Frameworks title style Description Benefits Analytical Provides a robust foundation for identifying inefficiencies, driving datadriven decision making, and prioritizing improvement projects across a portfolio Focuses existing resources Repeatable category management processes Increased transparency into expenditures Framework for strategic decision making Organizational Enriches expertise and transparency through both business processes and organizational alignment that promotes market innovation and drives operational improvements to achieve efficiencies Enhanced procurement role Change in operating perspective that focuses on market dynamics Enriched technical and acquisition expertise Optimized relationships with buyers and suppliers Improved spend under management Challenges Requires accurate, reliable, and available spend data Inconsistent application Analysis results must be accepted by end users Limited shift in spending behaviors and operations New functions and processes must be supported by systems and data Requires a shift in organizational culture May increase resource levels Necessitates enriched skills Transformation must be a priority 20

22 Click Desired to edit Outcomes Master title style Common understanding of the vision Data-driven decision making Focus Third on the level market view Innovation through collaboration Improved workforce capabilities Aligned performance metrics to illustrate success and maturity 21

23 Click to edit Master title style Myth Busters 22

24 Click to edit Master title style Category management is the new Fourth version level of strategic sourcing 23

25 Click Category to edit management Master title is style the new version of strategic sourcing Places greater emphasis on market research and spend analysis results to drive sourcing decisions Emphasizes greater engagement with buyers to understand and proactively address demand Focuses on strategically managing supplier relationships and providing greater oversight of supplier performance 24

26 Click to edit Master title style Small businesses will be negatively impacted 25

27 Click Small to businesses edit Master will title be style negatively impacted Strategic supplier criteria considers socioeconomic Third goals level and other factors Spend analysis allows buyers to see relationships» Fifth between level actions taken and their effect on small business Category experts focus on identifying and minimizing barriers to entry and innovation A reduction in contract duplication eases administrative burden 26

28 Click to edit Master title style Supplier management can be implemented in compliance with the FAR 27

29 Click Supplier to edit management Master title can style be implemented in compliance with the FAR Not only allowed, but encouraged Pursuit of performance data promotes increased CPARS quality and supplier performance improvements "Top-Tier" and "strategic" suppliers are not favored in competitions 28

30 Click to edit Master title style Common Acquisition Platform (CAP) is driving the government-wide category management initiative 29

31 Click CAP is to driving edit Master the governmentwide category management title style initiative CAP is an enabling technology Category Third management level is an operating model and set of Fourth business level processes CAP is intended» Fifth to level promote better buying behavior and share information Category management is a proven method to sustain value beyond traditional methods, negotiations, cost avoidance, etc. CAP provides information to support category management processes 30

32 Click Closing to edit Remarks Master title style Fosters Click to edit a fundamental Master text shift styles to traditional procurement practices Application framework does not assume a "one size fits all" model Detailed planning is essential to successful implementation Govern centrally, but apply locally 31

33 Click Contact to edit Information Master title style Eric Click Heffernan, to edit Principal Master text styles Meredith Barnard, Manager Grant Thornton, Global Public Sector 32