Microsoft has had a presence in Ireland since. Hands-on Procurement

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1 Hands-on Procurement Microsoft has had a presence in Ireland since As Microsoft Ireland Operations Ltd. (MIOL) it employs 1200 people and 700 full time contract staff in four facilities in Sandyford Industrial Estate and South County Business Park, housing departments such as R&D, engineering, localisation, finance and local sales and marketing, besides supply chain management and procurement. Microsoft dominates the world market for home computer operating systems and it is estimated that over 90% of users accessing the Internet from their own computers use Microsoft Windows. The latest incarnation of the software is Windows 10, launched in July 2015 and designed to enhance the user experience on mobile devices such as tablets. Microsoft's latest mobile launch is the Lumia 650 Dual SIM. The smartphone was launched in February of this year. Other recent product launches include the Microsoft Lumia 950 and 950XL Procurement Eric O Connell is the company s Field Procurement Manager for Ireland and is part of the Microsoft Procurement Group, reporting through the company s Finance Department to the Head Office in Redmond near Washington. As he explained, he is responsible for the indirect spend at Microsoft, including lower value items and services that support localisation, financial services, security, and print management and catering. 21

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3 The company has world-wide contracts for items like laptops and computers, which are negotiated on a global basis and purchased from manufacturers such as Dell, H- P and Lenovo. My focus is on the company s local needs, and as such I fulfil an operational and hands-on role which is complemented by our dedicated Category Teams such as Global Travel and Staffing, began Eric. Scrutinising Costs The procurement role in Ireland has two aspects: scrutinising the costs and requirements of the Irish sites, and making it easy for the internal customer to interact with the purchasing function whilst maintaining the protocols of proper procedure and best practice within the industry. The department uses its own dedicated software solution developed in-house to record all PO s, requisitions and sign-offs. Smartbuy allows the Microsoft in Ireland Microsoft has three strands of their business in this country: Microsoft Research Ireland develops and test products for the European, African and Middle Eastern markets. The Irish team collaborates with similar centres in Denmark, India and China and is part of the Group R&D organisation. Microsoft EMEA Operations provides back office support for over 85 countries in the EMEA region Microsoft Ireland (Sales, Marketing and Services Group) handles sales, marketing, services and technical support for customers and partners on the island of Ireland company s outsourced suppliers to get quotes for service offerings. All RFP s and RFQ s are hosted by an outsourced business provider and the company uses cloud computing to share and exchange information. This has transformed the way that Microsoft does business. We can share data 23

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5 on a huge scale through the cloud, said Eric. Being able to link into systems and look at changes in real time has made business easier and more secure. Suppliers Microsoft deals with around 2800 suppliers, which are based in Europe, the Middle East, Africa and the USA. We require a high standard of technological competence from our vendors, and that means we engage with suppliers who embrace modern procurement technologies. Every purchase order raised is referenced to a particular contract, and the company has a worldwide database holding the details of all its contracts. The choice of vendor within a fast moving business sector is crucial for Microsoft. We are looking to engage with dynamic companies with market agility and the ability to break the mould - to offer new and different solutions to traditional problems, summed up Eric Being able to link into systems and look at changes in real time has made business easier and more secure Communication with suppliers is via or Microsoft s own technology link platform, Live Meeting, which facilitates real time communication with vendors in remote locations. Eric regards the procurement relationship as a reverse sales activity, and that it is all about direct communication. Sometimes one phone call or online meeting can equal ten s! All contracts are negotiated with service level agreements, which are monitored to measure supplier performance. The Microsoft Vendor Programme divides suppliers into two groups, Premier and Preferred which recognises quality in the supply chain. The supply base is in a continual state of renewal, with all contracts reviewed every two to three years dependent on the service provision. it is estimated that over 90% of users accessing the Internet from their own computers use Microsoft Windows Rationalising the Supply Base Eric O Connell has been procurement professional for twenty-one years in a variety of industries including distribution, hospitality and business process outsourcing. One of our challenges within the department is to achieve rationalisation of the supply base, he went on. Multi-currency transactions also have to be managed, especially in terms of forecasting. An area of particular relevance at the moment is the viability of the supply base, as vendors are affected by the global uncertainty, which introduces an element of risk into the equation for Microsoft. Eric feels that that purchasing role has evolved from a non-strategic warehouse function to one where there is a clear definition and link to the finance function. Procurement is now on a strategic level of influence within Microsoft as it is in many companies, whereas fifteen or twenty years ago it was purely a transactional function. Maintaining the stature of procurement professionals within the organisation is an on-going challenge and becoming an effective procurement manager can mean developing quite complex business relationships across multiple business groups. Eric has continued to develop his professional qualifications in order to arm himself with the knowledge as well as the hands-on experience of procurement to fulfil the role. If people do challenge the role of procurement it gives me the opportunity to explain the complexity of the job, and its strategic importance to the success of Microsoft, he concluded. 25