Waarde creëren met het juiste Sourcing Business Model

Transcription

1 Waarde creëren met het juiste Sourcing Business Model Jeroen Kurvers en Sibrecht Diender 16 maart 2017 THE NETHERLANDS CHINA BRASIL AUSTRIA THE UNITED KINGDOM

2 Video A Beautiful Mind

3 Relative cost The Kraljic Matrix Logical and practical way to segment suppliers in a 2 x 2 matrix Leverage Product Routine Products Supply risk Strategic Products Bottleneck Products Suggested three strategies for working with suppliers Leverage/Exploit (preferred strategy) Diversification Balance (only use if you are unable to leverage or diversify) Kraljic misses the power of creating highly strategic collaborative supplier relationships

4 The Achilles heel of the Kraljic Matrix Kraljic was asked If you had the chance to rewrite the 1983 article with the benefit of 25 years hindsight, would there be anything to add? Kraljic replied, The importance of trust in longterm relationships with suppliers. You need trust to create win-win. Source:

5 Where many agreements fail Companies multi-service 3% Poor cultural fit 5% Poor performance 8% Not mutually beneficial Poor communication Poor governance Misaligned interest over time Unclear expectations 11% 11% Vested Agreements Address The Top Five Reasons For Contract Failure 13% 15% 23% Percent of Respondents Note: 11% in Other Source: Outsourcing Center Survey. Outsourcing Center

6 Sourcing Business Models Source: STRATEGIC SOURCING IN THE NEW ECONOMY: HARNESSING THE POTENTIAL OF SOURCING BUSINESS MODELS FOR MODERN PROCUREMENT, Keith, Vitasek Manrodt & Kling, Palgrave 2015

7 Architecting a model BUSINESS MODEL Economic model Relationship model Vision and intent SCOPE OF WORK Statement of work and objectives PERFORMANCE MANAGEMENT Performance focus Performance measures PRICING Pricing model and incentives GOVERNANCE Relationship management Improvement, transformation and innovation Exit management Compliance and special concerns Source: STRATEGIC SOURCING IN THE NEW ECONOMY: HARNESSING THE POTENTIAL OF SOURCING BUSINESS MODELS FOR MODERN PROCUREMENT, Keith, Vitasek Manrodt & Kling, Palgrave 2015

8 The Rules of the Game Transactional (Market) Relational (Hybrid) Investment (Hierarchy) Basic Provider Approved Provider Preferred Provider Perf.-Based / Managed Services Vested Relationship Investment (Equity Partner / Shared Services) BUSINESS MODEL Economic Model Transaction-based (per transaction, hour or unit) Transaction-based (per transaction, hour or unit) Transaction-based (per activity, hour or unit) Output-based Outcome-based Transactional, outputbased or outcome-based Relationship Model Transactional / no relationship Transactional / supplier vetted on Approved list Relational contract / emerging collaboration Relational contract (collaborative) Relational contract (highly collaborative) Investment-based Vision & Intent Supply at lowest cost Recurring commodities at fair or lowest cost Value-added capabilities at best value Performance to SLA / process efficiencies Shared Vision, Desired Outcomes & Value Creation Sustainable Value SCOPE OF WORK Statement of Work & Objectives Who and / or How Who and / or How Who and / or How (jointly defined How ) What and limited emphasis on How What What If, What For and When PERFORMANCE MANAGEMENT Performance Focus Simple three-way accounting match PO requirements Activity-based service level agreements Output-based service level agreements Strategic Desired Outcomes P&L-based Measures Performance Measures Right quantity, right price, damage-free Basic provider metrics + increased quality emphasis Operational + customer satisfaction Operational + relational (Values & Behaviors) Ops + transformational + relational system-wide KPIs Joint Measures of Success PRICING Pricing Model & Incentives Fixed price / typically no incentives / volume rebates Fixed price / low-no incentives / volume rebates Fixed price / low incentives / volume rebates Price with incentives and / or penalties Pricing Model with valuebased incentives P&L-based Equity Sharing GOVERNANCE Relationship Management Delivery & pricing validation (3-way PO match) Some performance & pricing oversight Limited Supplier Relationship Mgt Oversight emphasis: Supplier Relationship Mgt Oversight emphasis: Supplier Relationship Mgt Shared control and management Improve, Transform & Innovate None / market-driven Limited / market-driven Beginning to focus on incremental improvements Supplier-driven to meet SLAs / price glide path Joint & proactive Transformation Mgmt. Core innovation capabilities Exit Management One-way / limited commitment to buy One-way termination for cause & convenience One-way termination for cause & convenience Perf.-based termination for cause w/ safeguards Joint Exit Management Plan Divestiture Compliance & Special Concerns Compliance-driven / survey-based Typically compliance-driven / survey-based Typically market-based / minimum audit requirements Corporate-based audit requirements Outcome-based joint requirements Investment-based joint requirements

9 Are you ready for Vested?

10 Getting Ready In Practice January: Getting Ready Business Model Mapping Assessments: Trust Assessment Readiness Assessment Vested workshop Shared Vision Desired Outcomes May Finalise MSA: Shared Vision- Intent Performance Metrics Performance Management and Governance Addendum September: Year 3: Transformation Management/ Roadshow Repeat Trust Assessment survey

11 Getting ready - Business Model Mapping

12 Getting Ready Trust Assessment 2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission

13 Getting Ready Readiness Assessment Readiness Key Issues: Region/Country management reluctant 5 clients now transformed to vested Transparency/ sharing guardrails issue 10 Elements contract Key Issues: Performance Management frequency (global = bi-annual) Pricing model not implemented/ incentives in place and awarded Exit Management plan not included Special concerns / external regulation: to be clarified

14 Workshop - Shared Vision, Desired Outcomes Starting point: What s important to Business Owners: 1 Customer Satisfaction 2 Productivity 3 Right Products and Pricing 4 Cost Effectiveness 5 Innovations to WOW

15 Measure Desired Outcomes and Transformation Scorecard with Innovations Count Innovations Tracker Quarterly innovations webinar Innovator of the Year Award & Incentive

16 Vested Agreement Structure Year 3 Review PRE-WORK 100% MASTER SERVICES AGREEMENT (MSA) 100% Non-disclosure Non-compete Limitation of Liability Termination /Renewal Other Vested Agreement Structure RULE 1 RULE 2 RULE 3 RULE 4 RULE 5 100% BUSINESS MODEL STATEMENT OF OBJECTIVES 100% (WHAT) 100% DESIRED OUTCOMES 25% PRICING MODEL SPECIAL CONCERNS SPECIAL SPECIAL & REQUIREMENTS CONCERNS & REQUIREMENTS CONCERNS & REQUIREMENTS 100% 50% GOVERNANCE STRUCTURE SHARED VISION STATEMENT OF INTENT WORK SCOPE & ALLOCATION (HOW) 100% 0% PERFORMANCE MANAGEMENT 100% PLAN GUARDRAILS & 25% ASSUMPTIONS RELATIONSHIP MANAGEMENT 100% FRAMEWORK OPERATIONAL PERFORMANCE 100% REPORTING 25% RISK ASSESSMENT TRANSFORMATIO N MANAGEMENT 100% FRAMEWORK 0% QA PLAN MARGIN MATCHING 0% Service Provider Owned 50% INCENTIVES EXIT MANAGEMENT 25% PLAN A Vested Outsourcing agreement is structured as follows: A Master agreement is combined with subordinated schedules or exhibits that individually outline each of the 5 Rules and 10 elements of Vested Outsourcing Vested Outsourcing

17 Vested Agreement Structure - Review

18 Getting Ready Year 3 Assessment

19 Getting Ready In Practice January: Getting Ready Business Model Mapping Assessments: Trust Assessment Readiness Assessment Vested workshop Shared Vision Desired Outcomes May Finalise MSA: Shared Vision- Intent Performance Metrics Performance Management and Governance Addendum September: Year 3: Transformation Management/ Roadshow Repeat Trust Assessment survey

20 Compass & CLIENT Results of this deal: 17% savings Year 1 (3rd gen. outsourcing) Transformed operations with investments in 16 projects completed in 2 years USD 1 million annual reduction of Client Management Oversight cost Shared Vision Focused innovations program One single, comprehensive Scorecard driving Shared Vision KPI s and Cost Savings Simple, comprehensive contract model (36 pages) Contract model includes fee reward to continue innovating and avoid complacency

21 Wat zijn in jouw situatie de 2 grootste blokkades om een Vested relatie met strategische relaties aan te gaan?

22 Do you have any questions? Jeroen Kurvers en Sibrecht Diender 16 maart 2017 THE NETHERLANDS CHINA BRASIL AUSTRIA THE UNITED KINGDOM