A JOURNEY TO VALUE. Get Help, Go Solo or Somewhere in between. Columbus Symposium September 24, 2014

Transcription

1 A JOURNEY TO VALUE Get Help, Go Solo or Somewhere in between Columbus Symposium September 24, 2014

2 IT S NOT EASY TO DO WHAT WE DO!!

3 SO HOW DO WE DRIVE VALUE TO INDIVIDUAL LOB S

4 PEOPLE, PROCESS, & TECHNOLOGY

5 WHAT S MISSING? Courage Being Contrarian

6 PEOPLE "The CPO is going to have to be a real salesperson one capable of selling both internally and externally. It is going to be a very strategic position, where people have clear understandings of what the supply base can do in terms of supporting the company. --- KeyBank Chief Procurement Officer Jean-Jacques Beaussart, Vision 2020

7 LET S FIRST LOOK AT PEOPLE Internal Pros You own the IP You control relationships Recognize more $$ Cons Staff Development Resource Sourcing Domain Expertise External Pros Immediate expertise Faster time to value Elastic Spend Management Cons Demoralizing Costly Never seem to go away

8 SURVEY INTERNAL Likes / Dislikes Values / Distractions EXTERNAL Like / Dislikes Values / Distractions TIPS TIPS

9 SOMEWHERE IN-BETWEEN (NOT THAT 50 SHADES)

10 TECHNOLOGY

11 HOLY GRAIL

12 BIT OF MISCONCEPTION?

13 LOTS AND LOTS OF WORK!! Integration Implementation Data to make it usable Roll-out (usability / adoption) Change management Support / maintenance

14 HERE TO STAY Hackett Group Organizations that leverage the most out of technology see a 27% overall better performance within their procurement operations. Vision 2020 Procure-to-pay systems will be open architecture, webbased, and able to interface with many systems within an enterprise and among its supply base. Debbie Manos-McHenry, Chief Sourcing Officer for Huntington National Bank End users will execute their own bids. Procurement s role will be to set the automation engines up, then monitor and manage to make sure they continue to run Roy Anderson, former CPO at MetLife

15 BEST-IN-CLASS VS ONE-STOP-SHOP Best-In-Class Pros Able to find aggressive start-ups Very deep in specific areas Very service focused Cons Risky IT buy-in difficult Not wide enough breadth You can t move that fast One-Stop-Shop Pros More IT friendly Integration *** (careful) Tackle more process at once Cons Not deep enough in specific areas Costly and still hodge-podge Slow/difficult/no service

16 SURVEY BEST-IN-CLASS Likes / Dislikes Values / Distractions ONE-STOP-SHOP Like / Dislikes Values / Distractions TIPS TIPS

17 SOMEWHERE IN-BETWEEN (NOT THAT 50 SHADES)

18 PROCESS

19 ONE END OF THE SPECTRUM

20 THEN THE OTHER

21 DON T CONFUSE VALUE WITH BEING BUSY

22 FIND PURPOSE - EXCERCISE Background Understanding of what s going on or what s happened up to this point Objective and/or Outcome What is the goal of this meeting/discussion/call/activity Attendees Who is part of this discussion, but moreover, what are their roles Time Everyone is busy set a clear expectation of time form a loose agenda if necessary

23 VALUE TO THE LINES OF BUSINESS PUSH PULL

24 ELEMENTS OF THE NEW SOCIAL CAPITAL In this new Social Era of transparency, connectedness, and stakeholder empowerment, social media exchanges are acting as catalysts to accelerate the formation of the following forms of Social Capital between and amongst its stakeholders (i.e. employees, customers, business partners). Barbara Gray, Equity Analyst & Founder, Brady Capital Research Bonding Capital: formation of strong ties. There is a high degree of homogeneity, as individuals tend to reinforce shared practices, norms and similarities. Bridging Capital: formation of weak ties. This power comes from the ability to facilitate trust by providing transparency into the credibility of individuals. Linking Social Capital: formation of links between vertically/ horizontally-separated groups. This is the transaction and valuecapture side of the equation.

25 PYRAMID OF DISRUPTION

26 WHAT HAPPENS TO PROCUREMENT IN THIS MODEL? Learn to adapt Be transparent Get and stay connected Empower stakeholders

27 POINT OF DISRUPTION EMPOWERMENT Consumer world, social business was partly driven by low-cost Procurement s customers cost is empowerment, time, hassle/politics/etc.

28 POINT OF DISRUPTION FLEXIBILITY Consumer world, social business has the benefit of low switching costs Procurement is faced with a market of providers willing and able to service faster, better, cheaper we can leverage service providers who have developed exponentially better capabilities than we have in particular commodities or spend categories because they source them on a more regular and broader basis than we will ever do internally. Brad Costedio, Vision 2020

29 POINT OF DISRUPTION INTANGIBLES Consumer world, social business made brand empires inconsequential Procurement is faced with LOBs turning to their own peers

30 POINT OF DISRUPTION NETWORK EFFECT Networks drive Leverage Aggregation Pressure Broader Mindshare and Insight Scale the world will evolve to be less about buyers and sellers and more about integrated supply networks serving marketplaces." former JP Morgan Chase Bank Global CPO Javier Urioste In the same way that Apple has thousands of developers worldwide creating applications, I see us and our suppliers building loose networks where relationships are fluid and production moves out to a much broader spectrum of suppliers. We will be fighting over the same pools of supplier and customer resources. Henrik Larsen of Maersk

31 PROCUREMENT IS THE ENABLER NOT A PROCESSOR

32 THANK YOU Jason D Evans VP Procurement Services Jason.evans@xchanging.com (312) phone MarketMaker4 32