The Enterprise Mandate
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2 The Enterprise Mandate Breakout Session E01 Jim Collier, Managing Director, Accenture Brandon Briggs, Senior Manager, Accenture Tuesday, December 15 1:45pm 3:00pm 1 1
3 The Enterprise Mandate The Enterprise Mandate The Procurement Operating Model Category Cross-Category Governance Questions and Answers 2 2
4 The Enterprise Mandate An enterprise procurement mandate dictates that the organization function as a single buying entity, with increased responsibility, accountability, and/or authority for Procurement. Enterprise Mandate Drivers Legislation Executive Order Internal CXO Pressure OBJECTIVE Increase the value received from spending 3 3
5 The Enterprise Mandate Organizations encounter three key barriers when attempting to achieve savings goals associated with enterprise mandates. Barrier Implication Solution 1 Limited Reach 49 % of spend is untouched Category Experts 2 Lack of Information 3-5 % additional savings lost Market Intelligence 3 Lack of Follow-Through 30 % of negotiated savings are never realized End to End Process 4 4
6 The Enterprise Mandate Where to start? 5 5
7 The Enterprise Mandate The Enterprise Mandate The Procurement Operating Model Category Cross-Category Governance Questions and Answers 6 6
8 The Procurement Operating Model The Procurement Operating Model defines how an entity operates in order to accomplish its procurement function 7 7
9 The Procurement Operating Model A procurement organization should be focused on providing VALUE: Make it easy to Buy & Comply Ensure Supply Mitigate Risk Enable Business Strategies Deliver Value 8 8
10 The Procurement Operating Model Procurement Strategy Category and Sourcing Procurement Support Procurement Operations Stakeholder and Communications Workforce and Organization Technology 9 9
11 The Procurement Operating Model Procurement Strategy 1a.Vision & Strategy 2. Category and Sourcing 1b. Statutes, Policy & Governance 1c. Process 3. Procurement Support 1d. Performance 1e. Sourcing Portfolio 4. Procurement Operations Procurement Capabilities 2a. Category 2b. Sourcing 2c. Contract 2d. Supplier Relationship 2e. Compliance 3a. Spend Analytics 3b. Market Analysis 3c. Spot Buy / Tactical Sourcing 3d. erfx Support 4a. Requisition Processing 4b. Invoice Processing 4c. Travel & Expense (T&E) Processing 4d. Customer Service Desk 4e. Supplier Enablement 2f. Demand 3e. Contract Support 4f. Catalog Enablement Enablers 5a. Leadership Alignment 5b. Stakeholder Engagement 6a. Organizational Alignment 6b. People 7a. Supplier Contract Module 7b. Supplier Rating System Module 10 7c. esupplier Connection 5c. Stakeholder Readiness 7d. Strategic Sourcing Module 5d. Communication Strategy 6c. Capability Development & Training 7e. eprocurement Module 10
12 The Enterprise Mandate The Enterprise Mandate The Procurement Operating Model Category Cross-Category Governance Questions and Answers 11 11
13 Category Procurement Strategy 1a.Vision & Strategy 2. Category and Sourcing 1b. Statutes, Policy & Governance 1c. Process 3. Procurement Support 1d. Performance 1e. Sourcing Portfolio 4. Procurement Operations Procurement Capabilities 2a. Category 2b. Sourcing 2c. Contract 2d. Supplier Relationship 2e. Compliance 3a. Spend Analytics 3b. Market Analysis 3c. Spot Buy / Tactical Sourcing 3d. erfx Support 4a. Requisition Processing 4b. Invoice Processing 4c. Travel & Expense (T&E) Processing 4d. Customer Service Desk 4e. Supplier Enablement 2f. Demand 3e. Contract Support 4f. Catalog Enablement Enablers 5a. Leadership Alignment 5b. Stakeholder Engagement 6a. Organizational Alignment 6b. People 7a. Supplier Contract Module 7b. Supplier Rating System Module 12 7c. esupplier Connection 5c. Stakeholder Readiness 7d. Strategic Sourcing Module 5d. Communication Strategy 6c. Capability Development & Training 7e. eprocurement Module 12
14 Category Category is the overarching process that governs the planning and execution of the Sourcing and Contract processes. Objective Reduce the total costs of goods and services with solutions that meet customers needs through development and execution of the appropriate category strategies Representative Activities Manages a portfolio of categories (category governance) Establishes and maintains categorylevel strategy Develops and maintains category pipeline Develops multi-year category savings plan 13 Monitors project savings and impact to the benefits case Utilizes category expertise to make decisions Assesses category status (including risks and issues) 13
15 Category Common Challenges Procurement is organized by customer instead of category Lack of deep category expertise Planning and forecasting at the category level does not occur consistently Manual and/or incomplete pipeline process to conduct enterprise-wide planning Savings methodology and associated benefits case, do not exist or are inconsistently applied across the sourcing teams Leading Practices Centrally guided category management structure which cuts across organizational entities Category managers with deep expertise in their corresponding goods/services Proactive strategic category planning for critical business categories (e.g., looking at future business needs/identifying trends to plan supplier selection strategy/relationship to guarantee supply at the right cost) Managing and maintaining a long-term category plan and business case with category spend and savings projections Clear mandate from top management and full accountability to achieve major business impacts (innovation, cost reduction, etc.) 14 14
16 The Enterprise Mandate The Enterprise Mandate The Procurement Operating Model Category Cross-Category Governance Questions and Answers 15 15
17 Cross-Category Governance Procurement Strategy 1a.Vision & Strategy 2. Category and Sourcing 1b. Statutes, Policy & Governance 1c. Process 3. Procurement Support 1d. Performance 1e. Sourcing Portfolio 4. Procurement Operations Procurement Capabilities 2a. Category 2b. Sourcing 2c. Contract 2d. Supplier Relationship 2e. Compliance 3a. Spend Analytics 3b. Market Analysis 3c. Spot Buy / Tactical Sourcing 3d. erfx Support 4a. Requisition Processing 4b. Invoice Processing 4c. Travel & Expense (T&E) Processing 4d. Customer Service Desk 4e. Supplier Enablement 2f. Demand 3e. Contract Support 4f. Catalog Enablement Enablers 5a. Leadership Alignment 5b. Stakeholder Engagement 6a. Organizational Alignment 6b. People 7a. Supplier Contract Module 7b. Supplier Rating System Module 16 7c. esupplier Connection 5c. Stakeholder Readiness 7d. Strategic Sourcing Module 5d. Communication Strategy 6c. Capability Development & Training 7e. eprocurement Module 16
18 Cross-Category Governance Leading practice governance frameworks establish policies and procedures that can be scaled across all categories. Objective Establish and manage policies and procedures that govern the operations of the procurement function and that are consistent with applicable statutes. Representative Activities Establish procurement-related procedures that drive efficiency and compliance to statutes Design leading practice policies that support cost reductions and reduction of risk Examine existing statutes and policies to identify opportunities for improvement Analyze new statutes and policies to understand impact on procurement function 17 17
19 Cross-Category Governance Federal IT Acquisition Reform Act (FITARA) mandates and recent OMB guidance focus on IT categories; governance established should be scalable to non-it categories wherever possible. IT Categories Non-IT Categories Policies Policies Processes Procurement Processes Review Boards Governance Review Boards Reporting Reporting 18 18
20 Cross-Category Governance Process Overviews Org Models Process Flows Competency Model Process Maps Training Plans RACI Models 19 19
21 The Enterprise Mandate The Enterprise Mandate The Procurement Operating Model Category Cross-Category Governance Questions and Answers 20 20
22 The Enterprise Mandate The procurement operating model is an effective framework through which to drive change and deliver against the goals of an enterprise mandate. The Enterprise Mandate Objective Increase the value received from spending The Procurement Focus Provide value through: Making it easy to Buy & Comply Ensuring Supply Mitigating Risk Enabling Business Strategies Common Barriers Limited Reach Lack of Information Lack of Follow Through 21 21
23 Questions and Answers 22 22
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