July 2011How to Socialize a Change to aCenter-Led Sourcing Organization                                       Hosts       ...
Contract Labor Management                                                                                  July 2011      ...
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Roundtable Summary Socialize The Change To A Center Led Organization


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Roundtable notes from the ProcureCon Indirect West discussion on Socializing the change to a center-led professional sourcing organization

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Roundtable Summary Socialize The Change To A Center Led Organization

  1. 1. July 2011How to Socialize a Change to aCenter-Led Sourcing Organization Hosts Tom BokowyProcureCon Indirect West Roundtable Notes (208) 610-0032 tbokowy@costandcapital.com Cost & Capital partners hosted the roundtable Sebastian Fritz discussion regarding how to socialize the change within (646) 620-4204 a sourcing organization to a professional, center-led sfritz@costandcapital.com approach. Many barriers exist to transforming the organization. The roundtable discussed the challenges to begin the Participating Companies transformation of the organization. The issues ranged from communicating the message, publicizing executive - Abbot sponsorship, educating the team on the new tools to use, motivating the team to support activities across business - Alcatel units and creating a burning platform to show the scope and - American Cancer Society scale of the opportunity. - AutoNation - Brown Shoe Co. The message needs to be constantly communicated and - Diebold reinforced with successes. The roundtable discussed the methods to share successes and make sure the message is - Essilor received. Formal training, monthly town hall meetings and - FMC Technologies case studies are all good ways to make sure the team - Key Bank believes in the value of changing as well as to make sure - Kuehne and Nagel the team knows what to do to be successful. The best - Lanyon training methods included classroom based exercises where - Las Vegas Sands the team can apply the new tools to see how to apply the - Medtronic tools and change their behavior to improve. - Midwest ISO Some categories are naturally easier to be successful - Mutual of Omaha and build momentum. The group discussed the categories - MWV that are best to start to get some quick wins and showcase - Mylan the value and potential of the program. Office supplies and - Rockwell telecom were agreed to be the fastest to get right and make - Spend Matters an impact. Categories such as facilities and contingent labor - Symantec require more cross-functional support. The team agreed that external support is often helpful to provide benchmarking and the internal alignment to be successful. The more difficult categories include marketing, legal, IT and professional services due to the challenges in securing alignment with the internal stakeholders and more nuanced methods to compare options. Creating a culture of success. Several methods exist to continue to build upon the success of the organization and create a culture of expectations. The roundtable discussed how to coach individuals and deliver feedback to make sure the team is applying the tools as well as the softer selling approaches to make category execution repeatable and valuable to the organization.
  2. 2. Contract Labor Management July 2011 Working across functions. Success for many indirect categories requires that the sourcing team is able to engage the other functions. One of the key factors to deliver results is the level of emotional intelligence of the team. Strategic Sourcing needs to appreciate the value of the function and how it contributes value to the organization. Negotiating functional support for categories such as legal and marketing require that the procurement professional understands the value and total cost much more than other categories. While all suppliers try to highlight that they are not a “commodity,” some deliver unique value to the organization and do not lend themselves to traditional benchmarking. Working within the function to deliver the negotiation support needs to be within the value framework the function is uses to evaluate their options to in order to be successful. Getting the most from the staff. One challenge many on the roundtable had within their organization is the limited staff and bandwidth to handle all the support requests. While some prioritize based on their ability to deliver results and the total value, other struggle with not wanting to turn anyone away since they don’t want to lose future opportunities. All agreed that setting expectations with the functions as to the response time, requirements and thresholds for involving the team are important to communicate. Summary The challenge for many of the participating organizations is balancing the right categories to set up the team for success with reaching across the organization to leverage the power and resources to deliver results. For most organizations, this includes development in the form of training, coaching and sharing success stories both within the organization and across the functions. While external resources are good to increase bandwidth and improve success with outside benchmarking and knowledge, those results needs to be balanced with developing the team and setting them up for continued results. Some categories such as contingent labor are a good test case for the organization since it is quick to benchmark current performance, requires cooperation with HR to be successful and the impact is visible at high levels within the company. About Cost & Capital Cost & Capital Partners focuses on the two most critical levers for shareholder value today—Cost Efficiency and Capital Efficiency. Our Philosophy is to work along-side our clients to deliver results and transfer knowledge that builds lasting competence. Our team improves cost efficiency and capital turnover through developing and executing strategies with bottom-line value. Our Cost Efficiency practice focuses on direct and indirect spend, organizational deployment and logistics costs. Our Capital Efficiency practice improves capital turnover through cash management and revenue growth tools. www.costandcapital.comCost and Capital Partners, LLC 2|Page