Capgemini Consulting Procurement Transformation

1. Procurement Transformation
The way to world class procurement
October 2011

2. Global CPO survey: Our CPO survey shows numerous challenges for the procurement
organisations in the coming years
Despite much effort and often investment in procurement, we
Supply
see the following trends:
disruption
Supplier Compliance and spend visibility remains high on the
management
Sustainability
agenda.
Economic situation throws procurement back to
More savings
Procurement and short term savings machine.
Innovation
Innovation and sustainability entered the top 10 of
Spend visibility Compliance the CPO agenda.
Low Cost
Risk management and supply
Risk
management Country disruption are becoming key.
Sourcing
How to achieve sustained business value through procurement?
Copyright © 2011 Capgemini Consulting. All rights reserved.

3. We help procurement organisations in the development from different maturity levels
to the desired level of maturity in line with the corporate strategy
Recognizing Understanding Managing Mastering Leading
Focus Price Spend Control Performance TCO Value
• Procurement strategy
Procurement • Non-existing
• Objectives and plans limited
to departmental actions
aligned with overall business
• Strategy co-developed with
internal customers
• Integrated strategy for the
E2E value chain
Strategy • Savings realization
strategy
• Functional optimization
• X-functional integration • External integration
• Hybrid organization
Governance & • Fragmented within the • Centralized for key spend
• Center-led stand alone
function
• Right sized, right shored &
• Adaptive hybrid organization
• Cross functional teams incl.
Organisation organisation areas
• Organized around categories
right sourced
• Cross functional teams
vendor team members
• Supply network
Category • Informal sourcing processes
• Supply base rationalization
• Formalized sourcing
• Vendor segmentation and
• Supply risk management management
Management. • Savings realization • Value engineering • Innovation Driven
vendor rating
Procurement
• End-2-end integration across
Procurement • No / limited controls
• Basic controls in place to
manage spend and
• P2P standardization
• Supply planning using MRP
• Optimized channels
• Forecast & planning shared
functions
• Transaction, planning &
Operation • Transaction management
inventory and SIC inventory mgt with vendors product data sharing with
vendors
• eProcurement, eRFx, spend • Harmonized data processes • Processes & systems
• Phone / Fax / email /
• ERP and spreadsheets database & systems integrated with vendor
spreadsheets
Enablers • Administrative staff
• Basic sourcing skills • Procurement specific HRM • Procurement career • Use of open standards
• High level spend data policies development program • Standard KPIs across the
• No performance mgt.
• Function specific KPIs • X-functional KPI’s value chain
Current maturity
Future maturity Copyright © 2011 Capgemini Consulting. All rights reserved.

4. Our services include strategy development up to the transformation and
implementation of the world class procurement function
Strategy
Supply Mgt.
• Procurement assessment
Strategy • Procurement strategy
Development
• Organisation design
Governance &
Organisation
• Benchmark
Development • Procurement business case
Category Planning
Transformation
Purchase
Demand
Supplier
Relationship
• Source to Contract
Sourcing
Management Management • Contract management
• Purchase to pay - Closed loop procurement
Supply Planning & Control • Innovation Driven Procurement
• Supplier Management
Provision of Goods & Services • Supply (Risk) management
• Market Price Indexing
• Sustainability
IT People Knowledge & Information
• BPO-P and SSC
Managing the Enablers
• Package selection / system strategy
Capgemini Procurement Framework
The collaborative approach of Capgemini Consulting is key for a
successful transformation throughout your organisation
Copyright © 2011 Capgemini Consulting. All rights reserved.

5. The seven strategies that companies are pursuing to become a leading procurement function
focus on internal & external integration and differentiation
1. Closed Loop  Many purchasing organizations are still struggling to master the basics: spend visibility, sourcing and contract compliance. Establishing
Procurement closed loop procurement is a major achievement and end goal in itself for most procurement organizations.
 At a functional level we see a trend towards hybrid organizational models that combine the benefits of central coordination with
2. Hybrid Organizational improved business collaboration. At a category level we see further differentiation in organizational models depending on business,
Models category and supply market specific characteristics
 Leading procurement organizations manage collaborative supplier relationships to extract more value from the supply base
3. Supplier Value
 Use Innovation Driven Procurement to accelerate the pace of innovation within organizations by leveraging the innovative power of the
Management supply base
 Increased dependency on external suppliers, volatility in raw material & energy prices, shortages of key materials, currency imbalance
4. Supply Risk and the financial crises have made companies recognize again the importance of supply risk management and improving overall
Management resilience. Use Market Price Indexing to get in control.
 Leading procurement organizations manage multiple supply networks that differentiate service characteristics by product/market
5. End-2-End Supply segment . Managing complex supply networks requires pipeline visibility and alignment of planning and control across multiple-tiers of
Network Management suppliers
 Companies have recognized talent as the key enabler for further developing the supply management function, so they are investing
6. Develop Talent heavily in attracting, training and retaining top talent
 Leading supply management requires technology that is more user-friendly, provides real-time visibility, is better integrated, enables
7. Leverage Technology more effective collaboration with the supply base and has more powerful analytic & simulation capabilities
Priorities and progress with the implementation of these strategies depends on the
procurement maturity of an organization
Copyright © 2011 Capgemini Consulting. All rights reserved.

6. Some of our recent references of our Procurement Transformation projects
Customer Organisation Source to contract Contract Purchase to Pay System strategy
design managament procurement
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Copyright © 2011 Capgemini Consulting. All rights reserved.

7. Capgemini Consulting Procurement Research
Through our research and publications we
work to further develop the procurement
domain and the effectiveness of
procurement functions. Recent publications:
• Contract compliance best practices
• Bi- annual CPO research
• PoV sourcing strategies
• Temporary labour
• Bi-annual SRM research
Download the reports through:
http://www.capgemini.com/insights-and-resources/by-publication/
Copyright © 2011 Capgemini Consulting. All rights reserved.

8. T. (Ton) van Dolder
Vice President
Capgemini Nederland B.V.
Papendorpseweg 100, P.O. Box 2575,
3500 GN Utrecht - The Netherlands
T. +31 30 689 1323
F. +31 30 689 55 60
Mob. +31 651 267 717
Ton.van.Dolder@capgemini.com
www.nl.capgemini.com
Capgemini Consulting is the strategy and
transformation consulting brand of Capgemini Group