03Table of ContentWhat is EGP? (Erste Group Procurement) 04Principles of EGP 05Erste Group Procurement Service Pillars at a glance 05Sourcing International/Local 09Tactical Purchasing 11Order Management 13Customised Procurement Service (CPS) 14Outsourcing Competence Center (OCC) 14Business Process Outsourcing (BPO) 14Glossary of Terms & Definitions 15Contacts 16
04What is Erste Group Procurement (EGP)?Erste Group Procurement (EGP) has been established as the within Erste Group with exception of personnel expenses. Itsfirst address for the group’s external supply needs and man- mission has been approved by the Erste Group Managementages the whole external spend of all majority owned entities Board and local Boards and is as follows:Erste Group Holding Board decision on the Erste Group Purchasing Policy (PO 1008-PUR-A approved on 10 May 2011)– The central and single competence for procurement activities within Erste Group lies in Erste Group Procurement (EGP).– ll external spend should follow the principle of Total Cost of Ownership (TCO) and Quality, Cost and Delivery. In balance A with socio-economic, ecological and customer relationship factors the assignment of a contract has to follow the principle of highest added value for Erste Group.– GP has to be involved in any external spend of any Erste Group majority owned entity. Any exception has to be agreed E between EGP and the respective Erste Group entity.– EGP owns, defines and aligns with the local entities the purchasing processes within Erste Group.Erste Group Procurement (EGP) contributes the most in S2D in your S2P process. Source to Pay (S2P) Category Purchasing Contract project and Requisiton and Receipting and Invoice Management contract Ordering Evaluating Processing Supplier (not in scope of EGP) Demand creation Source to Delivery (S2D)
06The following sections gives a short descriptionabout the procurement steps within EGP Category Mgmt Supplier Mgmt Contract Mgmt Step 1 – Demand Analysis Category Management EGP uses a scheme which clusters currently 145 categories on three levels and assigns responsibili- ties, activities, contracts, key suppliers and strategies to those categories. Together with the respec- tive customers a category strategy is aligned and approved. Supplier Management In order to have more efficient processes between EGP customers and the suppliers. EGP is identify- , ing and focusing on key suppliers. EGP is jointly implementing supplier relationship models including Business Reviews, Supplier Audits, Supplier Strategies and Escalation paths. Contract Management Contract management is a structured and organised storage of contracts and the according meta- data. It allows rapid access to both contracts and aggregated information. Objectives are to provide a central point of information, distribute the contracts and enable their usage, link spend information to contracts, support the contract lifecycle management and allow analysis of suppliers or categories. Purchasing Project Step 2 – Purchasing Project/Tender ProjectRFx Package An Rfx Package contains at least one of the components RFI, RFQ or RFP The process can range from . a simple one-time RFQ to a complex multi-stage RFI/RFP/RFQ process, depending on the needs of the project. The complexity of the RFx process is then determined by the completeness of the require- ments, the number of suppliers that have been qualified, expected competition in the supplier base, inherent risk in the sourcing effort, and projected savings or cost avoidance opportunities.Evaluation Matrix The key objective is to collect bids from suppliers, negotiate terms and conditions with the sup- pliers and to award winning suppliers. There is no regulation that all activities in this step have to be executed in each project. Depending on the specific demand several steps can be skipped and/ or there can be directly a project finalisation after the clear specifications and evaluation criteria have been defined and approved by the project team.Supplier Offers To provide an offer is the legal act by which the supplier manifests its will unilaterally to be legally en- gaged in a purchase contract in determined conditions. The offer must be firm, unequivocal, precise and complete.Project Team The responsible EGP specialist organises the project team members that can include employees from EGP and from the requesting entity, covering commercial and technical expertise. In addition, the roles and responsibilities within the project team will be defined.eAuction An eAuction is the tool by which suppliers can place bids for a contract via the internet. An e- auction or reverse auction allows suppliers to compete for your business by outbidding each other in terms of quality, price and/or other criteria. The eAuction allows this to take place ‘real-time’ on the internet. The eAuction tool is provided by EGP with defined specifications.PO creation A Purchase Order is the concrete request towards a supplier to deliver clearly specified goods or services according to defined conditions. A PO needs to be confirmed by the supplier. A PO can also be requested by the customer directly, if it is a call-off from an existing agreement.
07 Contract Creation Step 3 – Contract CreationTemplate To support the alignment of activities, roles and responsibilities within the purchasing process it is mandatory to utilise a common set of templates. These will be provided via EGP Governance Department.Negotiation Perform commercial and technical negotiations with the short-listed suppliers after RFx rounds have been completed and evaluated. The goal is the final terms and conditions of the short-listed suppliers.Approval Approval process of the contract/PO has to be in alignment with the group standards, set by EGP and the local regulations. The output is the draft contract for supplier approved by all certified approvers.Signature Correctness of the content is always confirmed by the project responsible EGP Buyer. The signature depends on the obligation out of the contract and has to be undertaken in alignment with the existing Power of Attorney and Delegation of Authority guidelines. Requisition Ordering Step 4 – Requisition OrderingThe transactional part of the Source-2-Deliver process is the core responsibility of Order Management but also an integral part ofSourcing International/Local and Tactical Purchasing.Purchase requisition is a written order or a formal demand of a good or service, made available after a specific request. EGPgenerates a document that authorises a purchase transaction. After acceptance of all involved parties, it becomes a bindingcontract. Documentation CR/CA Calculation Step 5 – Documentation CalculationProject completition Information about finalised GMA/SLA has to be added in the system in order to be available also in the countries for local implementation (Participation Agreement). Rate supplier based on the perfor- mance provided in course of this project.CR/CA documentation Close project in respective EGP tools by inserting project data, activity recording data and CR/CA results. Receipting Evaluating Step 6 – Receipting EvaluatingThe Goods Receipt activities are decentralised, as the delivery of goods and services is directly to the beneficiary (e.g. businessunit). Nevertheless the feedback to EGP about the completeness and quality of goods and services is needed to execute asupplier quality appraisal and as input or future sourcing activities. Invoice Processing Step 7 – Invoice ProcessingInvoice Processing based on Purchase Orders (POs) is in tasked to determine the payment for goods and services includinginvoice processing and resolving discrepancies. This step is not in scope of the regular Procurement Services.
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09Sourcing International/LocalSourcing International is the strategic process of identifying Sourcing Local is the fulfillment of purchasing for commoditiespotential suppliers, conducting negotiations, and agreeing on that have either a strong local dependency or where no majorsupply contracts in order to achieve sustainable cost reduc- leverage on group level can be expected. Sourcing Local istion/cost avoidance on group level and meet the customer’s done individually in each of the countries and ensures efficientexpectations. strategic coverage of local demand. The Action Plan What are the benefits for you? Sourcing International/Local – Sourcing Specialist, one single contact and groupwide/local You have a requirement/demand with a value above € 30.000? Category and Supplier Lead. – Transparency in the level of achieved goals of cost reduction and cost avoidance through one clear methodology and Contact EGP in your country tool-based measurement. – High compliance through common collaboration on the product groups strategies and/or supplier strategies. – We can help you decipher which solutions are applicable An integrated project team collaborates to achieve the best possible solution. to your specific needs. Process owner of following steps is EGP. – Value-driven services designed to enhance strategic sourcing efforts and tactical processes Step 1. Demand Analysis – Identification and focus on key suppliers. Implement supplier relationship model in close collaboration with you. Step 2. Purchasing Project A structured process with clear responsibilities. Step 3. Contract Creation Step 4. Purchasing Requisition Step 5. Documentation Calculation Jointy conclusion of a GMA and achieving sustainable Cost Reduction/Cost Avoidance.
11Tactical PurchasingThe fast, easy and efficient execution of routine administrative volume with no strategic importance or based on agreementstasks. These are day-to-day buying activities, which are low that have been set in place. The Action Plan What are the benefits for you? Tactical Purchasing – Tactical buyer one single contact. You have a requirement/demand in the specific threshold? – The tactical buyer overviews the tender and RfX process. – In collaboration with you to find the best available solution for your request in a tender process coordinated by EGP‘s Contact EGP in your country specialised buyers. – EGP is searching for the best practise operation and focusing to gain maximum efficiency for minimum cost. An EGP buyer is searching for the best practise solution to execute the request. A structured process with clear responsibilities. Process owner of following steps is EGP. Step 2. Purchasing Project Step 4. Purchasing Requisition Delivering of the requested good or service.
13Order ManagementThe convenient execution of routine administrative are low volume based on call-offs from existingtasks. These are day-to-day buying activities, which contracts. The Action Plan What are the benefits for you? Order Management – EGP is providing the necessary systems. You have a requirement/demand in the specific threshold? – EGP has optimised systems in place in order to execute your request in a minimum of time. – Process contract information implementation to enable Call-off from an existing contract. call off from agreements OR – The opportunity for you to handle your requests on your Create a Purchase Order. own in a fast and efficient way. EGP is supporting the OR service by providing the necessary environment and Contact EGP in your country. systems. – A convenient execution of your lower procurement requests. Purchasing Requisition by EGP or by Customer A structured process with clear responsibilities. Step 4. Purchasing Requisition Delivering of the requested good or service.
14CPS/OCC/BPOCustomised Procurement Services (CPS) We give our commitment to continuousDo you have an additional request, which is not already service improvement in efficiency andin the scope of Sourcing, Tactical Purchasing or Order Manage- effectiveness:ment? EGP increases its levels of customer satisfaction.Please contact the appropriate person within the local EGPentity (See page 16). EGP is reducing financial and environmental risk. EGP is driving for more CR/CA in big spend areas and faster execution in smaller projects.Outsourcing Competence Center (OCC) EGP is achieving sustainable Cost Reduction and Cost Avoid-EGP ensures compliance with the Erste Group Outsourcing ance.Policy with any internal and external outsourcing activity. EGP’s solution draws on the significant experience of its experts.Business Process Outsourcing (BPO) EGP creates a bridge between budget owners and suppliersEGP is supporting the operational processes for the local through active management of product groups.entities. Do you want further information on the local BPO’s,i.e. Travel Management or Warehouse in AT? EGP uses unique systems and tools applied in all subsidiaries in all countries.Please contact the appropriate person within the local EGPentity (See page 16).
15Glossary ofTerms DefinitionsThe document contains a number of terms that may be unfamiliar Order Management (OM)to non-procurement person. The following table, provides a OM is placing and chasing Purchase Orders, based on exist-glossary of terms in alphabetical order: ing contracts or using preferred suppliers provided solely by EGP Purchase Request is either based on existing catalogue .Category Lead items or it is described in a free-text form in case that requiredThe Category Lead is the purchasing expert for a specific product or service is not in a catalogue. The core responsibilitycategory/commodity, owns the according strategy and the in of OM is to generate Purchase Orders which are fulfilled by adepth knowledge about all purchasing activities in the respective supplier.category. Source to Delivery (S2D)Category Strategy S2D covers all processes required to ensure that a demand isA Category Strategy is a document, which describes how to covered by an optimal good or service. These S2D processesapproach a specific commodity from the purchasing perspective. include the fields of procurement and category management asIt is based on market data and supplier analysis, defines next well as support for transactional buying.activities to be undertaken and contains also the framework forapproaching new demand (i.e. using a dual supplier strategy). Service Level Agreement (SLA)It is established by a Category Lead for the commodity aligned A SLA is a part of Service Contract between a service providerand approved by the responsible cooperation partner. and customer, where the level of service is formally defined. The goal is to make the control options for the customer transparentCost Avoidance (CA) by guaranteed performance characteristics such as a scope ofCA means that new costs can be reduced or avoided through services, priorities, responsibilities, guarantees and warrantiesprocurement activities. CA can be achieved for goods or servicesin case of a first time buy. CA can be achieved if a price increase Supplier Long Listis completely or partly avoided. The Supplier Long List considers all potential suppliers that shall be considered in the project execution phase. The list isCost Reduction (CR) determined by the category strategy, the market situation andCR means that existing costs have been reduced through existing business relationships.procurement activities. CR can be achieved for goods or servicesthat have already been purchased previously. Supplier Short ListNegative CR is possible (i.e. in case of a price increase). Evaluate RFx responses according to evaluation criteria andCR can be achieved in case of a contract with duration longer generate and approve a supplier short-list if necessary. Definethan one year also for the years after the first year. ranking within this short-list.eAuction RFI – Request for InformationAn eAuction is the tool by which suppliers can place bids for a An RFI is a document that is used to obtain non-price informa-contract via the internet. An eAuction or reverse auction allows tion from suppliers. RFI’s are most commonly used in purchasessuppliers to compete for your business by outbidding each other that are complex or of significant value. Often times RFI’s arein terms of quality, price and other criteria. The eAuction allows used when the procurement organisation needs informationthis to take place ‘real-time’ on the internet. to ensure that its specification is feasible or the organisation wishes to narrow down its field of potential bidders to the mostGroup Master Agreement (GMA)/Master Agreement (MA) qualified candidates. Procurement departments usually follow aA GMA/MA is a special type of contract that regulates the general RFI with one of the other solicitation documents (RFQ, RFP).conditions (i.e. rates, payment terms) for all Group entities forassessing goods and services from a contracted supplier. RFQ – Request for QuotationDue to the broad range of possible contract users, the level of An RFQ requests that suppliers respond with only prices, leaddetail varies and more concrete specifications are defined in time, and terms from suppliers based on fixed specifications.a separate Participation Agreement or the according Purchase Generally, RFQ’s do not allow for changes to the specification.Order. The lowest price is usually the determining factor in awarding an order based on RFQ responses.Matrix Management OrganisationThe Matrix Management Organisation applies for sourcing RFP – Request for Proposaloperations. It means that for sourcing the four-eye principle Like an RFQ, an RFP requests pricing, delivery, etc. However,will be applied in a way that each Sourcing Specialist reports unlike an RFQ, an RFP allows, sometimes requires, supplierboth to the Country Manager and the Head of Sourcing. input on specifications. RFP’s are often used to find solutionAdherence to this strict principle will guarantee close and to a problem. Orders based on RFP responses are generallydecisive appearance of EGP towards its suppliers in order to awarded based on the best overall value and not necessarilyachieve all possible benefits for Erste Group. on price alone.
16Key ContactsEGP – Erste Group Procurement HeadquarterAm Heumarkt 4, 1030 Vienna, AustriaManaging Director, CPO Erste Group AG Leopold IVAN +43 (0) 5 0100 - 28300Managing Director, CPO Erste Group AG Robert SEMETHY +43 (0) 5 0100 - 28222EGP Austria – Procurement Services GmbHAm Heumarkt 4, 1030 Wien, AustriaCountry Manager AT Jörg STRAUSS +43 (0) 5 0100 – 28140 Support Center AT +43 (0) 5 0100 – 28000 supportAT.EGP@erstegroup.comEGP Czech Republic – Procurement Services CZ, s.r.o.Budejovická 1912/64b, 140 00 Praha 4, Czech Republic ˇCountry Manager CZ Tomáš ZATLOUKAL +42 0 956 78 2700EGP Croatia – Procurement Services Croatia d.o.oIvana Lučića 2, 10000 Zagreb , CroatiaManaging Director HR Darko SEPIC +385 62 37 – 5345Director Procurement Department Montenegro Ivan CERDIC +385 99 237 – 2441EGP Hungary – Procurement Services HU Kft.Népfürdő str. 24-26., 1138 BudapestManaging Director HU Nikoletta KOVACS +36 1 373 - 2780EGP Romania – Procurement Services RO srl155 Calea Victoriei Stree, bl. D1, Sector 1, Bucarest, RomaniaCountry Manager RO Calin VALCEA +40 37 2269 111EGP Slovakia – Procurement Services SK, s.r.o.Tomášikova 48, 832 75 Bratislava, SlovakiaManaging Director SK Ivan UJČEK +42 1 910 684 410Erste Bank Serbia – Procurement Department SerbiaBul. Milutina Milankovića 11b, 11070 Belgrade, SerbiaDirector Procurement Department RS Milan GASIĆ +381 11 201 5046Erste Bank Ukraine – Procurement Department Ukraine24-d Polyova St., Kyiv, 03056, UkraineDirector Procurement Department UA Eduard MATULA +38 (050) 41 31 460
17Erste Group Procurement –Procurement Company of Erste Group Bitte die Landkarte auf der letzten Seite ersetzen Procurement Dept. Ukraine Czech Rep Slovakia Int. Austria Hungary Romania Croatia Procurement Dept. Serbia Erste Group Procurement Facts Figures: Central procurement function within Erste Group Headcount approximately 180 employees Process owner for group-wide S2P process www.erstegroupprocurement.com Erste Group Procurement Management Board HRM Finance Sourcing Org/IT Erste Group Procurement AT Sourcing AT EBSPK Sourcing SK Erste Group Procurement SK Erste Group Procurement CZ Sourcing CZ Sourcing HU Erste Group Procurement HU Erste Group Procurement HR Sourcing HR ME1) Sourcing RO Erste Group Procurement RO RS2) Sourcing RS SPV – DRUCK Sourcing UA UA3) 1) Department of Erste Bank AD Podgorica - Montenegro 2) Department of Erste Bank Novi Sad - Serbia Division Board Team in Matrix 3) Department of Erste Bank Ukraine
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