"Building Blocks to Achieve                       Sourcing Credibility"                           Gain Fortune 500 Value w...
Keynote Speakers   Moderator                       Copyright © Iasta, All Rights Reserved
Audience Profile                   Copyright © Iasta, All Rights Reserved
Credibility  Definition of credibility… TRUST  Your reputation is:     You have the expertise     You bring out the be...
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Copyright © Iasta, All Rights Reserved
Four Tactics               Copyright © Iasta, All Rights Reserved
Tactic #1: Choose your path wisely Do not oversell cost reduction Work with stakeholders that are open to collaboration...
Mini Case Study                                   Choose your path            Internal                                    ...
Mini Case Study                                     Choose your path                                                      ...
Tactic #2: Identify and understand the data      Know your         Know your          Know your        spend           key...
Tactic #3: Manage the gaps    Skills gap      • Right people with the right skills  Data/Visibility   • Spend/Contract dat...
Tactic #4: Develop a Center of Excellence                           Technology and tools                                ...
Mini Case Study                                Center of Excellence Avoid stop-and-start rollout program Maintain moment...
Summary Credibility is not built overnight Next Steps…   1. Spend Analysis       •   Will help you fill data gaps       ...
Q&A Please submit your questions…                                  Copyright © Iasta, All Rights Reserved
Question 1 Are there methods to measure the effectiveness or  productivity of category managers?    Yes- quite a few – a...
Question 2 How long did it take before FirstGroup plc started realizing  savings and gaining an ROI?    Within the first...
Question 3 Relative to your chart regarding average  savings by category, have you noticed any  significant changes or tr...
Question 4 What are some tips to help sourcing teams take over some  unmanaged spend in non-traditional areas such as Leg...
Question 5 Can you give some examples of selling sourcing credibility?    Procurement’s job is to sell situational influ...
Question 6 In your opinion, what are 1-2 key activities (that have  greatest impact in the least amount of time) that  pr...
Question 7 What are some good tactics or methodology for performing  an honest assessment of a sourcing teams skills so t...
Question 8 When publishing savings results, how do you avoid the  potential embarrassment of stakeholders who were  histo...
For more info      Iasta Global HQ                                                               Iasta European HQ      12...
Related Materials… White Papers      Iastas Structured Rollout Plan for eSourcing Initiatives      Spend Analysis: Its ...
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Building Blocks to Achieve Sourcing Credibility

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Building Blocks to Achieve Sourcing Credibility: Gain Fortune 500 Value with Mid-Market Resources

June 8, 2011 at 11AM - 12PM (EST)

Webcast is Sponsored By Iasta
Iasta

Featuring Analyst Firm Gartner

Published in: Business, Technology
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Building Blocks to Achieve Sourcing Credibility

  1. 1. "Building Blocks to Achieve Sourcing Credibility" Gain Fortune 500 Value with Mid-Market Resources Featuring Sponsored By June 8, 2011 at 11AM (EST)www.iasta.com Copyright © Iasta, All Rights Reserved
  2. 2. Keynote Speakers Moderator Copyright © Iasta, All Rights Reserved
  3. 3. Audience Profile Copyright © Iasta, All Rights Reserved
  4. 4. Credibility  Definition of credibility… TRUST  Your reputation is:  You have the expertise  You bring out the best in people  You work well with others  You focus on important issues  You listen and communicate well Copyright © Iasta, All Rights Reserved
  5. 5. Copyright © Iasta, All Rights Reserved
  6. 6. Copyright © Iasta, All Rights Reserved
  7. 7. Copyright © Iasta, All Rights Reserved
  8. 8. Copyright © Iasta, All Rights Reserved
  9. 9. Copyright © Iasta, All Rights Reserved
  10. 10. Copyright © Iasta, All Rights Reserved
  11. 11. Copyright © Iasta, All Rights Reserved
  12. 12. Copyright © Iasta, All Rights Reserved
  13. 13. Copyright © Iasta, All Rights Reserved
  14. 14. Copyright © Iasta, All Rights Reserved
  15. 15. Copyright © Iasta, All Rights Reserved
  16. 16. Four Tactics Copyright © Iasta, All Rights Reserved
  17. 17. Tactic #1: Choose your path wisely Do not oversell cost reduction Work with stakeholders that are open to collaboration Get quick wins and sell it internally Copyright © Iasta, All Rights Reserved
  18. 18. Mini Case Study Choose your path Internal Workflow Analysis Core Challenge: Lack of spend info & savings to justify acquisition Priorities Goals Lesson Learned: By analyzing and grading projects based on key criteria, teams can quickly determine how to prioritize their projects; leaving behind a proven methodology for planning strategic initiatives in the future. Copyright © Iasta, All Rights Reserved
  19. 19. Mini Case Study Choose your path Consumer ProductsWhat went wrong… Manufacturer  Selected indirect projects by spend size as top factor  Some 1st projects were “sacred cows”  Marketing data, media buys and 3rd party financials audit Sourcing engagement used to train Commodity Managers Backfired, sourcing lost credibility Lesson Learned: Companies should only source “sacred cows” after credibility has been built. Copyright © Iasta, All Rights Reserved
  20. 20. Tactic #2: Identify and understand the data Know your Know your Know your spend key metrics key suppliers Past, current How much is For critical & scheduled there categories projects How much is Influence their influenced by Savings performance sourcing via SPM Success stories of spend Copyright © Iasta, All Rights Reserved
  21. 21. Tactic #3: Manage the gaps Skills gap • Right people with the right skills Data/Visibility • Spend/Contract data • Supplier performance, risk & mgmt gap • Creates the conduits for effective internal communication • Understand goals and objectives of stakeholders and map Influence gap procurement to them • Build relationships / walk the halls Communication • Bridge the disconnects and break down legacy issues • Understand that finance can be your greatest ally gap • Deliver the results with effective descriptions • Translate the value to the stakeholders Culture gap • Responsibility is on Procurement to disclose the value to the organization or you will not get buy in Copyright © Iasta, All Rights Reserved
  22. 22. Tactic #4: Develop a Center of Excellence  Technology and tools  Spend analysis  Contract Management  Sourcing (RFx, optimization)  P2P Creates the IQ of the organization – essentially the nerve center for a best in class process Build the organization discipline for evolutionary cycles which generate greater spend under management Copyright © Iasta, All Rights Reserved
  23. 23. Mini Case Study Center of Excellence Avoid stop-and-start rollout program Maintain momentum:  Targets  Bespoke training  Reporting/ tracking KPI’s New technology & rollout program:  One view of truth  New Strategic Sourcing Group  Increased knowledge transfer Lesson Learned: Create a strategic plan and collaborate with other business units to create sourcing center of excellence. Copyright © Iasta, All Rights Reserved
  24. 24. Summary Credibility is not built overnight Next Steps… 1. Spend Analysis • Will help you fill data gaps • Will help you know your data • Will help you choose your path 2. Center of Excellence • Centralize technology • Business processes • Empower people Copyright © Iasta, All Rights Reserved
  25. 25. Q&A Please submit your questions… Copyright © Iasta, All Rights Reserved
  26. 26. Question 1 Are there methods to measure the effectiveness or productivity of category managers?  Yes- quite a few – anything from: • # of categories • #of events held • Overall spend in those particular categories • How that category translates into new and emerging products Copyright © Iasta, All Rights Reserved
  27. 27. Question 2 How long did it take before FirstGroup plc started realizing savings and gaining an ROI?  Within the first 3 months (wave 1), we started seeing benefits of the sourcing program. We split the project phases into wave 1, wave 2 and wave 3.  As we went through the ways, the projects became more technically difficult; savings took longer to implement.  We didn’t see 100% of savings in an award position until about 12 months later. Copyright © Iasta, All Rights Reserved
  28. 28. Question 3 Relative to your chart regarding average savings by category, have you noticed any significant changes or trends in what people are frequently doing and if the are any changes in the savings on average?  The numbers in these charts are from research we did 6-7 months ago.  The biggest difference is about how the service providers / vendors have added more savings into the bucket and also the different variety of categories.  More demand management techniques are being applied  Some categories have gone up and some have gone down- it all depends on: • Organization’s maturity • Collaborating with stakeholders • Working with 3rd party providers and how they bring about value add Copyright © Iasta, All Rights Reserved
  29. 29. Question 4 What are some tips to help sourcing teams take over some unmanaged spend in non-traditional areas such as Legal and Finance?  Develop relationships with those people • Work out their influences and identify decision makers in each of those sourcing groups  Select a project that might have little impact on their daily lives, but allows you to demonstrate a big impact on something they have overlooked. • Example: office equipment  Approach legal about helping them manage their contracts better and improve compliance • Use their language to better improve your credibility Copyright © Iasta, All Rights Reserved
  30. 30. Question 5 Can you give some examples of selling sourcing credibility?  Procurement’s job is to sell situational influence, not positional leverage.  The purpose of procurement is to lead internal customers to a logical conclusion about what is ultimately in the best interest of the organization.  When presenting your business case about a large opportunity in a particular category: • Use data gained from spend analysis. • Meet with everyone in that department. • Present the data in terms of questions such as, “How would you approach this if we worked together?” • If they say they want to get back to you and schedule another meeting – the credibility and selling; you don’t need to go in banging your shoe on the table and trying to take over the initiative to drive down cost. • Identify the problem, mitigate the risk and look for the threats in real-time. • Let the stakeholders give you feedback on the best way to approach the initiative and develop a secondary idea (if needed). Copyright © Iasta, All Rights Reserved
  31. 31. Question 6 In your opinion, what are 1-2 key activities (that have greatest impact in the least amount of time) that procurement can do to set the foundation of credibility?  Communication is always king. • As a sourcing pro, you need to be involved in every aspect of communication that is taking place on a project you are working on. • If you are unaware of the discussions taking place about your project, it could present a lot of problems.  Obtain strong support before escalating to executives. • Communicate and collaborate with departmental leadership / key stakeholders before reaching out to the business owners; get them on board to support the initiatives you are pursuing. Copyright © Iasta, All Rights Reserved
  32. 32. Question 7 What are some good tactics or methodology for performing an honest assessment of a sourcing teams skills so that they know what the next steps should be?  Gartner recently fielded a study about sourcing talent- we will have additional data the end of August. What we are asking goes above and beyond an assessment: • What have you done in the last couple of years? • What are you doing today? • Where do you want to go in the future?  Ask what you need to make your team successful. • Do you need more category managers? • Do you need more advocates in the business? • Do you need different financial perspectives? Copyright © Iasta, All Rights Reserved
  33. 33. Question 8 When publishing savings results, how do you avoid the potential embarrassment of stakeholders who were historically paying a higher price?  A lot of it is around sharing with those stakeholders that you found additional savings based on their initial work and identifying the additional benefits from the new sourcing process.  Explain that you found a new path to take with suppliers that takes costs out that you hadn’t identified previously.  Take a team approach- as Dave said- it’s about situational influence, not positional leverage.  Stay to the facts; know where you are going and you will not make an embarrassment out of the organization.  Show that you have done this together and that the combined efforts jointly delivered value; it shows you are a good team and can come together. Copyright © Iasta, All Rights Reserved
  34. 34. For more info Iasta Global HQ Iasta European HQ 12800 N. Meridian St. Hartham Park Suite 425 Corsham, Wiltshire Carmel, IN 46032 SN13 0RP United States of America United Kingdom Operations: 317.594.8600 Operations: +44 (0) 870 199 4060 Sales: sales@iasta.com Sales: +44 (0) 1249 700726 www.Iasta.com eSourcing | eSourcing | forum Iasta Alliance Group wiki www.eSourcingWiki.com www.LinkedIn.com www.eSourcingForum.com www.Twitter.com/Iasta.com Copyright © Iasta, All Rights Reserved
  35. 35. Related Materials… White Papers  Iastas Structured Rollout Plan for eSourcing Initiatives  Spend Analysis: Its what you dont know that costs you Case Studies  Kicking Off a Procurement Transformation Initiative  Uncovering, Articulating and Implementing Sourcing Goals through Best Practices eSourcingForum  Use Best Practices to Drive Procurement Credibility at the C-Suite NEW  What Language Are You Speaking NEW eSourcingWiki  Sourcing Leadership Copyright © Iasta, All Rights Reserved

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