Driving global adoption of
procurement technology
- A Cargill Approach
Presented by
Derek Batchlor
Global COE & Sourcing O...
Agenda
1. Who is Cargill?
2. Sourcing transformation – the catalyst for iAnalyze
3. Driving adoption
4. Early successes
5....
Who is Cargill?
Who is Cargill
We are an international producer of food, agricultural, financial
and industrial products & services. Found...
Cargill Video

6
From our modest roots in the US Midwest,

Cargill has grown to be a global leader in food & agriculture
2012 FORTUNE 500

...
Sourcing
transformation –
the catalyst for iAnalyze
In 2010 Cargill embarked on a transformation
of it’s Global Procurement Function into a

Strategic Sourcing Function
The t...
Cargill Strategic Sourcing
Organization
CPO

5 Category Leads
(PM&S, CM&S,
Chemicals,
Packaging,
Ingredients

Global COE/O...
Cargill Strategic Sourcing
Organization
Define the
Need





*Define

Needs
*Identify
Stakeholders
*Establish Team
*Es...
Process, Tools and Technology
As the organization was being transformed it was clear there were a few gaps in process,
too...
Driving Adoption
Setting the stage for broad adoptions
started well before iAnalyze was live
Cargill’s success in implementing was based
on...
Communication & change management
Focusing on communication and change management ensure all key stakeholders
understand t...
Open & complete transparency on decisions
Given the complexity of Cargill numerous scope decisions had to be made to ensur...
Focus on training and support
Significant effort was put into training team members how to use the tool and extensive

doc...
After go live a few success factors will
ensure sustained adoption
1.

Make clear the teams using the data own the data an...
Early Successes
Success Stories
 A few early successes
 Improved understanding of payment terms
 Better spend categorization
 Greater ...
Payment Terms – The opportunity
 iAnalyze gave us visibility to the vast number of payment terms across our
varied busine...
Spend Categories;
What we found


Prior to implementing iAnalyze manual spend
approximately $9 billion in annual indirect...
Managed Spend – iAnalyze improved
our understanding of managed spend
With iAnalyze in place we finally had a good idea of ...
Summary
Summary
Setting the stage for broad based adoption starts during the implementation
process and is facilitated by:
1.

Wel...
Questions

26
Nourishing ideas.
TM
Nourishing people.
Horizon 2013 Driving Global Adoption to Procurement Technology - A Cargill Approach
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Horizon 2013 Driving Global Adoption to Procurement Technology - A Cargill Approach

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"In 2010 Cargill, a $130B international producer and marketer of food, agricultural, financial and industrial products and services, initiated a project to reorganize the fragmented procurement function into a centralized Global Strategic Sourcing Function. One key missing element of a successful transformation was a spend visibility solution which could collect, categorize and disseminate spend data across the companies 70 plus business units, 30 plus ERP systems, 60 plus countries and more than a dozen languages. Cargill turned to Zycus’s spend analysis tool as their solution of choice.
Derek Batchlor will share Cargill’s approach to implementation of spend analysis tool and how they have been able to drive broad adoption of the tool by over half of the nearly 200 team members in Strategic Sourcing. "

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Horizon 2013 Driving Global Adoption to Procurement Technology - A Cargill Approach

  1. 1. Driving global adoption of procurement technology - A Cargill Approach Presented by Derek Batchlor Global COE & Sourcing Operations Leader Strategic Sourcing
  2. 2. Agenda 1. Who is Cargill? 2. Sourcing transformation – the catalyst for iAnalyze 3. Driving adoption 4. Early successes 5. Summary 3
  3. 3. Who is Cargill?
  4. 4. Who is Cargill We are an international producer of food, agricultural, financial and industrial products & services. Founded in 1865, Cargill is privately held & employs 142,000 people in 67 countries. AGRICULTURAL We buy, process & distribute grain, oilseeds & other commodities to makers of food & animal nutrition products. We also provide crop & livestock producers with products & services. FOOD We provide food & beverage manufacturers, foodservice companies & retailers with high-quality ingredients, meat & poultry products, and health-promoting ingredients & ingredient systems. FINANCIAL We provide our agricultural, food, financial & energy customers around the world with risk management & financial solutions. INDUSTRIAL We serve industrial users of energy, salt, starch & steel products. We also develop & market sustainable products made from agricultural feedstocks. 5
  5. 5. Cargill Video 6
  6. 6. From our modest roots in the US Midwest, Cargill has grown to be a global leader in food & agriculture 2012 FORTUNE 500 1. Exxon Mobil 452,926 2. Wal-Mart Stores 446,950 3. Chevron 245,621 4. ConocoPhillips 237,272 5. General Motors 150,276 6. General Electric 147,616 7. Berkshire Hathaway 143,688 8. Fannie Mae 137,451 12. Valero Energy 125,095 Cargill 119,4691 13. 7 Annual ranking of the largest U.S. public companies Bank of America Corp. 115,074 Revenues (U.S. $ millions) 1 . For fiscal year ended May 31, 2011 Source: FORTUNE magazine, July 23, 2012
  7. 7. Sourcing transformation – the catalyst for iAnalyze
  8. 8. In 2010 Cargill embarked on a transformation of it’s Global Procurement Function into a Strategic Sourcing Function The transformation focused on 3 areas of improvement: 1. Realigning and re-staffing the organization 2. Adopting a rigorous standard approach to category sourcing 3. Implementing supporting tools, processes and technology to make efforts more efficient and appropriately focused 9
  9. 9. Cargill Strategic Sourcing Organization CPO 5 Category Leads (PM&S, CM&S, Chemicals, Packaging, Ingredients Global COE/Ops NA Businesses NA BSSTs LA Business LA BSSTs Because Cargill’s roughly $9 billion in indirect spend is controlled by 75 independent Business Units it was imperative that Strategic Sourcing closely manage BU relationships. For this reason Strategic Sourcing was organized first by Business Unit and second by category. 10 EMEA Businesses EMEA BSSTs APAC Businesses EMEA BSSTs
  10. 10. Cargill Strategic Sourcing Organization Define the Need     *Define Needs *Identify Stakeholders *Establish Team *Establish Charter Research & Development Diagnostics     *Internal Research External Research Cost Modeling *Hypothesis Generation    Hypothesis Testing *Strategy Development Implementatio n Roadmap     *Marketing Testing (RFx) Structured Negotiations Operating Model Modifications *Policy Changes *Access to accurate spend date is critical at many points in the process 11 Ongoing Category Management Strategy Implementation Strategy iAnalyze   *On-going Value Management *Strategy Refinement
  11. 11. Process, Tools and Technology As the organization was being transformed it was clear there were a few gaps in process, tools and technology availability or use including:  Value Measurement – in order to drive credibility a robust value measurement tool & process was required  Supplier Database – in order to allow decentralized buyers to access strategic suppliers a comprehensive supplier database was leveraged  eSourcing – to make supplier selection and evaluation more efficient an eSourcing tool was employed  Spend Analysis – in order to define opportunities & prioritize projects iAnalyze was selected & implemented 12
  12. 12. Driving Adoption
  13. 13. Setting the stage for broad adoptions started well before iAnalyze was live Cargill’s success in implementing was based on 3 factors  Early and ongoing efforts on communication and change management  Open and complete transparency on project decisions  Significant focus on training and support structures for end users 14
  14. 14. Communication & change management Focusing on communication and change management ensure all key stakeholders understand the project and are appropriately managed through the change process • Cargill staffed a dedicated internal Change Consultant to ensure change management received the focus and priority it deserves • Additionally, a change network of team members was created to gather and address informal feedback such as rumor mill and “water cooler” talk • Leadership was given specific talking points and activities to support change efforts 15
  15. 15. Open & complete transparency on decisions Given the complexity of Cargill numerous scope decisions had to be made to ensure 16 Overall Value Effort Scope recommenda tion Spend Originating in SAP CROE (CROE) In scope EMEA-2 Spend Originating in SAP CTS (CTS - EMEA) In scope GL-1 GL-2 GL-4 LA-1 Packaging/Ingredients Detail in NIS Addressable Spend Filter - Object Account Level Addressable Spend Filter - Subsidiary Account Level JDE One World NA-3 Item Description from ASAP NA-2 Packaging/Ingredients Detail in Adage NA-5 Spend Originating in Maximo APAC CTS EMEA-3 Spend Originating in HT CAN In scope All CSS involvement required to identify accounts In scope All Substantial CSS effort required to identify the additional addressable spend account subsidiary codes per BU In scope Mexico, Assumption there might be some minor effort to bring all Brazil, data over Venezuela Corn Milling, CTS, NatureWork DSO, Specialty Malt, CAP In scope Assumption: only item description sourced from ASAP, no other preferred elements In scope High BU effort required In scope Assume the GL structure is sufficient for spend to be categorised Defer CTS Do not close CAN Do not close All Do not close GL-3 P-Card Spend GL-5 Spend Originating in SAP CFS (CFS) Do not close Do not close LA-2 GOSC Spend Originating in FTS Brazil NA-1 CPP Detail in Agrosoft NA-4 broadly to the organization Estimating Assumptions EMEA-1 AP-3  We analyzed source systems to include in the final roll out and communicated those decision Business unit(s) Category Maturity Gap Visibility of Impact Ref Length on iAnalyse Ease of alternati ves  One possible source of resistance is credibility the tool may loose if it is not comprehensive. Clearly communicating scope decisions can head off some resistance if decisions are clearly explained Size of Spend project timeline and budget. A core operating principle was to be completely transparent about scope decisions & their rationale Spend Originating in SAP CTS (CTS - NA) LA-3 GOSC Spend Originating in SOT Brazil AgHorizons Canada Do not close This is hosted as the same location as CTS - EMEA Two different instances - there might be opportunity to level the EMEA extract. We did not account for this Do not close
  16. 16. Focus on training and support Significant effort was put into training team members how to use the tool and extensive documentation was created as a repository for how the system works.  Several training sessions were offered both in person and virtually  Teams travelled to each region to provide face to face training during the roll out process  17 A network of Super Users was created to help end users better utilize the system
  17. 17. After go live a few success factors will ensure sustained adoption 1. Make clear the teams using the data own the data and play a key role in system maintenance 2. Solicit input on system enhancements and communicate the disposition of inputs 3. Provide consistent and frequent updates 4. Provide ongoing training for new team members & refresher for previously trained team members 18
  18. 18. Early Successes
  19. 19. Success Stories  A few early successes  Improved understanding of payment terms  Better spend categorization  Greater visibility of managed spend 20
  20. 20. Payment Terms – The opportunity  iAnalyze gave us visibility to the vast number of payment terms across our varied businesses (in excess of 80 different terms) ranging from “Due Upon Receipt” to “Net 180” and everything in between.  iAnalyze also gave us the data needed to calculate the working capital impact of moving from less favorable to more favorable terms, if we could move all suppliers with less favorable terms to more favorable terms we could free up about $200 million of working capital (best case)! 21
  21. 21. Spend Categories; What we found  Prior to implementing iAnalyze manual spend approximately $9 billion in annual indirect spend  iAnalyze confirmed the total indirect spend is $9 billion… but where we thought we were spending the $9 billion turned out to be less accurate. For example, the spend in the following categories was significantly greater than we thought (collectively they are ~ $180 million)   Waste Disposal  22 Lease and Rental Equip Paint and Scaffolding buildup indicated
  22. 22. Managed Spend – iAnalyze improved our understanding of managed spend With iAnalyze in place we finally had a good idea of how much spend is strategically managed. Now we can focus efforts to increase managed spend where the biggest opportunities are! 11% Un-Managed 55% 21% 43% 75% 89% Managed 45% 79% 57% 25% PM&S CM&S PACKAGING CHEMICALS INGREDIENTS 23
  23. 23. Summary
  24. 24. Summary Setting the stage for broad based adoption starts during the implementation process and is facilitated by: 1. Well executed project implementation 2. Laser focus on change management 3. Complete transparency in decisions made 4. Significant investment in training and support After go Live keep the “pedal to the metal”: 1. 2. Make enhancement to the tool based on end user input 3. Keep end users well informed on the status and plans 4. 25 Hold teams accountable for maintaining “Their” data Provide ongoing access to training
  25. 25. Questions 26
  26. 26. Nourishing ideas. TM Nourishing people.

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