The Talent Technology Connection_Celgene

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This presentation will explore how Celgene a global biopharmaceuticals company has connected talent management with technology to place large, complex and critical spend categories such as Marketing, SG&A, and R&D under management by procurement.

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The Talent Technology Connection_Celgene

  1. 1. THE TALENT-TECHNOLOGYCONNECTION Matt Mehalick, Director of Purchasing, Celgene Corporation
  2. 2. Celgene VisionCelgene is Building a Preeminent Global BiopharmaceuticalCompany Focused on the Discovery, Development &Commercialization of Innovative Therapies for UnmetMedical Needs in Cancer and Immune-InflammatoryDiseases
  3. 3. Celgene: A Leading Biopharmaceutical Company Portfolio Of Leading Fully Integrated Unique R&D Capability Products1. Operations in > 50 1. Expertise in countries hematology, oncology, and immunology2. Sales in > 70 countries 2. Diverse3. Manufacturing facilities technology platforms in US & EU 3. 19 Programs in4. Key Research facilities preclinical development in NJ, CA & Spain 4. 18 Treatments in clinical trials5. > 4,500 employees globally 5. >25 Pivotal / phase III programs underway
  4. 4. Technology & Talent – Global Scenario“A recent study of procurementorganizations by CAPS Research findssome 80% reporting they have Innovationexperienced talent shortages in one or „Green‟ Supply Supplymore functional areas related to Chain Analyticsprocurement and supply management inthe past year. The report also cites talentmanagement among 8 critical challenges Extended TALENTthat supply management organizations Global Risk MANAGEMENT Managementwill face in the coming decade. – Steve Supply NetworksWade, 2012” Metrics and Value Measurement Focused“According to the 2012 CAPS Systems Transformatio Supplystudy, procurement executives feel they n and Businesswill be more likely to automate than to Strategy Alignmentoutsource supply managementwork, ranking the former at 3.8 on alikelihood scale of 1 to 5 and the latter atjust 2.2”
  5. 5. Defining Procurement TalentTo excel at procurement one needed tobe:• Analytical and aware with respect to economies and markets• Skilled at negotiation• Ethical (to a fault)• More interested than average in treating the companys money as if it were something worth saving rather than squanderingAdditionally today‟s procurementprofessionals need to be:• Skilled at selling, marketing and communicating ideas externally & internally• Technically knowledgeable; possessing sophisticated understanding of engineering concepts• Technologically, culturally and socially savvy• High on business acumen; possessing sophisticated understanding of finance, accounting and treasury concepts• Customer/end-market focused• Capable of analysing, reengineering and/or designing processes and business systems
  6. 6. Procurement Function atCelgene Corporation 3 Years Back Transaction oriented. Did not bring value to the organization. Two separate purchasing organizations, North America and International No strategic sourcing experience in the department. Not leveraging spend. Department was set up to be reactive and not pro-active. No ERP system and no spend visibility globally. My vision was to become a global strategic sourcing organization that created value, mitigated risk, and developed strong business relationships with our suppliers.
  7. 7. Bridging the Sourcing Skill Gap Celgene hired expertise in key spend areas. Ability to “talk the talk”. More strategic thinking and able to leverage spend across all locations globally, bringing increased value to the organization. New hires have a consultant mindset. “How can we help add value to make your area better.” Supporting a “strategic partnership” environment with our stakeholders. Changed the structure of the department to allow category managers to be pro-active and find savings opportunities.These changes over the past 3 years have helped us grow the“footprint” of Strategic Sourcing globally and create value of $60M+
  8. 8. Technology Initiatives UndertakenImplemented the following technology globally: ERP, e-Sourcing, Zycus spendanalysis and iContractsTechnology helped us to be more transparent globally and have a betterunderstanding of where and who we procure fromIncreased the speed of our sourcing processesThe information that we obtain from our technology allows our sourcingprofessionals to present the “facts” to stakeholders, which helps sell our servicesOur technology is used mostly in the indirect spend areas of the organization(Marketing, SG&A, R&D, IT, etc)
  9. 9. Key Requirements for Technology Ease of Use Global Dashboard Support Capabilities Structure Technology Flexibility Robust and Reporting Scalability
  10. 10. CASE STUDY
  11. 11. IT Staff AugmentationUsed a Spend Analysis tool to uncover an opportunity inthis spaceFindings from our Analysis: IT Staff Augmentation annual spend is $35M Spend across 40 suppliers No control on supplier management, could use any supplier No consistent discounting or volume rebates from suppliers
  12. 12. Sourcing Process Put together clear Collaborate with IT Consolidate into 6 job descriptions, to review and job categories of 78 quantity and identify all jobs total jobs estimated hours Auctioned 7 lots: Narrowed down to Issued RFP to 45 one per job 21 for reverse suppliers use an e- category, plus the auction Sourcing tool combined Shortlisted 12 to Selected 8 to enter come in for on-site into contract through RFP review a VMS meetings
  13. 13. RESULTS Standardized jobs and established consistency in this area Consolidated Supplier Base (from 40 to 8) Generated 35% cost savings, expect > $500K rebates Implemented single point of control in suppliers management through MVS and IT supplier manager Current compliance is 90+%
  14. 14. PROJECT OVERVIEW – IT Staff Augmentation THE RESULTSPROGRAM UP FOR BID:Category: IT Staff Augmentation 35%Team Leader: Eric Pei $3.82 $12.3M SavingsHistoric Cost: $35M USD (Annual) $35.0MContract Length: 12 Months $2.77MARKET INTELLEGENCE OVERVIEW: $22.7MSpend Category: US IT Consulting ServicesSuppliers: 12 Preferred Suppliers 32 incumbents – preferred and non-preferred. Historic Low Bid Annual SavingsProgram: Corporate out-sourcing initiative serving11 buying locationsMarket Condition: Current market is tightening due to growing IT demands of about 2.5% in 2012 over 2011.BID STRATEGY:Bid Format: Round 1 RFP Round 2 Reverse Auction of 7 lots and 21 bidders. Downward, Rank Bidding OUTCOME: • 574 total bids • Consolidated to 8 suppliers • 35% savings
  15. 15. Procurement Function atCelgene Corporation “Today” Experienced sourcing professional in all key spend areas of the organization globally. Procurement technology roll-out globally. A Global Procurement Matrix Organization has been created to drive the global strategy for the organization worldwide. Implement a Market Intelligence function to the department.
  16. 16. Procurement Function at Celgene Corporation“Today” Admin Director of Procurement Assistant Category Lead Category Lead Category Lead Category Lead Facilities, Finance,Marketing, HR, Legal, IT & Travel Strategic R&D Non-Clinical, QC Procurement Ops Lead Logistics Strategic Strategic Sourcing Sourcing Strategic Sourcing Sourcing Manager Manager Manager Manager Manager Strategic Sourcing Strategic Sourcing Strategic Sourcing IT & Strategic Sourcing R&D Procurement Ops, E-Marketing, HR, Legal SG&A, Finance, Logistics Travel Non-Clinical, QC Sourcing, Spend Analyst Sr. Analyst Sr. Analyst Sr. Analyst Manager Strategic Sourcing Strategic Sourcing Strategic Sourcing IT & Procurement OpsMarketing, HR, Legal SG&A, Finance, Logistics Travel Sr. Analyst Sr. Analyst Procurement Procurement Strategic Sourcing Strategic Sourcing IT & Ops Analyst Ops AnalystMarketing, HR, Legal Travel Procurement Procurement Ops Analyst Ops Analyst Procurement Procurement Ops Analyst Ops Analyst
  17. 17. Critical Success Factors Hire sourcing professionals with expertise in sales, consulting experience a plus Implementing technology to enhance the skill set of the sourcing professionals Use the information that you obtain from technology to present the “facts” to stakeholders, which helps sell your services Develop strategic partnerships with internal stakeholders that add value
  18. 18. THANK YOU

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