Contracting's collaborative vision: this Transformation blueprint can make it happen - The Year of Transformation: Maximizing value through collaborative and agile relationships Now that we understand that contracting must redefine the function and its role, in Session Two we will explore what needs to change and how to do it: To make change happen you need to know your starting point. We will introduce the elements of a Transformation Blueprint which will be used to assess where you are. To move to a competitive differentiator (the top level of the maturity model) you MUST change who you consider to be a stakeholder (internal AND trading partners), the way you engage with those stakeholders (focus on their Decision Drivers) and your approach to collaborating and working with your trading partners. The essential contracting role is a strategic business partner, internal consultant and change leader. As a strategic business partner / internal consultant Contracting must bring together their internal partners with their customers / suppliers to create alignment and match risk between the two parties. Making the change happen will require a heavy dose of change leadership which may be the biggest challenge for your group. Your role as a change leader requires you to have these competencies as well. We will explore the following questions: What is the changing role of the contracting function and how it can be a competitive differentiator? Why is the change is necessary? After assessing the above, where are you today and what must you do to transform? How do you make the transformation happen? What are the business benefits associated with the change?

1. Contracting’s Collaborative Vision:
The How - What Does Contracting
Need to Change and How?
Executive Webinar
March 23, 2016
Dalip K. Raheja, President & CEO Tim Cummins CEO
The Mpower Group IACCM

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Agenda
Why Change?
Transformation Blueprint
Right Stakeholders / Business Intent
Big Ideas
3

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Business Models are Changing . . . . . .
Why Change?
. . . . and dependence on trading partners is higher than ever
Globalization
Desire to enter new markets
Suppliers drive revenue
Customers drive cost
Innovation is key
Internet Of Things is here
4

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Why Change?
Poor Supplier Relations Costing Bazillions
Are we sticking ours heads in the sand?
5

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Contracting
(Buy/Sell Side)
Sales
&
Marketing
Engineering
Transportation
&
Logistics
Warehousing
Materials
ManagementPurchasing
Information
Technology
Higher Collaboration Drives Higher Value
Collaboration Must be Across the “System”
Why Change?
6

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Next Practices Contracting Organization is Different
Why Change?
Will We Ever Get There?
• Contracting is expected to
deliver on corporate goals
– supported by senior
management
– early involvement in
customer / risk management
decisions
• Evaluated on basis of Risk
Management and Value
Creation not the efficiency of
the contracting process
• Raided internally / externally
for talent because it is a
talent factory
• Staffed to maximize impact
– includes best and brightest
– processes, tools & technology
enable value creation
• Leaders in building high
value relationships
• Drives portfolio risk
management
• A single Contracting
organization delivers
excellence to both the buy
and sell side
What C-Level Executives Demand of the Contracting Organization
7

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Traditional Buying & Selling Process
• End point is not the contract
• Buyer loses leverage once contract is signed
• Value is exchanged after the contract
Next
Practices
Step
1
Step
2
Step
3
Step
4
Define
Requirements &
Relationship
Partner
Selection
Contract
RM -
Value
Generation
Contracting
professionals have
misidentified the
endpoint
The
Pre-Nuptial
Why Change?
8

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The Real End Point
With real end point in mind…
– Contract is an intermediate step, not the goal
– Everyone acts differently throughout entire process:
1. Defining requirements & relationships
2. Partner selection
3. Negotiations and Contract
4. Ongoing Relationship Management
Next
Practices
Step
1
Define
Requirements &
Relationship
Partner
Selection
Contract
RM -
Value
Generation
Incremental
Value
Creation-
The Marriage
Step
2
Step
4
Step
3
Why Change?
9

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Poll
Why Change?
Questions ?????????
What will be the biggest challenge for
your organization in a Transformation?
A. Accepting that change is necessary
B. Getting your company to adopt a
collaborative mindset
C. Getting your company to invest in
your organization
D. No Transformation is necessary –
we are there
10

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Agenda
Why Change?
Transformation Blueprint
Right Stakeholders / Business Intent
Big Ideas
11

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Transformation Blueprint
Transformation is Necessary
Contracting Process
Tools & Templates
Regulations
Technology
Executive
Support
Higher
Expectations
Learning
Environment
Metrics
aligned with
the Business
New
Role
Strategic
Competencies
Adoption
Focused
• Contracting is expected to
deliver on corporate goals
– supported by senior
management
– early involvement in
customer / risk management
decisions
• Evaluated on basis of Risk
Management and Value
Creation not the efficiency of
the contracting process
• Raided internally / externally
for talent because it is a
talent factory
• Staffed to maximize impact
– includes best and brightest
– processes, tools & technology
enable value creation
• Leaders in building high
value relationships
• Drives portfolio risk
management
• A single Contracting
organization delivers
excellence to both the buy
and sell side
What C-Level Executives Demand of the Contracting Organization
Relationship
Manager
Adds value
throughout the
commitment
process and beyond
Process Leader
Improves efficiency of the
commitment process
Risk Manager
Identifies, assesses and
prioritizes risks in an effort to
minimize it’s impact on the
enterprise
Strategic Business Partner
Influences key strategies as a
trusted partner to the business
Change Agent
Influences company’s
capability to embrace &
capitalize on change
Contracting
(Buy/Sell Side)
Sales
&
Marketing
Engineering
Transportation
&
Logistics
Warehousing
Materials
ManagementPurchasing
Information
Technology
Wrong Stakeholders / Decision Drivers
Functional vs. Strategic?
Business,Industry,&EnterpriseKnowledge
Business Context /
Organizational
Competencies
Strategic
Competencies
Functional
Competencies
Change
Management
Consulting &
Facilitation
Information
Technology
Project
Management
Contracting
Processes
Legal terms
& conditions
Negotiations
“Customer”
Relationship
Management
Teamwork
Competency
Based
Talent
Management
Exceptional
Business
Results
OperationalManagement
12

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TMG Transformation Blueprint
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
Exceptional
Business
Results
• Business Processes
• Tools / Templates
• Technology
• Organization
− Roles, Jobs & Teams
• Talent
− Competency Models
− Performance Mgmt
− Training & Development• Design
− Vision /Strategy
− Strategic Objectives
− Principles
− Business Case /
Rationale
• Launch
− Stakeholder
Analysis
− Communication
Plan
− Risk Assessment
• Information Visibility
• Performance Metrics
• Knowledge Continuity
• Decision Processes
• Business Alignment
• Change Management
• Learning Environment
• Coaching / Mentoring
Transformation Blueprint
Consonants / Content
Vowels / Context
Begin with Rapid Launch
13

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Begin with Rapid Launch
B + A > E
Event /
Launch
Preparation And Follow-Up Are Essential
BEFORE AFTER
Preparation / Positioning
• Communication
• Sell the Effort
• Alignment
• Urgency
• Momentum
• Ownership by Leaders
Follow-Up / Reinforcement
• Communication
• Coaching / Mentoring
• Reward & Recognition
• Application
• Urgency
• Benefit Realization
Transfer Results/
Focus Focus
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
Transformation Blueprint
14

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Strategic
Objectives
Vision
Current Reality
Rapid Launch
Each Strategic Objectives along with Principles are
critical to move your Current Reality closer to your Vision
Principles
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
Transformation Blueprint
15

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Internal and External Customer Focus
Functional Expertise
Work Processes
Technology
SharedAcrossAllBusinesses
• High
• Standardized
• Development costs
• Required standardized level
• Low
• Customized
• Generic
• High
• Static
• Product/service requirements
• Volume/scale
• Nature of transaction
• Unique
• Low
• Dynamic
• Low
• Full
• Need for specialized knowledge
• Applicability across BUs
• High
• None
• Remote
• Required proximity to external
customer
• Close
SeparateOrganizationwithin
EachBusiness
Centralization Vs Decentralization : Multiple factors should
be considered in the decision.
Organization Structure Options
Organizations may use a blend of models
Transformation Blueprint
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
16

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Functional vs. Strategic Competencies?Business,Industry,&EnterpriseKnowledge
Business Context /
Organizational
Competencies
Strategic
Competencies
Functional
Competencies
Change
Management
Consulting &
Facilitation
Information
Technology
Project
Management
Contracting
Processes
Legal terms
& conditions
Negotiations
“Customer”
Relationship
Management
Teamwork
Competency
Based
Talent
Management
Exceptional
Business
Results
OperationalManagement
Client Example
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
Transformation Blueprint
17

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Technology as a Strategic Enabler
• Matching technology to
business needs
• Acquire and use technology
according to overall
architecture and plan
• Actively using technology to
improve and accelerate
process
• Investing in Best of Breed
solutions to capture early
benefits
• Conceptualizing and planning
for Integrated Suites
Advanced contracting organizations develop technology
platforms that are aligned with their strategic intent.
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
Transformation Blueprint
18

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Technology as a Strategic Enabler
Advanced contracting organizations remember that technology is
an enabler – and not the answer. Much of the value we provide
comes from the process itself and is enhanced by the underlying
technology.
• Technology cannot
reengineer your process…
…but it lets you do things
you already do better
• Technology by itself is
doomed to fail…
… but used in the context of your
overall contracting process it
provides a powerful lever
• Technology does not
dictate strategy …
… business needs drive strategy
and strategy dictates
technology
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
Transformation Blueprint
19

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TIME
EFFORT
Predictable
Inevitable
Transformation Blueprint
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
20

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Decision Principles transfer decision authority to the project
team based on mutually agreed to conditions.
PROJECT
TEAM
Without
Principles
With
Principles
PROJECT
TEAM
DECISION
AUTHORITY
DECISION
AUTHORITY
Decision making rules, logic,
parameters, constraints etc.
Define /
Optimize
Organization
& Talent
Create
/ Enhance
Infrastructure
Execution
Design/ Launch
Future State -
“Rapid Launch”
AEIOU (Enablers & Accelerators)
Transformation Blueprint
21

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Poll
Questions ?????????
In your experience, during a
transformation do you believe there is
sufficient balance between changing
content (people process, technology)
vs. context (AEIOU)?
A. YES
B. NO
Transformation Blueprint
22

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Agenda
Why Change?
Transformation Blueprint
Right Stakeholders / Business Intent
Big Ideas
23

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Contracting
(Buy/Sell Side)
Sales
&
Marketing
Engineering
Transportation
&
Logistics
Warehousing
Materials
ManagementPurchasing
Information
Technology
Have you Identified the Right Stakeholders?
Right Stakeholders/Business Intent
24
Buy SideSell Side

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When is a Hamburger NOT just a Hamburger . . .
Hamburger
TCO Value
• Best Price
Evaluation
• Recruiting
• Product Quality
• QOWL(Quality of
Work Life)
• Aggressive
Negotiation
• Employee
Retention
• Rationalize
Supply Base
• Value > Cost
Business owners place more importance on “Value” than Cost
Client Example
You need to
identify the
“Right”
Stakeholders
Right Stakeholders/Business Intent
25

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Cost
Management
Stakeholder
Identification &
Communications
Return on
Investment
Competitive
Analysis
Strategic
Planning
Relationship
Management
Lead
Generation
Differentiation
Industry
Awareness
Brand
Management
Sales
Support
Customer
Life Cycle
Management
Right Stakeholders – CRM Example (Sell Side)
CIO, CPO, CFO, ETC…
Others
Key
a
a
a
b
C
b
b
b
C
C
b
C
C
C
b
CMO
Traditional IT Focus
Stakeholder Focus (Sales)
Next Practice Focus (CMO)
Right Stakeholders/Business Intent
Client Example
26

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Another Example from the Sell Side
Right Stakeholders/Business Intent
Client Example
27
Solution:
• Worked with Sales Team to identify “Right
Stakeholders” – CEO, CFO, CMO
• Helped Sales Team to identify the Prospect’s strategic
needs (Business Intent)
• Linked their Value Proposition to the Prospect’s
Business Intent
• Taught negotiation techniques that responded to
advanced buyer strategies
Results:
• Combined Billings of $50 million booked on two
proposals within ten days of our workshop
• Continued improvement on successful proposal rate
• Increased profit margin on new sales
Global Media Agency

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Client Example: Right Stakeholders
Faculty
• Real time student KPI
& predictors
• Shorter courseware
development times
Academics
• Strategic options
• Real time curriculum
analysis
Technology
• Lower support cost
• Focus on innovation
instead of break/fix
Finance
• More granular view of
value drivers
• More accurate costing
Students
• Adaptive experience
• Immersive experience
• Failure proof
Partners
• Single platform to
service
• One set of ABC
standards
Employers
• Track skill set acquisition
via custom report cards
• Partner on course and
curriculum items
Enrollment Growth and Marketing
• Better market positions
• Better testimonials
Course of the
Future
Buy Books
Cheaper
Don’t Buy
Books
at All
Right Stakeholders/Business Intent
Client Example
28

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Common
Vision
• 10 Year Price And
Discount Schedule
• Incentive Based
Contract
• Valid for ABC's
Family
• Managed Globally,
Executed Locally
• Prototype Validates
Software Choice
• Global Solution Deployed
By Country/Region
• Contract Structure Incents
Country Adoption
• License Fees Tied
To Deployment Success
• Project Support Quality
As Important As Price
Client Example -
$100 M ERP
Stakeholder Business Intent
Brought in by IT Procurement to negotiate the Best Price
Right Stakeholders/Business Intent
29

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• What you ask (outside / in perspective)
• Who you talk to (define “customer” differently)
• How you engage your “customer” / supplier
• The metrics that drive/measure success
Value Influence Power
• When you realize benefits (define “success” differently)
Focusing on Business Intent dramatically changes:
Right Stakeholders/Business Intent
30

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Poll
Questions ?????????
Today, are you working with all the Right
Stakeholders?
A. Yes
B. No
31
Today, are you identifying and capturing
their Business Intent?
A. Yes
B. No

31. © 2016 The Mpower Group, Inc. All Rights Reserved.
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Agenda
Why Change?
Transformation Blueprint
Right Stakeholders / Business Intent
Big Ideas
32

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Survey Results
33
2.92
3.04 3.04
3.08
3.24 3.24
3.4
3.44
3.56
3.84
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
Investments in
your function
(people,
process,
technology)
are considered
to be strategic
and supported
by your
executives
Your
organization is
raided for
talent and
future leaders
are emerging
from your
function
You attract the
best and
brightest to
your
organization
because they
see
tremendous
career growth
People would
say my
organization
contributes to
us being a
customer or
supplier of
choice
You are
managing the
overall
portfolio risk of
trading
relationships
(both buy and
sell sides)
Your
organization is
an active
participant in
the
development
of corporate
strategy
You have been
successful at
selling the
value of your
function to the
rest of the
organization
Your
organization is
called upon to
lead critical
initiatives
beyond the
scope of your
function
Your executive
team considers
your function
to be critical
and strategic
to their success
Your staff have
the
competencies,
not just skills
to play a
strategic role
within your
organization

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Relationship
Manager
Adds value
throughout the
commitment
process and beyond
Process Leader
Improves efficiency of the
commitment process
Risk Manager
Identifies, assesses and
prioritizes risks in an effort to
minimize it’s impact on the
enterprise
New Role of the Contracting Professional
Strategic Business Partner
Influences key strategies as a
trusted partner with program
managers
Change Agent
Influences company’s
capability to embrace &
capitalize on change
Big Ideas
This is the role
we all play today
• Ensures alignment with
C-Level decision drivers
• Delivers tangible
business benefits
• Proactive vs. reactive
• Understands the
business
• Innovative
• Listens
• Challenges the status quo
• Sells the new “context”
• Proactively communicates
• Engages / aligns
stakeholders
• Facilitates cross-functional
decision making
• Creates a “pull”
• Resolves conflict
• Influences others t
34

34. © 2016 The Mpower Group, Inc. All Rights Reserved.
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Contracting Process
Tools & Templates
Regulations
Technology
Executive
Support
Higher
Expectations
Learning
Environment
Metrics
aligned with
the Business
Big Ideas
New
Role
Strategic
Competencies
Adoption
Focused
Context Always Trumps Content
35

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%oftotalcostsof
InnovationProcess
100%
50%
0%
Source: Maier, F. H.
Adoption is a mindset & a process, not an initiative
60%
18%
Solution
60%
Adoption Intended
Business
Results
Introduced
Into the Market
Economic
Success
Technical
Failure
Stopped Because
of Insufficient
Economic Success
Potential
Economic
Failure
• Only 8.8% of solution
(product, process, etc.) will
be successful
• Change is hard and not
easily adopted
• Getting a new process /
product adopted requires
investment (cost)
Impact on Funding
• Shift Investment
• Shift Resources
• Longer Timeline
• “Customer” commitment
8.8% of All
Projects
40%
22 %
Time
100
UNITS OF
“VALUE”
Big Ideas
36

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Educate
Execute
Evolve
Align
Big Ideas
Many organizations move straight to Execute
37

37. © 2016 The Mpower Group, Inc. All Rights Reserved.
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Poll
Big Ideas
Questions ?????????
Does your organization take the time to
Educate and Align before they
Execute?
A. YES
B. NO
38

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For more information on the work we are doing in Building
Collaborative Trading Partner Relationships including:
Our blog series
Results of major research study(s)
A white paper covering this area
Please contact:
Rick Sandoval
630-268-8963
ricks@thempowergroup.com
or visit our blog at
blog.thempowergroup.com
39
About TMG

39. © 2016 The Mpower Group, Inc. All Rights Reserved.
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The Mpower Group is in the business of Mpowering our clients to accelerate
Exceptional Business Outcomes by unleashing the full potential of their
organizations. We are a global consulting firm dedicated to serving the needs of
Fortune 500 Supply Chain (buy & sell side) organizations. We help our clients by:
– Accelerating Strategic Transformation: Rapidly move client organizations along The
Mpower Group’s Supply Chain Maturity Model to peak performance levels.
– Competency Based Talent Management: Advance the competencies of our clients’
professionals to World-Class performance levels.
– Maximizing Deal Value: Help clients realize the full value from large and/or complex deals
by focusing on A) “Customer” Value Drivers before and during negotiations, and B) an
adoptable, sustainable implementation once the deal has been reached.
About The Mpower Group
The Mpower Group is a World Class consultancy that delivers big results with a boutique feel.
We are Woman and Minority owned.
About TMG
40

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Our Selected Clients
Enhance Med
About TMG
41