ECATA - Sourcing Strategies of IT ServicesPatrick Nolot
The 11th International Aerospace Seminar organized by the ECATA Alumni (European Consortium for Advanced Training in Aerospace, www.ecata.org) took place in Munich, Germany, and hosted industry leaders who made presentations on the conference's theme "Balancing Core Competences and Out-Sourcing".
Patrick Nolot, VP Technology Strategy & Architecture, BNP Paribas Personal Finance, together with Björn Schichler, Senior Manager, LogicaCMG Management Consulting and Michel Cadars, LogicaCMG Global Account Director EADS, made a presentation on "Sourcing Strategies of IT Services".
Presentation abstract:
• Main evolutions of the IT sourcing services market, from off shoring of IT programming skills to Business Process Outsourcing (BPO)
• What IT outsourcing (ITO) is and is not? (scope)
• Why deciding for “optimal IT sourcing” initiatives? (business objectives)
• Where to source IT services? (location analysis)
• How to source IT services? (sourcing models)
• Best practices and return on experience from LogicaCMG, one of the leading 10 players in the Western European IT and BPO services market
• Emerging trends in the IT sourcing services market
This presentation shows the mismatch of Procurement with innovation processes, and how to change the focus of Procurement in order to successfully contribute to innovation
Global Water Investment Conference June 20, 2012BSTRINGE
The name Xylem is derived from classical Greek and is the tissue that transports water in plants, highlighting the engineering efficiency of our water-centric business by linking it with the best water transportation of all -- that which occurs in nature
Innovation Information Forum: Federal programs, services and financing for en...MaRS Discovery District
Find out how the latest in federal government innovation and commercialization initiatives can help your business.
Hear from experts at the following departments and agencies to get up-to-date information on how their programs and services support innovation and entrepreneurship:
* Public Works and Government Services Canada Canadian Innovation Commercialization Program (CICP)
* National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP)
* Foreign Affairs and International Trade Canada Going Global Innovation (GGI)
* Federal Economic Development Agency for Southern Ontario Investing in Business Innovation Program (IBI)
Offshore Outsourcing - Workshop In today’s world of sourcing, no conference would be complete without focusing on how to effectively employ Global Sourcing. It will discuss the essential considerations for capturing the benefits and managing the risks of offshore, as applied to both IT and Business Process Outsourcing. Participants will benefit from learning: The major offshoring models and what has been changing India vs. the others – host country tradeoffs Major contractual differences
ECATA - Sourcing Strategies of IT ServicesPatrick Nolot
The 11th International Aerospace Seminar organized by the ECATA Alumni (European Consortium for Advanced Training in Aerospace, www.ecata.org) took place in Munich, Germany, and hosted industry leaders who made presentations on the conference's theme "Balancing Core Competences and Out-Sourcing".
Patrick Nolot, VP Technology Strategy & Architecture, BNP Paribas Personal Finance, together with Björn Schichler, Senior Manager, LogicaCMG Management Consulting and Michel Cadars, LogicaCMG Global Account Director EADS, made a presentation on "Sourcing Strategies of IT Services".
Presentation abstract:
• Main evolutions of the IT sourcing services market, from off shoring of IT programming skills to Business Process Outsourcing (BPO)
• What IT outsourcing (ITO) is and is not? (scope)
• Why deciding for “optimal IT sourcing” initiatives? (business objectives)
• Where to source IT services? (location analysis)
• How to source IT services? (sourcing models)
• Best practices and return on experience from LogicaCMG, one of the leading 10 players in the Western European IT and BPO services market
• Emerging trends in the IT sourcing services market
This presentation shows the mismatch of Procurement with innovation processes, and how to change the focus of Procurement in order to successfully contribute to innovation
Global Water Investment Conference June 20, 2012BSTRINGE
The name Xylem is derived from classical Greek and is the tissue that transports water in plants, highlighting the engineering efficiency of our water-centric business by linking it with the best water transportation of all -- that which occurs in nature
Innovation Information Forum: Federal programs, services and financing for en...MaRS Discovery District
Find out how the latest in federal government innovation and commercialization initiatives can help your business.
Hear from experts at the following departments and agencies to get up-to-date information on how their programs and services support innovation and entrepreneurship:
* Public Works and Government Services Canada Canadian Innovation Commercialization Program (CICP)
* National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP)
* Foreign Affairs and International Trade Canada Going Global Innovation (GGI)
* Federal Economic Development Agency for Southern Ontario Investing in Business Innovation Program (IBI)
Offshore Outsourcing - Workshop In today’s world of sourcing, no conference would be complete without focusing on how to effectively employ Global Sourcing. It will discuss the essential considerations for capturing the benefits and managing the risks of offshore, as applied to both IT and Business Process Outsourcing. Participants will benefit from learning: The major offshoring models and what has been changing India vs. the others – host country tradeoffs Major contractual differences
Delivering Value Beyond Savings_Cubist PharmaceuticalsZycus
This presentation will address how Cubist Sourcing has integrated itself with its business partners, and how it measures, monitors and reports the value it delivers to the business.
Moving Beyond Labor Arbitrage in BankingEverest Group
Robert Guatelli, VP and BFSI Practice Lead at Intelenet, and Peter Bendor-Samuel, CEO at Everest, will discuss key trends in the BPO market and highlight how companies can improve value capture through an end-to-end services approach.
Canadian Innovation Commercialization Program (CICP) - Innovation Information...MaRS Discovery District
Find out how the latest in federal government innovation and commercialization initiatives can help your business.
Public Works and Government Services Canada: Canadian Innovation Commercialization Program (CICP)
State of the Global Services Market: 2013 Predictions Everest Group
What does the new year hold for the global services market? In what ways will industry-specific expertise drive service provider differentiation? How will Global In-house Centers (GICs) evolve and what value will organizations expect? What’s in store for cloud and how will the interplay between cloud and traditional IT Services progress?
integrating agile in a waterfall world, a presentation from the PMI Global Congress, North America, 2011
To hear the audio go to whitewaterprojects.com
The most successful retailers are those who are embracing change by continuously offering customers a more compelling shopping experience through new store types, new products and better value. To effectively deliver this enhanced value, retailers must implement strategies that increase efficiency and reduce costs in the sourcing of products.
Delivering Value Beyond Savings_Cubist PharmaceuticalsZycus
This presentation will address how Cubist Sourcing has integrated itself with its business partners, and how it measures, monitors and reports the value it delivers to the business.
Moving Beyond Labor Arbitrage in BankingEverest Group
Robert Guatelli, VP and BFSI Practice Lead at Intelenet, and Peter Bendor-Samuel, CEO at Everest, will discuss key trends in the BPO market and highlight how companies can improve value capture through an end-to-end services approach.
Canadian Innovation Commercialization Program (CICP) - Innovation Information...MaRS Discovery District
Find out how the latest in federal government innovation and commercialization initiatives can help your business.
Public Works and Government Services Canada: Canadian Innovation Commercialization Program (CICP)
State of the Global Services Market: 2013 Predictions Everest Group
What does the new year hold for the global services market? In what ways will industry-specific expertise drive service provider differentiation? How will Global In-house Centers (GICs) evolve and what value will organizations expect? What’s in store for cloud and how will the interplay between cloud and traditional IT Services progress?
integrating agile in a waterfall world, a presentation from the PMI Global Congress, North America, 2011
To hear the audio go to whitewaterprojects.com
The most successful retailers are those who are embracing change by continuously offering customers a more compelling shopping experience through new store types, new products and better value. To effectively deliver this enhanced value, retailers must implement strategies that increase efficiency and reduce costs in the sourcing of products.
Transforming Procurement into a Strategic Value Driver – NSG GroupSAP Ariba
The Networked Economy presents a great opportunity for Procurement to increase
its strategic value to an organization. By embracing automation and improving
skills, Procurement cannot just drive increased savings and productivity, but also
help finance better manage working capital and support a range of other
objectives. Learn how NSG Group has done just that, increasing the stature of
Procurement within the organization, improving collaboration with finance and
driving significant value.
Mike Nicklin, Procurement Systems Manager – NSG Group
Marie Gresko, Procure to Pay Manager – NSG Group
2013 Ariba Commerce Summit London
Closing the gap between Spend Analytics & Category Management_WeatherfordZycus
Consistent, accurate, timely, detailed spend analytics are just a starting point for Weatherford. This session by Procurement/SCM Director Michael Lariviere will focus on the collaboration he undertakes with Weatherford's spend category managers to ensure that spend analytics are being used to shape category management strategies and to drive outside-the-box thinking around how spend categories can be segmented and addressed by procurement.
Cisco ERP Implementation and related results about Systems Integration.
Project Members:
Rohan Kumbhar, Chris Moss, Dhanesh Gandhi, John Hicks and Gouthami Gurram
We have had a lot of inquires about the document we circulated during fundraising, so we thought the easiest thing might be to post a somewhat sanitized version as a Finance Tool along with some explanation. This type of Finance Tool will not apply to all companies, but for those looking to raise early stage capital, hopefully it will be a great contribution to the body of knowledge already out there.
Read more at:
http://profitabl.es/finance/resources/tools/sample-fundraising-deck/
Horizon 2013 Driving Global Adoption to Procurement Technology - A Cargill Ap...Zycus
"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. "
Big data and the bi wild west kognitio hiskey mar 2013Kognitio
This session reviews “Big Data” case studies from media analysis, retail analytics and customer loyalty that go beyond the data warehouse and Hadoop. Disruption from the “Facebook generation,” armed with iPads, Droid Phones and netbooks brings a melee of new tools, devices and data sources. An analytical platform is the ‘Golden Spike’ to hitch stable, proven, and mature BI solutions with the data frontier—deep analytics, predictive modeling, sentiment analysis, etc. to enable competitive advantage.
-or- “Big Data and the BI Wild West: Don’t Bring an Elephant to a Gun Fight!”
-or- “Big Data and the BI Wild West: Don’t Bring an Elephant to a Gun Fight!”
Globally manufacturers are facing a more complex and demanding environment, with slower economic growth, volatility in commodity prices, higher cost of warehousing, and a growing complexity of their supply chains to accommodate shifts in market demands. To achieve sustained growth and competitiveness in this environment, most industrial companies have by now, implemented ERPs and other technologies that help them capture data along their value chain. However, the underlying processes are still lacking in connectivity, rigor and controls, and the data gathered is difficult to interpret and analyze for real-time and accurate decision-making. Genpact has developed the insights and operational practices to power intelligent manufacturing enterprises with smarter processes, smarter analytics and smarter technologies to help them grow and outcompete.
1. A Look into Purchasing Organization
Optimization and Business Transformation
Spend &
Savings
Suppliers
Change
Structure
Management
& Adoption
People
1st April, 2010
Process
Systems
Barbara Whittaker
(Executive Director Global Purchasing, General Motors – Retd)
George Joseph
(Managing Director, Ariba Inc.)
A R I B A® C O N F I D E N T I A L 2010
General Motors Vision
To be the world leader in transportation products and related services”
Global sales leader for 76 years
GM does business in 140
countries
Produces products in 34
countries
Over 8 million vehicles sold in
2008
Employs 204,000 people
GM purchases over $40 billion
per year
A R I B A® C O N F I D E N T I A L 2010 2
1
2. Introducing Ariba
Most-Used Spend Management Software Suite
Over the past year, customers used Ariba to:
• Source $340B across 450 categories
• Enrich more than $240 billion of spending
• Manage over $170B in spend transactions
• Manage more than 2 million expense reports
• Manage more than 3 million contracts
• Generate over $30 billion in savings
Global Services and Expertise
700 global consultants
400 Spend Management specialists
Four global service centers
Open Global Network
168,000 transaction-enabled suppliers (>250,000 total suppliers)
21.5M POs, $110B annually
10M Invoices, $60B annually
>1,000 customers of all industries, sizes, geographies
Including more than half of the Fortune 100, including 18 of the F20
3 A R I B A® C O N F I D E N T I A L 2010 3
Table of Contents
1. Objectives of the program
2. Partner selection criteria.
3. The challenges facing the team initially.
4. The methodology that was applied.
5. The initial findings and recommendations.
6. The real life challenges faced and
compromises made implementing the change.
7. The end results of the change
A R I B A® C O N F I D E N T I A L 2010 4
2
3. General Motors Indirect Purchasing’s Evolution to Transformation
Pre 1992 Post 1992 2006 Future State
Local Purchasing with World Wide Purchasing “ Act as One GM” Approach Less tactical and
Buyers at each GM created New GPSC organization transactional work
division and facility
Beginning of global Broader scope of purchases Buyers manage strategic
(BOC,CPC,GMPT, sourcing initiatives Marketing & Advertising and business critical
GMTG,SPO, Opel AG, spend
Vauxhall, Holden, etc)
More influence on Mature global network but low
supply base and spend transparency to data More use of e-auctions
Low influence on
and spend analysis tools
supply base or spend
Clear need to drive to Substantial influence on
bottom line savings supply base and spend One global purchasing
Mostly tactical and
system
transactional activities
Reduced focus on
transactional activities Focus on Return on
Procurement Investment
Use of e-auction tool (ROI)
GFIMS (SAP) defined
A R I B A® C O N F I D E N T I A L 2010 5
Vision
Global operations that leverage both supply base and GM purchasing resources in
execution of the procurement of goods, services, and equipment required by the
company at the best value and on-time.
Segmentation Characteristics
Characteristics Enablers
Enablers Results
Results
Segmentation
• High Risk, Complexity, APV • Global CT Leadership • Best in class Supply base
• High Risk, Complexity, APV • Global CT Leadership • Best in class Supply base
• Global or Regional Commodities • Global Pipeline Tool, SAP • Standardized Global
• Global or Regional Commodities • Global Pipeline Tool, SAP • Standardized Global
Strategic • Strategic Engagements- Supplier, • Internal Customer alignment
• Internal Customer alignment
Specs
Specs
• Strategic Engagements- Supplier,
Internal Customers • Highly skilled Project Buyers • Maximize Value (Total
Internal Customers • Highly skilled Project Buyers • Maximize Value (Total
• Governance Structures Cost outlook) vs. just Cost
• Governance Structures Cost outlook) vs. just Cost
• Benchmarking Reduction (Package Cost)
• Benchmarking Reduction (Package Cost)
• Medium Risk, Complexity, APV • Global CT Leadership •Rationalized Supply base
• Medium Risk, Complexity, APV • Global CT Leadership •Rationalized Supply base
• Global or Regional Commodities • Local/Regional Buyers •Cost Reduction due to
• Global or Regional Commodities • Local/Regional Buyers •Cost Reduction due to
Tactical • High Interaction with Suppliers and • Spend Visibility for bundling aggregated volumes
• High Interaction with Suppliers and • Spend Visibility for bundling aggregated volumes
Customer opportunities (SAP) •Transparent and shorter
Customer opportunities (SAP) •Transparent and shorter
• Extensive use of E-Auctions Sourcing leadtimes
• Extensive use of E-Auctions Sourcing leadtimes
• Benchmarking
• Benchmarking
• Low Risk, Complexity, APV • Centralized, Outsourced
• Low Risk, Complexity, APV • Centralized, Outsourced • Reduced Structural Costs
Transactional • Highly Transactional • Reduced Structural Costs
• Highly Transactional Operations • Satisfied customers
• Low Supplier, customer interaction Operations • Satisfied customers
• Low Supplier, customer interaction • Self-Service capabilities • Reduced Spot buys
• Self-Service capabilities • Reduced Spot buys
• Common coding (SAP)
• Common coding (SAP)
A R I B A® C O N F I D E N T I A L 2010 6
3
4. Why Transformation ?
Savings performance over time had
flatten.
Number of resources had grown
disproportionately to the spend by
region. (GME 178 vs. NAO 139)
Numerous purchasing systems with
little integration.( SAP, Olympic,
OLAS)
Company Challenged to cut
structural cost and control spending
Repeated regional attempts to
restructure yielded modest results
Heighten awareness of the need for
internal controls.( internal audit, SOX
requirements)
I
Increased performance Imperative
A R I B A® C O N F I D E N T I A L 2010 7
Table of Contents
1. Objectives of the program
2. Partner selection criteria.
3. The challenges facing the team initially.
4. The methodology that was applied.
5. The initial findings and recommendations.
6. The real life challenges faced and
compromises made implementing the change.
7. The end results of the change
A R I B A® C O N F I D E N T I A L 2010 8
4
5. The importance of the right relationship
Selection criteria?
Needed a strong external change agent with organizational credibility.
Important that analytical tools were readily available.
Ability to broaden scope and be flexible on timing.
Approach presented fit organization strengths and weaknesses.
What did Ariba bring?
Excellent on site leadership jointly selected.
Extensive category management expertise.
Strong analytical capabilities.
A methodology to drive results.
An understanding of our business
Positive past performance with auction support etc.
A R I B A® C O N F I D E N T I A L 2010 9
Table of Contents
1. Objectives of the program
2. Partner selection criteria.
3. The challenges facing the team initially.
4. The methodology that was applied.
5. The initial findings and recommendations.
6. The real life challenges faced and
compromises made implementing the change.
7. The end results of the change
A R I B A® C O N F I D E N T I A L 2010 10
5
6. Challenges to Face
Track record for always meeting/
exceeding targets IME Employee distribution: Global Total- 544
Unstable economic environment GMNA- 190
Size and Scale GME - 175
Sweden -12
Number and disbursement of IME employees
Indirect spend $1,666 per /vehicle
Over 470,000 Items ( excluding service) Canada - 8 U.K.- 12
Germany- 83
25,000 Suppliers globally
Spain-12 Austria -8
179 plant sites plus headquarters Japan -1
USA- 165 Portugal - 5
China- 8 Korea - 54
Customer acceptance and increased
Egypt -7
demands Mexico- 20 Dubai- 2 APO- 125
Thailand- 9
Venezuela -8 India -22
Leadership understanding and support Columbia-4
throughout the company Equador-4
Brazil -31
Language and cultural differences
LAAM- 73 Australia- 18
Organizational alignment i.e. Global
Manufacturing South Africa- 7
Chile -4
Argentina- 6
Lack of spend analysis and visibility Global Purchasing and Supply Chain
Resistance to change 5
Rev. 04OC05, Joe Kushuba
Skill assessment of employees
Disparity of systems
A R I B A® C O N F I D E N T I A L 2010 11
Table of Contents
1. Objectives of the program
2. Partner selection criteria.
3. The challenges facing the team initially.
4. The methodology that was applied.
5. The initial findings and recommendations.
6. The real life challenges faced and
compromises made implementing the change.
7. The end results of the change
A R I B A® C O N F I D E N T I A L 2010 12
6
7. Our Organisational Design & Transformation framework provides
the foundation upon which engagements are executed
• Spend & Savings – Identification of yearly spend and the activity distribution to
manage the spend. Furthermore, identification of savings opportunities through sourcing or
procure-to-pay category enablement.
• Structure – Evaluation of the spend management organization’s internal design, reporting
relationships, place in the overall customer organization, and the identification of opportunities
for greater efficiency or effectiveness.
Spend &
Savings
• Processes – Identification of process improvement opportunities based on best practices
across the phases of the Spend Management Lifecycle.
Suppliers
Change
• Systems – Review of current spend management platform (applications, infrastructure
Structure and support) for opportunities to support more categories / spend under management and to
Management
People improve internal customer service.
Process • People & Culture – Evaluation of the organization’s performance and potential
Systems through the assessment of roles / responsibilities, training, professional development,
communication and change management. Identification of the appropriate metrics and
measures that firmly connect the organizational performance to strategies / goals.
• Suppliers - How do we manage our relationship with suppliers, How do our suppliers
rate us as a counterparty to do business with, how do we leverage the expertise of our
suppliers in our business.
• Change Management – Assess the extent of Change required across above
dimensions and all functional groups, stakeholders and internally within the Purchasing
team. Generate awareness, understanding and positive perceptions of the Strategic Spend
Management Team. Address necessary actions to improve state of readiness for change.
Engage and gain commitment from all sponsors, users & stakeholders to lead the change
process. Develop a Change management plan.
A R I B A® C O N F I D E N T I A L 2010 13
There are two key phases: Due Diligence and Implementation. Taken
together, they average 24 months to deliver.
Due Diligence – 3/6 months and 5 Sourcing events
Implementation – 18/24 months – Subject to Output from Due Diligence.
Due Diligence Implementation
Spend & Spend Management Life Cycle
Savings Identify
Opportunit
Develop Source Contract
and
Invoice Monitor
and
Strategy and and Pay
y Procure Manage
Suppliers Negotiat
e
Spend
Change Structure
Management Savings
People Jan ‘10
Week 1
Jan ‘10 Jan ’10
Week 2 Week 3 Week 4
Jan ’10
Feb Mar Apr May Jun Q3 ‘10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
Structure
Purchasing Charter & Plan
Process Process Develop reporting, compliance mechanism, & savings tracking
PMO
PMO
Ongoing program oversight, resource coordination & effort prioritization
Systems Change Mgmnt: Vision Workshop, Stakeholder Analysis, Change Planning, Ongoing Execution
Systems
AS IS Benchmark Plan
People
Transformation
Transformation
Program
Data Analysis
Data Analysis Best in Class
Best in Class
Program
Spend Management
Spend Management
Transformation
Transformation
Roadmap
Roadmap
Qualitative Assessment
Qualitative Assessment Gap Analysis
Gap Analysis
Suppliers Transform: Standard Process Creation, Training, Adoption Plan (Tech &
Process)
Category Assessment
Execution*
Sourcing
Execution*
Benchmarking / “Quick Hit” Savings Projects
Sourcing
Execution:
Strategy, Demand Mgmnt, RFx, Negotiation, Supplier Management, Compliance
A R I B A® C O N F I D E N T I A L 2010 14
7
8. Table of Contents
1. Objectives of the program
2. Partner selection criteria.
3. The challenges facing the team initially.
4. The methodology that was applied.
5. The initial findings and recommendations.
6. The real life challenges faced and
compromises made implementing the change.
7. The end results of the change
A R I B A® C O N F I D E N T I A L 2010 15
Total Spend
Spend under management (reported) was substantially
lower than actual spend (variance in excess of 150%)
Spend Tracked for Performance - $X
Spend Based on data Analysis - $ 2.1X
Spend back calculated by Finance - $ 2.6X
A R I B A® C O N F I D E N T I A L 2010 16
8
9. Purchasing organisation completely bogged down by low value transactions,
substantial spend fragmentation. Significant potential to increase savings by
focusing on larger spend, consolidation & aggregation.
Base Data
Sourcing 226,973 Orders
Activity Av $207k 100% of Spend
Frame Contracts Spot Buys Release Orders
3,655 Contracts 100,208 Orders
18.11% 19.24%
Spot Buys < 12.5K
Spot Buys > $12.5k 86,639 Orders
Rush Orders
10,157 Orders 6.55%
46,604 Orders
74.46% 0.67%
Transactional Activity
80% of transactions
Emergency Orders
712 Orders
0.67%
A R I B A® C O N F I D E N T I A L 2010 17
Number of GME´s current active suppliers: 15,396
$3.500.000.000 10% of all active suppliers represent 90% of the total spend (3.1bn U$)
$3.000.000.000
$2.500.000.000
Spend U$
$2.000.000.000
$1.500.000.000 13,961 suppliers represent only 299 Mio U$ of total spend
Ø $21,416 / Supplier
$1.000.000.000
$500.000.000
$0
1
606
1211
1816
2421
3026
3631
4236
4841
5446
6051
6656
7261
7866
8471
9076
9681
10286
10891
11496
12101
12706
13311
13916
14521
# of suppliers
A R I B A® C O N F I D E N T I A L 2010 18
9
10. Recommendations
There is a significant untapped opportunity within GME.
Move from a tactical to a strategic Purchasing Organization. Re-organize sourcing organisation using
current commodity groups.
Aggregate and Reduce Sourcing events
Increase percentage of spend in frame contracts
Increase size of negotiated contracts by aggregation.
Increase time spend on establishing sourcing contracts
Create a transaction centre in a low cost region and push low value transactions to this centre.
Implement a process/ system to get more visibility into your spend.
Deploy a process management system with workflows, templates/knowledge-supporting tasks and
on-line approval schemes
Rationalise approval process and thresholds.
Ensure compliance to Frame contracts.
Rationalise Supplier base and reduce low volume suppliers. Identify Strategic Suppliers and roll out
SPMP over time
Invest in Stakeholder Management.
Implement a Talent Management program. Clearly outline, define and communicate roles &
responsibilities across the Purchasing organization
A R I B A® C O N F I D E N T I A L 2010 19
Table of Contents
1. Objectives of the program
2. Partner selection criteria.
3. The challenges facing the team initially.
4. The methodology that was applied.
5. The initial findings and recommendations.
6. The real life challenges faced and
compromises made implementing the change.
7. The end results of the change
A R I B A® C O N F I D E N T I A L 2010 20
10
11. How we made a “ Win- Win”
Organizational acceptance a pre-requisite to success
Key sponsorship from the top ( Global Executive Director and Region VP )
Regional leadership approval (Strategy board member communications and buy-in cross functionally, Works Council discussions by country
gained support)
Clarity of mandate
Establish a set of metrics with customer buy-in.
Set baseline through data collection and cleansing.
Alignment to current organization out of synch
GFIMS delay in implementation required segregation of resources
Functional changes in Manufacturing resulted in country hub structure
Optimal location of transaction center not in line with GPSC hub
Ability to assess skills and talent inhibited due to work rules
Conducted global talent reviews to establish crucial skills
Appointments based on performance and needs.
Challenges to off shoring solution not fully anticipated.
Timing adjustments made to allow adequate training
Metrics were reassessed and revised to focus on customer turnaround
Management oversight was extended to allow for support
Key to overcoming implementation challenges
Ariba change management process
Real time data and metrics to assess status
Timing of resource redeployment allowed deployment flexibility
Quick early wins secured organization support
A R I B A® C O N F I D E N T I A L 2010 21
Table of Contents
1. Objectives of the program
2. Partner selection criteria.
3. The challenges facing the team initially.
4. The methodology that was applied.
5. The initial findings and recommendations.
6. The real life challenges faced and
compromises made implementing the change.
7. The end results of the change
A R I B A® C O N F I D E N T I A L 2010 22
11
12. Ariba Snapshot
Transformation Implementation Highlights
Transparency of actual spend (higher than tracked)
Improved visibility into sourcing pipeline and re-sourcing
requirements.
Low Value transactions moved out allowing focus on Strategic
Buying
Strategic Buying hubs established (High Cost & Low Cost location).
Faster turnaround time and improved efficiency
Clarified Global common approval process
Reduced Complexity in approval levels and process
Reduced Structural costs by approx 35%.
A R I B A® C O N F I D E N T I A L 2010 23
Significant Impact on Savings Performance
Savings performance
160
140
135
140 Start of 127.4 130.3
124.5 124.3
Transformation 120.58 117.9 118.4
111.1 113.7
120
106.4
100.2 101.8 101.7
100 92 91.9
83.3
$ Million
78.3
73.5 73.9
80 68.5 69.7
63 12 63.4 65.3
55 54.7 52.8 54.5
60 48.1
44.9
40 40.3 38 38.7 39 39.3 39.6 39.8
37.3 34.2 36.4 34.3 35.9
40 30.7
25.6 25.9
18.4 20.2 38.5 38.9 39.4 41.3
15.6 16.1 32.9 35.4
20 27.3 27.8
22.5 24.9
20.8
15.2 16.1 Before Transformation
0
ITB Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2004 2005 2006 2007 2008
A R I B A® C O N F I D E N T I A L 2010 24
12
13. Contact Information
Barbara Whittaker - barbwhitt@comcast.net
Executive Director Global Purchasing (Retired),
General Motors Corporation.
Cell: +1 (586) 899 1309
Office: +1(248) 3351943
George Joseph – gjoseph@ariba.com
Managing Director, Spend Management Services
Ariba, Inc.
Mobile: +1(908) 635 4732
Office: +1(412) 297 8081
A R I B A® C O N F I D E N T I A L 2010 25
A R I B A® C O N F I D E N T I A L 2010 26
13