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Procurement TransformationThe way to world class procurementOctober 2011
Global CPO survey: Our CPO survey shows numerous challenges for the procurementorganisations in the coming years          ...
We help procurement organisations in the development from different maturity levels  to the desired level of maturity in l...
Our services include strategy development up to the transformation andimplementation of the world class procurement functi...
The seven strategies that companies are pursuing to become a leading procurement functionfocus on internal & external inte...
Some of our recent references of our Procurement Transformation projects    Customer        Organisation   Source to contr...
Capgemini Consulting Procurement Research                                                                   Through our re...
T. (Ton) van Dolder                                                              Vice President                           ...
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Capgemini Consulting Procurement Transformation

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Capgemini Consulting Procurement Transformation

Capgemini Consulting Procurement Transformation

  1. 1. Procurement TransformationThe way to world class procurementOctober 2011
  2. 2. Global CPO survey: Our CPO survey shows numerous challenges for the procurementorganisations in the coming years Despite much effort and often investment in procurement, we Supply see the following trends: disruption Supplier Compliance and spend visibility remains high on the management Sustainability agenda. Economic situation throws procurement back to More savingsProcurement and short term savings machine. Innovation Innovation and sustainability entered the top 10 of Spend visibility Compliance the CPO agenda. Low Cost Risk management and supply Risk management Country disruption are becoming key. Sourcing How to achieve sustained business value through procurement? Copyright © 2011 Capgemini Consulting. All rights reserved.
  3. 3. We help procurement organisations in the development from different maturity levels to the desired level of maturity in line with the corporate strategy Recognizing Understanding Managing Mastering Leading Focus Price Spend Control Performance TCO Value • Procurement strategyProcurement • Non-existing • Objectives and plans limited to departmental actions aligned with overall business • Strategy co-developed with internal customers • Integrated strategy for the E2E value chainStrategy • Savings realization strategy • Functional optimization • X-functional integration • External integration • Hybrid organizationGovernance & • Fragmented within the • Centralized for key spend • Center-led stand alone function • Right sized, right shored & • Adaptive hybrid organization • Cross functional teams incl.Organisation organisation areas • Organized around categories right sourced • Cross functional teams vendor team members • Supply networkCategory • Informal sourcing processes • Supply base rationalization • Formalized sourcing • Vendor segmentation and • Supply risk management managementManagement. • Savings realization • Value engineering • Innovation Driven vendor rating Procurement • End-2-end integration acrossProcurement • No / limited controls • Basic controls in place to manage spend and • P2P standardization • Supply planning using MRP • Optimized channels • Forecast & planning shared functions • Transaction, planning &Operation • Transaction management inventory and SIC inventory mgt with vendors product data sharing with vendors • eProcurement, eRFx, spend • Harmonized data processes • Processes & systems • Phone / Fax / email / • ERP and spreadsheets database & systems integrated with vendor spreadsheetsEnablers • Administrative staff • Basic sourcing skills • Procurement specific HRM • Procurement career • Use of open standards • High level spend data policies development program • Standard KPIs across the • No performance mgt. • Function specific KPIs • X-functional KPI’s value chain Current maturity Future maturity Copyright © 2011 Capgemini Consulting. All rights reserved.
  4. 4. Our services include strategy development up to the transformation andimplementation of the world class procurement function Strategy Supply Mgt. • Procurement assessment Strategy • Procurement strategy Development • Organisation design Governance & Organisation • Benchmark Development • Procurement business case Category Planning Transformation Purchase Demand Supplier Relationship • Source to Contract Sourcing Management Management • Contract management • Purchase to pay - Closed loop procurement Supply Planning & Control • Innovation Driven Procurement • Supplier Management Provision of Goods & Services • Supply (Risk) management • Market Price Indexing • Sustainability IT People Knowledge & Information • BPO-P and SSC Managing the Enablers • Package selection / system strategy Capgemini Procurement Framework The collaborative approach of Capgemini Consulting is key for a successful transformation throughout your organisation Copyright © 2011 Capgemini Consulting. All rights reserved.
  5. 5. The seven strategies that companies are pursuing to become a leading procurement functionfocus on internal & external integration and differentiation1. Closed Loop  Many purchasing organizations are still struggling to master the basics: spend visibility, sourcing and contract compliance. Establishing Procurement closed loop procurement is a major achievement and end goal in itself for most procurement organizations.  At a functional level we see a trend towards hybrid organizational models that combine the benefits of central coordination with2. Hybrid Organizational improved business collaboration. At a category level we see further differentiation in organizational models depending on business, Models category and supply market specific characteristics  Leading procurement organizations manage collaborative supplier relationships to extract more value from the supply base3. Supplier Value  Use Innovation Driven Procurement to accelerate the pace of innovation within organizations by leveraging the innovative power of the Management supply base  Increased dependency on external suppliers, volatility in raw material & energy prices, shortages of key materials, currency imbalance4. Supply Risk and the financial crises have made companies recognize again the importance of supply risk management and improving overall Management resilience. Use Market Price Indexing to get in control.  Leading procurement organizations manage multiple supply networks that differentiate service characteristics by product/market5. End-2-End Supply segment . Managing complex supply networks requires pipeline visibility and alignment of planning and control across multiple-tiers of Network Management suppliers  Companies have recognized talent as the key enabler for further developing the supply management function, so they are investing6. Develop Talent heavily in attracting, training and retaining top talent  Leading supply management requires technology that is more user-friendly, provides real-time visibility, is better integrated, enables7. Leverage Technology more effective collaboration with the supply base and has more powerful analytic & simulation capabilities Priorities and progress with the implementation of these strategies depends on the procurement maturity of an organization Copyright © 2011 Capgemini Consulting. All rights reserved.
  6. 6. Some of our recent references of our Procurement Transformation projects Customer Organisation Source to contract Contract Purchase to Pay System strategy design managament procurement                                         Copyright © 2011 Capgemini Consulting. All rights reserved.
  7. 7. Capgemini Consulting Procurement Research Through our research and publications we work to further develop the procurement domain and the effectiveness of procurement functions. Recent publications: • Contract compliance best practices • Bi- annual CPO research • PoV sourcing strategies • Temporary labour • Bi-annual SRM research Download the reports through: http://www.capgemini.com/insights-and-resources/by-publication/ Copyright © 2011 Capgemini Consulting. All rights reserved.
  8. 8. T. (Ton) van Dolder Vice President Capgemini Nederland B.V. Papendorpseweg 100, P.O. Box 2575, 3500 GN Utrecht - The Netherlands T. +31 30 689 1323 F. +31 30 689 55 60 Mob. +31 651 267 717 Ton.van.Dolder@capgemini.com www.nl.capgemini.comCapgemini Consulting is the strategy andtransformation consulting brand of Capgemini Group

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