20120329 EGP General Presentation

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General presentation of EGP capabilities and services.

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20120329 EGP General Presentation

  1. 1. Erste Group Procurement (EGP)The Procurement Company of Erste Group (EG)
  2. 2. History: Austria’s first savings bank: Founded in 1819 Erste Group went public in 1997 with a strategy to expand its retail New holding structure business model into CEE 2008 improving Group Governance Acquisition of more than 10 2007 banks between 1997 and 2008 2006 Erste Group now runs market leading retail banking operations 2005 in the new EU member states, which remain underpenetrated 2004 compared to their Western European markets 2003 2001 2000 Erste Group’s customer base grew from 600 000 in 1997 to 17,3 million in 2011 1997EGP – Member of EG © 2012All rights reserved Page 2
  3. 3. Erste Group in Central and Eastern EuropeEGP – Member of EG © 2012All rights reserved Page 3
  4. 4. Erste Group Procurement: Procurement of the Erste Group Erste Group Bank AG - Holding Board CEO CFO COO CRO Group Markets GCIB Group Retail Erste Group Procurement Facts & Figures: EGP AT Erste Group Procurement Central procurement function within Erste Group (Procurement Services GmbH) (incl. Centre Functions, as Finance, HRM, Org/IT) Headcount approximately 180 employees Group Org/IT EGP RO Process owner for group-wide S2P process Group Property EGP CZ AT: Warehouse with more than 3 000 sqm Operations/Processing EGP SK EGP HU Erste Group Procurement – (Procurement Services GmbH) EGP HR Management Board SPV DRUCK Leadership by EGP Procurement RS Functional HRM Finance Sourcing Org/IT Procurement ME Procurement UA Erste Group Procurement AT Sourcing AT EBSPK Sourcing SK Erste Group Procurement SK Established 2006 Erste Group Procurement CZ Sourcing CZ Procurement Dept. Sourcing HU Erste Group Procurement HU Ukraine Czech Rep Slovakia Erste Group Procurement HR Sourcing HR Int. & Austria ME1) Sourcing RO Erste Group Procurement RO Hungary Romania Croatia RS2) Sourcing RS Procurement Sourcing UA UA3) Dept. Serbia SPV – DRUCK Procurement Dept. Montenegro 1) Department of Erste Bank AD Podgorica - Montenegro 2) Department of Erste Bank Novi Sad Division Board Team in Matrix 3) Department of Erste Bank UkraineEGP – Member of EG © 2012All rights reserved Page 4
  5. 5. EGP in Erste Group Aligned priniciples within Erste Group: …The central and single competence for procurement activities within Erste Group lies in Erste Group Procurement (EGP)… …EGP has to be involved in any external spend of any Erste Group majority owned entity. Any exception has to be agreed between EGP and the respective Erste Group entity… …All external spend should follow the principle of Total Cost of Ownership (TCO) and Quality, Cost and Delivery. In balance with socio- economic, ecological and customer relationship factors the assignment of a contract has to follow the highest added value for Erste Group principle… …EGP owns, defines and aligns with the local entities the purchasing processes within Erste Group... EGP Cooperation with clients based on: Contract (SLAs) Responsibility (NDAs) Code of conduct Purchasing Policy & HandbookEGP – Member of EG © 2012All rights reserved Page 5
  6. 6. EGP Focus Before RFxP/RFQ Supplier Relation Management Contract Management Category Management After RFx Implemen- tation Supplier Relation Management Foundation Contract Management and Core Category ManagementEGP – Member of EG © 2012All rights reserved Page 6
  7. 7. Our Way to World Class Procurement Processes Perspective: Processes Perspective: -- Paying PO’s only Paying PO’s only -- Maverick spend < 10% Maverick spend < 10% -- Spend coverage > 90% Spend coverage > 90% Move away from -- Delivering core processes Delivering core processes -- Fully integrated AR/CM/CR-CA/PM/eSourcing `Tender Factory´ Fully integrated AR/CM/CR-CA/PM/eSourcing -- Mature Category Mgmt and SRM Mature Category Mgmt and SRM Financial Perspective: Financial Perspective: Vision: Vision: Learning Perspective: Learning Perspective: -- A team of good purchasers A team of good purchasers -- COA < 1% COA < 1% World Class Procurement World Class Procurement -- Pro-active working -- CR/CA > 4,4% Pro-active working CR/CA > 4,4% organisation in the organisation in the -- Willingness of responsibility Willingness of responsibility -- 20 mio av. spend by buyers 20 mio av. spend by buyers financial area financial area -- Good working atmosphere Good working atmosphere Customer Perspective: Customer Perspective: -- Our customers adhere to our vision and support it Our customers adhere to our vision and support it -- Our customers see high value added Our customers see high value added in EGP services and are ready to pay for this in EGP services and are ready to pay for this -- Our strategy supports customers targets Our strategy supports customers targetsEGP – Member of EG © 2012All rights reserved Page 7
  8. 8. EGP Services in Scope Erste Group Procurement Customised Outsourcing Business Sourcing Tactical Order Process Procurement Competence International/Local Purchasing Management Services Center Outsourcing Category Mgmt Category Mgmt Category Mgmt Vendor Mgmt Vendor Mgmt Vendor Mgmt Contract Mgmt Contract Mgmt Contract Mgmt Compliance with Operations of Additional requirements Outsourcing support Purchasing Project Purchasing Project Purchasing Project requested Policy Provision processes by customer of Outsourcing for the local and are not in Project entities, i.e. Contract Creation Contract Creation Contract Creation the scope of Documentation purchasing • Travel Depart. Requisition Requisition Requisition • Print Shop & & & • Warehouse Ordering Ordering Ordering Documentation Documentation Documentation & & & CR/CA Calculation CR/CA Calculation CR/CA Calculation Receipting Receipting Receipting Customer Compliance to Provide & & & Satisfaction regulatory cost-efficient Evaluating Evaluating Evaluating and services internal Invoice Invoice Invoice requirements Processing Processing Processing Strategic, monitored Ensure fast, easy and efficient execution On Customer’s Additional Services purchasing in a team Demand for the customer’s benefit approach By EGP By EGP or Customer Invoicing as a % of 3rd party spend Invoicing in a separate fee (SLA)EGP – Member of EG © 2012All rights reserved Page 8
  9. 9. Sourcing Sourcing is the strategic process of identifying potential suppliers, conducting negotiations, and agreeing on supply contracts in order to achieve a sustainable cost reduction and meet the customer’s expectations. Demand analysis Identificaton of potential suppliers based on to conclude a GMA GMA Category Management support through Vendor Management Contract Management eAuction / RFx / negotiation Supporting tools Reporting Package Vendor / Country / eAuction, RFx (SAP FI / QLIKVIEW) Project Management tool (“CAP”) (Electool) • Analysing the spend of • Allows the linking of information • Live eAuctions entity/supplier/category to a 360°view of projects, • Collecting of informationen (RfI*) contracts, product categories • Strategic basis for the and offers (RfQ*) in a defined and suppliers. purchasing project specification form • “In-house” development *RfI = Request for Information *RfQ = Request for QuotationEGP – Member of EG © 2012All rights reserved Page 9
  10. 10. Sourcing International/LocalCategory Management/Matrixorganisation Matrixorganisation Category ClassificationSourcing Specialist, the first contact for the customer and Find opportunities, create & implement a strategy in agroupwide Category Manager and Supplier Relationship team approach with the Business Line.Manager. Category Management 145 categories divided according to local and international opportunities. Sourcing Categories FM Facility Management (FM) IT Informationstechnology (IT) S&O&M Service & Operations & Marketing (S&O&M) FM FM Maintenancerelated Services/Work IT Personal and Office Computing S&O&M Car Fleet FM FM Investmentrelated Services/Work IT Telephony and Communication S&O&M Cards FM Goods IT Networks S&O&M Consulting FM Energy IT Branch Equipment S&O&M Logistic FM Security Equipment IT Servers/Storage/Host Components S&O&M Marketing FM Property Management IT Infrastructure Software S&O&M Office Equipment & Office Operation IT Direct Application Software S&O&M Personnel Management IT IT Services S&O&M Travel IT Indirect Application Software S&O&M Security ServiceEGP – Member of EG © 2012All rights reserved Page 10
  11. 11. Sourcing International/LocalContract Management/Spend Data Analysis/Data Reporting Budget and Category Analysis Tool Data ReportingStructure spend by vendors, categories, countries and entities Define Spend categories, analyse it (spend & vendors)Real-time Business Intelligence Tool for management In a team approach with the Business Line. Contract Management Integrate all vendor contracts in Contract management solution and establish proactive & timely contract activity planEGP – Member of EG © 2012All rights reserved Page 11
  12. 12. Sourcing International/Local Supplier Relationship Management Tools Identify and focus on key suppliers. Implement supplier relationship model in cooperation with Business Line. Supplier Supplier Business Reviews Escalation Audits Strategies• HYR/QBR • Standardised • Similar to Category • Escalation management Questionnaire for Management• Standardised • Single Point of Contact Assessment and Self presentations • Long Lists and Short and coordination of all Assessment Lists participants (Business• Participants: Business • Document Management Line, Legal, Countries, Line, Supplier and EGP System, Reminders Suppliers)• Measuring the periodically and • Identification of cooperation automatically disqualified suppliers• Search out further • Scoring through cooperation/collaboration Business Line • Risk Management • EthicsEGP – Member of EG © 2012All rights reserved Page 12
  13. 13. Tactical Purchasing (TP) and Order Management (OM) Purchasing Project The fast, easy and efficient execution of routine administrative tasks. These are day- to-day buying activities, which are low volume with no strategic importance or based on agreements that have been set in place. Purchase requisition through GMA or catalogue(OM) Demand (online or catalogue) or Offer Agreement Tender Project (TP) Supporting tools Catalogue / OM Software eAuction SAP SRM (ITAM – Office Asset) (Electool) • In 3 countries available • Standardised articles • In all EGP countries available • Integration with MM / Accounting • Order Processing for low purchases • Efficient eAuction through webbased forms • Covering about 55% of the spend • Integration in Warehouse Management System • Supplier’s self registration for saving resourcesEGP – Member of EG © 2012All rights reserved Page 13
  14. 14. KPIsEGP – Member of EG © 2012All rights reserved Page 14
  15. 15. The Measures of Success Objectives/Strategies/Tactics (OST) Not achieved Open and lat e Achieved lat e Not yet approved Achieved Status: XXX out of XXXX weight points were to be achieved (due) by end of October Overall achievement XX% fully achieved XX% closed late XX% open and late XX% missed Key Achievements Q3 Missed Achievements Q3 • XXX% of contracts in the system for Lean Management workshop for all 2nd liners the Top 50 vendors (achieved: XX%) Business reviews with XX major vendors • On time delivery of projects: XX% Purchasing policy approved by X local boards (achieved XX%)EGP – Member of EG © 2012All rights reserved Page 15
  16. 16. The Key Messages for a successful Procurement Organisation Centralized procurement in one seperate company with clear groupwide organisation structure and an agreed and approved Power of Attorney (PoA) Organisation & Unique systems and tools applied in all subsidiaries in all countries Structure Unified processes with locally optimised deployment Service Agreement structure and hierarchy applied in all countries Full costs transparency through analytic tools and reporting Transparency & Quarterly Business Reviews with clients and suppliers Communication Defined communication and escalation process By using spend analysis tool the bypassing/‘maverick spend‘ procurement activities are identified and tracked Sustainable Relationship High compliance through common cooperation with budget owners on the product groups strategies and/or supplier strategies Through active management of product groups and suppliers EGP creates a bond between suppliers and budget owners Procurement Process EGP is involved in the whole procurement process with clear tasks and responsibilities Educated procurement specialists (Sourcing Matrix) Goals & Transparency in the level of achieved goals of the cost reduction through one clear methodology and tool-based Incentives measurementEGP – Member of EG © 2012All rights reserved Page 16
  17. 17. Thank you! Erste Group Procurement (Procurement Services GmbH) Email: communications.EGP@erstegroup.comEGP – Member of EG © 2012All rights reserved Page 17

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