Future Proof Your Procurement

Organization

Tracy Stephenson

Former JC Penney CPO

Infosys

Rajiv GuptaPractice Engagement Manager

www.sig.org/eval

Tracy Stephenson & Rajiv Gupta

2

Why Future Proof Procurement

5 Steps to Future Proof

Quick Steps You Can Do Now

Q&A

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Procurement Seen

As A Strategic

Partner/World

Class

By Industry

Aerospace

51%

Pharma

54%

Auto/Other

57%

Publlic

Sector

44%

CPG

55%

Hospitality

50%

Retail

64%

Call to Action

Procurement and Supply Chain should be a strategic partner in a company across all industries

Results In

• Incremental 10-20%+ Value• Risk Mitigation• A Sustainable Competitive Advantage• Innovation• Increased Talent

• 10% or Less of Companies are considered World Class

Why Future Proof?

Source Data: Infosys

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1 2 3 4 5

Strategy Marketing Talent Governance

Best In Class Process, Technology

and Data

• World Class Roadmap• Refine with External

Best Practices• ROI• Innovation and Risk• Timelines/Milestones

5 Pillars to Future Proof Procurement

To Huge Success!

• Aign Procurement +Company Goals

• Executive Alignment• Customer Alignment• Metrics /Scorecards• Communicate Success• Leadership Council

• Talent Development• ROI/Benchmarking• Training• Organizational Structure• Rotate Talent• Performance Process • Change management

• Centralize Procurement

• Board Approved Policy

• Structured Approach to Risk and Continous Risk Monitoring

• Integrate P2P Modules• Visibiility to Spend, Value

Add Tracking, Contracts• Best in Class Processes,

Robotics and automation,• Strategic Category

Management and Market Intelligence

Keep Simple and Take People With You

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Strategy

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World Class Procurement

0.50

1.00

1.50

2.00

2.50

3.00

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Inhibiting Performing Enabling Optimizing Best In Class World Class

N/A Feb-13 Nov-13 Feb-14 Oct-14

Procurement Maturity

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Procurement Roadmap2-3 Year Plan

7

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Policy and Centralization

Vision/Mission/Goals/Roles and Responsibility

CRM: Planning and Align Goals

Training/Process/Tools

Strategic Category Management

E-Sourcing

Procure To Pay

Procurement Leadership Council

Score Cards, Value Add Tracker, Metrics Aligned to Customer/Company Goals

Supplier Risk Program/ID SC Blind Spots

SRM

High Degree of Customer Engagement and Strategic Function

TALENT DEVELOPMENT

ROI($, MM) on $1B Spend

$ 5 0 $75 $100

2015 2016 2017

1

4

1

3

2

2

1

1

1

2

1

3

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TALENT Assign to Key Leaders on Your Team Develops Talent and Grows Results FasterBuilds Capability, Trust, Capability --- And FUN!Report on Progress to CPO/Director/Leadership Team weekly/monthly

Strategy Initiatives Owner Measure Due Date2015

Results Target Status

Savings

Metrics (and Scorecard vs. World Class)Sr. Sourcing

Manager Scorecard; 3.0 of 4.0 World Class Q2 Green

Procurement Leadership Council Sourcing Manager Kick Off Q1; Quartelry Meeting Results Q1 Yellow

Work w/Finance on Process Reduce Fcst/Re-invest Savings

Sr. Sourcing Manager Quarterly Scorecard/Customer Feedback Q3 Yellow

Process Improvement

Strategic Category Management Sourcing Manager 2 Done Well; 50 completed EOY Q2/Q4 Red

7 Step Process/e-SourcingSr. Sourcing

Manager 50 e-sourcing initiatives Q3 Yellow

SRM Sourcing Manager New Program in Place; Report Progress Mo Q1 Green

Risk Management

Establish a framework to assess risk & identify blind spots Sourcing Manager Complete Q1; Ongoing Monthly Scorecard Q1 Yellow

Global/IT Compliance Sr. Sourcing

Manager Complete Q1; Ongoing Monthly Scorecard Q1 Green

Ongoing Recertification of Suppliers andContingency Planning Sourcing Manager Improved Process and Monthy Scorecard Q1 Yellow

Talent Development

Training Sourcing ManagerQuarterly Training Completed with Survey Results/Action Steps Q2 Green

Development ProcessSr. Sourcing

Manager Qtly Discussions/Progres vs. Develop Plans Q1-Q4 Yellow

Recognition Sourcing Manager Dept Meeting; Peer to Peer; Leadership Q1 Red

Technology

P2P Contracts Sourcing Manager 30/60/90 Day Expiring Report Q1 Yellow

P2P ServicesSr. Sourcing

Manager Contract Leakage Improvement of 10%+ Q4 Green

Ongoing Training (Policy and Process) Sourcing Manager Training Survey Results with Action Steps Q1-Q4 Green

Suppliers

Innovation Meetings with Top 20 suppliers Sourcing Manager Lunch Meetings with Action Steps Q2 Yellow

Increase Supplier Diversity SpendSr. Sourcing

Manager From 3% to 10% of Spend Q3 Yellow

Sustainability Sourcing Manager 30% contracts with sustainability programs Q3 Green

Customer Relationship

Understand your customers goals for 2015 Sourcing Manager Scores Reported (A/B) with Solutions Q2 Yellow

Up-Front Planning with CustomersSr. Sourcing

Manager Q1: Aligned Goals Completed with Metrics Q1 Green

Develop feedback methodology and standard scorecard for communicating with customers Sourcing Manager Report Scorecard Results Monthly Q1 Yellow

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MARKETINGElevates Value

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Develop feedback

methodlogy and a standard

scorecard for comunicating

with cusotmers

Strategic

Partnerships

with customers

and suppliers

(cross-

functional

teams)

Marketing

Execute Internal Customer Marketing and Gain Alignment

Understand and

align with your

customer’s goals

for 2015

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Value Add

• Acheived $70MM of

$100MM Goal YTD

Compliance

• 10% Spend w/o A PO or a

Contract (Maverick)

• 5% Bid Waivers YTD

• 90% Contracts in System

• 1 Expired

• 10 Expiring 30 days

• 20 Expiring 60 days

• 50 Expiring 90 days

Suplier/Operational

Communicate Success Metrics

$70M 10%

Align on Metrics with Executive Team Define 3 Metrics by Customer

• SRM and Supplier Performance

• Continuous Risk Monitoring:

• Brand/Global/Social/Reputational/Geog

raphic/QA

• Suppiier Re-Qualification (Annual)

• ID Sole Source/Secondary Supply

Options

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TALENTTop Talent, Top Results

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Training

• Sourcing Boot Camp• 7 Step Process/E-sourcing• Contracts• Customer Engagement• Category Management• SRM• Ongoing...

Succession Planning

• 6 Box Reviews• Bench Planning for all levels• Rotate Talent • Hi Potentials

• Ability • Engagement• Aspiration• Learing Agility

Review Process

• Skill Matrix• Defines skills required at all

levels Specialist to Director• Self Assessment• Personal Development Plan• Build A Team

• Reward /Address Top/Bottom• Internal/External Talent

• In-Source vs. Out-Source (based on core competencies)

• Performance Management

TALENT

The Power of Developing World Class Sourcing Talent

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GovernanceKey to Ongoing Success

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• Executive/Board Approved• Communicate To Employees• Employee signature • Address non compliance

Centralize

• Present Fact Based Data to CF Leaders• Why it makes sense to centralize:

• Expert Resources to support BU’s• Checks and balances• Improved Savings/Contract terms• Risk to BU’s to sign own contracts• Proper expertise in right area to

safeguard the company

• Synergies: Learning, Tools, Processes

Ongoing Risk

2 Key Elements:• All negotiations triple

bid unless bid waiver by CPO/BU/CFO/CEO

• All contracts signed by procurement

Governance

Put Strong Base and Visibility In Place

Procurement Policy

• Structured Approach to Risk• Approval by CPO for

anything with Brand, Global Component

• Social Compliance• Geographic• QA• Legal

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Process, Technology and DataThe Right Decisions

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18PROCESS, TECHNOLOGY, AND DATA

Procurement InsightsAdvanced Spend Classification & Analytics

tool to identify savings opportunities

Procurement CloudProcure-to-Pay “Enablement”

Platform with a B2C Experience

Infrastructure & Hosting

Expert Consulting Services

Implementation Services

Infosys IP/Products

Partner Products

Ecosystem

Multitenant

Cloud based

SMART Tech.

Pay as per use

• Product Discovery

• Guided Buying

• Purchase Request

• Approvals

• Action Center

• Order Management

• Catalog Management

• Supplier Portal

• Spend Classification

• Spend Analysis

• Collaboration

One SearchExternal

MarketplaceGuided Buying

Channels

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19Proven Managed Services in Sourcing and Procurement

• 70+ Global clients in

Managed Sourcing &

Procurement

Services

• 14 Global Delivery

Centers

• 10-15 X ROI in

Managed Sourcing &

Procurement

Services

• 150 + Bn Spend

Under Management

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Now2015

Our success story

Putting 5 Key Pillars in Place Built World Class Results:• $180MM Value Add• $200MM+ Risk Mitigation• Built People Capability• Innovation

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Session #14

Future Proof Your Procurement Organization

Rajiv Gupta

Infosys510-284-9354

rajiv_gupta@infosys.com

www.sig.org/eval