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Presented at :
Zur ich,
June 2014
Managing the Talent of a Central-led
Global Procurement Function from
Switzerland
Giles Breault
2
1. Background Personal: Roche, Aventis, Novartis
The Beyond Group AG
2. Why CH?
3. Challenges for Managing Talent Structure
Mandate
Governance & pull through
Capability
4. Deploying Capabil i t ies program
5. Putt ing it together The other 6-steps
6. Q&A
Overview
3
1. Background Personal: Roche, Aventis, Novartis
The Beyond Group AG
2. Why CH?
3. Challenges for Managing Talent Structure
Mandate
Governance & pull through
Capability
4. Deploying Capabil i t ies program
5. Putt ing it together The other 6-steps
6. Q&A
Overview
4
Professional History Giles Breaul t
Strategic Procurement
Emerges Trail-blazer
A Breakthrough in
Value Creation
Getting Control of
Global Spend
7 8 3 8
1988 1994 2002 2005
Va
lue
D
D D
Business Unit Head
Director WW Purchasing
VP US Procurement
Head of Strategic Proc. SVP - CPO
CPO – Pharma
Head of Productivity
4
I
I
I D
I
5
Research & Publications
Through our global Academic network with leading institutions, seek to understand,
evaluate, publish, and present findings related to top options by industry & geography on
how Procurement can help businesses drive greater company-wide productivity
Advisory
Work with few companies at Sr.
Exec. Level to develop & deploy
next-level productivity strategy
Transformation blueprint to grow
organizational readiness and
Procurement capabilities
Intense, pragmatic and output-
focused, drawing from
experience, practice & research
Centered around personal
relationships, and guidance /
coaching
Industry Think Tanks
Gathering small groups of
Procurement executives (8-12)
in a single industrial sector
Balanced group of peers,
thought leaders, practitioners,
academicians and advisors
Three 1-day sessions to
Assess, Analyze, and Solve a
key question facing industry
Aim to share innovative content,
develop concrete solutions, and
build a close community
Learning Conferences
Open enrolment sessions (100–
150 persons) mixing industry
conference and training seminar
Bring together supplier
executives and Purchasing
decision makers from industry
Covers trends, challenges &
opportunities, and KAM / SRM /
CRM process
Change the value proposition to
create durable, value-add and
interdependent relationships
Our unique offering Strategy & guidance for break-through results in cost optimization
6
We focus exclusively on “what’s next” for
companies to driver wider Productivity Evolut ion, dr ivers, and barr iers
Goals
Key levers
Traditional purchasing
Strategic procurement
Spend Optimization
What's Next?
▪ Secure stable supply at right price
▪ Ensure compliance
▪ Optimize costs/value
generation across
businesses ▪ Generate savings
▪ Generate higher returns per dollar spend
▪ Centralize process
▪ Efficient transactions
▪ Local buying
▪ Little or no category management
▪ Process focus
I
II
III IV
• Top Line Contributor
• Innovation Sourcing
• Total Cost-Base Management
• Comprehensive Risk management
• Global Business Services
• Take over operational activities
• Next Level ”Collaborative Buying”
• Internal Consultant/ Project Managers
• SRM as Value Creation
• Embed function into business
10
▪ Drive demand management (what you buy)
▪ Process Management (how you buy)
▪ Internal focus
▪ Category management
▪ Aggregate global/regional volume
▪ Long-term agreements
▪ Maximal use of automated tendering
▪ External focus
Process & Systems Skills Acceptance
1
2
3
4
5
6
7
8
9
Top options identified
Path to master the productivity /cost challenge
7
We cover the entire value-chain including
external supply Our “Top Ten Opt ions ” cover a l l major company dr ivers
Board
Agenda Innovation Productivit
y Growth
SUPPLIER BUYER CUSTOMER Who
Beyond
Procurement
Options
Innovation
Sourcing 2
SRM as
value
creation
1
Total Cost-
Base
Managemen
t
Global
business
services
Comprehen-
sive risk
managemen
t
3
4
5
Take over
operational
activities
“Next level”
collaborativ
e buying
Internal consulting /Project management
Embed
function
into
business
6
8
9
7
Top-line
contributor 10
8
7 Success Factors of High-Output
Procurement Teams
PEOPLE : Ensure organization is adequately structured, staffed,
and skil led
STRATEGY : Functional strategy l inked to business strategy and
plan driving Procurement leadership annual objectives
PLANNING CYCLE : Clear annual process (drumbeat) to drive
your activit ies (projects, targets, objective cascade)
PROJECTS : High-visibi l i ty transformational init iat ives with
impactful results (e.g. >$10mio savings)
PULL-THROUGH : Robust Operating Model to inf luence goals &
objectives of everyone who matters in the chain
REPORTING : Absolute closed-loop tracking, refereed by external
objective organisation
SYSTEM AND PROCESS: Standardised, Harmonised, Globalised
1
2
3
4
5
6
7
9
1. Background Personal: Roche, Aventis, Novartis
The Beyond Group AG
2. Why CH?
3. Challenges for Managing Talent Structure
Mandate
Governance & pull through
Capability
4. Deploying Capabil i t ies program
5. Putt ing it together The other 6-steps
6. Q&A
Overview
10
So Why Switzerland?
OK – Company Headquartered in Basel
TAX / Business / Finance Model
Location: Europe is close
Time zone is convenient: US and Asia
Travel Infrastructure
Cultural: Highly Educated
Multi-Lingual – Prevalence of English
Globally Aware Culture
Talent: Easy to attract and retain (within limits)
Challenges: Living Costs, Expatriate Costs, Native Talent Vacuum
Business supportive employment law
11
1. Background Personal: Roche, Aventis, Novartis
The Beyond Group AG
2. Why CH?
3. Challenges for Managing Talent Structure
Mandate
Governance & pull through
Capability
4. Deploying Capabil i t ies program
5. Putt ing it together The other 6-steps
6. Q&A
Overview
12
Challenges for a Central-Led Function
Structure - Consistent organisational models across BUs, regions and
countries
Ability to communicate effectively to all levels (goals &
objectives, targets and performance)
Ability to influence objectives of key players
Mandate – Clear mandate from the top as to role and expectations
Backed up by management actions and commitment
Governance – Management model that includes business in decision
making, resources allocation, accountable for performance
and owner of the results
Capability – Talent that can talk the game of the customers (not the
language of category management)
Global project management skills
LSS skills
13
Business Interface – Integration with Finance Alignment with Finance at all levels: key enabler to business
partnering
Head of Sourcing
Systems &
Process
Global CFO
Chief Purchasing
Officer
Head IT
Sourcing
Head CS
Sourcing
Head Syst. &
processes
Local CFO
Regional CFO Regional
Sourcing
IT
Head Mrkt
Sourcing
Head Dev
Sourcing
Head
Production
Sourcing
Global
Affiliate
Regional
Procurement Finance
Corp.
Spend Marketing
Clinical /
Scientific Direct
14
Size Annual Spend
Spend/ FTE
Strategic Focus Organizational Model
Large countries
>$50 Mio
±$10 Mio
Maximize value delivery (top 10 sites represent 75% of spend)
Active participation in Global Category Projects
Medium countries
>$20 Mio
±$4-7 Mio
2nd wave project implementation through above-site regional leadership
Compliance and full process penetration
Local CatMan initiatives
Small countries
<$10 Mio
±$3-5 Mio
Savings through local tactical gains
Compliance &optimal risk management
Best practice sharing of Global Project
Managed through clusters (e.g. Nordics) or Cross Divisional (Asia-Pacific) wherever possible to build critical mass
Adapting Country Procurement organizations Standard structure ref lect ing spend volume
15
1. Background Personal: Roche, Aventis, Novartis
The Beyond Group AG
2. Why CH?
3. Challenges for Managing Talent Structure
Mandate
Governance & pull through
Capability
4. Deploying Capabil i t ies program
5. Putt ing it together The other 6-steps
6. Q&A
Overview
16
Procurement Talent Development Program Overview of key activities to ensure correct skills
2. Career Map
1. Roles & competencies
7. Mentoring
5. Action learning
4. Training curriculum
8. Hiring process
6. Job rotation
3. Talent Assessment
9. Talent Review Sessions
10. Governance and KPIs
Fo
un
dati
on
D
evelo
pm
en
t M
an
ag
em
en
t
1. Streamlining positions globally, identifying required
competency levels (incl. new ones), and map associates
2. Required and desired country and category experience to
reach key Procurement leadership positions
3. Survey associates skills against current needs and future
positions, identifying strengths and development needs
4. Reach, frequency and alignment of courses in identified
functional competencies.
5. Developing skills and behaviours through assigned
project leadership
6. Consistent approach for short & mid-term assignments of
top talent in countries or head office
7. Pairing high-potential talent within Sourcing and Business
8. Attract high-potential talent, clear selection criteria and
interview process
9. Discuss and calibrate individual potentials, upcoming
open positions, and succession plans
10. Metrics for hiring and developing talent, embed in
Sourcing leadership team’s objectives, review quarterly
17
1. Background Personal: Roche, Aventis, Novartis
The Beyond Group AG
2. Why CH?
3. Challenges for Managing Talent Structure
Mandate
Governance & pull through
Capability
4. Deploying Capabil i t ies program
5. Putt ing it together The other 6-steps
6. Q&A
Overview
18
Headcount
Impact
Sourcing Operating Model overview Increase Strategic resources by consolidating tactical & transactional
activities (through Elimination, Automation, Delegation, and Outsourcing)
Middle Office Front Office Back Office
• Requisition to pay process
• Infrastructure support
• Deliver user requirements
• Negotiation & contract issuance
• Business Interface & Stakeholder Mgmt
• Strategy development; Category Mgmt, SRM Tasks
& Process
- Value execution
- Efficiency
- Business Partnering
- Category Strategy
- Risk Management
- Customer Services
Drivers
65% 35% <1%
To
be
• Opp. Analysis
• Junior Catman
• Bidding / negotiating
• Buying / E-Sourcing
• Spend Analytics
• PO issuance
• Process compliance
• Systems / data
Support
Strategic Tactical Transactional
30% 50% 20%
As is
Outsourced HC
Internal HC
As % of Internal HC
Need definition
Order issuance & Payment
Sourcing strategy
Tactical activities
Outsourced Resources
19
PULL-
THROUGH REPORTING
The essential 7-Steps of Procurement Transformation Fulfilling the Board’s expectations to accelerate delivery of productivity
1. Func t iona l
s t ra tegy l i nked
to bus iness
s t ra tegy and
p lan d r i v ing
Procurement
l eadersh ip
annua l
ob jec t ives
2. Clear annua l p rocess (d rumbeat ) t o d r i ve you r ac t i v i t ies (p ro jec ts , t a rge ts , ob jec t ive cascade)
3. High -v i s ib i l i t y t rans fo rmat iona l i n i t ia t ives w i th impact fu l resu l t s (e .g . >$10mio sav ings )
4. Robus t Opera t ing Mode l t o i n f luence goa ls & ob jec t i ves o f eve ryone who mat te rs in t he cha in
5. Abso lu te c losed- loop t rack ing , re f e reed by ex te rna l ob jec t ive organ isa t ion
PLANNING
CYCLE PROJECTS STRATEGY
Capabil i t ies Systems & Process
1 2 3 4 5
7 6
6. Ensure o rgan iza t ion i s adequate ly
s t ruc tu red , s ta f fed , and sk i l l ed
7. S tandard ised, Ha rmon ised , G loba l ised
© 2 0 1 3 T h e Be yo n d G r o u p AG
20 20
“Unless you try to
do something
beyond what you
already mastered,
you will never
grow”
- Ralph Emerson
Huge opportunities to do more But first need to step up…
Q & A