CPOstrategy – June 2019 by B2e Media

HCT: A PROCUREMENT REVOLUTION

Issue 3 / June 2019 / www.cpostrategy.com

EXCLUSIVE

Frank Vorrath: the hidden potential of a strategy driven supply chain

Vinnell Arabia: Procurement excellence a business enabler

A procurement transformation CPOstrategy interviews Natalia Graves VP, Head of Procurement at Veeam Software to discuss the company’s procurement transformation

P88 EXECUTIVE INSIGHTS

What we learned at World Procurement Week…

THE #1 DIGITAL PROCUREMENT CONFERENCE ON THE PLANET

www.digitalprocurementworld.com

Welcome to the June issue of CPOstrategy This month’s cover story features Natalie Graves, VP Head of Procurement at cloud management giant Veeam Software. Veeam Software is a privately held information technology company and the leader in Cloud Data Management for organisations, ranging from SMB to enterprise. As Veeam Software grows so does its spend and Graves soon recognised the need to have a more systematic, pointed focus on procurement as a discipline, when she joined the company in January 2018. Graves was tasked with looking at the automating, simplifying, and accelerating of Veeam’s procurement and travel processes and systems around them, including evaluating and rolling out a company-wide source-to-pay platform. “It has been an incredible journey,” she tells us from her office in Boston, Massachusetts. “We looked at simplifying our processes and putting systems into place that allow Veeam teams across the globe to move even faster.” Elsewhere, we speak to Dr. Preston Butler JR, on achieving procurement excellence at Vinnell Arabia, which provides logistics and training to the National Guard of Saudi Arabia. We also spend time with Mahmoud Al Alawi, Director of Procurement and Contracts at Higher Colleges Technology (HCT), who discusses the organisation’s digital journey in procurement. While Frank Vorrath, Executive Partner Supply Chain at Gartner details the hidden potential of a strategy-driven supply chain. We also provide five big takeaways from World Procurement Week and list the best procurement events and conferences from around the globe. While Frank Vorrath, Executive Partner Supply Chain at Gartner details the hidden potential of a strategy-driven supply chain.

I hope you enjoy the issue!

EDITOR IN CHIEF Kevin Davies CONTRIBUTING EDITOR James Hutchins CREATIVE LEAD Mitchell Park SNR. PROJECT DIRECTORS Andy Lloyd Heykel Ouni PRESIDENT & CEO Kiron Chavda

– K evin Davies, Editor in chief content@b2e-media.com

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Contents

VEEA M S O F TWA R E

V INNE LL ARA BI A 4

CONTENTS

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28 FRANK VORRATH EXPLORES THE HIDDEN POTENTIAL OF A STRATEGY DRIVEN SUPPLY CHAIN

SECURING PROCUREMENT AT THE DIGITAL EDGE

HCT

88 TOP 5

100 EVENTS

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Frank Vorrath, Executive Partner: Supply Chain for Chief Supply Chain Officers and Chief Operating Officers, Gartner

Rache and M at clo ford G

LIST LAT

EXCLUSIVE INTERVIEW WITH SAM ACHAMPONG REGIONAL HEAD & GENERAL MANAGER, MENA A

el McElroy, Sales Marketing Director oud specialists CranGroup

Dr. Marcell Vollmer, Procurement Influencer and SAP Aribaâ&#x20AC;&#x2122;s Chief Digital Officer

Mike Dargan, Group CIO, UBS

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A procurement transformation WRITTEN BY Kev i n D av i e s PRODUCED BY A n d y L l oyd

CPOstrategy interviews Natalia Graves VP, Head of Procurement at Veeam Software to discuss the company’s procurement transformation atalia Graves is the first Vice President of Procurement at Veeam Software and when she joined in January 2018, she was asked to further evaluate already existing best practices at the software company, broadening those practices across the organisation, as well as introducing new ones “where it made sense”. Veeam Software is a privately held information technology company and the leader in Cloud Data Management for organisations, ranging from SMB to enterprise. As Veeam Software grows so does its spend and Graves soon recognised the need to have a more systematic, pointed focus on procurement as a discipline. Graves was tasked with looking at the automating, simplifying, and accelerating of Veeam’s procurement and travel processes and systems around them, including evaluating and rolling out a company-wide source-to-pay platform. “It has been an incredible journey,” she tells us from her office in Boston, Massachusetts.

V E E A M S O F T WA R E

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Let us help you master tomorrowâ&#x20AC;&#x2122;s challenges. KPMG can support you in all matters along your entire supply chain, including planning, procurement, production, logistics and distribution. The digitalization of your comprehensive network plays a key role and changes the value chain. Our experts can help you find the right operational solution. Christoph Wolleb Partner, Head of Operations Consulting +41 58 249 54 97 cwolleb@kpmg.com kpmg.ch/operations

V E E A M S O F T WA R E

“We looked at simplifying our processes and putting systems into place that allow Veeam teams across the globe to move even faster.” Veeam had many stakeholders participating in the transformation: finance, technology teams, operations and business stakeholders (the largest spenders) all participated in the enterprise-wide RFP, going through the process to contribute, making sure Veeam picked the right company. “We’ve looked at all the leaders out there and through the process, selected Coupa as our Spend Management Platform and KPMG

as our implementation partner,” she explains. “We looked to the likes of Gartner and Forrester, etc. to really understand what they are seeing happening in the industry, and who the leaders are, and how they evaluate them. We took that into our internal decision-making process and then selected what was right for Veeam.” Veeam took the approach of going with industry best practice and changing the processes only when there was a true business case to do w w w. cp o stra te g y. co m

so. “We’ve done it through workshops that were enabled and conducted by our implementer – KPMG - and really, I think that spending the time to do that was what took the longest and was probably the most difficult stage. First and foremost, the most important step was really to observe what was happening, because people were extremely overloaded, and procurement was viewed as a black hole where things would enter only to come out months later. We absolutely had to look at automation.” First Graves looked at the operating model. “It was clear that we couldn’t sustain the volume of transactions that we had in the operating model that we had, so that had to be changed. We had manual processes and the end-to-end operating model and proper organisational structure had to be designed to effectively and efficiently support our fast-moving and demanding business stakeholders.” The second part of the transformation was to identify the critical roles that were missing and had to be filled immediately. “We brought in a Director of Procurement Operations and a Director of Global Contracts 14

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Natalia Graves VP, Procurement Veeam Software Natalia is the first Vice President, Procurement at Veeam Software, responsible for building and leading Veeam Procurement organization. Prior to joining Veeam Natalia was VP, Sourcing and Procurement at Cengage Learning. Earlier in her career she held a number of leadership roles in Fortune 100 companies. Natalia was responsible for procurement engineering for HealthSuitDigitalPlatform Business Unit at Philips Electronics. She was the top-level leader for IT Global Supplier Management Office at one of worldâ&#x20AC;&#x2122; largest oil field services companies - Baker Hughes (now part GE Oil and Gas). Prior to Baker Hughes Natalia dedicated 14 years to Hewlett-Packard in a variety of roles, from Procurement, Corporate Functions, Product Management, Sales Support to Business development.Â A female visionary leader, a builder, Natalia paved a path through various business cycles: be it during high growth or downturns or mergers and acquisitions. Throughout her career Natalia always relentlessly strived to make things better, easier, more profitable, and always emphasized to engage people work closer together and be more unified 15

WE ELEVATE YOUR PROCUREMENT Consus Provides Source To Pay Solutions & Services

www.consus-global.com

V E E A M S O F T WA R E

that allowed us to move more freely, quickly, and begin to measure what needs to be done, and bring in the automation,” adds Graves. The third point of the transformation occurred once the process blocks were laid out on paper, as a part of an end-to-end, cradle-to-grave cycle. “The candidates for automation and simplification just jumped out at you,” she says. “Existing processes were so painful and manual, and the teams were in such a large backlog, that transformation was inevitable. And so

we went on a journey.” The procurement teams had been working out of mailboxes, and these were promptly removed before the team migrated to a centrally automated portal for the tracking of all the procurement activities. “We also, in parallel, with the help from IT and the CIO, launched a new procurement portal on the corporate Veeam intranet, that all Veeam employees could then access,” says Graves. Another area for concern lay in the processing of contracts, as Veeam was 100% manual. “In a company of our size and complexity it became

“ W HILE WE HAVE ACCOMPLISHED A LOT, EVOLUTION AND CONTINUOUS IMPROVEMENT NEVER STOPS” Natalia Graves VP Head of Procurement at Veeam Software w w w. cp o stra te g y. co m

simply unsustainable, we outgrew our manual processes and so we launched the electronic signature initiative. We saw a stunning 72% improvement in obtaining digital vendor agreement approvals and signatures by implementing DocuSign. Just think about that for a moment. We’ve then taken it even further. As 100% of our contracts get adopted from a procurement side, we’re now starting to move this to sales contracts as well, so that’s a huge enabler.” SECOND PHASE With the “low hanging fruit and no brainers” taken care of in the initial phase of the transformation, Veeam turned its focus to a bigger transformation. “Where do we go from here and how do we clean up and prepare for the growth that is happening at Veeam?” asks Graves. “What tools do we need, what platforms do we require? The conclusion we came to is that the company needed to invest in a full source-to-pay system. As I’ve mentioned we’ve gone through an extensive RFP, with many future users’ and stakeholders’ organisations participating in the RFP, and eventually 18

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we landed on Coupa, our spend management platform of choice.â&#x20AC;? Veeam required an easy and mobile experience aligned for the corporate strategy to enable employees to buy goods and services quickly, safely, mobile, and cost effectively, while maintaining the overall visibility and control. â&#x20AC;&#x153;Coupa was definitely best-of-breed on the P2P side and as we were going through the RFP it just clicked with us. We launched in December 2018 for Souring and CLM modules and then January 2019 we launched with onboarding our pilot w w w. cp o stra te g y. co m

Fairmarkit delivers a simple sourcing platform to address the 20% of spend thatâ&#x20AC;&#x2122;s not under management See how Fairmarkit can put your data to work to receive an average of 6-12% cost savings, increase operational efficiencies by 30% and gain the ability to re-allocate your team to more strategic initiatives.

V E E A M S O F T WA R E

“THE ROLE OF A CPO IS THE RO L E O F A B U S I NE SS PA RT N E R WHO DESIGNS A PROCUREMENT ORGANISATION THAT SUPPORTS BUSINESS PRIORITIES AND NEEDS” Natalia Graves VP Head of Procurement at Veeam Software

stakeholders’ groups. Graves describes the digital transformation as a ‘three-way dance’. “We kept a close eye on the parties involved with KPMG acting as implementer for the source-to-pay solution. “We have gone through a thorough RFP selecting Coupa, but it’s not all about the platform, it’s all also about the implementer, who we also selected through a RFP process. We were also truly saved by Consus; another technology implementer who used their own AI tool to quickly clean up our large supplier database, suppliers and supply records

in the ERP, saving months of manual work.” Transformations don’t happen overnight. Just because the system is launched, it does not mean the transformation journey is complete. Saurabh Mehta, President and GM, Consus Global, explains, “Veeam needed to quickly clean, deduplicate and group their supplier master in order to meet tight project deadlines. Because Veeam’s procurement operations depended on it, we appreciated the high level of accuracy required from the output of this exercise. Using w w w. cp o stra te g y. co m

V E E A M S O F T WA R E

our AI engine we were able to deliver clean and highly reliable data to Veeam within 2 weeks.” An automated system allows companies to perform some basic things, quicker and better, but more than that, there is less of human error so resources can be utilised on tasks that matter more, the strategic tasks. “Then your resources can better align with the business stakeholders, to make sure you listen and hear where each stakeholder is going, so you can design your commodity strategies, and your procurement strategies around that. A procurement understanding of the business strategy is absolutely key. You need to understand that strategy and incorporate it into your ways of procuring. You have a successful procurement organisation when you’re able to listen and translate what you’ve heard into sourcing and procurement strategies.” And so what is Veeam’s procurement strategy? “What’s important to us is not only the price – price is very important – but we are also driven by the overall quality of what we buy, the overall value,” she says. “We don’t

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Simpler. Smarter. Faster. Run Coupa. Business Spend Management in the Cloud.

Value. Delivered.

V E E A M S O F T WA R E

always buy the cheapest, but we do expect the best price for what we buy, that’s for sure. We want to invest the right time to negotiate that. Best value procurement is a concept that some companies use heavier than others, but I think the elements of it should be present in just about any organisation. In my opinion, the procurement organisation is only successful when it is guided by at least some element of best value, coming from understanding the current business needs, combined with the ability to predict

what the future needs might be during said project implementation.” Graves notes: “The first year our procurement evolution and transformation was focused on getting ourselves organised and setting the foundation”. Veeam procurement cleared the huge backlogs and put in the automation and undertook the sourcing and understanding of what its spend management needs looked like going forward. “Our transformation was possible because of our best-in-class people. While we didn’t always agree, teamwork across our large implementation

“ A S WE GO DOWN THE ROAD THIS YEAR, WE VIEW BEST IN CLASS NEGOTIATION PRACTICES AND AGILE PROCUREMENT PROCESSES BECOMING MORE AND MORE A PART OF VEEAM DNA” Natalia Graves VP Head of Procurement at Veeam Software w w w. cp o stra te g y. co m

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teams representing the enterprise was a must. Together we selected a platform, found an implementer, partnered with them, launched the system, and embedded into the company on a day-to-day. We’ve established some things from the category perspective, which didn’t exist before. We have category managers and specialists looking at each particular area, be it technology, be it marketing. This year is a year of completing the implementations, and further operationalising 26

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what we’re doing, as we turn into an improvement cycle of continuous improvement. While we have accomplished a lot, evolution and continuous improvement never stops. As we go down the road this year, we view best in class negotiation practices and agile procurement processes becoming more and more a part of Veeam DNA.” Graves believes that often times CPOs are still viewed as very transactionally focused and an internal administrative hurdle to overcome.

“ C LO U D STO R A G E I N R E A L L I F E ” W I T H T H E # 1 C LO U D D ATA MANAGEMENT PROVIDER, VEEAM

“CPOs are sometimes viewed as someone whose organisation will only make sure contracts are done with the proper terms, someone who runs controls and enforces policy around the buy-in process and someone who only cares about saving or cost. However, I think these so-called ‘administrative musts’ are just the foundation to the services the CPOs must offer to their companies. The role of a modern CPO implies taking the time to understand the business, and only then, design and run the

best possible practices relevant for that particular company. The role of a CPO is the role of a business partner who designs a procurement organisation that supports business priorities and needs, and that can adapt to the ever-changing landscape.”

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EXCLUSIVE Frank Vorrath,

Executive Partner at Gartner, explores the hidden potential of a strategy driven supply chain WRITTEN BY Kev i n D av i e s

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F R A N K V O R R AT H Executive Partner Supply Chain at Gartner

IN YO UR CA R E ER YOU’ V E IDENTIFIED S OME S ER I OUS

and also the “Strategy Driven Value Planning and Execution” model.

U NLO CKED ST RAT EGI C POTENTIA L I N THE S UP P LY C HAIN, WHAT A L E RTE D YOU TO THI S?

I have been working for some time with Dr Bram Desmet and he wrote for me, one of the most profound and excellent business and supply chain strategy books called “Supply Chain Strategy and Financial Metrics”. Now, while I was actually in contact with him, I had the privilege to contribute to the book with the forward, and also with a business case study on my previous work with a company called Johnson Controls. That encouraged me to look into the concept of everything involved in business transformation and supply chain and the idea of taking a more strategic approach to it. Leading up to Bram and myself, working on a concept called “Strategy Driven Supply Chain” 30

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I N YO U R W H I T E PA P E R , T H E C O N C E P T O F T H E S T R AT E GY D R I V E N S U P P LY C H A I N , YO U EXPLORE THE CURRENT TREND OF BUSINESSES PUTTING THEIR S U P P LY C H A I N F R O N T A N D FORWARD I T H I G H L I G H TS S O M E OF THE ISSUES THAT COMPANIES ARE GOING THROUGH There’s an enormous amount of change. We know that probably 63% conform, but their CEOs are going through a business model change over the next couple of years. Now, what we are also highlighting is that lots of companies are overly focusing on gross and margin improvement, and have a somewhat lack in focus on shareholder value. That’s measured in a metrics called Return on Capital Employed (ROCE). Another problem

“ Another problem is that companies don’t have enough understanding of the true complexity of their supply chain and how to balance service costs, and capital employed within what Bram calls the supply chain triangle” F R A N K V O R R AT H Executive Partner Supply Chain Gartner

is that companies don’t have enough understanding of the true complexity of their supply chain and how to balance service costs, and capital employed within what Bram calls the ‘supply chain triangle’. Having a better understanding would lead to sharper strategies and stronger execution. This would lead to more sustainable performance and results. So it’s really that sustainable performance and results aspect which comes through, and we believe that it looks like a perfect storm. Supply chain is at the front

of it. A supply chain that is seen from an entity point of view, and not just a functional point of view, is really important to companies. Companies have different supply chains and each of the supply chains needs to be strategy driven. Then, different strategies lead to different supply chains with different targets and different tradeoff, for service cost and capital employed. There’s also a belief that supply chain strategy is simply following a business strategy or from the business strategy. We do believe that, but it is not a sequential process and the value proposition, and the supply chain are the ying and the yang of the business strategy. Only together can they define how business generates shareholder value and is measured by ROCE. So, it’s about looking into supply chain from the perspective of driving value for customers, and for the business. Supply chain delivers on the promise that businesses are making through their value proposition. DOES THIS REPRESENT A N E VO LU T I O N F R O M T H E T R A D I T I O N A L O P E R AT I O N A L w w w. cp o stra te g y. co m

B AC K- E N D S U P P LY C H A I N FUNCTION?

Absolutely! Itâ&#x20AC;&#x2122;s an evolution defined by asking the question as to what supply chain management actually is. We believe that supply chain management is more about balancing the supply chain triangle of service cost and cash. It is also about facilitating the internal debate between sales operations and finance. It somehow takes on the role of balancing these kind of trade off decisions. Now that also proves that the supply chain is coming from the back room into the front room. It is becoming an equal partner around the C-suite, hence we are also talking about putting the supply chain or Chief Supply Chain Officers (CSCOs) into a more strategic role. That would require people operating on that level with more financial and strategic skills instead of in the past, having just operational skills. They will be measured on their operational skills and their execution. ARE YO U S EE I N G EXA MP L E S OF THAT IN ACTI ON N OW ?

Companies are now taking a more strategic approach. We also see companies promoting people 32

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who have lead the supply chain become the Chief Executive Officer. Youâ&#x20AC;&#x2122;ve seen other companies in the US like Apple. Tim Cook, who had been leading the supply chain for Apple for many years under Steve Jobs, is now the one leading the organisation. Now thatâ&#x20AC;&#x2122;s a very good example when you look into how supply chain becomes a more competitive advantage for an organisation that has and understands the importance of having a great supply chain. It also shows how

important it is to have somebody leading the organisation that he has an operational, financial and strategic skillset. The future skills requirements of the CSCOs in many companies will follow this path. WOUL D THIS RE QUI R E QUI TE A SUBSTANT I A L CULTURA L S HIFT? HOW I MP ORTA N T I S C HANGE MA N AGEME N T TO A N EVO LUTION OF THI S KI N D?

Yeah, absolutely. We say that it takes a bit of a leap in terms of maturity

of organisations, and also changing and shifting the paradigms from where they are today to where they need to be in the future. Now that requires a value creation and that is why we actually started to work on the concept of the strategy driven supply chain. Even knowing that this is maybe five to ten years out. But starting the debate and starting the value creation really helps to facilitate and move the needle up. Itâ&#x20AC;&#x2122;s enabling organisations to have a more serious look into their strategic supply chain and what

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it means to them as well as what it means to the overall strategy employment process in the organisation. Some organisations took the approach of being driven by gross initiatives, without truly understanding the strategy behind them or the value proposition and even the complexity of the business. How do they want to differentiate themselves in the marketplace and what does it mean in terms of the service they have to deliver, the corresponding cost as well as the capital employed in their environment? We are looking at how we can help organisations by highlighting the problem or the potential issue. More importantly, it’s about finding a solution and an approach, and taking a different more strategic approach in future. We’re highlighting how the supply chain triangle can be balanced differently by promoting the CSCO into a more strategic role.

etc.) The CSCO becomes the ring man. They will help the CEO, and the entire leadership of the company, including board of directors, make more informed decisions, or as I would call it ‘deliberate choices’.

WOUL D THAT RE S ULT I N T H E

SO TH E K E Y TO TH I S I S T HAT

CSCO REPORTI N G ON A P E E R -

TH E SU P P LY CH AI N FU NC T ION

TO -PEER BAS I S TO A CEO?

H AS A WE ALTH O F DATA AND

It’s an equal partner in the business, and with the same level of importance as the C-suite, (CFOs, CEOs

K NOWLE DGE AND I NSI GHT

F R A N K V O R R AT H

R E ADI LY AVAI LAB LE TO USE?

It’s also about the reality of balancing

the triangle. When you think about a supply chain, and the mission of a supply chain, it’s often about delivering the right product at the right time, at the lowest cost, at the lowest inventory. There is conflict in the triangle all the time. It’s about a service you want to give to your customers. When you talk about service, it’s not only how you move your products and deliver them but it’s also the complexity of the product. It’s about the order flexibility you want in order to give

you the product portfolio as such, but also having an understanding of what it means in terms of cost you’re going to have in the organisation and the capital employed. When we talk about the capital employed, it’s really about two elements: a working capital (the decision you have to make to strategically keep a certain inventory level in your organisation) or it’s how you deploy your assets in a fixed asset structure. How this applies to the conflicts and the w w w. cp o stra te g y. co m

â&#x20AC;&#x153; Tim Cook, who had been leading the supply chain for Apple for many years under Steve Jobs, is now the one leading the organisationâ&#x20AC;? F R A N K V O R R AT H Executive Partner Supply Chain Gartner

F R A N K V O R R AT H

triangle and the critical stakeholders in your business. The VPO of sales, as an example, what does he really care about? It’s probably the sales top line and market share. The COO or Head of Production? The primary concern is probably efficiency, as efficiency drives cost. But if you think about the VPO sourcing of purchasing, it’s the spend and how the company can buy more volume at a lower cost. That’s conflict. So the question then becomes; who is best positioned in a company to balance that? Decisions and people being driven differently in terms of service cost and cash and the best positioned person to do that would be the CSCO. Now that’s the best thing for organisations to understand and if they do so, it can really set them up for a very successful future or operating on a new competitive level. DO YOU ENVISION A SITUATION WHERE A CSCO COULD E VO LV E A N D T R A N S I T I O N I N TO A S U C C E S S F U L C E O ?

Yeah, absolutely. That’s a prediction Dr Bram Desmet and myself are making and we believe you will see it happening more and more in the future, and in organisations where

successful CSCOs who have those operational skills, financial skills and strategic skills are the best people for taking the job at the top of the house. I F A SU P P LY CH AI N FU NCTION I S E V O LV I N G I N T H I S WAY I T W O U L D H AV E TO S H E D SOME OF ITS TRADITIONAL O PE R ATI O NS, I S I T TR U E TO SAY TH AT SO ME O F TH I S CO U LD B E LI B E R ATE D TH R O U GH TE CH NO LO GY ?

Yes you are right. You see the merge between the physical worlds and the digitalisation of the digital world, and enabling technologies. Companies are not only selling products and services, they sell solutions and outcomes. That is a new complexity that organisations are dealing with that requires certain changes and like I said before, be crystal clear about the value proposition you’re going to have or want to have as a business, and what it means in terms of the corresponding supply chain, and now your supply chain or different supply chains are delivering on the promise you made. The question is now about how you deploy your resources in your organisation more efficiently and effectively. That’s what we are talking about. w w w. cp o stra te g y. co m

“ Overall I would say that more and more companies are at the starting point of truly understanding that change needs to happen” F R A N K V O R R AT H Executive Partner Supply Chain Gartner

D O YO U THI N K THI S WOULD AFFECT, GOI N G FORWA R D, T H E T R A I N I N G O F S U P P LY C HAIN OFF I CE RS?

I believe it goes deeper than that. I believe if affects structures, it affects roles and it affects your whole recruiting process in terms of the discourse you would need as an organisation. It would also impact the talent development. Going back to the example of the CSCO, in the past he has probably been promoted based on his ability to bring in results based on how the organisation performs. Now in 38

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the future I think it would be more about the balance between how he is actually contributing to the overall results of that organisation based on a strong operational per formance. It’s also about financial results of an organisation being top line, bottom line and results or returns and what kind of strategic skills he has in terms of taking the organisation forward. So that’s what we are talking about and that requires a new skillset and new talents in the organisation. There will need to be new training which needs

the paradigm to a more strategy driven supply chain and value planning and execution model. So culture probably is the key obstacle in the evolution of the role. I N YO U R VAST K NOWLE DGE, DO YO U SE E ANY I NDU STRY SE CTO R S WH E R E I Tâ&#x20AC;&#x2122; S ACCE LE R ATI NG MO R E TH AN I T I S I N OTH E R S?

to be provided and opportunities for people to move into these kind of roles. W H AT W O U L D Y O U S AY A R E S O M E O F T H E O B S TA C L E S

Well thatâ&#x20AC;&#x2122;s a very good question. I would say, from my own perspective it is that you see some of industries a little bit ahead. Technology companies for example would be ahead in terms of looking at that from more of a strategic point of view. Overall I would say that more and more companies are at the starting point of truly understanding that change needs to happen.

TO T H E E VO LU T I O N O F THIS ROLE?

Probably mindset and the culture of an organisations where they have traditionally rewarded their people differently in the past. They need to overcome that and look at what that change means for them. They need to be ready with their maturity and company culture to move and shift

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PROCUREMENT EXCELLENCE â&#x20AC;&#x201C; A BUSINESS ENABLER WRITTEN BY Kev i n D av i e s PRODUCED BY H ey ke l O u n i

WE SPEAK TO DR. PRESTON BUTLER, JR., DIRECTOR OF PROCUREMENT AND SUBCONTRACTS AT VINNELL ARABIA, A UNIQUE US SAUDI COMPANY OF FORMER MILITARY EXPAT PERSONNEL WHO PROVIDE TRAINING AND LOGISTICS TO THE SAUDI NATIONAL GUARD… innell Arabia is under contract with the United States Army and has been around in various different formats since 1975. Its primary customer has been, and still is, the Ministry of National Guard in the Kingdom of Saudi Arabia. Vinnell Arabia primarily provides training to the forces guarding the Kingdom; everything from military tactics to sustainment. Today, the company is the leader in US military doctrine-based training, logistics, and support services inside the Kingdom of Saudi Arabia.

VINNELL ARABIA

“We’ve been doing that for 43 years now,” retired military officer and current Director of Procurement and Subcontracts, Dr. Preston Butler, Jr. explains. “ The function we’ve grown into is providing additional purchasing support for the US Army’s Office of the Program Management. Vinnell Arabia’s Procurement & Subcontracts Division does some work on their behalf in terms of subcontracts and other procurement transactions. We’ve grown from a small organisation to a relatively large one with 2,200 employees here in the Kingdom.”

PROCUREMENT EXCELLENCE With a procurement staff of 40 comprised of Saudis and expats, Vinnell Arabia has established tens of thousands of formal contractual agreements with local suppliers and vendors. Dr Butler has a firm idea of what constitutes procurement and supply chain excellence and works hard to galvanise his team behind a vision that promotes excellence through the entire process. “I guess the words could even be reversed because procurement is one part of the supply chain, which is made up of different

functions linked together starting with identifying the requirement, to getting the approvals and necessary funding to award the purchase order.” “Since Vinnell Arabia is contracted by the United States government, we work within a very structured process in a slightly a different way than many private companies who can pretty much broker whatever deals they want to on a golf course, or over a cup of coffee.” Vinnell has a very robust procurement process in in order to be in compliance and withstand government w w w. cp o stra te g y. co m

and other third party audits. We have to make sure that when we think about procurement holistically. It’s not just procurement alone,” he says. “It’s the entire supply chain process that must be considered. And if we do it right, then we have what I would consider, an excellent process that has integrity built into it, so as requisitions flow from one link to the other, we can be transparent and avoid a conflict of interest. We must also ensure there does not appear to be opportunities for manipulation because things of that nature that could get us 44

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“ BE COMPETENT AND PROFESSIONAL — KNOW YOUR JOB AND DO IT.’ AND THAT’S PRETTY MUCH UNIVERSAL, WHETHER YOU’RE DOING PROCUREMENT OR ANYTHING ELSE” D r. P r e s t o n B u t l e r, J r Director Procurement and Subcontracts at Vinnell Arabia

into trouble really fast.” The procurement team at a company like Vinnell Arabia is inextricably linked to the operational success or failure of the company, when reliant on third-party outsourcing. “We have three types of suppliers: Critical, Key and Standard. About 9% are Critical suppliers who provide everything from aircraft repair parts and services that we just cannot live without. They are day-today services that are on site every day providing services such as janitorial and food services. We spend a large sum of money on service subcontracts and recently developed a formal supplier management program that includes a monthly evaluation of their performance. We work really hard to ensure the right suppliers are selected at reasonable prices using a “Best Value” methodology. This means we take price and other factors into consideration when making each purchase and awarding each subcontract. The way I see it is our job is to w w w. cp o stra te g y. co m

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enable the operational or business units to succeed. To a large degree, we cannot succeed if our subcontractors fail.” T R A N S F O R M AT I O N Vinnell Arabia had a vast roster of suppliers prior transitioning to a new ERP system in 2018. Seven hundred fifty (750) suppliers were reduced to 350 during the transition. “We only moved forward with active ones,” Dr. Butler explains. “350 suppliers is still a large number. Anytime you’re over 100, that’s a lot of suppliers to monitor and maintain a healthy relationship with.” Vinnell has upgraded its procurement SOPs (standard operating procedures), three times “in the spirit of pursing excellence” since 2014. “We perpetuate the theme within the division called ‘From Good to Great’. We’re always thinking we did good this week, but how can we do better next week?” This type of thinking keeps you alert so you bring your “A-Game” to the office every day.” Traditionally, the Middle East has been slow to change with technological trends, but all that is changing as focus shifts dramatically towards the digital age. Massive amounts of

investment into new technology will enable many Middle East companies to match their western competitors, but there is still a long way to go for many local businesses. “The Kingdom as a whole may not be ready for e-commerce, but I spoke to a fairly large company last month, in terms of their contracting practices, and they have not moved to e-commerce because their opinion is that the suppliers in the Kingdom are still not ready for that type of technological shift.” Well, Vinnell is going to go ahead whether the market is ready or not, as part of its modernisation outlook. Dr. Butler stated, “we are using the McDonalds’ business method…If you build it, they will come. Whether it’s two months, three months or three years, our suppliers will eventually make the transition and we will all benefit, and move from good to great.” Vinnell made a change a few years back from cash payments and now avoids making them unless it’s absolutely necessary and justified. “You’re either on EFT (electronic funds transfer), which is the best-case scenario or we will write a cheque and even that’s a little old-fashioned. And then the third is to pay cash, which is w w w. cp o stra te g y. co m

the worst-case scenario. To protect ourselves from the perception of impropriety, we use the principle I call the Rule-of-Two. The objective is to ensure at least two people are involved in each procurement activity especially ones that involve cash transactions because the last thing you want is a scandal in your procurement organisation. An essential element to Dr Butler’s notion of procurement excellence is procurement integrity, of which incorporates two aspects. “Number one, you have to have personal integrity, which is essential for every Buyer. When I say personal integrity, I mean having a strong ethical attitude in your business dealings because we are held to a higher moral standard. After all, we are trusted officials spending government money, whether it’s Saudi money, or US money, it is public money; it belongs to the people. It belongs to the Kingdom. And we have a huge fiduciary responsibility. So, we (procurement officials) must have personal integrity.” Dr. Butler’s second (classification of) integrity deals with the system, meaning the processes put in place and so these two work in tandem, 48

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rendering them auditable. “If you do a gap analysis, you should be able to see if someone veers to the left or right, just like in SPC (statistical process control) charts. We don’t have those of course, so all of ours checks and balances are conducted via human intervention to see if what we’re doing is what we said we were going to do in accordance with our approved procedures. If not, the question(s) is what corrective action(s) do we take?” The third element to procurement excellence at Vinnell revolves around training. “Not necessarily formal w w w. cp o stra te g y. co m

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“ T HE NUMBER ONE RESPONSIBILITY FOR A PROCUREMENT ACTIVITY IS TO FUNCTION AS AN “ENABLER” FOR THE SUCCESS OF THE COMPANY” D r. P r e s t o n B u t l e r, J r Director Procurement and Subcontracts at Vinnell Arabia

training, but training in terms of peer training and on-the-job by managers. When I was in college, I did an internship at a bank. One of the jokes back then was about banker hours. Since banks didn’t open until 9:00 a.m., most people thought the employees came to work at 9:00 a.m. So everyone desired a job where they could go to work at 9:00 a.m., like bankers. The truth is they came to work at 7:30 and spent 90 minutes counting money and preparing to receive customers. So I implemented the same concept in our organisation. From 7:00 a.m. to 9:00 a.m. we train, execute numerous administrative actions, and prepare for customers and suppliers. The purpose is to ensure we take time to train and prepare ourselves to perform at a high level.” Another important tenet to Vinnell’s pillars of procurement excellence is external training, or better stated, education, so that customers understand how to work within the procurement system. “I always tell my guys to work as though the customers are wrong. I know we’re supposed to say the customer is always right, but if you do that, you will not question the requisitions, statements of w w w. cp o stra te g y. co m

work, item descriptions, etc. In other words, you will not do your due diligence, which will most likely lead to errors and poor decisions. The best way to review a requisition package is to assume something is incorrect. Then you will review it more meticulously, which could save time and money. Accuracy in contractual agreements is paramount and the responsibility of the procurement official, not the customer. After all, the procurement officer signs the contracts. He who signs - is responsible.

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“ I THINK PROCUREMENT OFFICIALS HAVE TO UNDERSTAND THEIR ROLE AND HOW IT FITS WITHIN THE GRAND PLAN OF THE COMPANY” D r. P r e s t o n B u t l e r, J r Director Procurement and Subcontracts at Vinnell Arabia

SUPPLIERS CONFERENCE To foster those essential relationships with suppliers, Vinnell Arabia hosted Suppliers Conference in 2017. The four-hour event hosted 125 participants representing 65 companies and covered topics such as the procurement process, vendor expectations, best value procurement, blanket purchase agreements, subcontracts, and Value Added Tax (VAT). “We’ve only done one so far and based on the written feedback from participants, it was a huge success. Most requested we hold the event every year. It was a great way to communicate to your major suppliers as well

as prospective suppliers at one time. In addition, it gave us an opportunity to listen to them in order to see things from their perspective. So, what in Dr. Butler’s opinion constitutes a successful Chief Procurement Officer (CPO)? “I have something up on my wall that I try to live by. The title of it is “Leadership” and it consists of 14 different points. It serves as a daily reminder. The first point says, ‘Be competent and professional - know your job and do it.’ And that’s pretty much universal, whether you’re doing procurement or anything else, but especially procurement because there are a ton of factors to consider when w w w. cp o stra te g y. co m

making decisions such as regulatory requirements, local laws, , compliance, policies, operational mission, just to mention a few. There are so many factors you have to take into consideration when you’re making what appears to be a simple decision on the surface, but in reality is full of complications. You really need to be competent in your job, first and foremost because so many people are depending on you. And then I would say, probably trumping all of that, you must have integrity. The first boss I ever had in contracting told me, ‘You can’t legislate integrity. You either have it or you don’t.’ If you’re working in this field and you have an integrity issue, it’s going to hurt you, and potentially the entire organisation. I think procurement officials have to understand their role and how it fits within the grand plan of the company and ensure their actions are in alignment with the company’s goals and strategies.” “It is also important to enjoy what you do because it will keep you motivated. We don’t get many pats on the back and public appreciation for what we do. So procurement professionals can’t work for recognition and praise. The top performers simply enjoy their 54

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profession and make it look easy, but it is really challenging and taxing. Every decision we make has a financial implication. I’m sure I contribute to this misperception. When I’m asked what I do, I tell people I buy things for my company, which sort of is an understatement. There really is a lot more to it than that.”

Preston Butler Director of procurement Vinnell Arabia

Dr. Preston Butler currently serves as the Director, Procurement & Subcontracts for Vinnell Arabia, Saudi Arabia. He provides executive and operation management in the solicitation, award, and administration processes for all procurements and subcontracts in excess of $100M annually in support of three United States Government prime contracts worth $1B. Serves as the companyâ&#x20AC;&#x2122;s subject matter expert for all subcontract and procurement functions and related systems with direct supervision of 40 personnel acquiring supplies and services for 2,200 employees directly supporting the Saudi Arabia Ministry of National Guard (SANG) Modernization Program. He has 30 years of exceptional results-oriented leadership in the functional areas of logistics, contracting, and program management. Dr. Preston Butler has extensive U.S. Government contracting experience primarily while serving as U. S. Army Acquisition Corp officer for 22 years with multiple stateside and overseas tours. He retired in 2006 as a Lieutenant Colonel and shortly thereafter earned a Doctorate of Philosophy in Leadership. w w w. cp o stra te g y. co m

VINNELL ARABIA

BUSINESS ENABLER When asked how he envisions the procurement and subcontracts functions, Dr. Butler stated, “the number one responsibility for a procurement activity is to function as an “enabler” for the success of the company. Everything we procure or lease has a direct impact on the daily mission of the company or quality of life and will hinder or enable success. The procurement officials, both Buyers and Managers, affect the reputation of the company when we engage with external customers and suppliers. I believe we are business enablers because without office supplies, computers, printers, furniture, materials, vehicles, housing accommodations, leased office space,

custodial services, etc., the company cannot function.” Companies are always chasing and striving for excellence or best in class. “In my opinion, if a company seeks to achieve excellence it needs to focus on people and systems. Without both being excellent, you will always have a gap. If the supply chain is to achieve excellence, it must be an integral part of the company’s vision and properly aligned to enable operational success. I cannot over emphasise the importance of noncompromising integrity in both the individual and the processes. Finally, companies that normally achieve and sustain excellence have a strong continuous improvement philosophy that permeates throughout the organisation as the norm rather than the exception.

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Securing procurement at the digital edge In this article, Jon examines two opposing elements of the digital procurement paradox, including what organisations can do to begin to address the stalemateâ&#x20AC;Ś WRITTEN BY J o n H a n s e n 58

ou are likely familiar with the phrase about irresistible force meeting an immovable object. When it comes to procurement in the digital age, the same paradox applies to technological advancement and the need for greater security. In other words, technological advancement is the irresistible force that promises to transform procurement and business in general. While there are several obstacles to the adoption of technologies such as the absence of â&#x20AC;&#x153;clean dataâ&#x20AC;? within an enterprise, security is the immovable object that executives cite as being their greatest concern.

T H E C U R R E N T L AY O F T H E L A N D In my paper Digital Transformation in Procurement, I referred to a McKinsey survey of 1,600 incumbent global companies. In the survey, 23% of the responding executives report having a digital strategy in place. Of those, just 2% have a strategy that includes their supply chain. While the above numbers are in and of themselves noteworthy, in the context of the 2%, the results of a second survey are even more 60

surprising. In that one, 70% of the respondents say that the supply chain is essential to delivering on the digital promise. Think about this revelation for a moment. Respondents to a second survey state that the supply chain is essential to realising their company â&#x20AC;&#x2122;s digital aspirations. With the first survey, only a small number of organisations have a strategy for digitising their supply chain. The obvious question is, why? THE RISK SIDE OF REWARD

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“ A January 18th, 2019 a Clint Boulton article in CIO magazine sums up the need for executives to align their thinking with the realities of an emerging digital world” Jon Hansen

Earlier this year, I had a chance to sit down and talk with the Director, Cyber Security for Cisco Michael Tryon. The focus of our conversation was on how organisations must have a “sure and safe pathway” towards achieving their digital objectives. It was an interesting discussion on many levels. What stood out to me the most was Tryon’s reference to an article he had written in which he discusses a report from North Carolina State University. According to Tryon, the findings from the University’s report show that

the top concern of executives in the study was an inability to manage a new risk. The risk to which they are referring to is those associated with rapidly evolving technological advancement. What is it about evolving technologies that have executives stuck in a holding pattern between the recognition of digital's importance and the realisation of its promise? THE AMAZONISATION EFFECT From the standpoint of procurement, concerns with risk start and w w w. cp o stra te g y. co m

“ When it comes to procurement working on the digital edge, it is important to recognise that all buyers do not have to be procurement professionals” Jon Hansen

end with the Amazonisation of the supply chain, including increasing decentralisation. One of the great things about Amazon is the ease at which someone can buy a product online with little to no difficulty. Purchasing is a simple exercise that is becoming progressively easier as the platform leverages RPA and AI to provide a seamless and intuitive experience for the buyer at home. The Amazon experience at home 62

raises the question; why can’t the same buying process exist in the work environment? The answer; decentralisation and independence and the potential risks associated with each. INDEPENDENCE ON THE EDGE In another interview I did with the President of Hewlett-Packard Enterprises, there was the suggestion that the success of a digital strategy was dependent on going beyond the

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cloud to work at the edge. HPE President Paula Hodgins referred to a study indicating that by 2020, each person globally will have up to 10 IoT devices at their disposal. We are no longer talking about a BYOD to work scenario. We are talking about individuals having incredible computing power at their fingertips all the time â&#x20AC;&#x201C; buyers included. According to Hodgins, this personal digital capability provides tremendous

opportunities to maximise efficiency. By dealing with data (or requests) at the point of capture as opposed to pushing everything back to the cloud for processing saves time and money. Like the Amazon experience, the consumerisation of the procurement process in business is a reality that all organisations need to recognise and embrace. Otherwise, they may not remain competitive in a demanding global economy. w w w. cp o stra te g y. co m

â&#x20AC;&#x153; Securing the supply chain is critical. Especially in an age where with increasing frequency organisations are already sharing more and more information with third partiesâ&#x20AC;? Jon Hansen

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But through the above decentralisation, the vulnerability of working on the edge, i.e., having many access or entry points to a company’s internal information through a myriad of personal IoT devices poses some risk. How do you control access? How do you protect against unauthorised breaches? Based on the findings of the North Carolina State University report, the best way to address these as well as other concerns regarding securing the supply chain is to wait. But is this the best option? GETTING TO THE REWARD OF RISK Overcoming the above challenges comes down to two things. The first is a willingness on the part of executive leadership to change their way of thinking about how procurement “works.” The second is the development of a viable security strategy. A January 18th, 2019 a Clint Boulton ar ticle in CIO magazine sums up the need for executives to align their thinking with the realities of an emerging digital world. In the article, Boulton writes; “your digital transformation is doomed unless you empower employees to succeed in the digital era.” He

then goes on to say you must “craft a workplace that boosts engagement and agility.” Engagement and agility come with decentralisation. It is providing all buyers (not just procurement people) with the ability to conduct transactional business at “the edge” leveraging new technologies. The new technologies to which I am referring include mobile devices, computers and personal analytics. Once executive leadership not only recognises the tremendous competitive advantages of a digital procurement strategy but that they have to take action to make it a reality, they can then turn their focus to securing their supply chain. A SOUND STRATEGY Securing the supply chain is critical. Especially in an age where with increasing frequency organisations are already sharing more and more information with third parties such as suppliers, business partners, and even customers. Referring, once again to my talk with Michael Tryon, you need to respond to the “pervasive threats that are inherent in this exciting new world.” The best way to do that is through “a w w w. cp o stra te g y. co m

comprehensive cybersecurity strategy. One that focuses on prevention, detection, response and recovery.” It is in this area that the CIO can take the lead. Within the framework of a collaborative environment that includes the key stakeholders, the CIO can create a strategy that adapts to the new technologies and the way they work. For example, one organisation suggests using a distributed Security model in which they deploy and interconnect security controls at “points of digital engagement”, i.e., on “the edge”.

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A FINAL THOUGHT When it comes to procurement working on the digital edge, it is important to recognise that all buyers do not have to be procurement professionals. Nor should they be. In other words, people at a department level can leverage RPA and AI technology capabilities to do direct purchasing. Procurement professionals can then focus on the more strategic and complex supply chain acquisitions. From a procurement standpoint, the effective utilisation of resources both within and external to the procurement department is how organisations will realise the greatest return on their digital strategy. w w w. cp o stra te g y. co m

A procurement revolution WRITTEN BY J a m e s H u tc h i n s PRODUCED BY H ey ke l O u n i

TASKED WITH A REVOLUTION OF PROCUREMENT, MAHMOUD AL ALAWI, DIRECTOR OF PROCUREMENT AND CONTRACTS, DISCUSSES THE ORGANISATIONâ&#x20AC;&#x2122;S DIGITAL JOURNEY

HCT

s the largest applied higher education institution in the UAE, The Higher Colleges of Technology (HCT) encompasses 16 men’s and women’s campuses across Abu Dhabi, Al Ain, Al Dhafra region, Dubai, Sharjah, Ras Al Khaimah and Fujairah, where around 23,000 Emirati students attend those colleges. Established in 1988 by the late His Highness Sheikh Zayed Bin Sultan Al Nahyan, founder of the United Arab Emirates, the concept of HCT was originally started in 1985 by its founder H.E. Sheikh Nahayan Mabarak Al Nahayan, then Chancellor of United Arab Emirates University and current UAE Minister of Tolerance. From its outset, HCT was built on a foundation of productivity, self-determination and excellence. Today, as a key to the UAE’s vision

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for future development and prosperity of the nation, HCT combines international best practice and UAE excellence. In line with international benchmarking, the UAE vision and future development requirements, HCT offers approximately 72 majors in the academic programs in Engineering Technology, Health Sciences, Applied Media, Business, Computer Information Science, and Education. The programs are constantly reviewed to ensure that they meet the UAE’s diverse labour market requirements. Through its “Hybrid Education Model”, HCT introduced a system

of awarding students with professional certificates from international awarding bodies, together with the academic degrees, so as to make HCT graduates the number one choice in the UAE labour market. To ensure this model and other initiatives are fully implemented, HCT has established dynamic relationships with UAE companies and organisations and the world’s leading universities and organisations. The Higher Colleges of Technology developed its transformative HCT 2.0 strategic plan (2017-2021), in line with the future aspirations and vision of the UAE’s wise leadership. This was w w w. cp o stra te g y. co m

subsequently transformed into HCT 4.0 in 2019, another significant milestone in HCT’s rich history, following its celebration of its 30th anniversary of operations in 2018. HCT 4.0 has come about in support of the international challenges and changes brought about by the “Fourth Industrial Revolution”, which will have an impact on future jobs. During its 30 years of operation, HCT has evolved as a higher education service provider to continue to serve the needs of an increasingly diverse UAE labour market. This evolution is particularly pertinent within the HCT procurement strategy. In October 2018, HCT set itself a strategic mission to bring upon a “revolution in procurement” and tasked with overseeing this is Mahmoud Salem Al Alawi, Director of Procurement and Contracts. With over 10 years’ experience in the rapidly evolving procurement space, from the Armed Forces, to the Abu Dhabi Vocational Education and Training Institute, Al Alawi is certainly well equipped with a key understanding as to how procurement has become central to a business’s operations. “When I started in procurement, we were just dealt with as a department in which we were given orders to deliver items,” he says. “Over the years since, HCT leadership and UAE Government have recognised that procurement is more strategic to an organisation. As an example of that, I, on behalf of the HCT procurement department, am a member of, and attend meetings of the strategic committees that look to the future of HCT.” Examples are the Executive Committee and Portfolio Committee, 74

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“ W H E N I STA RT E D, W E FAC E D M A N Y CHALLENGES WITH T H E D E PA RT M E N T ’ S P R O C E SS E S A N D AT T E N D E D TO T H E N E E DS O F OUR INTERNAL AND EXTERNAL STA K E H O L D E R S ” Mahmoud Salem Al Alawi Director of Procurement and Contracts, HCT

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which represent an organisation-wide HCT 4.0 Strategy - the “next generation” HCT. For Al Alawi then the task was simple – to revolutionise a procurement function that supports the purchasing and contracting of “almost everything” across HCT, from basic consumables and lab equipment right through to transportation and the construction of new campuses. The major challenge that lay before him is one of legacy, as HCT has historically used a paperbased procurement process. With HCT recognising that it needed a digital procurement function in order to grow, to expand its campuses and hire more staff and attract new students, Al Alawi and his team have had to hit the ground running. “When I started, we faced many challenges with the department’s processes and

attended to the needs of our internal and external stakeholders,” he says. “I sat down with the leadership of the HCT and outlined what was required of me and the procurement function of HCT – we wanted to take it to the next level. This means digital systems, implementing a new ERP system, reducing the time of transaction and deferring them and the processes,” he adds. Success is by no means a guarantee, but Al Alawi can already point to significant milestones along this journey, namely the successful completion of 85% of that initial 70% of transactions by the end of 2018 and reaching 95% by the first quarter of 2019.

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The key to this initial success, and something that will remain crucial moving forward has been a sense of trust. Prior to Al Alawi’s arrival and the launch of this revolution, HCT’s procurement function was in his own words “scattered”. Some of the team members were inexperienced in the field of procurements and contracts, which caused delays and inefficiencies in finalisation of projects and the day-to-day operations of the department. So, when Al Alawi came in, he was already on the back foot. “The key for me has been the full support

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of the HCT senior management. With them we’ve already been able to make significant strides in establishing trust.” For Al Alawi, this trust has been established through transparency – something increasingly topical within the global procurement conversation. Al Alawi says that transparency goes hand in hand with giving the right message or the right situation for end users and stakeholders, both internal and external including suppliers. Al Alawi, with the backing of senior management, is establishing internal governance and creating order within the procurement

team. As the team is the key success factor for any transformation plan, Al Alawi stressed that building his team’s capabilities was his first priority to overcome challenges facing him and his department. Hiring fresh blood in the Department helped to create a mixture of the fresh joiners supported by the experienced team members. “This helped us to move faster with the reformation of the Department and in applying the new governance and policies. In fact, it was amazing how both old and new members blended together as one team within a very short time, believing in our goal to be achieved as a team,” Al Alawi w w w. cp o stra te g y. co m

says. Now, every member of the team has a specific area of focus, which is openly shared with the end users so that they are aware of exactly what is being done at any given time. “I would say that we are very fortunate to have such support from leadership in HCT to support this transformative journey. All resources were provided to support us which gave us an opportunity just to innovate and work very hard to achieve our mission. We have a clear and essential role in achieving HCT 4.0 strategic plan which proves HCT’s management awareness of procurement’s strategic role in the organisation,” he adds. As part of the transformation process, Al Alawi hosts conferences with the end users to spotlight the work being done and the progress being made. “I engage with everyone, starting from my staff and their decisions and input right through to stakeholders – they are engaged in everything,” he says. He points to the process of floating a tender, in which the stakeholders can now participate in the timeline and help determine how long a tender will float for as well as the criteria for awarding. “As academics, they 80

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want everything to be on time and in a specific time, not just any time. I started to show them the results. So, the results, they could be good or bad, but I gave them a promise that I will show them the results in a very transparent way. This is key for building trust,” he explains.

Mahmoud Salem Al Alawi Director of Procurement HCT Group

Mahmoud started his career in the General Purchasing Directorate in the Armed Forces where he was awarded ‘best staff in Logistics’ in both 2006 and then in 2008, after receiving the Sheikh Rashed Award of Excellence in 2007. In 2009, Al Alawi moved to the Institute of Applied Technology, where he worked as Contracts Supervisor for almost two years. Mahmoud was then offered the post of Contracts Manager in another educational institution: Abu Dhabi Vocational Education and Training Institute in 2011 and within a year was promoted to Senior Manager of Operations, where he was in charge of Procurement, Contracts, Facilities and Transportation Sections, achieving the Al Thuraya Excellence Award (Best Supervisor Category) in 2018. In 2018, Mahmoud was offered a new job as Director of Procurement & Contacts at the Higher Colleges of Technology, which has become the largest applied educational institution in the country. Mahmoud is now leading the Department towards digital transformation to implement ERP and e-archiving while applying new governance as the Department moves forward with HCT’s ambitious 4.0 strategic plan. 81

“With suppliers, transparency in the process is very essential, we have started a new methodology in dealing with suppliers as partners to HCT in achieving its vision. We have improved levels of communication with suppliers which led to increasing number of suppliers participating in our tenders effectively.” “As our suppliers are a cornerstone in our supply chain, we have worked closely with them to ensure proper supply for our requirements, regardless if it’s stationery or workshop

“ I SAT DOWN WITH THE LEADERSHIP TEAMS AND OUTLINED WHAT WAS REQUIRED OF ME AND THE PROCUREMENT FUNCTION OF HCT – WE WANTED TO TAKE IT TO THE NEXT LEVEL” Mahmoud Salem Al Alawi Director of Procurement and Contracts, HCT

equipment. Each purchase request that we receive is considered as a project by itself,” Al Alawi said. “We prepare a project plan for each purchase request that we receive and all stakeholders are involved in this plan. End-Users do specify the quality and time that they require and it’s our responsibility to acquire it with the best cost for HCT. Our suppliers appreciate our transparency in preparing project plans; where we share clear information and instructions on project requirements, including unforeseen costs, such as, and not limited to, required

infrastructure for the project or if there is a dependent licence or approval required to achieve the project completion or delivery.” “This helps both the supplier and HCT Procurement to save time in finalising the project later on and avoid any variations that may arise due to unclear project scope. Being an educational institution, we do have some special requirements or dependencies during implementation of our projects, such as having students in the classes during academic year which may be a challenge for suppliers to make w w w. cp o stra te g y. co m

“ I ENGAGE WITH EVERYONE, STARTING FROM MY STAFF AND THEIR DECISIONS AND INPUT RIGHT THROUGH TO STAKEHOLDERS – THEY ARE ENGAGED IN EVERYTHING” Mahmoud Salem Al Alawi Director of Procurement and Contracts, HCT

HCT

renovations, deliver furniture or lab/workshop equipment. Working closely with suppliers and end-users to put proper plans in for those projects led us to achieving projects on time and as planned, besides getting best prices from suppliers when all project details are clear to them. We do believe that our suppliers are our partners in our journey and without them we can’t achieve what have been achieved or what is to be achieved in our HCT 4.0 strategic plan,” Al Alawi says. There are seemingly no limits to the power of technology in procurement and, while HCT is currently focusing on the digital transformation, Al Alawi points to the implementation of a new ERP system that is still ongoing. Inviting major providers such as Oracle, SAP and Microsoft, HCT will look to implement a new system by the end of 2019. As the very nature of procurement continues to evolve and become increasingly digital, the impact on the procurement professional and the demands placed upon them is significant. The procurement functions of tomorrow are vastly different from the ones of yesterday and Al Alawi admits to pushing his team to continuously learn, develop new skills and be at the very forefront of this changing landscape. This is where HCT’s partnership with the Chartered Institute of Procurement & Supply (CIPS) is fully recognised. “Working with CIPS is incredibly important to us,” says Al Alawi. “One of my objectives for 2019 is to use CIPS as a benchmark and to participate in CIPS Procurement Excellence Programme. If we are to benchmark ourselves with w w w. cp o stra te g y. co m

international organisations, we have to have a benchmark with CIPS. They are the best around the world, and in procurement supply chain they are the leader in this field.” “By engaging with CIPS it provides key exposure to the department and team. It will give the confidence to HCT management here, that when we propose anything to develop or to change any process, we have a very strong benchmark that we rely on. It’s not just Mahmoud’s vision that will enforce or change this decision. No, it’s based on an international benchmark and standard.” As HCT continues its journey it can already begin to look back on key turning points and successes. Al Alawi says that it is already 30% of the way through its mission achieved from the Annual Procurement Plan in the first quarter and so the next 12 months will be pivotal in defining the future of HCT’s procurement function. With a new ERP system in place later this year and more technology-based announcements in the pipeline, HCT can build on this to create an accurate database, using the data obtained this year as a starting point. “We’ll have more time to do personal 86

HCT

development for the team and come up with new initiatives since we’ll have the system supporting us by automating lots of processes that we are doing right now manually without the ERP,” says Al Alawi. “I believe that by this time next year we will have achieved 50% of our Annual Procurement Plan in the first quarter.” With any journey, it’s a constant evolution and Al Alawi can point to a number of key lessons that he has

learned over the course of his career, and his time so far at HCT. While he admits that this is the biggest challenge of his professional career, he recognises that it’s not just about one person. “Everything we have achieved so far, and will achieve, is because of the team,” he says. “It’s about believing in people and their capabilities. If we believe in people, if we give them the proper support, they will achieve more than we could ever imagine.”

“This journey is my biggest challenge across all my career. I was very lucky to be in this challenge. I am very happy and I am very proud of the success that I’m achieving with the team, with the support from senior management of HCT. Moving from nowhere to where we are now.”

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WHAT WE LEARNED AT WORLD PROCUREMENT W WRITTEN BY Elliott Francis

WEEKâ&#x20AC;Ś

CPOstrategy met with procurement leaders from banking, utilities, consulting, solutions providers and financial services. Taking the temperature on the latest trends and predictions for the future we spoke with Barclaycard, Enel, Bain, Coupa and Legal & General. 89

01 Barclaycard

Rob Tuckwell, Director of Partnerships & B2B Barclaycard is building an ecosystem of P2P software providers (including Coupa and Amadeus) with the aim of bringing payments and procurement closer together for B2B. “We’ve got to make sure that our payment products are embedded within those ecosystems,” says Tuckwell who is keen for Barclaycard to tackle “horrendous inefficiencies” for its customers… “Digital payment products work in the consumer space. Why is that not filtering through to business? Our strategy is to go from Procure-to-Pay to ‘Procure-and-Pay’. It’s a really key difference that they’re not separate processes anymore and the future for payments and procurement is going to be the convergence of these areas.”

W H AT W E L E A R N E D AT W O R L D P R O C U R E M E N T W E E K …

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W H AT W E L E A R N E D AT W O R L D P R O C U R E M E N T W E E K â&#x20AC;¦

02 Enel

Salvatore Bernabei, Head of Global Procurement Enel is among the world’s leading integrated private utilities with a presence in over 40 countries and more than 70 million retail customers. Bernabei is focused on developing relationships to enhance flexibility, minimise time to market and add value. “We welcome innovation by vendors,” he says. “We say: I have a challenge here, I am not capable, with my knowledge, to solve it. It’s a very precise case study. I invite suppliers, offer a case with one month to provide a solution before I select the best idea. We offer the possibility to experiment, on our plans and assets before a contract is awarded.” To support this approach Enel has an agreement with crowdsourcing platform Innocentive.

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Bain & Company Borja Tramazaygues, Procurement Leader EMEA & Gerry Mattios, EVP, APAC

Consulting firm Bain & Company’s Performance Improvement Practice advocates targeted solutions for immediate impact combined with broad transformation programmes to redefine how work gets done. “Once we have helped implement technology to optimise tactical processes in procurement, such as invoicing and purchase orders, we have to address the broader digital struggles of an organisation,” explains Mattios. “Procurement tends to be a back-office activity linked to savings,” agrees Tramazaygues. “There’s a big opportunity for procurement to be a real part of the business; it can play a big role in rebuilding the supply chain to make it more agile, opening the best markets and bringing innovation through from suppliers.” Tramazaygues and Mattios believe new approaches are vital in the current inflationary environment. 94

W H AT W E L E A R N E D AT W O R L D P R O C U R E M E N T W E E K …

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W H AT W E L E A R N E D AT W O R L D P R O C U R E M E N T W E E K â&#x20AC;¦

04 Coupa

Rajiv Ramachandran, Product Strategy Management Coupa offers an all-in-one, end to end, business spend management platform. “Coupa provides users the richness of insights, based not just on their own data but truly normalised, and anonymised data across all the buyer, supplier relationship that exist on our cloud-based platform,” says Ramachandran who cites the need to be able to use consolidated data to chart the efficiencies and risks of suppliers. It’s a “game changer” he sees customers greatly benefiting from when analysing B2B data on a platform holding approximately one trillion dollars of spend. Coupa believe the ability to match your progress against the community of the platform, and take efficiencies from it, points to the future for agile procurement as part of an ecosystem.

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05 Legal & General Maarten Ectors, Chief Innovation Officer Legal & General is focused on disrupting procurement from the inside out. Ectors stresses the importance of allowing ecosystems to generate innovative solutions for its customers. “You need to get everybody at your organisation excited about innovation,” he advises. “You can’t innovate on your own and if you don’t collaborate with the challengers in the market they can only disrupt you, but not in a positive way.” Ectors highlights an important trend, the need to optimise the cost of failure: “Our Beta programme runs four-week trials with new companies to assess potential new partners,” he explains of a process which allows L&G to remain agile in its approach to innovations that can speed up claims handling from days to minutes.

W H AT W E L E A R N E D AT W O R L D P R O C U R E M E N T W E E K …

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100

EVENTS OF 2019

WRITTEN BY Kev i n D av i e s

Conferences and events provide industry professionals with a forum to share knowledge and best practice while gaining strategic insight into industry trends and challenges. Over the next 12 months, the procurement industry has a number of high-level events lined up across the globe, each one adding practical business value for attendees.

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25.06.19

www

PUBLIC SECTOR SOLUTIONS EXPO ExCel, London PSS connects market-leading solution providers with senior procurers, decision-makers and influencers from across local and central government and the wider public sector. We exist to support the public sector by addressing the key challenges facing the sector, including: • Sustainable public procurement; achieving efficiency and social value

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EVENTS

• Innovating procurement and the impact of pre-engagement • Best practice in cost saving and collaborative approaches to public services •U nlocking the potential of digital, technology and data for future government •A ttracting, retaining and developing workforce • Urban transformation and delivering the smarter

15.07.19

www

4TH GLOBAL PROCUREMENT CONFERENCE Villa Mondragone, Rome, Italy

economists, lawyers, public procurers that will engage in a muchneeded debate concerning issues related to innovation, competitiveness, sustainability and regulation in procurement worldwide.

University of Rome Tor Vergata, with the School of Economics, is launching the 4th Global Procurement Conference that will take place in Rome, at Villa Mondragone, a patrician villa in the suggestive territory of the Alban Hills in the area called, from its many castles and villas, Castelli Romani (about 20 km southeast of Rome). The goal of the Global Procurement Conference is to raise awareness for the planetary implications of joint decisions regarding what is purchased, how and for whom in the public domain. Thanks to a partnership with the European Bank for Reconstruction and Development, the University of Rome Tor Vergata has the pleasure of presenting the conference speakers, experts from International Financial Institutions and regulatory bodies, policy-makers, w w w. cp o stra te g y. co m

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16.09.19

www

GARTNER IT SOURCING, PROCUREMENT, VENDOR & ASSET MANAGEMENT SUMMIT 2019 London, UK Gartner IT Sourcing, Procurement,

operational business objectives.

Vendor & Asset Management

This year’s summit will help provide

Summit is designed for strategic

you with the insights to transi-

sourcing leaders, IT finance manag-

tion from a tactical provider of a

ers, procurement leaders, IT asset

service—the skillful negotiation of

managers, and vendor manage-

a contract or the effective manage-

ment leaders. It is the most impor-

ment of a vendor’s performance—to

tant annual gathering for IT profes-

a strategic advisor helping deliver

sionals to enable the achievement

innovation, business value and

of their organizations’ strategic and

growth – at speed.

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EVENTS

30.10.19

www

600MINUTES SUPPLY CHAIN AND PROCUREMENT Middelfart, Denmark This event offers a unique networking opportunity to connect face-toface with top decision-makers and key players across all functions in the industry from the largest companies. 600Minutes Supply Chain and Procurement will discuss the application of advanced technologies such as

Big Data, Analytics and other innovations that are transforming the future of supply chain and procurement. Get all the latest insights on technological developments, industry trends and best practices to achieve a successful ecosystem of suppliers, collaborators, and customers for your organisation.

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31.10.19

www

CIPS UK CONFERENCE QEII Centre, London At the 2018 CIPS UK Conference,

This one-day event was packed full

procurement professionals gained

of keynotes, case studies, panel

practical solutions to the challenges

discussions and debates with Q&A.

they are facing and left the confer-

The day split into three streams after

ence with the insight they need to

lunch:Â fit for purpose tech, strategy

make the shift to becoming a stra-

through people and resilient supply

tegic, collaborative function that

chains.Â There were CPOs from lead-

adds value. The 2018 speaker line-up

ing organisations speaking and a

featured the most influential speak-

large variety of content that really

ers, incorporating Procurement

served the profession and addressed

Power List winners.

our most vital concerns.

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EVENTS

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