Procurement Magazine - January 2022 by procurementmag

January 2022 | procurementmag.com

HACKETT GROUP: Should people be at the top of CPOs’ agenda? TECHNOLOGY: Empowering employees & suppliers with advanced P2P solutions VODAFONE: From customer experience to digital transformation

THE GOLD STANDARD IN DIVERSE SPEND

Through mandates, mentorship and mobilisation, JPMorgan Chase & Co. is promoting diverse spend throughout its supply chain to enact real change

SUSTAINABILITY: Verifiable ratings systems secure sustainable procurement EQUINITI: Transforming and digitising procurement

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SHAPING THE FUTURE OF SUSTAINABLE BUSINESS

2022

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Mary-Jane Morifi

Global Head, Sustainability Solutions, Engineering Plastics

Chief Corporate and Sustainability Officer

Covestro

Tiger Brands Limited

Øistein Jensen

Sandeep Chandna

Chief Sustainability Officer

Odfjell SE

Tech Mahindra

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The Procurement Team EDITOR-IN-CHIEF

GEORGIA WILSON DEPUTY EDITORS

PRODUCTION EDITOR

JANET BRICE CREATIVE TEAM

GEORGIA ALLEN DANIELA KIANIČKOVÁ

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIIN SMITH REBEKAH BIRLESON JORDAN WOOD

PRODUCTION MANAGERS

VIDEO PRODUCTION MANAGER

RHYS THOMAS EDITORIAL DIRECTOR

SCOTT BIRCH

PRODUCTION DIRECTORS

ELLA CHADNEY PHILLINE VICENTE JACK THOMPSON JANE ARNETA

KIERAN WAITE SAM KEMP

DIGITAL VIDEO PRODUCERS

EVELYN HUANG HABBIE AMOS JACK NICHOLLS MARTA EUGENIO ERNEST DE NEVE MOTION DESIGNER

TYLER LIVINGSTONE MARKETING MANAGER

KAYLEIGH SHOOTER PROJECT DIRECTORS

TOM LIVERMORE MIKE SADR CRAIG KILLINGBACK

MEDIA SALES DIRECTORS

JASON WESTGATE JAMES WHITE EXECUTIVE ASSISTANT

JORDAN HUBBARD MARKETING DIRECTOR

ROSS GARRIGAN

MANAGING DIRECTOR

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN CEO

GLEN WHITE

FOREWORD

New year, new magazine… What’s in store for procurement in 2022? Welcome back to Procurement Magazine!

“This April, Procurement & Supply Chain Live will be returning to the Tobacco Dock (London) for its hybrid event of two unmissable days!”

This January we start the new year with an issue jam-packed with trends, insights and innovations from the industry. Speaking to global industry executives and thought leaders, Procurement Magazine takes a look at why people should be at the top of a CPO’s agenda; how organisations can close the performance gap when it comes to procurement transformation; ways to empower employees and suppliers using advanced procure-to-pay (P2P) solutions; and how AI-powered technology is helping deliver accurate ESG data.

The best of the best… Procurement Magazine is proud to present, for the first time, its own Top 100. Keep an eye out this month for our list of Top 100 Companies in Procurement. Nominated by you and selected by us, each nomination is thoroughly deserved, well done to those that were nominated!

Don’t miss out on our upcoming LIVE events! This April, Procurement & Supply Chain Live will be returning to the Tobacco Dock (London) for its hybrid event of two unmissable days! From keynote to roundtables, fireside discussions to topical presentations, Q&A sessions to 1-2-1 networking, don’t miss out on essential deep-dives into issues impacting the future of industry today. All this, and more, to come in 2022, Happy New Year!

GEORGIA WILSON PROCUREMENT MAGAZINE IS PUBLISHED BY

georgia.wilson@bizclikmedia.com

procurementmag.com

CONTENTS

Our Regular Upfront Section: 12 Big Picture 14 The Brief 16 Timeline: The Procurement Journey to Net-Zero 18 Trailblazer: Melani Wilson Smith 22 Five Minutes With: Costas Xyloyiannis

Procurement Strategy:

Should People be at the Top of CPOs’ Agenda?

JPMorgan Chase & Co

The Gold Standard in Diverse Spend

52 SSE

Data-driven, Frictionless, Insights and Creating Value

Technology:

Empowering Employees & Suppliers with Advanced P2P Solutions

Digital Procurement:

Closing the Performance Gap in Procurement Transformation

72 76 Cranfield School

Navigating theData Complexity Iron Mountain Centers and Web of Supply Chain & Procurement Werks Data Centers: Growing Together

Unifying Procurement to Drive Change

of Management Iron mountain

University of Massachusetts

Interos maps supply chain in 3D and real time. You can know every single thing about how all your partners do business. Or you can read it in papers.

142

Vodafone

From Customer Experience to Digital transformation

114

Sustainability:

Verifiable Ratings Sytems Secure Sustainable Procurement

126

Equiniti

Transforming and Digitising Procurement

156

Keolis Amey

Partners in Passenger Safety

BIG PICTURE

2022: New year, same trends Global

No doubt the year ahead will throw the procurement industry new curveballs to contend with, but some trends remain the same. 89% of executives believe that digitally transformed companies have a competitive advantage. As such digital transformation remains a top trend for procurement leaders as we start 2022, one that will be driven by another two trends—

January 2022

traceability and resilience, of which 87% of sourcing and procurement leaders believe their supply chains need to incorporate in the next two years. Another familiar face will be sustainable sourcing. As we tick closer to the 2030 mark, global efforts will continue to ramp up if industries want to meet their sustainability targets.

procurementmag.com

THE BRIEF “ LEADERS IN THIS SPACE WILL NEED TO BE MORE OPEN TO DIFFERENT APPROACHES TO MANAGE SUPPLY CHAINS, OPEN TO DIFFERENT SOLUTIONS, AND OPEN TO SUPPLIER DIVERSITY” Dr Soroosh Saghiri

Course Director and Senior Lecturer, Cranfield School of Management

BY THE NUMBERS What will be the top priority for procurement leaders in 2022? (LinkedIn Poll)

4% Process

28% Risk

Change

Management

“ OUR WORK IS MISSIONCRITICAL FOR AN ORGANISATION, SO WE CANNOT AFFORD TO MAKE MISTAKES, THEREFORE WE ARE METICULOUS IN WHAT WE DO” Michael Burt CPO, Equiniti

30% Digitalisation

38% Sustainability

EDITOR'S CHOICE COULD AUTOMATION BE THE KEY TO SUCCESS? With 88% of executives stating that end-to-end digital transformation needs to be fast-tracked, 90% believe that automating business workflows post-COVID will ensure continuity. READ MORE

“ IF YOU HAVE A STRATEGY IN PLACE, THAT IS ALREADY A BIG ACHIEVEMENT FOR MANY ORGANISATIONS. THE NEXT STEP IS TO DRIVE THAT PLAN, AND DETERMINE HOW YOU WANT TO IMPLEMENT IT” Hüseyin Ipiv,

Head of Supply Chain Management, Consumer Business Unit, Vodafone READ MORE

January 2022

IS THE COST OF RESILIENCE IMPACTING PROCUREMENT’S DEVELOPMENT? 53% of sourcing and procurement leaders report that the cost to develop greater resilience is a barrier for their organisations. READ MORE

IS YOUR ORGANISATION A HIGH PERFORMER IN CONTRACT MANAGEMENT? Higher-performing teams are 37% more likely to put a greater focus on integrated (digital) data-flows across the contracting lifecycle, and up to 50% more likely to have invested in automation and analytics. READ MORE

Understanding supplier risks With the complex nature of supply chains, supplier risk management is a task that has been plaguing leaders in this field for centuries. As the complexity and risks associated with supply chains rapidly grows, so does the importance surrounding the understanding of the types of risk out there and the strategies to defend. “Failing to consider these supplier risks ahead of entering into an agreement with a new supplier, or neglecting to continually monitor their risk profile throughout your relationship, can lead to surprises that can significantly impact your supply chain’s health, and therefore your operations,” said Taulia. So what are the risks? While there are many risks, typically they can be broken down into four core areas: • Financial • Legal • Operational • Reputational In order to effectively manage risk, procurement functions must identify, evaluate and then mitigate risks. This starts with correctly assessing whether a risk is known (losing some customers to competitors) or whether it is unknown (extreme weather conditions, pandemics, or accident). “Unknown risks tend to be more dangerous as they are unexpected and it is difficult to anticipate the damage they will cause,” commented Taulia. “It’s important to have a continuity plan in place to help manage these events when they do happen.”

 ADNOC ADNOC announces its plans to invest up to US$6bn in procurement awards to enable drilling growth. The investment comes as the ADNOC boosts its crude oil production capacity to five million barrels per day by 2030 and drive gas selfsufficiency for the UAE.  PAYHAWK B2B spend management startup, Payhawk, raises US$112mn in its Series B funding round taking its value to US$570mn after just three years of operations.  DICKINSON STATE UNIVERSITY Investigations into Dickinson State University (DSU) by North Dakota University System (NDUS) finds that DSU was not in compliance with North Dakota Century Code, conducting improper procurement for Instructional Design.  UK GOVERNMENT The UK government faces public concerns regarding the transparency around PPE procurement contracts and the UK’s military procurement contracts wasting billions.

U P JAN

2022

D O W N

procurementmag.com

TIMELINE THE PROCUREMENT JOURNEY

TO NET - ZERO 2015

2017

Mars Inc. procurement to “change what we buy or where we buy it” to achieve net-zero greenhouse gas (GHG) emissions

Concrete clean law

Since 2015, Mars has: • Decreased its direct emissions by 31% • Cut its emissions by 7.3% across its value chain This year, Mars laid out plans to achieve netzero greenhouse gas (GHG) emissions by the middle of the century.

January 2022

Cement, an ingredient of concrete, is responsible for 8% of global CO2 emissions. In 2017, the state of California adopted a ‘Buy Clean’ law. The Low Embodied Carbon Concrete Leadership Acts (LECCLA) is a procurement bill which requires all state agencies and departments to factor in climate impact in their selection criteria for concrete procurement.

Every industry in the world has the eyes of its consumers and stakeholders watching them, as the move to net-zero is no longer a mere extra merit, but an absolute necessity. Here’s what the procurement industry is doing to move closer to the target: Where the greenhouse gases emitted are balanced by the removal.

2021

Highway to net-zero

Procurement reforms from The Civil Engineering Contractors Association (CECA)

DeepStream helps businesses reach for net-zero

A net-zero plan from Highways England will concentrate on driving a low carbon supply chain through its procurement power.

In the pursuit of net-zero, The Civil Engineering Contractors Association has called for an end to awarding contracts to the lowest bidder - and instead demanded a pledge to future contracts being awarded to those who qualify as the Most Advantageous Tender (MAT).

IT services company DeepStream is dedicated to transforming buyer-tosupplier communication and transactions and has endeavoured to help businesses reach net-zero.

procurementmag.com

TRAILBLAZER

MELANI WILSON SMITH JOB TITLE: CPO COMPANY: PEPSICO

An inspirational leader and champion of diversity, inclusion and sustainability

elani Wilson Smith's career in procurement began 20 years ago in 2001 at Procter & Gamble, where she started out as a purchasing manager. Since then, she has worked for a variety of other industry leaders in the pharmaceutical, hospitality and consumer products industries in the US and Europe; such companies include Pfizer, Merck, Mondelēz International, Novo Nordisk, and Hilton. “I am a global strategic sourcing and data driven executive with demonstrated ability to: a) innovate and drive transformation across organisations and industries; b) deliver savings to the bottom line to fund investment in business priorities; c) manage the supply chain and deliver value; d) effectively collaborate with customers, stakeholders and suppliers across the value chain; e) develop organisations and build talent,” commented Smith.

January 2022

“I am honored to be among such a distinguished group of leaders. Thank you to Supply Chain Digital for this recognition”

procurementmag.com

TRAILBLAZER

Colleagues and peers of Smith’s describe her as a ‘great leader’ that ‘leads by example’ and a ‘thoughtful procurement professional with a great capacity for developing her people’. “Melani is an experienced and thoughtful procurement professional with great capacity for developing her people. Melani effectively took sourcing ownership for key categories of indirect spend at Merck while sharing her expertise and experience across her peer group to help build a better team,” said Gavin Murdoch, Senior Director of Strategic Partnerships Business Development at Thermo Fisher Scientific. “Melani is a great leader [...] She leads by example and always keeps us motivated,” said Nayda M. Berrios, Procurement Director, AstraZeneca. “She gives you the opportunity to develop your leadership skills. I learned a lot about leadership from Melani.” Smith joins PepsiCo Smith joined PepsiCo in 2020 as Senior Vice President, Procurement Market Supply Officer - Pepsi Foods North America, accountable for spend, savings and supplier relationships in the PepsiCo value chain. Today, Smith is the CPO of PepsiCo. A role she took on after just six months at the business, and is accountable for the sourcing and procurement across the enterprise. Dedicated to the ‘D.R.E.A.M’ Smith has been a member of the board of Vanguard Theatre Company since 2018 and is a strong believer in the company’s mission Diversity, Reciprocity, Education, Awareness, Mentorship (D.R.E.A.M). This belief shines through into her work at PepsiCo and her interests in climate change, putting an end to hate crime and systemic racism, uplifting positive images of the community, and inspiring others. 20

January 2022

Number of years in the industry: 20 Joined PepsiCo: 2020 Rank in Supply Chain Digital’s Top 100 Leaders: #5 Florida Agricultural and Mechanical University: BS/MBA in Business Administration and Finance (1992 to 1995)

“We absolutely believe that our supplier base should be as diverse as our employee base and the customers we serve,” said Smith. “PepsiCo partners with the National Minority Supplier Development Council (NMSDC) because their dedication to advancing opportunities for ethnic minority business enterprises is perfectly aligned with our belief that utilising diverse-owned businesses leads to more value for our consumers and customers, and strengthens communities where we operate.” procurementmag.com

FIVE MINUTES WITH...

COSTAS XYLOYIANNIS: I AM CO-FOUNDER AND CEO OF HICX, THE SUPPLIER EXPERIENCE MANAGEMENT PLATFORM

Q. PLEASE COULD YOU START BY INTRODUCING YOURSELF AND YOUR ROLE?

» My name is Costas Xyloyiannis, and

I am co-founder and CEO of HICX, the Supplier Experience Management platform. HICX is a growing company, and my responsibility is to drive the vision and strategy, whilst building a top-notch leadership team. A large part of my role is also to make sure that whatever we’re doing as a company is scalable.

Q. HOW DID YOU FIND YOURSELF TO BE IN THE PROCUREMENT INDUSTRY?

» I ended up in procurement a little

by chance. While still studying for my computer science degree, my co-founder Hassan and I had the opportunity to work on a project for Novartis. To cut a long story short, the Novartis CEO was very forwardthinking. He had just signed up to the UN Global Compact at the time, and asked the CPO to ensure that their suppliers, some 150,000 of them, were compliant. Naturally, the CPO wondered who all these suppliers were! He needed our help in automating their supplier data, and thanks to this brief, our first ever data platform for a business, ‘The Global Supplier Database’, was born. 22

January 2022

The CPO loved the system because for the first time he had a view of the entire supply chain. More excitingly for us, he was able to demonstrate compliance at board level. The feeling of being able to add value in this way, really fired us up. Back then already, businesses were having supplier data struggles. So, in a way, we made solving this our quest.

Mondelez, Lenovo and Baker Hughes for example.That said, I think our biggest achievement is yet to come. Ultimately, we’re on a mission to help change the way companies work with their suppliers, and we’ve made a great start but there is still a long journey ahead.

Q. WHAT HAS BEEN ONE OF YOUR BIGGEST ACHIEVEMENTS IN YOUR CAREER?

inventing the future inspires me. I have been very fortunate to work with brilliant colleagues, customers and investors who have brought new thinking into the organisation. As a company this enables us to add real value to procurement. The idea of us continuing to challenge the status quo and grow, so that HICX can one day transform the enterprise software space as we know it, really motivates me.

» In many ways I think we’re only just

getting started, but I suppose my biggest achievement to date is to have built from scratch a 100-person company that is solving some really significant business challenges for some of the world’s largest and most respected brands – like Unilever,

Q. WHAT INSPIRES YOU?

» Solving problems, creating things, and

procurementmag.com

FIVE MINUTES WITH...

“ I AM NATURALLY INCLINED TO FEEL INSPIRED ABOUT HICX, BECAUSE I REALLY BELIEVE IN OUR PRODUCTS”

One thing I’m always enthusiastic about is the challenge of trying to do things which seem difficult or impossible. So, on a personal level, I’m inspired by any opportunity to create something new, and then the process of persevering to bring an idea to life. Also, I am naturally inclined to feel inspired about HICX, because I really believe in our products. I am excited about the idea of creating a category and building the best possible solutions for our customers. I do genuinely 24

January 2022

love what I do, so I suppose that makes it easy to feel passionate about our business.

Q. WHAT IS YOUR PLAN FOR THE NEXT 12-18 MONTHS?

» Our main goal over the coming year

is growth. We have a lot of exciting new customers who are helping to evolve the solution, and we’re working in close partnership with them to develop the most relevant products. There are some launches

in the pipeline, so watch this space. Our Supplier Experience Management category, which I mentioned earlier, is also part of our growth plan, and a major focus area for the coming year. .

Q. WHAT ARE YOUR FAVORITE THINGS TO DO OUTSIDE OF WORK?

» Hanging out with my wife and kids is my

favorite activity. I love to travel with my family and have a couple of holidays coming

up. Having things to look forward to outside of work helps to balance and motivate me, so I’m trying to make this a priority. When it comes to fun, I am a big music fan and enjoy playing the drums and guitar. I also love to snowboard and am one of those guys who walks for hours just to get to ride the fresh powder. Apart from my family and building HICX, personal growth gets me excited too. I love to read books – mostly non-fiction – and always make it a priority to learn new things. procurementmag.com

Gain control over contracts and manage obligations efficiently GTAA achieved smooth operations and automated its manual contracting processes with SirionLabs’ contract management solution. The airlines breezed through the constant changes brought on by the pandemic owing to continuous, uninterrupted flow of data between GTAA and Wipro. Explore smarter contracting solutions

GTAA & Wipro: Partnering with SirionLabs for Success

Canada’s airports are coming back from COVID stronger than ever—thanks to SirionLabs’ automated solutions “It’s not an exaggeration to say that the pandemic brought the aviation industry to its knees,” says Angella Dikmic, Manager of IT Vendor Management at Greater Toronto Airports Authority (GTAA). But with the help of SirionLabs, she and Anudeep Kambhampati, Director & Global Client Partner at Wipro, have successfully maintained their operations. “As Canada’s largest airport, a variety of passengers from around the world depended on us. That meant we had to innovate and return stronger than ever. With partnerships like Sirion and Wipro we are able to achieve this.” she adds.

GTAA: Flexing A Future-Oriented Mindset

When the world was facing the height of the pandemic, GTAA relied on SirionLabs’ automation solutions to manage its contract renewals, negotiate savings, maintain relations and mitigate risks. “We used SirionOne, Sirion’s CLM platform, to report demand to our IT leadership team in a time of crisis,” says Dikmic. “Through it all, Sirion was responsive, flexible, and aware of the latest trends in contract management.”

Wipro: Maintaining Core Airport Operations In addition, Sirion’s end-to-end CLM platform caters to all functions and levels—and helped Wipro maintain its close technology partnership with GTAA. Even prior to the pandemic, Wipro helped GTAA manage its core operations with artificial intelligence and automation. “Now, every manager on our team uses Sirion on a daily basis,” says Kambhampati. “Because SirionOne handles most tasks, we can easily pull up our contract clauses, review our obligations, and provide GTAA with weekly status updates despite industry disruption.”

Overall, GTAA intends to work with SirionLabs to make Canada’s airports more efficient, effective, and successful. The journey ahead is an interesting one. “We want to take advantage of economies of scale,” says Dikmic. “Our vision is to develop an airport framework that promotes consistent, data-based interactions. We want to drive effective outcomes. We want to draw upon our strengths. And we believe that our partnerships with Wipro and Sirion will allow us to give our passengers a transformative air travel experience.”

Learn more

THE

GOLD STANDARD IN

DIVERSE SPEND WRITTEN BY: RHYS THOMAS PRODUCED BY: MIKE SADR

January 2022

JPMORGAN CHASE & CO.

procurementmag.com

JPMORGAN CHASE & CO.

Through mandates, mentorship and mobilisation, JPMorgan Chase & Co. is promoting diverse spend throughout its supply chain to enact real change

n an era where Environmental, Social, and Corporate Governance (ESG) is rising rapidly to the top of corporate agendas, prioritising diversity is not, on the surface, a novel idea. In fact, JPMorgan Chase has been committed to supporting diverse suppliers for almost 30 years, with the philosophy that an inclusive supplier base that mirrors the communities in which the bank does business generates wealth, creates jobs and fosters economic growth. Currently, JPMorgan Chase dedicates about $2bn annually - to diverseowned and managed companies. And in October of 2020, JPMorgan Chase made a commitment to increase its spend with Black, Hispanic and Latino businesses by US$750 million as a part of the firm’s $30bn commitment to help close the US racial wealth gap. JPMorgan Chase’s global procurement function oversees $19bn in annual spend, across 6,500 suppliers encompassing technology, professional services, real estate, legal, and every category in-between. Given the impact of this significant spend and its ripple effect on the global economy, the team is cognizant of the importance of purchasing responsibly. Jim Connell, Chief Procurement Officer and Head of Global Supplier Services aims to drive diversity further through the bank’s procurement function.

January 2022

Example of an image caption procurementmag.com

JPMORGAN CHASE & CO.

Title of the video

“Supplier diversity is a top priority across Global Supplier Services, which really involves every part of our team - even payment operations and supplier assurance services, who historically wouldn't be involved,” Connell says. “I think it's important that we all play a part in driving supplier diversity forward.” JPMorgan Chase is “doubling down” through a unique approach that leverages its own scale to systematically promote best practices and commitments throughout its supply chain. The firm is mobilising key suppliers to spend more with diverse companies; mentoring those with emerging supplier diversity programs; enhancing discoverability of diverse suppliers; and promoting increased spend targets with key business communities, specifically Black, Hispanic and Latino. The strategy is built upon JPMorgan Chase’s Gold Supplier program, an initiative launched in 2017 that brings together industry leaders 32

January 2022

to generate shared, incremental value and strengthen relationships with its most strategic and highest performing suppliers, from bluechip market leaders to small and agile innovators -both publicly traded and privately held. Connell and his team understand that simply demanding that Gold Suppliers spend more with diverse companies may not provide the desired results. To help drive results they needed a better understanding

JIM CONNELL TITLE: CPO AND HEAD OF GLOBAL SUPPLIER SERVICES INDUSTRY: BANKING

of each company’s current capabilities and how much room there is to grow. "Around a year ago, we engaged with over 100 of those top suppliers to figure out where they are in their journey toward a sustainable supplier diversity program,” Connell says. “We conducted a comprehensive end-toend supplier diversity benchmarking survey, which allowed us to tier them into three different groups.”

EXECUTIVE BIO

LOCATION: USA Jim Connell, as Head of Global Supplier Services (GSS) for JPMorgan Chase & Co., is responsible for Sourcing, Procurement, Third Party Oversight (TPO), Payment Operations and supplier control assessment for a $19B supplier spend portfolio, distributed across 31,000 engagements with 6,500 suppliers. Prior to this role, Jim was the Head of Third Party Operations and Controls for the firm, overseeing the firm wide TO program, Supplier Assurance Services and Payment Operations. Before this, Jim led the firm's Corporate TPO group, inclusiveof the PO policy, technology, regulatory engagement and cybersecurity. Before joining the firm in February 2014, Jim served as CPO for RBS Citizens Bank, managing Strategic Sourcing, the Contract Management Center of Excellence and a supplier spend profile of $1.7B per year. Prior to accepting the CPO role in 2012, Jim held various leadership positions within BS Citizens Bank's sourcing function, including management of the Marketing, HR, Technology, Facilities & Operations sourcing teams. Prior to entering the financial services industry in 2008, Jim practiced strategic sourcing for 7 years at Comverse, Inc., which followed a successful 5 year tenure as a corporate technology sales representative. Jim holds a Bachelors degree in Political Science from Merrimack College, and lives in Connecticut with his wife, Dorin.

procurementmag.com

WWW.OVERLANDTANDBERG.COM

Empowering Organizations to Securely Manage and Protect Their Digital Assets • Leading global technology solution provider for 40+ years • Customers include global Fortune 500, Enterprise,

SME and SMBs in 100+ countries • Data Management and Security Solutions: • Hybrid Cloud Infrastructure, Business Continuity, Data Protection • Crypto-currency, IT Integration and Manufacturing

Tackling diversity through data and technology Overland-Tandberg is a global technology company serving over 100 countries. We spoke to its Chairman and CEO, Eric Kelly. As Chairman and CEO, Eric Kelly takes a dynamic role in leading the company in its global growth strategy. This has involved an important collaboration with one of the world’s leading banking corporations, JP Morgan Chase, that is expanding the company’s mandate of improving global diversity in the corporate and technology sectors. Kelly says Overland-Tandberg was on the lookout for a partnership with a bank to fit the company’s growing, global footprint. “We actually started off discussing the banking relationship, and then it quickly moved into a symbiotic partnership—they became our corporate sponsor. The collaboration has gained momentum and velocity, with Overland-Tandberg carrying out business with JPMC on the supplier diversity side, working with their chief procurement officer and their supplier diversity group. Established trust and success Kelly points to Overland-Tandberg’s long history when he speaks about the company’s robust reputation in the marketplace. As one of the longest

established black-owned global technology companies, it has built up a respected position. Our vision of “Global Intellect and Inclusiveness” is the ethos that drives the organization – this vision allows us to have a comprehensive understanding of diversity and inclusion. Diversity and data challenges Multinationals and foreign companies face the same challenges as US companies when trying to find black-owned businesses, says Kelly, it comes down to a lack of access, availability and awareness. “There are organizations here in the US that showcase specifically black-owned businesses, and diverse companies,” he elaborates. “But I think that from a multinational standpoint of foreign companies, it’s one of access and availability and awareness. How do you find and develop partnerships at scale with diverse companies when there’s no technology platform that’s designed to provide that information?” Kelly continues, “The world is digital and getting smaller. If you’re a US company you’re directly or indirectly doing business globally. This challenge has been constant, which led me to leveraging my history in technology to focus on creating a platform that could align these resources across industry and essentially play a key role in closing the digital and diversity divide.” It’s called Bridge 2 Technologies. Learn more

January 2022

JPMORGAN CHASE & CO.

“WE VIEW SUPPLIER DIVERSITY NOT ONLY AS A MORAL IMPERATIVE BUT AS SMART BUSINESS”

JIM CONNELL

CPO AND HEAD OF GLOBAL SUPPLIER SERVICES JPMORGAN CHASE & CO.

Very nascent supplier diversity programs, or those still in the planning stages, are labelled ‘emerging’. Relatively successful supplier diversity programs that have been established for several years are categorised as ‘established’, while industry-leading, bestin-class supplier diversity programs are considered ‘mature’. “That benchmarking allowed us to approach each supplier in a different way,” Connell explains. "We asked them to draft and submit a growth plan that would show us over a three-year horizon how they're going to improve supplier diversity, in general, and specifically with Black, Hispanic and Latino companies. We then benchmarked those growth plans against each other, and once we felt they were sufficiently ambitious, we accepted them.” To date, almost 40% of Gold Supplier growth plans have been determined ambitious enough to have an impact. Collectively they will increase diverse spend by $6.2bn over the next three years, $1.2bn of which is earmarked for Black, Hispanic and Latino suppliers. Financially, it is a major step in the right direction for diverse businesses, and Connell expects that figure to balloon further as more Gold Suppliers are fully onboarded. What’s even more motivating to Connell and his team is ending 2021 with about a dozen Gold Suppliers initiating a supplier diversity program for the very first time. “Most exciting is the exponential impact of this,” he says. “Around half of our Gold Suppliers have also committed to replicating this initiative with their supply chains, cascading the mandate that diversity is a priority for them. We're excited about the idea of magnifying and multiplying that impact. If we can, in some small way by evangelising the methodology that we use, procurementmag.com

BRIAN SHORTER

NOEL WASHINGTON

TITLE: HEAD OF THE GOLD SUPPLIER PROGRAM

TITLE: VP OF SOURCING, BUSINESS DEVELOPMENT & SUPPLIER MENTORING PROGRAM LEAD

Mobilising Key Suppliers “I created the Gold Supplier Program in 2017. My vision for the programme then, as now, was that it be differentiated from traditional ‘preferred supplier’ programs and create real value for JPMorgan Chase, our Gold Suppliers, and the communities we serve. This is a highly influential group of companies with combined revenues of over US$2 trillion, wielding very significant spending power. It’s in this context that we have developed our supplier diversity initiative over the last year, and have the potential, collectively, to make very material improvements for diverse suppliers and diverse supply markets. “My hope for the future is simple: I want supplier diversity to become businessas-usual for our Gold Suppliers, with supplier diversity programs, and diverse suppliers, that are fully incorporated to the Golds’ sourcing, procurement, and vendor management practices. “The most encouraging sign that my hope may be achieved, though, are the reasons why Gold Suppliers are participating. It’s not just because JPMorgan Chase asked them to get involved. Gold Suppliers tell us that they view supplier diversity as a way to invest in and improve the communities they serve where their employees and customers live and work. In short, it’s good business."

January 2022

Mentoring Suppliers “I partner existing suppliers that support the organisation, but do not currently have a supplier diversity program (mentees), with other external strategic suppliers of JPMorgan Chase that have well-established supplier diversity programs (mentors). “Mentees and mentors will work together over the next 18-24 months to design and implement a sustainable supplier diversity programme. We hope the organisations we are mentoring will create a long-term sustainable diversity department that will in turn create more opportunities for diverse-owned businesses. Our goal is to have opportunities translate into awarded business, and increased revenues for diverse companies; and access to a broader selection of innovative businesses for our Gold Suppliers. “A majority of the mentees have secured leadership buy-in to hire a Head of Supplier Diversity or assign a dedicated resource to drive the effort. Many of the companies have recognised the importance of inclusion of diverse suppliers and identified opportunities to shift how they procure products and services to drive awareness to the utilisation of the diverse business community.”

JPMORGAN CHASE & CO.

TED ARCHER

WILLIAM KAPFER

TITLE: HEAD OF DIVERSE SUPPLIER BUSINESS DEVELOPMENT

TITLE: GLOBAL HEAD OF SUPPLIER DIVERSITY COMMUNITY ENGAGEMENT

Discovering Diverse Suppliers “Not being able to find or discover qualified diverse-owned businesses is a pervasive misconception. There are diverse businesses in just about every industry. In my role, I work closely with colleagues across the firm to match excellent diverse businesses with the opportunities that will lead to their success. JPMorgan Chase is committed to growing minority and other underserved businesses more broadly. My team connects these businesses to resources directly provided by the firm or provided indirectly through partnerships with other organisations. “Black, Hispanic and Latino-owned businesses often face greater challenges than their counterparts when navigating relationships with large enterprises. This can sometimes lead to challenges with being ‘corporate ready’ when an opportunity arises and once an opportunity is awarded it can be difficult to scale up to meet all the demands from a large corporation.“According to the JPMorgan Chase Institute, Black, Hispanic and Latino households have median family wealth of just 13 percent and 19 percent of white households’ median family wealth, respectively. If black businesses achieved parity with non-black businesses, we would have US$676 billion in more business revenue, 1.6m more jobs, and 25m more wages.”

Supporting Black, Hispanic and Latino “Just as we know that a diverse organisation leads to better problem-solving and innovation, so does a diverse supply chain. Focusing supplier diversity programming on Black, Hispanic and Latino companies helps us to play a role in addressing the racial wealth gap, while promoting and increasing economic mobility for the country’s most historically underrepresented segments. Advancing racial equity requires a more intentional focus on the challenges faced by these communities of colour and a commitment to becoming an inclusive institution. “We have set a clear, quantifiable goal to spend an additional US$750 million with Black and Latino-owned businesses by 2025, as part of the firm’s overall US$30 billion commitment to racial equity. Our program is distinguished by the fact that we don’t limit our internal relationships to simply sourcing and procurement. Our team cohesively aligns its efforts with JPMorgan Chase’s firm-wide DE&I initiatives allowing us to raise awareness about supplier diversity throughout all levels of the business. “We are off to a strong start – and remain encouraged by the firm-wide support that this strategy has catalysed—as we continue to further accelerate work already underway to address racial equality and opportunities in the communities in which we live and work.”

procurementmag.com

JPMORGAN CHASE & CO.

make supplier diversity an integral part of doing business for these big companies, it can really have a transformational effect on diverse communities. That's an exciting notion for us that really mobilises the team.” Though supplier diversity is a mandate for these suppliers, JPMorgan Chase recognises that not every organisation has the resources or expertise to transform overnight - and is supporting them through these challenges. For suppliers with emerging diversity programs, the firm offers access to mentorship. “We're pairing them up with those that are best-in-class, industry leaders in supplier diversity,” Connell says. “We're creating mentor-mentee relationships where they can learn from the best, and providing them with tools, templates, and training modules. For suppliers with established but growing diversity programs, the bank is helping to overcome one of the most common hurdles: discoverability. In the US, the inability to find a deeper pool of diverse suppliers is more a perception than a reality. Connell and his team help to point the way to getting started. “Many suppliers are daunted by the idea of finding diverse businesses and it's a blocker to initiate their programs at all,” Connell says. “We tell people to start small and analyse their own spend, because they're probably spending money with diverse suppliers today that they don't even know about. “There are tools you can use to analyse that, but more importantly is creating relationships with some of the key diverse business certification organisations like the National Minority Supplier Development Council or the Women's Business Enterprise National Council. They can give you the support you need to build your program, expand your databases with eligible suppliers, 40

January 2022

“CREATING MORE INCLUSIVE SUPPLY CHAINS ACROSS THE WIDER BUSINESS COMMUNITY WILL CHANGE THE COMPETITIVE LANDSCAPE FOR DIVERSE SUPPLIERS FOR GENERATIONS TO COME.” JIM CONNELL

CPO AND HEAD OF GLOBAL SUPPLIER SERVICES JPMORGAN CHASE & CO.

and your network of other companies that you can share best practices with.” Through the Gold Supplier program, JPMorgan Chase also shares its own list of diverse suppliers, with teams in place to ensure that minority and underserved businesses share the same level of visibility as more established competitors. “We have over 100 of the biggest companies in the country, and together we've created this community where we

share diverse supplier lists,” Connell says. "Through practices like this, we help each other succeed.” Improving spend with diverse suppliers supports a wider ESG agenda at JPMorgan Chase & Co. “There is an expectation now that companies that we do business with also share our values. We believe that procurement spend can be leveraged for social good, whether that’s racial equity, environmental

sustainability or good governance. It is not a box-checking exercise,” Connell says, “but a vital pillar for the future of the bank and its stakeholders. We view supplier diversity not only as a moral imperative, but as smart business,” he explains. “We compete with other banks for clients, customers, and talent. And so we know that a bank that is firmly rooted in these communities is going to have a positive long-term impact.” procurementmag.com

JPMORGAN CHASE & CO.

January 2022

"COMPANIES SHOULD EXPECT THAT ESG IS GOING TO BE AN INTEGRAL COMPONENT OF HOW THEY'RE MEASURED”

JIM CONNELL

CPO AND HEAD OF GLOBAL SUPPLIER SERVICES JPMORGAN CHASE & CO.

When society wins, so too does the overall business community. "Companies should expect that ESG is going to be an integral component of how they're measured in their relationships,” he adds. "And it all boils down to: are you spending your money in the right way, in a way that helps the community? It's a hard thing to measure until you start looking at it in specific domains around diversity, sustainability, and governance. We're taking a programmatic approach to this, getting quantitative around our Gold Supplier community and how we would seek to influence both our direct spend and our suppliers’ spend.” In the coming 12 months, the bank anticipates firm progress in the growth plans that have already been submitted, with more opportunities as further Gold Supplier growth plans are approved. But it is the longterm vision that will enact real change, and bring the bank’s true ambition to life. “The larger purpose of all of this is to have companies develop sustainable programs that will create new diverse spend for decades into the future,” Connell says. “We'd like to see this initiative cascaded to thousands of businesses because creating more inclusive supply chains across the wider business community will change the competitive landscape for diverse suppliers for generations to come.” procurementmag.com

HACKETT GROUP:

SHOULD PEOPLE

BE AT THE TOP OF

CPOS’ AGENDA? Nicolas Walden, Senior Director, Hackett Group, discusses the importance of investing in people when realising intelligent procurement practices WRITTEN BY: GEORGIA WILSON

n today’s modern organisations, the procurement function is expanding. Merely a few years ago executives in the function were primarily focused on sourcing and contracting suppliers; a much narrower, basic approach, with technology lagging behind many other functions. “We lacked that investment, and the investment that we did have was often in limited or difficult to use tools. We found that many procurement teams were actually resisting the use and the adoption of technology. But moving forward to where we are now, from 2021 going into 2022, there has been a huge amount of investment. All

January 2022

these startups, private equities, fundings, tens of hundreds of millions have gone into a whole raft of new modern tools with all these great new features and functionality and a majority of procurement functions realise that they really do need to accelerate the adoption towards these modern tools, right? So it's a very big change to where we were from only a few years ago,” reflects Nicolas Walden, Senior Director, Procurement Executive Advisory Membership Programmes, Hackett Group. “These days robots, AI and smart intelligence are becoming embedded into the features and functionalities of these platforms. So where are we going next?

PROCUREMENT STRATEGY

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PROCUREMENT STRATEGY

“ My vision for the function is about how we can become a much more modern and more strategic, business enabling function” NICOLAS WALDEN

SENIOR DIRECTOR, PROCUREMENT EXECUTIVE ADVISORY MEMBERSHIP PROGRAMMES THE HACKETT GROUP

It's about how we change the focus from simply talking about using technology. My vision for the function is about how we can become a much more modern and more strategic, business enabling function. And a key part of that will be the data and insights that we need to tap into to enhance decision making.” But while AI is likely to be the next key enabler in the future, Walden doesn’t think procurement is there yet. “I don’t think

we are anywhere close to AI taking over procurement, but today if we think about what AI is, we are seeing some real life, interesting and powerful examples such as automated negotiation bots. You’ve got an AI powered tool that extracts data from a stream of requisitions that business users are raising, and then it goes out to suppliers and haggles with them. We are also seeing AI solutions being used in third party risk management, the tools are able to review and search through a large database of contracts or suppliers and market information, and identify differences and areas of risks to recommend actions for the business to take. So I can see AI being a huge enabler but we're really only at the start of that journey, I don't see it taking over the whole of procurement any time soon.” procurementmag.com

PROCUREMENT STRATEGY

AI is also not the only tool that will need to be used in procurement to drive intelligence into the function. “We’re going to need a number of different tools,” says Walden. “One is automation, if we’re going to be intelligent and smart in the future, procurement will need a tool to sort out its data - capture it, ingest it, bring in internal and external data - and provide a visual representation. Because we don’t just want to use technology to automate processes we want to be intelligent with it. I see modern platforms having these sorts of features and functionalities to improve the overall 48

January 2022

environment. Stuff like cloud, IoT, sensors, GPRS, Big Data will all be game changers.” But is procurement intelligence the answers to global challenges in procurement? While technology will be a key enabler, Walden doesn’t see it as a ‘silver bullet answer’. “I think we need to be led by the vision. What is procurement all about? Where are we going? Who do we need to be in the future to meet business requirements and provide business value? And so I see technology as just one of these tools. We need data, we need insights and analysis,

Nicolas Walden TITLE: SENIOR DIRECTOR, PROCUREMENT EXECUTIVE ADVISORY MEMBERSHIP PROGRAMMES

and we need great people, and it’s that last part that I think many organisations neglect, and don’t invest enough time and energy into. There is this massive gap, the people aspect, new roles, new skills, new expertise, and new ways of working that I think too often gets missed.” But will this be at the top of procurement’s agenda for 2022 and beyond? “It should be,” says Walden, “but it’s definitely not the top priority. The top priorities for procurement will still be cost savings particularly in today’s environment

My name is Nicolas Walden, I'm a Senior Director at the Hackett Group. I lead one of our service lines, what we call our procurement executive advisory membership programmes. I've been with Hackett Group for 14 years now, but I actually started my career in finance, then moved over to procurement. At Hackett Group I work solely with the leadership team. Utilising our research, our world-class performance insights to work with those leadership teams to de-risk and accelerate their transformation plans towards worldclass performance. We typically work with large and multinational procurement teams. procurementmag.com

PROCUREMENT STRATEGY

January 2022

“ I can see AI being a huge enabler but we're really only at the start of that journey, I don't see it taking over the whole of procurement any time soon” NICOLAS WALDEN

SENIOR DIRECTOR, PROCUREMENT EXECUTIVE ADVISORY MEMBERSHIP PROGRAMMES THE HACKETT GROUP

of scarcity and inflation. It will also be third party risk management, business resilience, supply assurance, sustainability, and mastering data and information architectures. We run a study every year that looks at the CPO top 10 priorities, and people are always in the top 10, but it's usually around number seven, eight, or even nine. But I think it needs to be much higher. One of the differences that we see with the world-class procurement organisation is that they invest double the number of training hours. They invest much more effort into developing their people. The majority of procurement leadership functions that I talk to are all on the same journey towards cost savings, but also managing risk, sustainability and collaborating with suppliers for innovation. We're all on the same journey and we're all chasing the same sort of people. You'll be able to bring in some people externally, but you'll also need to develop your own and move some people around the business. So I really think that people are key. It needs to be higher on that priority list.” procurementmag.com

January 2022

SSE

DATA-DRIVEN, FRICTIONLESS, INSIGHTS AND CREATING VALUE

WRITTEN BY: GEORGIA WILSON

PRODUCED BY: TOM LIVERMORE

procurementmag.com

January 2022

SSE

SSE’s Ronnie Fleming and Chris Platts discuss SSE’s digital transformation agenda and its commitment to a net zero transition and sustainability that makes a difference

ogether, Ronnie Fleming, Chief Procurement Officer and Chris Platts, Head of Procurement Operations, have worked for SSE for more than 15 years. The two have deep roots in the procurement sector working for the likes of Wimpey Construction, Leighton Contractors (Malaysia / Middle East ) Mace Group, United Utilities, Accenture and DHL Supply Chain. “I am a Chartered Quantity Surveyor by profession,” says Fleming. “I have been in the construction and utility industry for over 40 years, the last 12 have been with SSE. As well as overseeing the procurement for all third party spend across the SSE Group (around £3bn per annum), I’m also responsible for a team delivering post contract commercial support across our large capital projects portfolio. In addition, I look after Property & FM, Logistics, Fleet, and Travel with a team of c460 highly talented people.” Chris Platts, on the other hand, heads up the procurement operations team at SSE, “I have the pleasure of looking after about 80 people across UK and Ireland which includes our sourcing teams, purchase to pay, data analytics, system support, sustainability, SRM, and innovation. I also lead our large change programmes for the Procurement & Commercial , such as digital transformation and some broader group change programmes.” Being a leading generator of renewable energy in the UK and Ireland, as well as one procurementmag.com

SSE

Data-driven, frictionless, insights and creating value

of the largest electricity networks in the UK, SSE develops, owns and operates low carbon infrastructure for the net-zero transition, including onshore and offshore wind, hydropower, electricity transmission and distribution to grid, efficient gas generation, alongside providing energy products and services for businesses. Data-driven, frictionless, insights and creating value The mission: ‘A data-driven strategic partner, providing a frictionless procurement and commercial experience with insightful market and supplier information that delivers significant value for each SSE business.’ Making a significant, multi-million-pound investment in new processes, tools, and skills over the next few years, SSE aims to achieve its mission creating a world-class procurement function, by focusing on four core themes: 1) optimising the core 56

January 2022

2) data, analytics and insight 3) customer experience and 4) automation. “This programme is one of many across the group. Our CEO wants to create an upper quartile digital business by 2023, which was set last year,” said Platts. “We’re one year into our three-year programme and we’ve had two big deliveries focused on optimising the core. We have implemented a new source to contract system and a new system to control contingent workers and professional services engagements in SSE. “We’ve also completed a data strategy that sets the foundations for the digital change; we’re also in the middle of some proof of concepts and trials to introduce machine learning and analytics on commodity pricing impacts, and in the early stages of a mobile app for catalogue procurement.” Despite this, being successful with a strategy of this magnitude doesn’t come without its challenges. “Big deliveries are

SSE

EXECUTIVE BIO CHRIS PLATTS TITLE: HEAD OF PROCUREMENT OPERATIONS LOCATION: MANCHESTER, UK Chris graduated from Lancaster University in 2003 and began life in procurement at United Utilities in 2004. In 2007 he joined DHL Supply Chain and spent several years in a number of project management, business development, and product development roles. In 2013 he joined Accenture and spent his time working on various procurement and supply chain projects including SSE as a client, which led him joining SSE as Head of Transformation in 2015. Chris is now Head of Procurement Operations and oversees all group procurement and major change programmes on behalf of Procurement & Commercial and leads on some broader programmes across the group. Chris is married with 3 children. He enjoys cooking, football and cycling.

procurementmag.com

SSE

EXECUTIVE BIO RONNIE FLEMING TITLE: CHIEF PROCUREMENT OFFICER LOCATION: SCOTLAND Ronnie qualified as a Chartered Quantity Surveyor in 1991 and comes from a background in construction, where prior to joining SSE, he spent 28 years in various main contracting and construction management organisations working on a wide range of civil engineering and construction projects in both the UK and SE Asia / Middle East. He was previously Director of Procurement & Commercial Operations for SSE Group and in April 2018 assumed the role of Group Director of Procurement & Logistics responsible

January 2022

for all procurement and post contract commercial management services across SSE Group. In addition to his Procurement and Commercial responsibilities he also manages our Group Logistics function which entails the control of stock, inventory and distribution of goods from two main distribution centres as well as a network of nationwide depots. In April 2019, Group Property and FM, along with Fleet and Travel were added to his area of responsibility as Chief Procurement Officer. Ronnie lives in Biggar on the edge of the Scottish Borders (SW of Edinburgh) and is married with three grown up children, 2 cats. In his spare time, he is a keen golfer and has recently taken up cycling.

SSE

obviously complex,” says Platts. “Having a large number of users in procurement and the wider business means that business change and adoption needs to be carefully through, but we have managed to deliver them on time and under budget. More broadly we recognise that digital isn’t just about the shiny new technology, it’s a cultural change in the function and the wider organisation to consider new ways of working to become more agile in what we do. “Another challenge has been on the recruitment side. We are looking for resources in some key roles at the moment, but so are a lot of other procurement functions. Labour markets are becoming buoyant post-COVID so we have to consider how we attract and importantly retain talent in the team,” adds Platts. SSE and its relationship with sustainability When it comes to sustainability at SSE, the utility company is deep-rooted in making a difference. “Our purpose is to provide the energy needed today, while building a better world of energy for tomorrow.. Our vision

“ This programme is one of many across the group. Our CEO wants to create a quartile digital business by 2023, which was set last year” CHRIS PLATTS

HEAD OF PROCUREMENT OPERATIONS, SSE

is to be a leading energy company in a net-zero world. Our strategy is to create value for shareholders and society in a sustainable way by developing, building, operating and investing in the electricity infrastructure and businesses needed in the transition to net-zero. And our Goals by 2030 are to cut carbon intensity by 60%, treble our renewable energy output to 30TWH/annum, help accommodate 10 million electric vehicles onto the electricity network, and be the leading company in the UK and Ireland championing fair tax and a real living wage,” says Fleming. procurementmag.com

SSE

Focusing on the company’s sustainable procurement strategy, Platts emphasises how proud SSE is of what it has achieved over the last 18 months. “SSE has aligned to the ISO 20400 Sustainable Procurement Guidance Standard as well as the UN’s Sustainable Development Goals,”says Platts. “We have a new Sustainable Procurement Code, which sets out the requirements and expectations for our supply chain – from paying a real living wage to setting sciencebased carbon targets. “We have also carried out detailed risk and opportunity assessments across our 62

January 2022

“ Our purpose is to provide the energy needed today, while building a better world of energy for tomorrow” RONNIE FLEMING

CHIEF PROCUREMENT OFFICER, SSE

SSE

SSE and It's Partners “We’re fortunate enough at SSE to have a rich, diverse and highly capable supply chain, which extends to some 10,000 suppliers across the group. We have a significant number of deep and mutually beneficial relationships with our top suppliers including GE , Balfour Beatty, Siemens, Hitachi Energy & Vestas. All of these key suppliers participate in a tailor-made supplier relationship management forum that focuses on safety, delivery, excellence, innovation, and B2B opportunities in the spirit of openness, trust, and collaboration. “Healthy, sustainable, and highly capable supply chain partners are essential to the delivery of our ambition. The relationships we have and will continue to develop are founded on the principles of integrity, honesty, and mutual trust. We recognise that without our supply chain would not be able to deliver our strategy and targets, and that is why we devote so much time and energy into developing and managing these critical B2B relationships” – Ronnie Fleming, Chief Procurement Officer

entire purchasing categories, allowing us to directly link our sustainable tender criteria and performance metrics to material risks and opportunities, as well as apply proportionally for our suppliers. We also publish a compliant Modern Slavery Statement each year, dating back to 2016.” Reflecting on SSE’s digital transformation strategy, Platts explains that the challenges from a digital/sustainability perspective have included, "How we can digitally enable our sustainable procurement strategy? How can we assess and track supply chain risk? How do we provide supply chain insight that will

add value to the ESG story? This is why we are currently piloting things like supply chain reporting tools.” “It’s an extremely exciting time to be a part of SSE. We’re a principal sponsor to COP26 and our purpose is to help to address the climate emergency. Having a sustainable supply chain, which is managed by a digitally enabled, world-class Procurement & Commercial function will be key to delivering our net zero ambition,” concludes Platts.

procurementmag.com

FEATURE HEADER

CLOSING THE

PERFORMANCE GAP IN

PROCUREMENT TRANSFORMATION 64

January 2022

DIGITAL FEATURE PROCUREMENT HEADER

Roman Belotserkovskiy (McKinsey & Company) and Nicolas Walden (the Hackett Group) discuss the performance gap in procurement transformation WRITTEN BY: GEORGIA WILSON

Roman Belotserkovskiy Partner, McKinsey & Company

Nicolas Walden Senior Director, The Hackett Group

iving in a world with increasing disruptions, in the last three to four years alone organisations have faced COVID-19, tariffs, inflation, and trade wars. “There have been a variety of things that have happened that highlighted the weaknesses that are in global supply chains and procurement organisations,” says Roman Belotserkovskiy, Partner, McKinsey & Company. “While today the nature of the problems may be different compared to a couple of years ago, the reality that we are seeing is that volatility in general is increasing, and that has challenged procurement to be able to sustain the globalised, just-in-time (JIT) model. Instead these disruptions are calling for a more sophisticated function, that is more tuned into your supply market, and better partnered with internal stakeholders. In a world that is getting more challenging, these features will be needed in procurement functions,” adds Belotserkovskiy. “In the last decade I have seen more excitement around proven procurement capabilities and effectiveness than I’ve seen in a long time. I think people are finally realising that procurement can help to weather the challenges and create value for the company. It’s raising the profile of what procurement can do.” procurementmag.com

How will business leaders set in motion a better working world? Environmental Social Governance Services

ESGS is driving an inclusive and sustainable mindset across the EY organization through our procurement strategy. Our purpose is to drive sustainability and economic impact for EY and the communities we serve.

DIGITAL PROCUREMENT

“ In our benchmark database, we are seeing a significant gap between the median performer and the top quarter performer” NICOLAS WALDEN

SENIOR DIRECTOR, THE HACKETT GROUP

Understanding the transformation gap in procurement “In our benchmark database, we are seeing a significant gap between the median performer and the top quarter performer,” says Nicolas Walden, Senior Director, Procurement Executive Advisory Membership Programmes, The Hackett Group. “And it’s a significant gap, a two to three X difference whether you are talking about cost savings, ROI, number of

suppliers, level of automation, or touchless orders. And that gap is growing year-onyear, and it's not one single industry that is outperforming over others It is specific leading organisations across all industries. They have taken a systematic and deliberate approach to invest in their procurement functions, they see the value potential in the future, so they are building in the best practices, they are developing capabilities, people, data and technology.” Agreeing with Walden, Belotserkovskiy adds: “in many organisations procurement is a cost centre, it is not a profit centre. So the investment in technology and procurement can be hard to justify. If you think about the journey of procurement technology there has been a wave of big ERP implementations in the last decade or so, but while these have some procurement features they are not going to fix procurement problems. Organisations have come to realise that they need a whole different layer of specific procurement tools on top of your ERP which many organisations are lagging behind in. So we have been seeing a lack of prioritisation procurementmag.com

Nicolas Walden TITLE: SENIOR DIRECTOR COMPANY: THE HACKETT GROUP Nicolas Walden is a Senior Director at The Hackett Group. Walden leads one of the company’s service lines called ‘Procurement Executive Advisory Membership Programmes’. He has been with the Hackett Group for 14 years, but started his career in finance before moving to procurement. At the Hackett Group Walden works solely with the leadership team, utilising research and world-class performance insights to work with leadership teams to de-risk and accelerate their transformation plans. The Hackett Group typically works with large and multinational procurement teams.

for strategic procurement and investment in technology in the past, but I think, while the gap is still pretty wide, this is starting to change.” “But it’s not only technology,” says Walden. “It is an entire business change of ‘where do we need to get to in two or three years?’ Yes we need some new tools, but we also need new roles, new processes, maybe a new operating model, and new data. Success in terms of transformation relies on investing ahead of the efficiencies. ‘We are doing this because it’s going to give us some benefits.’ Too many organisations start to chase down the business case too quickly, 68

January 2022

“ In the last decade I have seen more excitement around proven procurement capabilities and effectiveness than I’ve seen in a long time” ROMAN BELOTSERKOVSKIY PARTNER, MCKINSEY & COMPANY

DIGITAL PROCUREMENT

they start rolling out new tools, but where is the funding for the new roles needed in order for the use of these tools to be successful? We need to invest ahead in order to deliver these efficiencies.” Adding to Walden’s comments, Belotserkovskiy says: “It is important to identify the aspiration for what the function is supposed to, understanding this first, makes it easier to justify investments in things like technology, it provides an anchor for the business case.” “Procurement isn’t very good with leading changes,” continues Walden, “it’s not really a professional skill that we have within procurement. We’re still hiring on the basis of sourcing, contracting, and supply management skills. Some procurement functions have dedicated

Roman Belotserkovskiy TITLE: PARTNER COMPANY: MCKINSEY & COMPANY Roman Belotserkovskiy, is a Partner, at McKinsey & Company’s Austin office. He is a part of the procurement practice, leading the company’s global work in energy and materials. For more than a decade, Belotserkovskiy has been helping local companies optimise their supply chains and procurement. procurementmag.com

DIGITAL PROCUREMENT

“ We run a study every year that looks at the CPO top 10 priorities, and people are always in the top 10, but it's usually around number seven, eight, or even nine, but I think it needs to be much higher” NICOLAS WALDEN

SENIOR DIRECTOR, THE HACKETT GROUP

January 2022

change or transformation teams but it's not common. So there is a massive opportunity to help close this gap by professionalising and levelling up our own skills in being able to more effectively drive change.” Top priorities for procurement leaders in 2022 and beyond When it comes to priorities for procurement leaders as we start the new year, Walden would like to see investment in people at the top. “It should be, but it’s definitely not the top priority,” says Walden. “The top priorities for procurement will still be cost savings particularly in today’s environment of scarcity and inflation. It will also be third party risk management, business resilience, supply assurance, sustainability, and mastering data and information architectures. We run a study every year that looks at the CPO top 10 priorities, and people are always in the top 10, but it's usually around number seven, eight, or even nine. But I think it needs to be much higher.” Adding to Walden’s comments, Belotserkovskiy says: “organisations shouldn’t try to wait this cycle out, taking a bet that it is going to come back to normal is a dangerous place to be. We are seeing volatility increasing, and if it’s not the next virus then its climate change, it’s a natural disaster. Recent history points at a need for increased resiliency so it comes down to what capabilities do we need to build now to deal with recent disruptions. All of the implementations made in response to recent disruptions now need to be built into the fabric of procurement in a sustainable way going forward.” procurementmag.com

Navigating the complexity of supply chain & procurement WRITTEN BY: GEORGIA WILSON PRODUCED BY: GLEN WHITE

January 2022

procurementmag.com

CRANFIELD SCHOOL OF MANAGEMENT

Soroosh Saghiri, Course Director and Senior Lecturer at Cranfield School of Management on supplier diversity, industry advancements, and core priorities

r Soroosh Saghiri began his career journey in industrial engineering, “it was a fascinating time,” says Saghiri. “We learned some basic tools and theories around managing activities and businesses from an operations perspective, including product design, process design, and quality management.” While purchasing activities were a part of this, Saghiri explains “we didn’t have a specific topic on procurement management, but everything was around managing operations and supply chain management. In the 1990s, it was the early days of understanding the valu and massive publicity of the supply chain. “The very first book I read about supply chain management was in the mid-1990s and we learned that if you want to do something for businesses, it should be supply chain-wide. That is when I started my doctorate at the University of East Anglia focusing on supply chain strategies,” he adds. Today, Saghiri is the Senior Lecturer of Supply Chain Management and Course Director for Executing MSC in Logistics and Supply Chain at Cranfield School of Management.

January 2022

Dr Soroosh Saghiri Course Director and Senior Lecturer

Example of an image caption procurementmag.com

CRANFIELD SCHOOL OF MANAGEMENT

Navigating the complexity of supply chain & procurement

The history of Cranfield School of Management Established in 1967, Cranfield School of Management is a unique institution with over 96 courses dedicated to postgraduate studies, including MSC and doctorate and business executive courses including marketing, supply chain, MBAs, human resources, and finance, which the school always ranks highly. “Our rankings signify the quality of our course and how popular they are for UK, European, and international students. We are training the future business leaders,” says Saghiri.

a wide range of suppliers from all different backgrounds and different areas, whether they are individuals or companies, because they may have innovative ideas and practical solutions that can help to enhance the supply chain. “These days it is not individual companies, but supply chains who are competing. And those supply chains are dependent on hundreds or thousands of suppliers all around the world. The more diverse we are, the more benefits we can have from the supply chain, and ultimately be more effective and efficient.”

Supplier diversity As supply chains become more complex structures and processes, Saghiri explains that “leaders in this space will need to be more open to different approaches to manage supply chains, open to different solutions, and open to supplier diversity. We need to make sure that we are using

Technology advancements in the supply chain and procurement When it comes to the level of technological advancements in supply chain and procurement, Saghiri says “it’s huge, all different types of industry 4.0 technologies — robotics, big data analytics, artificial intelligence — these are very fast-moving

January 2022

DID YOU KNOW...

A MEMBER OF THE CHARTERED INSTITUTE OF LOGISTICS AND TRANSPORT (CILT) “Similar to many other professional bodies, the Chartered Institute of Logistics and Transport (CILT) is a massive learning forum of practitioners from logistics and transport backgrounds. They gave me lots of new ideas and operations perspectives, providing an understanding of what is happening in different infrastructures and the real challenges we have at the moment in the logistics sector,” says Saghiri. “Through different events, seminars, and networks, I learned a lot about human resource management in logistics and the shortage of different expertise such as the lorry drivers, data analysts, and supply chain leaders. This was a good learning

curve for me to see what the industry is asking the academic side to design and deliver something relevant and on target to make sure we have the right people for the job market in the short-term and midterm future. So my connection with the CILT has been very fruitful.”

procurementmag.com

CRANFIELD SCHOOL OF MANAGEMENT

DR SOROOSH SAGHIRI TITLE: S ENIOR LECTURER AND COURSE DIRECTOR INDUSTRY: EDUCATION

EXECUTIVE BIO

LOCATION: BEDFORDSHIRE, UK Dr Soroosh Saghiri is a procurement and supply chain thought leader, senior lecturer and programme director at Cranfield University, School of Management. He has BSc and MSc in Industrial Engineering and PhD in Supply Chain Management from the University of East Anglia. Soroosh is Chartered Fellow of CILT and Senior Fellow of HEA. He has published two book chapters and more than 50 articles in peer-reviewed journals, international conferences, and professional magazines. Soroosh has been involved in training, research, and consultancy in the UK and internationally, in fields of procurement and supply chain management, Industry 4.0, and digital transformation for the past 21 years.

“ COVID-19 was a massive disruptor, it may take time for some of those suppliers to go back to full capacity” DR SOROOSH SAGHIRI

SENIOR LECTURER AND COURSE DIRECTOR, CRANFIELD SCHOOL OF MANAGEMENT

in all aspects of the supply chain, which will lead to business models moving towards more digital procurement activities in terms of how you run tenders, deal with suppliers, manage relationships, monitor quality and delivery performance.” In general, Saghiri’s main focus is on the information systems, the digital supply chains, and how the industry produces the quality of data needed to generate valuable analysis and insights that can be shared. However, these are quite complex topics due to the network structure and connectivity of the supply chain. “The conceptual model for this is something that is being developed. We need to bear in mind both the practical aspects and the integrations, as well as the fact that most of the time when we are talking about global supply chains, we need to consider

managing relationships across multiple tiers of suppliers, which is quite complex,” says Saghiri. With this in mind, the university has embedded supply chain complexity theories into its studies. “We need to manage these complexities, understand the challenges, risk and resilience. So while digital transformation will help to manage the flow of data better, in most cases, a complete redesign of the whole process will need to be done alongside the new technology. It will be a long journey — technology will be at its core — but it will depend on how well we understand and analyse the supply chain data, and this is where the likes of big data analytics and artificial intelligence have been beneficial giving use intelligence into the supply chain and consumer market so that hopefully we will be in a much better position to respond to future disruptions.” procurementmag.com

CRANFIELD SCHOOL OF MANAGEMENT

“ Leaders in this space will need to be more open to different approaches to manage supply chains, open to different solutions, and open to supplier diversity” DR SOROOSH SAGHIRI

SENIOR LECTURER AND COURSE DIRECTOR, CRANFIELD SCHOOL OF MANAGEMENT

January 2022

Top priorities for supply chains and procurement functions for 2022 As we start 2022, Saghiri explains that there are many things that procurement functions should prioritise to secure the flow of material supply from around the world. “COVID-19 was a massive disruptor. It may take some time for some of those suppliers to go back to full capacity. Some were totally wiped out, so we will need to develop a new generation of suppliers and new technologies that can help secure products and materials. Attached to the challenges of COVID-19, we have trade wars, economic changes, and social changes that have implications. Resilience will be something that, on both the operations and strategy side of the business, will be looking to improve in order to battle risk and uncertainties. “So that is one priority for procurement, another is continuous digital transformation and adopting an effective strategy. It’s not just about applying new technologies, having everything automated and sensors everywhere, is no good if they are not aligned with a clear strategy on how the entire supply chain is going to be managed. We will have huge amounts of data generated, so that will be another challenge for procurement and supply chain leaders going forward. How do we handle that data? “Finally, we need to evaluate whether there are enough leaders in this function. Do we need to train more in this area? What lesson do they need to learn? This will be a long journey, but we need to assess what is needed when it comes to procurement and supply chain leadership,” concludes Saghiri.

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January 2022

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What are the core functions of procure to pay (P2P)? AS: Procure-to-pay (P2P) is – put simply – the function that allows an organisation to request, buy, receive and pay for essential products and services. Done right, P2P solutions can empower employees and suppliers, simplifying the buying experience, providing transparency, optimising cash management, maximising compliance and managing spend effectively. How are leading P2P organisations enhancing their offerings with advanced technologies (AI, real time analytics etc.)? AS: Advanced technologies are greatly enhancing the value of spend management technologies, P2P included. Once viewed as nice-to-haves, as the technologies mature, they have become vital to realising the full potential P2P solutions offer. For example, AI is improving the user experience and adoption through virtual assistants, such as Ivalua’s IVA, that quickly guide users to the goods and services they need. Decision-making is improved by advanced analytics which bring together data from suppliers and stakeholders, procurementmag.com

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“ Once viewed as niceto-haves, as the technologies mature, they have become vital to realising the full potential P2P solutions offer” ALEX SARIC

SMART PROCUREMENT EXPERT, IVALUA

drastically improving visibility into spend and enabling suppliers to share their data more effectively. Automation is also being improved by advanced technologies such as modern automated eInvoice processing tools that can convert file types and remove duplicates, capturing invoices in a single hub that will make checks on tax compliance, authenticate invoices and simplify the process for accounts payable. This frees up time for employees to spend on higher-value activities.

WM: This year we saw vendors across the board improving their use of AI in several areas including conversational platforms to enhance search and interactions with suppliers, improved document handling, and spend analytics. AI is also used in risk mitigation to determine the impact of adverse events on the supply chain including predicting potential financial distress in suppliers or their ability to fulfill orders on time in full. Advanced technologies help more mature companies continue to get value out of their investments and move from purely transactional processes to more value-added ones (ex: supplier relationship management and risk mitigation), but the fact of the matter is there is still tremendous value in simply automating a manual process. Automation yields both time and money savings that can be redirected to other areas of the business that require more advanced decision making. procurementmag.com

TECHNOLOGY

“ P2P solutions help a procurement organisation become more efficient and strategic thus contributing to their own sustainability” WILLIAM MCNEILL,

RESEARCH DIRECTOR, GARTNER SUPPLY CHAIN PRACTICE

How can organisations benefit from collaboration in the P2P process? AS: Collaboration has become increasingly vital for procurement, both with other departments such as finance, and with suppliers. Today’s top business challenges benefit from collaboration in the P2P process. For example, supply continuity can be improved by collaborating with suppliers on planned orders and forecasts. Suppliers regularly point out that they are more willing to share innovations with customers that provide timely and transparent payments. And reducing a businesses’ carbon footprint requires collaboration on targets, improvement plans and alternate product options with environmental impact details. This is an area of significant differentiation for P2P technologies. Point or legacy P2P solutions often struggle to drive supplier enablement, lack collaboration capabilities and integration with other steps in the procurement process where critical information is captured. P2P solutions that are tightly integrated, make it simple and cost-free for suppliers to join and enable secure, efficient communication and information 86

January 2022

sharing greatly improve collaboration and, as a result, position businesses to succeed in today’s volatile market. For example, by adopting Ivalua’s cloud-based P2P solution, Maxim Healthcare was able to onboard more suppliers in just eight weeks than in the previous seven years with a legacy system. This drastically improved efficiency, visibility, and control on spend.

WM: Collaboration in P2P allows buyers and suppliers to create more accurate pricing, forecasts and delivery dates. This type of assurance (seeing the data in a cloud-based platform) cuts down on a lot of manual back and forth by email and phone. Some procurement professionals spend more than half their day simply fielding inquiries from suppliers on the status of events. P2P systems can make 90% of that manual work disappear.

As the volatility of procurement and supply chain increases, how can P2P solutions help procurement leaders increase visibility, manage risk, and be more sustainable? WM: P2P solutions can offer greater visibility into PO acknowledgements, invoice and payment status. A buyer can track how quickly and how often a supplier acknowledges a PO for example. Suppliers often gain visibility into the status of their procurementmag.com

January 2022

TECHNOLOGY

payments. Suppliers like to know when they’re getting paid because the amount of cash on hand often affects their decisions on what to make and when. Risk takes a variety of forms including performance, financial, environment and social. P2P systems that incorporate risk data can help procurement professionals make better decisions on which products to buy from whom and limit the amount of risk exposure. If given a choice and all other things being equal, a procurement professional will always select a supplier with a better on-time delivery rate. Or a supplier that is in better financial standing. Or one that doesn’t appear on a terrorist watch list. Who wouldn’t? Sustainability applies to both the procurement group itself and the company

overall. In other words, P2P solutions help a procurement organisation become more efficient and strategic thus contributing to their own sustainability. And the solutions help procurement professionals select more sustainable products and suppliers which helps the overall company’s contribution to sustainability. What will 2022 hold for P2P solutions? WM: We fully expect the use of AI to continue as a trend and quickly become standard functionality in P2P suites. We’re also focusing on the trend of hyper automation, which is a discipline and methodology that a company applies to automate as many areas of the business as possible. procurementmag.com

UNIVERSITY OF MASSACHUSETTS

January 2022

UNIVERSITY OF MASSACHUSETTS

UMASS: Unifying Procurement to Drive Change WRITTEN BY: RHYS THOMAS PRODUCED BY: GLEN WHITE

procurementmag.com

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SupplyLogic: Driving Procurement Innovation at UMass Phil Schoonmaker, CEO, SupplyLogic discusses why to leverage partner services and how these services are helping UMass to modernize their procurement function There are two sides of marketing –the go to market strategy and the execution of that strategy. The business critical execution management is where SupplyLogic comes in.Phil Schoonmaker, CEO, SupplyLogic explains that it is vital for organizations to look to a provider such as SupplyLogic for its services. “The only way to truly optimize marketing execution is to partner with an expert like SupplyLogic. Given the events of the last couple of years especially, more and more companies are coming to this realization. Organizations are frustrated by supply chain disruptions, disorganized data, inadequate technology, and most recently a dramatic reduction of internal staff to manage these categories,” says Schoonmaker. Working With the University of Massachusetts “Anytime an organization changes the way that it manages an important aspect of their business, one of the biggest challenges is the transition from the status quo to the new model. We are working with David Cho, Chief Procurement Officer at UMass and the stakeholders across the university system on implementing a phased approach so that this new model, while innovative, is not disruptive. As a company, we

are dedicated to a client-first approach and continually seek and incorporate feedback, in this case from all the campuses, to ensure we are exceeding expectations,” explains Schoonmaker. SupplyLogic began its partnership with the university in early 2021 and at the most fundamental level is helping the university manage one centralized procurement strategy, rather than individual procurement silos. This includes an optimized and right-sized supplier panel; previously UMass worked with over 400 suppliers, which made it very difficult to aggregate spend to get the best pricing. The new panel includes a mutually agreed-upon set of suppliers with priority on MA-based businesses, diversity, and sustainability. Additional aspects of the solution include onsite client services, program management and state of the art technology to automate previously manual tasks and workflows. SupplyLogic’s managed services enable organizations to do more, with less, by providing an innovative, data-driven, transparent, and truly optimized solution. This ‘do more, with less’ mindset and capability helps partners like UMass achieve their goals quickly with less budget, time and risk.

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David Cho, Chief Procurement Officer and Managing Director, UMass

January 2022

UNIVERSITY OF MASSACHUSETTS

CPO David Cho on transforming the University of Massachusetts’ procurement functions, and the ‘better, faster, cheaper’ philosophy to deliver value

1863

Year Founded

24,163

Employees including students

18,615

Employees excluding students

$3.4bn Revenue

he University of Massachusetts is a world-class public research university committed to advancing knowledge and transforming lives. Through its world-class educational programmes, groundbreaking research enterprise, and its impactful community service and industry engagement activities, UMass harnesses the revolutionary spirit of Massachusetts to deliver an unparalleled student experience. With four comprehensive campuses, a top-ranked medical school and a missiondriven law school, each campus offers a dynamic educational experience in a uniquely Massachusetts location, from the coastal town of Dartmouth to the international hub of Boston, from the vibrant mill cities of Lowell and Worcester to the bucolic hills of Amherst. Though separated geographically, the campuses are unified through a central goal of preparing students to contribute to their communities, thrive in a new economy and change the world by providing a broad range of rigorous academic programs and opportunities. However, not everything shared this central spirit. Until 18 months ago, the university’s procurement function was fragmented, with each campus responsible for its own procurement, accounts payable, sourcing, and contract management activities. That began changing in fall 2019, when David Cho, who was the CPO of BlackRock, was recruited through a national search to join UMass as the first-ever system-wide Chief Procurement Officer. Hiring a CPO followed the recommendation procurementmag.com

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WEI: Value Added at Every Step of the Procurement Process Value-added reseller WEI strengthens its partnership with UMass and how it is empowering procurement organizations to unlock value beyond just price More than an IT solution supplier, WEI is a valuable problem solver and key supplier to the University of Massachusetts’ procurement organization. WEI has worked on several projects with the university’s newly appointed CPO David Cho. “I met David close to 18 months ago when he started,” says Greg LaBrie, VP of Technology Solutions, WEI. “The pandemic slowed that project down, but fortunately we were invited to participate in the UMass procurement process that we’re now involved in.” Cho unified the university’s procurement function and processes under the Unified Procurement Services Team (UPST), and enacted a new strategy to work more closely with suppliers to extract more value - a philosophy wholly aligned with that of WEI. “When organizations that we work with open up and collaborate with us, that’s when we’re at our best,” says WEI COO Todd Grubbs. “Now

we’ve created a regular cadence to meet with the UPST, and have a vision going forward that is not a hunt-and-peck type of model, but has a cohesive strategy. Our pre-sales group and our architects will meet with them frequently to discuss price, lead times, strategy and vision all at the same time. And that’s how UMass is going to get the technology solutions they’re looking for.” Together, WEI and the UMass procurement organization are unlocking value that goes beyond price, LaBrie adds: “UMass’ new vision, to standardize the procurement process, and standardize technology and procedures across the campuses, allows students and faculty to go from campus to campus and benefit from the same technology. That makes a big difference to their people, and it also provides all that data back to the procurement organization about the devices, people and how they’re leveraging the environment.” The partnership between WEI and UMass has also been an emphatic win for promoting spend with diverse suppliers, says Grubbs. “When UMass supports someone like us, who are a minority business enterprise, that helps us scale, that helps us hire from the minority community, and that helps us support minority suppliers ourselves,” he adds. “The effect of UMass making that commitment is exponential in the diversity community.”

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of a comprehensive shared services plan, a collaborative, system-wide, cross-functional project that was released in April 2019 and endorsed by the UMass Board of Trustees. “The outcome was very similar for each of these separate functions at the campus level, but business was conducted in six different ways, with different operating procedures, and even the same technologies were configured differently,” Cho says. His first challenge was to unify these disparate organisations and harmonise a “patchwork” of policies, procedures and technologies into a standardised system for conducting business. The new centralised organisation driving procurement efficiency for UMass is known as the Unified Procurement Services Team (UPST). “The premise of this was to create a shared services environment to support the campuses,” says Cho, whose newly unified team now manages close to $1 billion in annual spend and more than 17,000 active suppliers. “The good thing is we had the opportunity to deepen the

procurement competencies of the folks in these legacy organisations, who can now go deeper, instead of being generalists,” he says. The team reduced in scope from 70+ to 50 specialists, but “we built competency frameworks specific to the function, and we can plan training paths for each individual and role to build more domain expertise”. With the mandate to create a functioning shared services organisation while still maintaining business-as-usual support for campus procurement activities, the UPST had their work cut out for them. Unfortunately, within three months of becoming operational they had to face the COVID-19 pandemic and its ripple effects on the system. UMass experienced a $240m revenue shortfall. They shifted their focus to supporting UMass in meeting specific short-term objectives, such as health and safety goods and services, and remote learning equipment, that needed to be addressed instantly. But when the initial dust of the pandemic had settled, so too did Cho’s focus. “Better, Faster, Cheaper” The procurement harmonisation project is underpinned by a philosophy to derive more value at every point, something Cho characterises as “Better, Faster, Cheaper.” “It’s about ensuring that we have more strategic partnerships, and that we're getting the best value in reducing operational risks,” Cho says. “We’re faster by using catalogues, for example, and pre-negotiating a lot of framework agreements so that people can point, click, and buy, just like we do every day in our personal lives. To be cheaper, we’re using market intelligence benchmarks that come not only in the form of price points, but operating procedures, best practices, and really using that market intel to its full extent.”

UNIVERSITY OF MASSACHUSETTS

“ We are now closer to being a datafirst organisation”

David Cho

DAVID CHO

TITLE: CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

EXECUTIVE BIO

COMPANY: UMASS Cho is the Chief Procurement Officer for the University of Massachusetts, Unified Procurement Services Team (UPST) that provides strategic sourcing, contracts, supplier management, procurement operations, accounts payable, travel services, and customer services to the various campuses within the UMass system. Before joining the UMass System, he was the former Global Head of Sourcing and Vendor Management at BlackRock where he led Sourcing and Vendor Management (SVM) for the World’s largest Asset Management firm. SVM covers all third-party sourcing for technology, HR, marketing, L&C, professional services, and corporate services. Over Cho’s 25+ years of work experience, he has maintained COO roles for emerging alternative asset management companies, and also provided strategy and operations management consulting services to regional, national, and global companies during his stint at KPMG, Archstone Consulting, IBM, Deloitte Consulting and JP Morgan Chase. Cho is a graduate of Boston College and completed the MIT Sloan Executive Program in Technology, Operations and Value Chain Management.

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UNIVERSITY OF MASSACHUSETTS

UMass: Unifying Procurement to Drive Change

“ We're capturing this low hanging fruit, but once we realise those recurring savings, we need to continue to optimise and extract costs and inefficiencies out of the system so that it's something that we can confidently harvest year over year” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

The results of Cho’s and the USPT’s efforts have been immediate. An initial target of achieving $16.5m in annual cost reduction was eclipsed within the first 18 months of operation. The UPST delivered $33.9m in savings through 100+ initiatives, within those 18 months, across each of the five UMass campuses. “The key to that is data, and we are now much closer to being a data-first organisation,” Cho says. “We are utilising techniques that private equity firms might use for optimising their portfolio companies. We're factoring in methods that you would use for mergers and divestitures, and all these different tools and approaches.” Cho expects to see twice the amount of financial benefits in the next year, but the ultimate goal of his initial five-year plan will not necessarily follow a linear path. “It doesn't mean we have to continue to double the output that we're getting from procurementmag.com

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UNIVERSITY OF MASSACHUSETTS

a cost reduction standpoint,” he says. “We're capturing this low hanging fruit, but once we realise those recurring savings, we need to continue to optimise and extract costs and inefficiencies out of the system so that it's something that we can confidently harvest year over year. We may not necessarily maintain that growth trajectory annually, but I am confident that it's something that we're going to be able to benefit from on an ongoing basis.” 102

January 2022

Procurement with Purpose Beyond the mechanics of cost-saving, Cho and his team are driven by their contributions towards the UMass mission of providing affordable and accessible world-class education. This is procurement with purpose. “That’s why I think many of the leaders who joined us, particularly from the non-higher-education verticals, are so excited about this, because the mission really resonates,” Cho explains.

UNIVERSITY OF MASSACHUSETTS

MICHAEL E. DURKIN TITLE: DIRECTOR OF STRATEGIC PROCUREMENT Michael describes himself as a “dynamic procurement leader, educator, manager and coalition builder”. These attributes have helped him establish and grow the capabilities of the UPST strategic sourcing team which handles, category management, strategic sourcing, contracts and supplier management needs. He is passionate about adding value to people and processes through efficiency, effectiveness, and driving best business practices. Prior to rejoining the UMass System as a part of the UPST Leadership Team, he held a variety of leadership positions with the University System of New Hampshire, University of Massachusetts Lowell, Merrimack College, Stonehill College and with the National Association of Educational Procurement (NAEP) of New England.

BRIAN L. GIRARD

MEET THE TEAM

TITLE: DIRECTOR OF PROCUREMENT OPERATIONS Brian is a leader known to have the proven ability to influence and manage stakeholders, innovate and drive process improvements throughout the supply chain to capture optimised cost benefits and budgetary control. Brian continues to leverage his over 25 years of experience in Procurement and Supply Chain within both the public and private sectors, to lead harmonisation of UMass procurement operational processes.

He currently oversees the Procurement Operations function which encompasses Accounts Payable, Bank Card (Procurement Card Operations), Travel and Expense, Process Improvement, and Procurement Compliance teams. With his team, he continues to focus on streamlining internal business practices to ensure operational process efficiency and effectiveness.

AMANDA ONWUKA TITLE: DIRECTOR OF SERVICE & QUALITY Amanda’s focus is to ensure that UPST continues to put its best foot forward as it progresses in its maturity journey as the harmonised procurement services centre for the University of Massachusetts system. Within her UPST portfolio are the Customer Services, Procurement Technology, Data Analytics, and Training & Communications teams. They support the operationalisation of the harmonised processes while ensuring resources are available to support enhanced change and communications management. Prior to joining UMass system, Amanda worked as a management consultant with KPMG leading and providing strategy and business transformation services to global and national companies.

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“ We are utilising techniques that private equity firms might use for optimising their portfolio companies” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

Technology adoption and an overarching digital transformation have been crucial to UPST’s results. The organisation leverages tools like Jaggaer for daily procurement activities, Salesforce for case management,

and Tableau for business intelligence, among others. But in Cho’s mind, technology alone will only get you so far. More important is to prioritise, harmonise, and modernise policies and targets, upgrade procedures and processes to align with the policies, and ensure the team has the core competencies to operate within them. “When you have all those pieces together, the rollout of technology enablement becomes much more elegant, and it gets you to the outcomes and the output that you're looking for,” Cho says, pointing to ensuring applications are uniform across both desktop and mobile devices to enable flexible work, as an example. “The more important thing is being able to leverage your suppliers’ technologies, as well. We can't be

supplychaindigital.com procurementmag.com

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UNIVERSITY OF MASSACHUSETTS

“ The good thing is we had the opportunity to deepen the procurement competencies of the folks in these legacy organisations, who can now go deeper, instead of being generalists” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

everything to everyone. It’s not just about building the catalogue, for instance, but how do we leverage their platform? Some of our partners’ data on the things we buy is better than the data we have in-house. So we can leverage that kind of intelligence.”

The Power of Partnerships A good example, Cho says, is the partnership with Huron, with which UMass’ investment has risen over the past 18 months. “They've been terrific in looking at where we are today and where we want to be tomorrow,” Cho says. “What’s really vital is that it's not just what they know, it's how they deploy. It's how the team we work with at Huron take in that input from us and understand the particular outcomes that we're looking for. To be able to factor in change management, very gracefully as part of the underlying sense of processes and services that they're delivering, has been tremendous.” Another key supplier, SupplyLogic, provides “intelligence that we can't build,” Cho says, which is helping the organisation towards its supplier diversity objectives. Taking print services as an example, the UPST can leverage SupplyLogic’s platform to discover veteran-owned suppliers, procurementmag.com

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UNIVERSITY OF MASSACHUSETTS

CONGRATULATIONS David Cho & The UMASS Procurement Team Thank you for your business over the last 35 years!

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“ We're also incorporating inclusion and equity into all of our competitive processes” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

procurementmag.com

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minority-owned businesses, womanowned businesses, and other diverse partners in the local community. “This is really valuable to us,” Cho says. “That's an area where we can leverage our partners’ technologies to get that visibility, and to make those kinds of important decisions.” Enhancing the diversity of suppliers is a key objective of the University of Massachusetts, and by extension the UPST, and although the central procurement organisation is barely 18 months old, Cho is happy with the progress it’s already made. The university’s spending with diverse suppliers is “trending in the right direction,”

LISA A. CALISE TITLE: SENIOR VICE PRESIDENT FOR ADMINISTRATION & FINANCE AND TREASURER

EXECUTIVE BIO

COMPANY: UMASS Lisa A. Calise is the Senior Vice President for Administration & Finance and Treasurer for the University of Massachusetts. She has been with UMass since February 2017. In her role, Lisa oversees the University’s financial and operational departments including Treasury, Insurance and Operations, Budget and Planning, Enterprise Risk Management, Human Resources, Controller’s Office and the University-wide Unified Procurement Services Team (UPST). Lisa was most recently the Chief Financial Officer at Watertown-based Perkins School for the Blind, focusing on global services and education for those living with blindness and deaf blindness. Before joining Perkins in 2010, Lisa served the City of Boston for over a decade, most recently as the Director of Administration

with both a short and long-term plan to build a more robust diverse supplier base. “We're also incorporating inclusion and equity into all of our competitive processes,” Cho adds. “That’s not something that was mandated by any government programme. We have imposed those requirements on ourselves to build accountability. We're also pushing strategic providers that act as primes to provide more visibility into their second-tier level spend, so that as dollars flow to them, they also make their way to diverse suppliers. That is very impactful.” The UPST has performed above expectations throughout its first 18 months,

and Finance, and previously as Chief Financial Officer and CollectorTreasurer and Budget Director, implementing efficiency improvements and managing the City’s finances through challenging economic times. Prior to coming to Boston, Lisa served in the White House Office of Management and Budget as a budget examiner. A Massachusetts native, Lisa obtained her B.A. from Boston College and a Master's Degree in Public Management from the University of Maryland. She recently served as a member of both the MBTA Finance and Management Control Board and MassDOT Board.

UNIVERSITY OF MASSACHUSETTS

“ We're also incorporating inclusion and equity into all of our competitive processes” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

and as it matures further, Cho is confident that procurement will provide further savings, and reroute vital value and resources into the university’s educational programs. But Cho is quick to highlight that the work of UPST, its future ambitions, and its ability to deliver transformational results is a holistic effort, achieved through collaboration with various UMass stakeholders. “Being able to promote this level of change in coordination with the campuses couldn’t have been done without leadership sponsorship,” Cho says. “We've been 112

January 2022

empowered. We have UMass President Marty Meehan's backing, the support of all the campus chancellors, the campus Administration & Finance (A&F) Vice Chancellors and the UMass Senior Vice President for Administration and Finance (CFO) and Treasurer, Lisa Calise.” “I’m so proud of all that we’ve been able to accomplish in such a short time, and under such challenging and unprecedented circumstances,” says Calise. “The collaborative approach between the system and campuses, especially between

UNIVERSITY OF MASSACHUSETTS

the A&F leadership, has been paradigmshifting for the university, and enabled us to leverage the university’s buying power to benefit the campuses. Our team – driven by exceptional leaders like David – will continue to experiment, innovate and push the organisation to realise every efficiency and ensure that we are delivering on our mission in the most competitive manner possible.” According to Cho, the UMass campus leaders are “encouraging us to do more and continue to move the agenda forward. With 75,000 students and

24,000 employees, UMass is the largest university and third-largest employer in the state of Massachusetts. So there are many priorities, and being able to have that one vision that leadership endorses, is just tremendous. What really makes this incredibly powerful is that egos are checked at the door and it's all about just doing the right thing.”

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VERIFIABLE RATINGS SYSTEMS

SECURE SUSTAINABLE PROCUREMENT Sustainability ratings systems Ecovadis and Interos use AI powered technology to deliver accurate ESG data WRITTEN BY: HELEN ADAMS

rom securing diversity and inclusion policies to eradicating child labour from the supply chain, sustainability is growing in importance for all companies, across all industries. But many businesses don’t know where to start to implement successful strategies EcoVadis and Interos are two organisations that provide business sustainability ratings: EcoVadis EcoVadis is the world's most trusted provider of business sustainability ratings. Global supply chains, financial institutions and public organisations rely on EcoVadis to monitor and improve the sustainability performance of their business and trading partners. Backed by a powerful technology platform, EcoVadis’ evidence-based ratings are validated by a global team of experts, and are adapted to more than

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SUSTAINABILITY

“ As the past two years of disruption have clearly demonstrated, supply chains are deeply complex and continuously in flux” JENNIFER BISCEGLIE CEO AND FOUNDER, INTEROS

200 industry categories, 160 countries, and companies of all sizes. Its actionable scorecards provide benchmarks, insights, and a guided improvement journey for environmental, social and ethical practices. Industry leaders such as Amazon, Johnson & Johnson, L’Oréal, Unilever, LVMH, Salesforce, Bridgestone, BASF, and ING Group are among the 85,000 businesses that collaborate with EcoVadis to drive resilience, sustainable growth and positive impact worldwide.

“At EcoVadis, we provide reliable environmental, social, and ethical performance ratings of suppliers for companies of all sizes. We have a talented and dedicated team, guided by a scientific committee of experts from industry and academia, that works to combine technology with expertise,” explains Sylvain Guyoton, Senior Vice President at EcoVadis. Interos Operational resilience company Interos develops relationships between supply chains and businesses. Using artificial intelligence, Interos manages risks and disruptions, as well as unearthing new opportunities for companies to grow. Interos is led by Jennifer Bisceglie. “I’m the CEO and founder of Interos. We provide procurementmag.com

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Interos, industry-first artificial intelligence and machine learning platform

technology critical to building supply chain resilience for Fortune 500/100 companies and government agencies, including the U.S. Department of Defense and NASA,” says Bisceglie. “Through my work at Interos and throughout my career, I’ve worked to reshape how the global business community thinks about supply chain risk and resilience, and to develop the technology to power that change: an industry-first artificial intelligence and machine learning platform that provides supplier visibility deep into organisation’s extended business ecosystems. This cloud platform has reinvented how companies manage their supply chains, enabling 118

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instant supply chain mapping, monitoring, and modelling that eliminates risk and improves business performance.” Sustainability in procurement EcoVadis and Interos are well-versed on the core challenges in the modern-day procurement sector. “In today’s climate, it’s become a board-level imperative to identify and course-correct supply chain risk in realtime,” says Bisceglie. “Disruption is the new normal. That said, a key challenge in procurement is visibility across complex supply chains – according to the Interos

SUSTAINABILITY

Annual Global Supply Chain Report, which surveyed 900 senior decision-makers across the US and EU, large companies are losing an average of US $184mn per year due to supply chain disruption, with 83% having suffered reputational damage because of those problems. Yet 66% are still not assessing their global supply chain on a continuous basis.” “There are a lot of hurdles that impact a procurement team’s sustainability efforts. For example, if you’re a procurement manager, it’s within your remit to ensure your value chain operations are not contributing to negative environmental impacts including

“ The pandemic has accelerated the growing emphasis on ESG-risk, as well as the need to optimise on longerterm resiliency” JENNIFER BISCEGLIE CEO AND FOUNDER, INTEROS

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SUSTAINABILITY

“ Satellite images will be used more frequently for collecting data on deforestation and water pollution” SYLVAIN GUYOTON

SENIOR VICE PRESIDENT, ECOVADIS

GHG emissions, deforestation, waste, and water pollution. How your business operations may impact the environment depends on the industry you’re buying for,” says Guyoton. “The supply chain of a Global 1,000 organisation typically has tens of 120

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thousands of suppliers, of all sizes, spread across the globe that are generally far lower maturity in terms of sustainability. Consider the global impact of a Fortune 500 company transforming internal operations and policies to be more sustainable, environmentallyfriendly and socially conscious. Now, imagine if they engaged their thousands of suppliers to take that journey with them. The impact would be exponentially larger. At EcoVadis, that is what we are helping these companies to do.” “We work with over 85,000 businesses working to improve their sustainability practices. For example, a lot of them have signed up to the Science Based Targets initiative, requiring them to measure both Scope 3 and their own emissions. But setting targets without a way to measurably

demonstrate progress and impact is a challenge. Also, treatment of workers is a huge issue heightened by Covid-19. Employees have been asked to work harder and longer while others have been laid off. To address these challenges, companies are reconfiguring their supply chains and trying to make them more resilient. “We provide these companies with EcoVadis Ratings which are snapshots of their sustainability performance. They enable conversations between buyers and suppliers to identify where improvement can happen across environment, labour and human rights, ethics and sustainable procurement practices.” A growing concern is often-neglected Scope 3 emissions, which stems from goods and services purchased by an organisation, as well as those caused by employee procurementmag.com

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transportation and investments - but these emissions cannot be ignored. In overcoming this challenge, Bisceglie sees an opportunity that has arisen from COVID-19. “The pandemic has accelerated the growing emphasis on ESG-risk, as well as the need to optimise on longer-term resiliency instead of shorter-term performance,” says Bisceglie. “But with strong corporate governance, enterprises can achieve both. Because supply chain sustainability is an urgent issue that’s become critically important to both organisations and governing bodies, it’s critical to monitor for both physical and digital supply chain issues, especially with regard to concentration risk, compliance with government prohibitions and restrictions, and ESG transparency.” Bisceglie believes that visibility must be made a priority at the procurement level to ensure business partners are not contributing to environmental harm or perpetrating labour-law violations. “Companies that focus on environmental awareness, ethical behaviour, and sound corporate governance are better positioned to mitigate risk and avoid many of the issues surrounding supply chain disruption,” she says. “In fact, the pandemic has reinforced the need for resiliency through an ESG lens.” The role of technology and AI The pandemic has also advanced businesses dependence on technology as working from home was embraced. For EcoVadis, Guyoton says technology has driven sustainable practices in procurement. “Covid-19 stopped the ability of auditors traveling abroad to conduct their analysis onsite. This made virtual and online audits even more important as the world was shifting to remote operations during the pandemic,” says Guyoton. “EcoVadis bases 122

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SUSTAINABILITY

our Ratings on evidence collected on a platform, so we were well-positioned to support customers in this shift. And our remote evidence also includes data from hundreds of thousands of news sources, databases and NGOs, as well as newer promising technologies that can help detect social issues like labour unrest, and environmental issues such as water pollution or deforestation.” “Technology makes it possible at scale,” agrees Bisceglie. “As the past two years of disruption have clearly demonstrated, supply chains are deeply complex and continuously in flux. Manual processes simply cannot keep track of all the different sustainability variables across a large organisation’s entire extended supply chain. AI makes it possible for companies to develop that extensive insight and monitor for ESG-related risk factors on an ongoing basis, such as unethical labour practices or greenhouse gas emissions. In turn, this level of insight helps guarantee best ESG practice across procurement partners and allows procurement leaders to mitigate the risk of reputational damage that results from poor sustainability practice.” AI-powered technology can support procurement’s ESG commitments through collecting data in new ways. “AI is only as good as the quality of the data used to 'train' it,” said Guyoton. “We need human expertise both to program these tools, and to drive accurate, insightful analysis of the information being evaluated. But with a strong approach, we can scale how many companies receive ratings exponentially.” “As concerns grow surrounding ESG, AI powered-technology provides visibility throughout the complex business ecosystem that can be built into one system that differentiates between different procurementmag.com

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“ AI without humans is not going to work. You need a human to refine what the AI is telling you” SYLVAIN GUYOTON

SENIOR VICE PRESIDENT, ECOVADIS

risk elements,” continues Bisceglie. “This technology allows companies to map and model supply chains deeper and further: to view and know everything, everywhere, about their business relationships, in seconds. Using an arsenal of naturallanguage AI models, trained on supply-chain data, companies can build the most highly connected, multi-dimensional network of B2B relationships in existence, and then use 124

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this to continuously monitor global events providing real-time indicators of supply chain sustainability vulnerability and distress, across the business ecosystem, all the way down to the Nth tier.” Sustainable procurement in 2022 and beyond For the procurement function, 2022 is going to be a big year. “Interest in Scope

SUSTAINABILITY

3 emissions is going to continue and diversity and inclusion in the Fortune 500 will increase, which is why we are always looking to provide our customers with the latest tools and tactics to help support these important topics,” explains Guyoton. With regards to future innovations, he anticipates more AI-powered technology will be used to support ESG, as well as more analytics aligned with upcoming

regulations. “It’s exciting to see the ways in which we can bring together market requirements for carbon management, supply chain risk management, and driving improvements in customers’ supply bases with our solutions.” Bisceglie has a vision for the year ahead: to bring game-changing technology to market and enable customers to intelligently examine supplier risk on a far deeper and more timely level than previously possible. “In 2022, we’ll see companies continue to prioritise operational resiliency as governments begin to enact stronger mandates for it,” says Bisceglie. “The SEC, for example, is expected to announce new ESGrelated disclosure laws for investors, which will drive a lot of activity here, as will Germany’s recently enacted Supply Chain Law.” AI-powered mapping and monitoring technology will make it possible to monitor all direct and indirect supplier relationships. Bisceglie is looking forward to a future when companies can monitor ESG compliance through firm, industry, and country-level information as this will provide valuable context often absent from traditional ESG reporting. “AI and ML are the only ways to get a truly comprehensive picture of a company’s total environmental impact – it’s not possible to see the full picture without it,” concludes Bisceglie. “Additionally, as technology solutions dissolve the barriers that keep supply chain information siloed, such as widely differing formats for supply chain data, this level of predictive insight will become much more common.” With this operational resiliency revolution, sustainability best practices will be driven across entire supply chains. procurementmag.com

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TRANSFORMING AND DIGITISING PROCUREMENT WRITTEN BY: GEORGIA WILSON

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PRODUCED BY: THOMAS LIVERMORE

EQUINITI

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Michael Burt, CPO at Equiniti, discusses his role in spearheading the company’s procurement transformation and the challenges to overcome along the way

ichael Burt, CPO, Equiniti started his career as a engineer designing missile systems at BAE Systems in 2002. “I was seconded into procurement to help on a major cost reduction programme at BAE Systems.” In 2007, Burt joined Capgemini as a Senior Consultant, specialising in procurement transformation. Since then, he has held a number of senior procurement positions including Head of Supply Chain Management for The Metropolitan Police Service and Chief Procurement Officer for Colt Technology Services, a global network and voice services company. In his current role at Equiniti, Burt is responsible for the global procurement and supply chain management for the group as well as all properties and facilities. Who is Equiniti? Founded in 2007, Equiniti provides three core services; “Firstly, we offer share registration services, which are focused towards supporting public companies with all the activities that go with being listed in the public market. There are many services that we offer, but the major ones are helping to manage a company’s share register, dividend payments and employee share plans. We also help organisations list through supporting Initial Public Offering (IPO’s). We serve over 70% of organisations

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Michael Burt, CPO, at Equiniti

EQUINITI

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“ OUR WORK IS MISSIONCRITICAL FOR AN ORGANISATION, SO WE CANNOT AFFORD TO MAKE MISTAKES, THEREFORE WE ARE METICULOUS IN WHAT WE DO” MICHAEL BURT, CPO, EQUINITI

listed on the FTSE 100 and 15% of those on the NYSE. “We also provide specialist technologyled solutions to regulated businesses, such as complaint remediation, Know Your Customer (KYC) and loan administration. Finally, we have a division that focuses on pension administration, which delivers software, payment and complex administration solutions,” says Burt. “Our work is mission-critical for an organisation, so we cannot afford to make mistakes, therefore we are meticulous in what we do. We are a unique organisation in the services and technology that we provide and there is a very high chance that you are one of the 36m people who benefit from our services.” Spearheading Equiniti’s procurement transformation When Burt joined Equiniti, there had been several short term leadership changes within the department that had caused a significant impact on staff morale and performance. “There was limited strategy, lack of 130

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processes, and insufficient management information creating the perfect storm. You often hear people refer to Procurement Greenfield sites, well this was definitely a Procurement Brownfield site, with a lot of clean up required, all doable, but it required careful management and a lot of hard work. The function had great potential for what it could achieve and this was one of the reasons why I took the job.”

EQUINITI

MICHAEL BURT TITLE: CPO INDUSTRY: FINANCIAL SERVICES

But where to start? People. Burt knew that in order to be successful and make the job easier, he needed to get the people element of the business right. “The first challenge was to get the team to trust me and to get them working together. It was way too soon to discuss any kind of vision, besides they had likely heard it all before from my predecessors. In these situations, actions

EXECUTIVE BIO

LOCATION: UNITED KINGDOM Michael Burt, CPO, Equiniti started his career as a systems engineer designing missile systems at BAE Systems in 2002. “I was seconded into procurement to help on a major cost reduction programme at BAE Systems.” In 2007, Burt joined Capgemini as a Senior Consultant, specialising in procurement transformation.Since then, he has held a number of senior procurement positions including Head of Supply Chain Management for The Metropolitan Police Service and Chief Procurement Officer for Colt Technology Services, a global network and voice services company. In his current role at Equiniti, Burt is responsible for the global procurement and supply chain management for the group as well as all properties and facilities.

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Medius and its partnership with Equiniti Shannon Kreps of Medius discusses how Equiniti is harnessing Medius supplier management solutions Shannon Kreps, Vice President Product Marketing and Marcom at Medius started her career in the purchasing department over 25 years ago as a buyer. The spend management process is one that Kreps is very familiar with. At Medius Kreps’ job is to serve as a conduit between the company’s research and development team, as well as its Salesforce, and its customers.

“At Medius we like to say that we simply help our customers find the right suppliers to buy and pay for what they need with full control over cost and compliance. We really are a spend management suite. It is our role to make sure that our customers are able to purchase items that they need, pay for them with confidence, and do everything across the whole source of the pay platform,” says Kreps.

How Equiniti is harnessing Medius’s supplier management solutions “Equiniti is a great example of a company that’s using supplier management to the fullest. They actually begin at the start of the process with a feature in Medius that we have called demand capture. it allows anyone in the organisation to request a new supplier to come on board. When that happens, it’s routed throughout the organisation. They have some pretty stringent requirements on what they need to ask regarding new suppliers coming on board, and it really varies depending on the type of supplier that they use. So Equiniti has supplier questionnaires that are completed internally to make sure that the right information is being captured as well as externally for their suppliers to make sure that they’re providing the right requirements that they need.

“Equiniti then uses a robust approval process, so that once a supplier has answered a set of questions that is routed to the appropriate person they’ll review that information before moving onto the next stage of the process. Equiniti really uses this process to make sure that its suppliers are properly vetted and managed. They also use supplier management for the ongoing maintenance of their suppliers. It’s not useful for organisations to spend all of that time setting up your supplier to begin with only to then let it fall. It is important to conduct ongoing management.”

EQUINITI

Equiniti: Transforming and digitising procurement

talk much louder than words, so I decided to focus the team on one very key objective, where everyone could come together to deliver. It needed to be something in the short term which would make them feel instantly good when they achieved their objective.” With this in mind, Burt focused the team’s efforts on achieving a set savings target for the year-end, ensuring their remuneration was linked to it. “There was one goal for the remaining 5 months and I deprioritised all others. I wanted laser focus and I wanted to see how the team would come together. It was amazing to see people’s motivation and confidence grow week on week, as we edged closer to the target. We ended up smashing the target and people were buzzing, it was great to see smiles back on people’s faces. At that point, the team began to trust me and so 134

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“ BUSINESSES CANNOT AFFORD TO BE ON THE BACK FOOT ON ESG AND PROCUREMENT IS PERFECTLY PLACED TO HELP WITH THE CHALLENGE” MICHAEL BURT, CPO, EQUINITI

it was then time to start to introduce them to my vision.” Since joining, the procurement department has evolved significantly, by building a strong culture of delivery in the team, Burt emphasises that this has earned the team the respect and trust of the business, allowing the team to regain control. “We have gone through 3 phases of maturity in the past 4 years,” says Burt. “The first was about establishing our purpose, our team and our operating model. Defining what activities we perform centrally and those that are decentralised. It’s important to set expectations with your stakeholders around what you are here to do. The second phase was about systemising, offshoring and optimising. We built a shared service centre in Chennai which performs all our

procurement & property operations, leaving our category leads to focus on strategic procurement and value generation. “Our third phase has been about integrating deeper relationships with our critical suppliers and our stakeholders, with a focus on unlocking hidden value. We don’t measure ourselves purely on savings generated.” Centralising and digitalising timesensitive operational work As part of the company’s wider transformation strategy, Burt and his team have been working to centralise and digitise time-sensitive operational work. “The first stage was to define each and every process procurement and property should perform. We took a very lean approach to this and ensured we only focused on those activities that were procurementmag.com

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Modernise your IT and ride the waves of change A modern IT infrastructure lies at the very heart of ensuring businesses can meet the demands of an increasingly digital and dynamic world. Yet while the business case is obvious, modernisation can be costly, time consuming and fraught with risk – especially when critical business systems are dependent on legacy infrastructure. Partners for more than 30 years, Computacenter and Dell Technologies can deploy globally, at massive scale, with a wealth of experience of sourcing, transforming and managing IT infrastructure for large corporate and public sector organisations. Together, we can help you ride the waves of change by modernising your IT faster and smarter, and become more customer-focused, elastic and responsive to business needs and market drivers.

computacenter.com

WHY BIG IS BEST FOR DIGITAL TRANSFORMATION IN THE EXPONENTIAL AGE Bottom line: The corporate world is ramping up its digital transformation plans and looking for the quickest route to market. But there is no room to get this wrong. Managing risk is everything and the financial services sector has the most to lose. Why? According to Arash Ghazanfari, Dell Technologies’ CTO in the UK, “The pandemic has moved us all, irreversibly, into an Exponential Age.” But financial services firms cannot embark on this transition on their own. Despite building resilience in the aftermath of the financial crash of 2008, great swathes of the financial sector are still burdened with technical debt. There are organisations with critical business capabilities that are dependant on legacy hardware and software, in some cases more than half a century old. Some of these critical systems can’t be replaced overnight. Such modernisation efforts can be expensive, time consuming and fraught with risk. This is where Dell Technologies and its lifelong partner Computacenter come in. Ghazanfari says “The partnership with Computacenter has always been vital but in the current pandemic environment this connection is more important than ever.” He adds “Nobody is immune to the supply chain challenges the industry is facing. Whilst Dell Technologies has remained resilient, we recognise the importance of strategic partners such as Computacenter to scale

our capabilities and assist our customers in accelerating their digital transformation efforts. Our customers are rationalising their vendor and partner relationships to simplify and de-risk their procurement strategies. They look to partners like Dell Technologies and Computacenter to accelerate their business transformation.” Mark Griffin, Client Director at Computacenter agrees. ‘It is the skills and expertise we have in our core business. That’s designing the right infrastructure for each of our clients and being able to leverage that expertise at massive scale. “If you pivot that approach across to our relationship with Dell Technologies, many large enterprises need to accelerate their digital transformation in the tens of thousands of users and often in multiple geographical locations. You can only do that with a focused ecosystem of core vendors such as Dell Technologies and service and solution providers such as Computacenter who can deploy that, at scale, globally.” “You can’t do this without depth, experience and massive scale and that explains why government departments and the largest corporates across UK industry, such as Equiniti in the financial services sector, are drawn to Computacenter and Dell Technologies” says Griffin.

Learn more

EQUINITI

absolutely necessary and that created value. We then centralised these processes into the team and assigned a nominated process owner with a clearly defined service level agreement (SLA). “It was important that we could measure the time and quality of each process. Depending on the complexity of the process and the capability required to run it determined whether we offshored it to our shared service centre or kept it onshore. We formed internal contracts between the teams for each process and set review sessions to hold each party to account. It’s very much like our own outsourcing agreement, it keeps all parties accountable for performance,” explains Burt. Achieving this, Burt and his team moved on to selecting the right technology to become truly digital. “For P2P we use Workday, for contract management we selected HighQ and for supplier onboarding and supplier management we decided upon Medius. It was important that we matched our department’s process maturity to the functionality of the platforms. There is no point in owning a Ferrari if all you want to do is drive to the shops,” adds Burt. “It was during the implementation where we maximised the automation opportunities, our ethos is always to have as little manual intervention as possible. In practice this means enabling smart forms to guide users, setting workflow rules to only flag exceptions for approval and also using scheduling and reminders to ensure activities are being completed. We also use statistical analysis to help identify where we should set our optimum manual procurement intervention points.” Equiniti is also looking at evaluation platforms that harness emerging technologies such as Blockchain and AI, “but I 138

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EQUINITI AND ITS SUPPLIER ECOSYSTEM “It has been one area where we have had to focus a lot of time and effort on. Before forming any partnerships it’s important to understand each other's roles, responsibilities and expectations. We have done this by creating a procurement network which we use not only to educate the business of their role in the different procurement processes but also to seek feedback on what is working and what is not, making adjustments where necessary. Partnerships are built through strong working relationships to common goals. We listen to our stakeholders goals, translate them to procurement objectives and then ensure they are cascaded to the relevant suppliers. “Our supplier ecosystems have been built to enable two-way feedback, focusing not just on their performance as a supplier but on our performance as a customer. We need to listen carefully to what they say and try to be as easy to work with as possible. “Sometimes it can be difficult to get their honest feedback, after all, who wants to tell the customer their behaviours are counterintuitive, but it’s important that all issues in the relationship are tabled and discussed. Our ultimate goal is to become the customer of choice and this is the biggest benefit of investing so much time in developing the relationship. We think of the supplier account managers as an extension to our team, they are the people who will advocate for us in their own organisation, solve problems and help to fight for scarce resources” Michael Burt, CPO, Equiniti.

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“ THE FIRST CHALLENGE WAS TO GET THE TEAM TO TRUST ME AND TO GET THEM WORKING TOGETHER” MICHAEL BURT, CPO, EQUINITI

2007

Year Founded

5,288

Number of Employees

£472m Revenue

think they have a little way to go before we can adopt them,” says Burt. “I can definitely see their application in the evolution of procurement, perhaps in 2-3 years time. The benefits of Blockchain on verifying supplier information would be of huge benefit. It amazes me how much time is spent verifying supplier data.” Over the next 12 to 18 months, Equiniti will be moving into the next phase of maturity for its supplier management programme, which will look to improve the resilience of the company’s supply chain. “We will be looking at performing audits of our key suppliers to understand in greater detail our second and third-tier suppliers and how they are being managed,” says Burt. “The next big question I will be asking the function is how we can best support our business to be an even more responsible business. We will be looking to set specific ESG targets for our suppliers as well as making sure we incorporate ESG into our procurement evaluation criteria. In the very near term, I can see carbon reduction targets being equally weighted in importance as cost reduction targets. Businesses cannot afford to be on the back foot on ESG and Procurement is perfectly placed to help with the challenge,” concludes Burt.

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FROM CUSTOMER EXPERIENCE TO DIGITAL TRANSFORMATION WRITTEN BY: GEORGIA WILSON

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PRODUCED BY: THOMAS LIVERMORE

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VODAFONE

Hüseyin Ipiv, Head of Supply Chain Management, Consumer Business Unit, discusses Vodafone’s supply chain digital transformation over the last two years

ead of Supply Chain Management, Consumer Business Unit at Vodafone Germany, and father of three children. Hüseyin Ipiv grew up in the beautiful city of Bielefeld, Germany. “I am a fan of the local football club, Arminia Bielefeld. I would consider myself a European and a cosmopolitan. I studied in Germany and the Netherlands, and I have lived abroad for eight years now, in the US, England or Hungary. So far, I have moved around 23 times in my life, I always say ‘change is with me’,” says Ipiv. “Today, I am working for a fantastic company called Vodafone. I have the privilege of working with a great supply chain team in Germany, managing the entire end-to-end supply chain for all consumer products (smartphones, tablets, accessories, IoT products, and fixed-line products),” adds Ipiv. Since joining Vodafone in 2007, not just Vodafone but the entire telecommunications industry has changed during this time. “When I joined Vodafone, there were many companies like Nokia and Siemens Mobile selling mobile phones, however, today most of these organisations have disappeared. Today we have other great companies like Oppo, Xiaomi, Apple, or Samsung, which are now big players in the market. The supplier landscape is very volatile in this business. procurementmag.com

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Let’s smart up your processes!

Arvato Supply Chain Solutions is an innovative and international leading service provider in the field of supply chain management and e-commerce. Partners come together with industry specialists in the fields of Telecommunication, Tech, Corporate Information Management, Healthcare, Consumer Products and Publisher. About 16,000 employees work together to provide practical and relevant solutions and services worldwide. Using the latest digital technology, Arvato develops, operates and optimizes complex global supply chains and e-commerce platforms, as the strategic growth partner for its customers. Arvato combines the know-how of its employees with the right technology and appropriate business processes to measurably increase the productivity and performance of its partners. For more information, please visit arvato-supply-chain.com

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Smart up Vodafone’s processes As Arvato celebrates its partnership with Vodafone –focused to be your digital change agent for a green, sustainable future As Arvato Supply Chain Solutions celebrates its partnership for almost 30 years with Vodafone it is now focused on becoming your digital change agent for a green, sustainable future.

Celebrating the partnership with Vodafone Arvato has supported Vodafone to transform their supply chain from a pure mobile phone logistic into an multi device supply chain with solution for smartphones, broadband, IOT and eSIM, always making sure that Arvato provides a robust, reliable and flexible logistics solution which adapts to Vodafone’s needs – also for the upcoming years.

“We would love to be your digital change agent when it comes to transforming your businesses for a sustainable future,” said Andreas Barth, President Tech Group and Head of Corporate Responsibility & Sustainability.

Future Warehouse with carbon-free footprint

Arvato is the leading international provider of order-to-cash solutions for end-customeroriented industries. During its long partnership with Vodafone it has set up a green location to pave the way for a zero-carbon future.

“The backbone of this is to have a solid IT solution. We strive to be the most data-driven supply chain company in the world that includes a cloud-only backbone, and includes that we use the data our clients provide us, along with the date we are generating, to invest in a new business model.”

Arvato in numbers: • • • • • • •

Euro 2 billion revenue 85 locations 20+ countries 16,000 employees over 2 million sqm warehouse space 470k sqm new only in 2021 500mio shipments and returns

As a supply chain company with a high level of IT expertise, Arvato has been quick to initiate the transformation to the Future Warehouse.

“We are thereby underlining the climate effects of digitization. The digital transformation is a relevant key to a successful climate policy and we support our clients!” said Barth.

Learn more

“At the time I joined, it was only possible to make phone calls with mobile phones. Today, you can do everything on your smartphone like using Apps, surfing the internet, watch videos on youtube, paying invoices or making video calls with your friends This became possible with the upgrade of the mobile network. At the time we had 2G or 3G, then 4G and now we have 5G. We used to be a mobile-only company, but today we are also a fixedline company, you can watch Vodafone TV or you can surf the internet using our cable infrastructure,” says Ipiv. Vodafone’s supply chain digital transformation journey When it comes to digital transformation, Ipiv explains that the first step to success is an effective strategy. “If you have a strategy in place, that is already a big achievement for many organisations. The next step is to drive that plan, determine how you want to implement it, how it can be achieved, 148

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“If you have a strategy in place, that is already a big achievement for many organisations, the next step is to drive that plan” HÜSEYIN IPIV

HEAD OF SUPPLY CHAIN MANAGEMENT, VODAFONE

VODAFONE

HÜSEYIN IPIV TITLE: H EAD OF SUPPLY CHAIN MANAGEMENT INDUSTRY: TELECOMMUNICATIONS LOCATION: GERMANY

EXECUTIVE BIO

what the next milestones are. You need to convince your stakeholders to believe in the goals that you want to achieve because you will need funding from stakeholders. You also need to convince your own team. I believe that is always the most difficult part as your teams can anticipate the challenges ahead since they know your supply chain in detail. “When you start a journey like this you soon realise that a plan is nice, but the reality is much more difficult. We understood that we had to start with the basics. We upgraded our ERP System from SAP R3 to SAP 4 HANA to enable our digital journey. At Vodafone Germany, we have a great Big Data team. Together, we initiated a project to improve our smartphone forecasting accuracy on SKU level which we successfully implemented after 12 months. We have benchmarked our forecasting in the industry with an external consulting company, which showed that we are industry-leading with our forecast process,” says Ipiv.

Internationally experienced Commercial & Supply Chain Manager with a track record of delivering top-line and bottom-line results in global companies who have shaped the agenda in their industry. Held operational and strategic executive roles combining General Management, Supply Chain Management and Procurement over the last 20 years. Driven by a strong commercial and customer-centric mindset. Practices a human-centric leadership style, stimulates innovation & change. Currently transforms the Supply Chain for consumer devices of Vodafone Germany towards a more digital, simple, and agile organization with a clear focus on improving customer experience.

“You need to convince your stakeholders to believe in the story that you want to achieve” HÜSEYIN IPIV

HEAD OF SUPPLY CHAIN MANAGEMENT, VODAFONE

“We have also implemented a digital return portal. If customers want to return their smartphones to us for whatever reason, we need them to use our online platform to provide us with data as to why they want to return their smartphones. Understanding the return reason, we can offer an immediate solution to the customer. This is a win-win situation for customers and Vodafone. The customers might not have to return their smartphones back to Vodafone and we are 150

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happy since we retained a customer and avoided process costs. If a customer does wish to return a smartphone, we no longer print return labels anymore, instead they can use their smartphones at a local DHL store, show the QR code and return the product, making it a fully digital process. Another step for us was to implement “Click & Collect”, allowing customers to choose a product online, and offer the customer a Vodafone Shop to collect their product immediately from. This way we avoid sending the product with a carrier from our central warehouse to the desired address of the customer, which is beneficial for the environment as well as the customer who is able to pick up the product immediately.

VODAFONE

Vodafone: From Customer Experience to Digital transformation

“We have also implemented in-store repair capabilities. Customers can walk into certain Vodafone stores with, for example, a broken screen and we will repair it within two hours. The customer experience is great, and customers love this service. This again furthers our circular economy vision and is part of our planet purpose not to do any business on the cost to our environment.

“In my opinion simplification is a key enabler for digitisation. During the last years, Vodafone Germany acquired various fixedline providers like Unitymedia and Kabel Deutschland. Both companies had their own supply chain processes and systems in place. Therefore, we decided to harmonise our supply chain processes for our fixed-line and mobile business. This project is ongoing and beyond what we have done so far in Supply procurementmag.com

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THE PURPOSE OF VODAFONE Vodafone has three core purposes for its operations: • Enabling a digital society – Connecting people, places and things through fixed and mobile networks • Planet – Ensuring commercial success does not come at a cost to the environment • Inclusion for all – Enabling the digital society to be accessible to all “I always say, ‘we are the digital backbone of our society’. During this pandemic period we became aware of the required infrastructure for working and learning from home. We provide the mobile network, but also the fixed-line network to our society. I believe that Vodafone delivered a great service by enabling everyone to work and learn from home,” says Ipiv.

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“When it comes to the planet, we do not want to do business that is detrimental to our environment. We believe that digitalisation can help businesses to become more efficient in using resources. From a supply chain perspective, we believe in a circular economy. Take for example a smartphone. We bring the products to market, collect them back, repair them, refurbish them and then reuse them again. In the fixed-line area, we refurbish and reuse up to 80% of our products, which we are very proud of. “Inclusion for all focuses on access to connectivity, digital skills, and creating relevant products and services such as access to education, health care or financial services. Many people around the world do not have access to banking facilities. Vodafone Group developed the first mobile money transfer service, M-Pesa. This provides financial services to millions of people who have a mobile phone but limited access to a bank account.” For example in Africa, 40 million people can transfer money using our M-PESA platform.

“In my opinion simplification is a key enabler for digitisation” HÜSEYIN IPIV

HEAD OF SUPPLY CHAIN MANAGEMENT, VODAFONE

Chain at Vodafone Germany. It will help us to reach the next level on our transformation roadmap delivering business growth by focusing on customer experience.” Why the people of Vodafone chose to put customers at the centre of its transformation “People often refer to companies as human beings,” says Ipiv. “It’s not Vodafone who does something, there is no ‘Mr or Mrs Vodafone’ it is the human beings working at that company, and usually it needs one or two people to make a change in the company. If you believe improving customer experience is the right strategy, then you should drive for it.

“Two and a half years ago, we said: ‘we need to change’. Digitalisation is all around now is the right time. We developed a cross-functional team from digital, retail, IT and supply chain. We sat down and assessed how traditional supply chain organisations are functioning. They are mainly looking at costs and processes to add value to the company, but we said that one element is missing, and that is the customer. “This cross-functional team worked together four days a week for three months and defined a customer journey along the supply chain by asking: how should a customer perceive and feel the supply chain when purchasing a product from Vodafone? We used various creativity techniques, developed personas, analysed data, talked to customers, invited our partners to give us feedback on our ideas or talked to various experts to challenge our views. We had a clear focus on improving the customer experience and digitisation was the enabler. This is how we developed our supply procurementmag.com

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chain strategy and transformation roadmap thinking from the customer perspective first. “After 2.5 years, we can say that this was absolutely the right approach. The supply chain team is delivering significantly more value to our customers and to Vodafone compared to the ”traditional” supply chain approach focusing on cost and process optimisation only.” Vodafone and its partners Along the way, Vodafone’s partners have been fundamental in its supply chain transformation. “We have a few key partners,” says Ipiv, including Arvato, Loxxess, CTDI, COMSPOT, UPS, GLS, and DHL. “These are the biggest partners that we have at Vodafone. In our supply chain functions, we decided to be as lean and as simple as possible, which requires dependence on your partners. You need to trust them and, at Vodafone we do! “I always say that I want our partners to make Vodafone a better company. They should share the same values and support us in becoming better when it comes to customer experience, reducing costs, increasing efficiencies, and optimising processes. At Vodafone, we want to become better every day, and our partners should support us in that. Our partners should not be silent if they recognise that our processes are not good. This is what I expect from our partners to drive us to become a better company. “A good example is our very close relationship with Arvato and their continuous support improving the customer experience. Arvato is analyzing our operational performance and providing insights on how to improve especially in the return and after-sales space, which is usually a very critical area of customer experience,” concluded Ipiv.

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Partners in

Passenger Safety

WRITTEN BY: RHYS THOMAS PRODUCED BY: GLEN WHITE

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Natalia Pickett, Head of Procurement, KeolisAmey Docklands, sheds light on the vital role procurement plays in more than 117 million annual rail passenger journeys

117 million Passengers use the DLR each year

ondon’s Docklands Light Railway, known as the DLR in local shorthand, is the UK’s busiest light railway network and one of the vital transport arteries for business and leisure in the sprawling British capital. It is operated by French transport specialist Keolis and British infrastructure engineering firm Amey, under the joint venture KeolisAmey Docklands. The service is responsible for the comfort and safety of more than 117 million passengers each year, giving the transport network an enormous impact on the economy, and the day-to-day lives of Londoners and tourists alike. Cutting through the city’s financial hub in Canary Wharf, the line also feeds into convention centres and cultural hotspots, as well as residential areas and retail destinations. Though the pandemic has significantly reduced the number of passengers over the past 18 months, it is a responsibility that Natalia Pickett, Head of Procurement at KeolisAmey Docklands, takes incredibly seriously. “Safety is a word I say a million times a day, because whichever solutions we implement, services we buy or technology we deploy, the safety of our passengers, staff and transport crew is the most important factor –always,” she says. Pickett’s procurement division is responsible for sourcing and implementing everything from vital services and back office supplies, to spare parts for maintaining rolling stock. When someone once asked Pickett’s husband what his wife does for a living, he joked that she is a “professional shopper, at an industrial procurementmag.com

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Title of the video

“ Safety is a word I say a million times a day, because whichever solutions we implement, services we buy or technology we deploy, the safety of our passengers, staff and transport crew is the most important factor” NATALIA PICKETT

HEAD OF PROCUREMENT, KEOLISAMEY DOCKLANDS

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scale”. To some extent, she says this is true: “If you imagine your thought process at the DIY shop when you’re redecorating the bathroom, there are parallels to the considerations in my professional life: whether the product is good quality, safe, value for money. But there is much more to it than that." Pickett describes herself as part matchmaker, part problem solver –the key to both being partnerships. “Those are really the core of my work, and I’m pleased to say that the team and I are very good at it. Procurement is not only about saving money. That is fundamentally not true; savings will be the natural outcome of procurement processes,” she says. “Partnership is another of those words I repeat a lot, because it is very important to me. With my suppliers, we must learn from one another, bounce ideas between one another and grow together; it is almost love,” she jokes. “We need to reach the stage of the relationship where we can talk

KEOLISAMEY DOCKLANDS

NATALIA PICKETT TITLE: HEAD OF PROCUREMENT LOCATION: LONDON DOCKLANDS, UK

EXECUTIVE BIO

about the good things, the bad things –it doesn’t matter to me. As long as we’re talking then we can find a solution, which is what procurement is really all about.” Pickett and her team operate in a unique procurement environment. Unlike malleable sectors such as IT, procurement in the rail and wider transport industry runs at a more cautious, measured pace. Safety concerns mean Pickett is unable to “simply change a nut here and a bolt there because it is cheaper”, but these stringent regulations do crystallise a fundamental level of quality adherence not often present in more agile sectors. Pickett says, “One of the key reasons for the success of Keolis in achieving operational excellence has been its choice of its technology partners. Amongst those suppliers GOAL SYSTEMS stands out through its provision of the latest technology for the optimisation of the planning of material, technical and human resources .The partnership has grown steadily over the

Natalia Pickett is an experienced procurement and sourcing professional with more than 25 years’ experience. In her current role she is responsible for developing and implementing commercial strategy and contracting models to support a variety of rail network contracts, including DLR, Wales and Borders Rail, and Metrolink. Pickett has worked in senior procurement roles at Network Rail, Regus and Shell, and earned a masters in Math, Physics and Computer Science from Moscow Railway University, and latterly an MBA in management from the Open University.

KEOLISAMEY DOCKLANDS

“ With my suppliers, we must learn from one another, bounce ideas between one another and grow together; it is almost love” NATALIA PICKETT

HEAD OF PROCUREMENT, KEOLISAMEY DOCKLANDS

Goal Systems Improving the Productivity of your Business!

Goal Systems provides the software to maximise the efficiency of timetabling, scheduling and rostering for employee and vehicles for transport operators.

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last few years as Keolis have entrusted transformation. “I don’t like to use lots more key operations and tasks to of different computer systems and GOAL SYSTEMS. pieces of software,” she says. “I find that The DLR Goal have adapted their approach the more systems you use, the more has a to suit the UK market and introduced noise you have to deal with. But we robust, standardised and automated do use Microsoft Dynamics and IBM departures solutions which are driving a more Maximo, which is a very robust asset record efficient and more profitable operation management ERP system and very with high levels of internal and external important to our procurement analysis. customer satisfaction.” Using this system I can instantly know what All suppliers in the rail industry can be found a good is, how we bought it, what we spent on the Rail Industry Supply Qualification and use the information to review our System, a sector-specific database which categories. From a digital perspective, they holds all their insurances, certifications, are enough for us.” licenses and financial information. “It makes Not all Pickett’s procurement efforts are my job quicker,” Pickett says. “And it also dedicated to steel, tracks and carriages. makes suppliers’ lives easier because they Services play an equally important role don't need to answer all those same questions in keeping passengers and staff safe and again for me.” comfortable. That comes with its own set Pickett’s teams also leverage a suite of challenges, particularly as the size of of other digital procurement tools, though KeolisAmey Docklands belies its impact. she admits she may be considered “a little “We operate a large service, but our actual old fashioned” in her approach to digital company is only around 860 employees,

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GOAL SYSTEMS One of the key reasons for the success of KeolisAmey Docklands in achieving operational excellence has been its choice of its technology partners! Among those suppliers, Goal Systems stands out by providing the latest technology for optimising the planning of material, technical and human resources. The partnership has grown steadily over the last few years as KeolisAmey Docklands have entrusted more key operations and tasks to Goal Systems. Goal has adapted their approach to suit the UK market and introduced robust, standardised and automated solutions which are driving a more efficient and more profitable operation with high levels of internal and external customer satisfaction.

“ I think in 2022, we will be back to business as usual. […] It will be a time to achieve efficiencies” NATALIA PICKETT

HEAD OF PROCUREMENT, KEOLISAMEY DOCKLANDS

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which is nothing compared to the biggest networks. We can be limited in finding suppliers that want to work at that scale,” she says. After around a year of negotiations to secure a quality occupational health provider, Pickett encountered Medigold Health. “They were different. They were keen to work with us, but beyond the usual services, it was apparent that they care about our staff as much as we do. They offered insight into how to reduce blood pressure, how best to approach dietary requirements. When we inevitably have staff off sick, they help us bring people back to work as swiftly as possible, because while we are paying them on leave, we need to cover

KEOLISAMEY DOCKLANDS

their job, meaning we are paying twice. But this is not about simply pushing people back to the track, it’s about caring for our staff while minimising spend, and Medigold are a great partner for that.” Another example of this close collaboration is Xrail, a rail services supplier which provides trackside cabling to KeolisAmey Docklands. Xrail was discovered through the Rail Industry Supply Qualification System, though none of Pickett’s team had heard of their work previously. “But we followed procedure –as is our mantra –and invited them for a presentation,” she says. “And then the magic happened. This sounds like such a matter of fact, one-

dimensional job on the surface but they are so passionate, so innovative, and we all thought: ‘wow’. We awarded them the contract, and they have been fantastic.” Pickett’s decision to offer Xrail the contract was further vindicated some months later. While sleeping rough at an organised event to raise money for The Railway Children Charity, she encountered Monica Barbosa, Xrail Group’s Director of Business Development and Communications. “It was an accidental meeting, but we got to talking and realised we are cut from the same cloth,” Pickett says. “It was an interesting experience and great to know we’re passionate about the same values. This is what I mean when I talk procurementmag.com

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“ When the new franchise started on 1 April this year, nobody noticed. The suppliers delivered on time, the network didn’t stop, and that was our real achievement” NATALIA PICKETT

HEAD OF PROCUREMENT, KEOLISAMEY DOCKLANDS

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2014

Year Founded

Transport Industry

about the importance of partnerships that go beyond saving money.” Pickett’s partnerships extend beyond London. The joint venture between Keolis and Amey expanded in 2017, landing the contract for the Manchester Metrolink, a light rail network that is the largest of its kind in the UK. Procurement played a central role in the project, but it was largely invisible –and that was by design. “We began by providing numbers and what we can achieve with suppliers, but procurement’s real role in the launch of this service was in the realisation. Our job was to ensure that day one looked no different to the previous day. So when the new franchise started on 1 April this year, nobody noticed. The suppliers delivered on time, the network didn’t stop, and that was our real achievement. The purpose of my role is to make sure that everything works and I’m not noticeable. It’s similar to HR: why should anyone notice if everything runs nice and smooth? So well done to us.” When KeolisAmey Docklands was awarded the ISO 55001 asset management certificate, “we were very proud of it”, Pickett says. “And I'm particularly proud of the fact that to get this certificate, we as a procurement function didn't need to do anything extra.” Pickett hopes to remain quietly exceeding expectations and out of the limelight in the coming year, when commuters begin returning to work and cities reopen to tourists. “I think in 2022, we will be back to business as usual. And I will do all my standard efficiencies projects, and we have taken over maintenance of the Lewisham extension – seven stations in south London. It will be a time to achieve efficiencies. Nothing is certain, but this is the plan.”

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