aerce 201006 (slideshare)
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The document discusses how procurement must adapt to a changing business landscape driven by digitalization and new economic models. It outlines four key areas procurement must address: managing a more complex ecosystem involving a broader range of players; securing continuity to prevent disruptions; driving sustainability to meet economic, social, and environmental needs; and building the chief procurement officer of the future with new skills. The document provides examples and considerations for how procurement can rise to these challenges and play a more strategic role in organizations.
aerce 201006 (slideshare)
- 1. Sammy Rashed Coaching & Development Presented to How to steer Procurement in a post-digital world Manage a more complex eco-system Secure continuity Drive sustainability 6 October 2020Sammy Rashed Coaching & Development SRCD
- 2. Sammy Rashed Coaching & Development Sammy Rashed Coaching & Development About Sammy Rashed A serial “Corporate Intrapreneur” turned Entrepreneur 5 6 12 1990 1995 2001 2013 7 Think Tanks Strategic Planning Executive Coaching SCR Workshops MycareerMyproducts COMPANIES INDIVIDUALS Sammy Rashed Coaching & Development 2
- 3. Sammy Rashed Coaching & Development Think Tanks theme § Collaboration beyond SRM Publications from Think Tanks Publications Strategy & guidance for break-through results 2013 2014 2015 2016 2017 2018 2019 § Innovation Sourcing Research & Publications § Productivity Engine § Next-Level Skills § Driving Agility and Efficiency § Deploying the Digital Roadmap § Defining Procurement’s Contribution post-digital • “Beyond Procurement, Options for Procurement fo Drive Company-wide Productivity”, EBS Universität, 2012 • “Co-creating Value”. Chemistry Today, 2013 • “The Seven Pillars of Strategic Procurement” Supply Business, 2014 • “Innovation Sourcing” Procurement Leaders, 2015 • “The Changing Rules of the Game” Procurement Leaders Quarterly, 2016 • “Procurement in the Age of Digitalisation” Medium, 2017 • “Preparing for digital transformation: A practical breakdown” Raconteur 2018 • “Deploying the Digital Roadmap” Procurement Leaders, 2018 § Beyond Procurement Survey2012 3
- 4. Sammy Rashed Coaching & Development Proper alignment is critical to enabling successful transformation Focus for 2020 Think Tank is how to position, engage, and develop © 2019 S. Rashed – all rights reserved Alignment Business 1 Engagement Stakeholders 23 Function People Development Inform / mobilize support from critical players upstream and downstream Align your leadership team, have them steer their resources, and position for growth beyond Understand company’s strategic imperatives and how our function can best contribute to it Trends Industry landscape Business strategy Internal stakeholders Suppliers Community Self Team Organization Members Focus BUSINESS STAKEHOLDERS PEOPLE 4
- 5. Sammy Rashed Coaching & Development Understanding the burning platform Managing a more complex eco-system Securing continuity Driving sustainability Building the CPO of the future
- 6. Sammy Rashed Coaching & Development 6 Change Management To create a burning platform, start with WHY? 1 3 2 WHY we must change? HOW we can change? WHAT to change into? © 2017 S. Rashed – all rights reserved
- 7. Sammy Rashed Coaching & Development Initial Theories §Digitalization will offer the unique opportunity for procurement to meet the demand that it plays a strategic role. §Procurement plays a decisive role in bringing innovations into a company. Procurement is shrinking and operative procurement is becoming autonomous in most areas. In the future, procurement will take on a completely different form and traditional purchasers will be a thing of the past. Expectations from strategic procurement are growing and the demand for a higher value contribution is increasing. Personal relationships will also continue to be extremely important in Procurement 4.0. 1 2 3 4 The Digitalization of Procurement Key Thesis in pilot Study: Procurement 4.0 7
- 8. Sammy Rashed Coaching & Development Then Now Future 1) Focus Spend Penetration Spend Optimization Enterprise Value 2) Business Requirements Technical Specifications Functional & Output Outcomes & Benefits 3) Value Realisation Tactical Win/Lose Strategic Win/Win Collaborative Value 4) Governance Operational Finance or GBS Excom 5) RTP Process Workflow, Spend Coverage Efficiency & Automation User Experience 6) STC Process Spot-buys, Annual Contracts Cat Man & Multi-year Contracts Agile Sourcing & Contracting 7) SRM Process Compliance (QPD) Management Performance Management Innovation & Value Co- creation 8) Supply Base Fragmented & Disaggregated Aggregated & Consolidated Broader and more complex eco-system Org Suppliers Process Role and aim Procurement has greatly evolved and will continue to do so, enabled by Digital This will require new capabilities and mindset 8
- 9. Sammy Rashed Coaching & Development In the future everyone will need to think like an entrepreneur Digital is key, but not the only consideration Procurement needs to adapt to the Five New Economies Digital Economy Less need for physical things and more alternate instant solutions Sharing Economy Less need for for ownership and more focus on access Gig Economy Less need for permanent employees and more flexible workforce Platform Economy Less large companies and more brokerage between smaller players in fragmented eco- system Circular Economy Less disposal and more reusing 9© 2017 S. Rashed – all rights reserved 9
- 10. Sammy Rashed Coaching & Development Understanding the burning platform Managing a more complex eco-system Securing continuity Driving sustainability Building the CPO of the future
- 11. Sammy Rashed Coaching & Development A system, or a group of interconnected elements in an area, formed by the interaction of a community and the way they affect each other and their environment Managing a more complex “eco-system” Implications for Procurement WHAT IS IT? WHY IS IT IMPORTANT? The traditional sequence of clients à company à suppliers has changed Now more circular than linear, with more players This brings new challenges for Procurement: • Broader supply base • Smaller-size vendors with different needs • Greater benefits but also risk 11
- 12. Sammy Rashed Coaching & Development CFOs allowingshorter payment terms for smaller suppliers Procurementmanagingonsiteincubator Procurement is now increasing its vendor base in many companies Covid-19 reduces social safety net in Gig Economy Joint ideation teams formed with buyer, customers, consultants, solutions providers, SMEs, and freelancers Managing a more complex “eco-system” Some examples The growing eco-system brings new challenges and opportunities for Procurement
- 13. Sammy Rashed Coaching & Development Aim is to offer small / new entrepreneurs capabilities that are flexible, affordable, and reliable, so they can focus on their expertise and scale their business. Small Business Ecosystem © An example of potential solution to new challenges Clan Tribe Community Cell 10 1 100 13
- 14. Sammy Rashed Coaching & Development Understanding the burning platform Managing a more complex eco-system Securing continuity Driving sustainability Building the CPO of the future
- 15. Sammy Rashed Coaching & Development Secure continuity Implications for Procurement Preventing potential disruptions and ensuring recovery to enable ongoing operations. Disruption can come from areas less managed by Procurement WHAT IS IT? WHY IS IT IMPORTANT? Production of goods and delivery of service is subject to weakest link in value-chain, not highest spend Opportunity to reinforce critical contribution that was taken for granted This brings new challenges for Procurement: • Step-back to more basic responsibilities • Deal with smaller vendors with less KPI impact • Traditional levers not applicable during crisis
- 16. Sammy Rashed Coaching & Development Procurement is reminded of the 3 types of customer needs The Kano Model Slide No. 16 • Satisfaction + Primary Satisfiers Service Fully FunctionalService Dysfunctional - Dissatisfaction § To fully understand customer need, it is important to understand that they have different types of needs § Dr. Kano determined that there are three types of Customer needs as shown MUST BE DELIGHTER §Unfortunately, customers typically only tell us about their primary satisfiers when asked and we must use other methods to identify the “Must be” and “Delighters”
- 17. Sammy Rashed Coaching & Development Immediate needs are clear, but what’s next? Corona crisis has forced companies to build Resilience in 3 phases RecoverRespond Reimagine Source: BGC analysis Ensure safety and business continuity Prepare to restart and rebound Invest for sustained competitive advantage Tackle immediate priorities to keep employees safe and stay in business Be ready to grow in the right markets at the right time Transform to strengthen resilience and drive in the future These are under way How do we prepare for this?
- 18. Sammy Rashed Coaching & Development Sammy Rashed Coaching & Development What to measure and report? Focusing on output and impact on company objectives Why What How Output Traditional measurements from support functions Alignment with strategic imperatives Tangible contribution to business results ✗ ✗ ✗ Internal metrics: help understand factors behind performance and improve Reported measures: demonstrates impact of performance and alignment to business goals Leverage focus on short-term basic needs to tie-back Procurement’s contribution to wider company strategy
- 19. Sammy Rashed Coaching & Development Understanding the burning platform Managing a more complex eco-system Securing continuity Driving sustainability Building the CPO of the future
- 20. Sammy Rashed Coaching & Development Driving sustainability Implications for Procurement Meeting our own needs without compromising the ability of future generations to meet their own needs. Based on 3 pillars: Economy, Society, and Environment WHAT IS IT? WHY IS IT IMPORTANT? Consistently in top trends and priorities Impacts all stakeholders groups Expectations moved from ”do no bad” to “do good” Circular economy This brings new challenges for Procurement: • Responsible for impact of vendor-base • Directly impacts reputational risk • Can be a significant differentiator
- 21. Sammy Rashed Coaching & Development Exploring the top future trend of Environment / Sustainability Outcome & Insights from Think Tank Roundtable 21 Who What pain points are relieved What delighters are gained Customers - reduce consumption guilt + Brand equity + Differentiator + Can move upmarket Employees - Less ”reputational” risk (to work for bad employer) + Proud to work + Attract & retain + Purpose Suppliers - Less orders if don’t support + Increase collaboration to address problems + Can sell new solution elsewhere Shareholders - May cost more + Reduce higher costs + Reduce consumption (e.g. energy) 1) Why is this a key trend for Procurement to consider above the others? 2) Consider what are future pain points / delighters that you can help address: 2a) What will customers expect? 2b) What will be the impact on employees? 2c) How will this change our dealings with suppliers? 3) How can you take concrete steps to help address this future scenario WIP
- 22. Sammy Rashed Coaching & Development Sustainable Procurement Pledge – Impact starts with “I” vBased on UN Global Compact Principles vSupport UN Sustainable Development Goals vCreated by MANY, intended for ALL ! vCenters around 5 Principles 1. Standing up for people and our planet! 2. Together we will change the world! 3. Starting with myself! 4. Sharing my knowledge and listening to others! 5. Leaving the right legacy! vComplements existing "Top-Down" initiatives vBecome an Ambassador on LinkedIn vCollaborate on www.spp.earth #SPP
- 23. Sammy Rashed Coaching & Development Understanding the burning platform Managing a more complex eco-system Securing continuity Driving sustainability Building the CPO of the future
- 24. Sammy Rashed Coaching & Development The trend is clear Which competencies are growing in demand vs. declining Emotions Relationship Technical Process
- 25. Sammy Rashed Coaching & Development 25 SELF SOCIAL RECOGNITIONREGULATION SELF AWARENESS • Emotional Self-Awareness • Accurate Self-Assessment • Self-Confidence SOCIAL AWARENESS • Empathy • Organizational Awareness • Service Orientation RELATIONSHIP MGMT • Developing others • Change Catalyst • Build Bonds & Influence SELF MANAGEMENT • Self-Control • Adaptability • Initiative © 2017 S. Rashed – all rights reserved Driving relationships will be core in the future And Emotional Intelligence will be even more key
- 26. Sammy Rashed Coaching & Development How do you contribute to the value chain Insights will come from CONNECTING + APPLYING CustomersIndividual Procurement Stakeholders Where you want to go in the future What you have going for you now (soft or hard) What people will pay you for Questions to ask yourself? • Which strategic priorities can you contribute to? • What ”unclaimed land” can you move to? • What unmet problems can you help adress?
- 27. Sammy Rashed Coaching & Development Mastering the Journey Towards personal and professional fulfillment © 2017 S. Rashed – all rights reserved Sammy Rashed Coaching & Development DEFINE3 ASSESS2 PURPOSE1 VALIDATE4 BRAND5 SHARE6 START7 ENGAGE8 AIM9 DELIVER10 PAUSE11 STEER12 STRATEGIZE CRYSTALIZE REALIZE Write well Emotional Intelligence Combine skills in a unique way DEFINE3 ASSESS2 PURPOSE1 VALIDATE4 BRAND5 SHARE6 START7 ENGAGE8 AIM9 DELIVER10 PAUSE11 STEER12 STRATEGIZE CRYSTALIZE REALIZE Find your tribe Entrepreneurial Thinking Maximize your time Stand out Be (truly) authentic Stay focused Attract attention
- 28. Sammy Rashed Coaching & Development The future CPO will be supercharged “You must lead with your head, heart, hands… and guts” Heart § Wants value for all partners § Perceived as principled and trustworthy Hands § Credible Experience § Finance and Legal Knowledge Guts! § Strong Advocate § Unafraid of manageable risks § Manages Conflicts § Don’t ask for permission Head § Understands the totality of the business § High Emotional Intelligence § Align with Digital Strategy § Drive Operational Efficiency § Provide enhanced stakeholder experience § Make better decisions with data insights
- 29. Sammy Rashed Coaching & Development Welcome and Intro Understanding the burning platform Aligning Procurement’s strategy Engaging internal & external stakeholders Build on strengths to assemble “fit-for-purpose” teams Q&A and next steps