Future of Sourcing Awards 2018: Innovations in Sourcing, with GEP and HERE Technologies

Posted: 10/18/2018 - 09:21

At SIG's Fall Global Executive Summit in 2018, SIG held its first annual Future of Sourcing Awards. Join Sourcing Industry Group CEO and President, Dawn Tiura, as she interviews the teams nominated for the Innovations in Sourcing category who have demonstrated excellence in their field and represented the best examples of innovation, transformation and/or leadership in outsourcing.

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Dawn Tiura: Well folks I'm excited to introduce you to the next team and that's GEP Procurement Transfer Nation with a CPG client. They are an outsourcing finalist in the Future of Sourcing Awards and I'm real excited to welcome you guys to the podcast.
Rafiq Merchant: Thank you so much. Thank you so much for having us.
Connor Hill: Yes. Thank you, Dawn.
Dawn Tiura: It's an honor. I read your incredible submission. And obviously the judges thought it was fantastic, and you were made it into a finalist. But can you start by just stating what the problem was for our listeners? What were you trying to solve?
Rafiq Merchant: Sure, absolutely. So, we had an opportunity to work with a Fortune 500 client and fundamentally they were looking to change the way their procurement organization operated, right? So, what does that really mean: I mean, it broke down into sort of four or five major areas.
Rafiq Merchant: One was more around… they wanted to change, you know, historically, they operated in a very tactical fashion. And they wanted to sort of move away from that. Ultimately try to transform their organization where they're now driving significant value both from a financial perspective, but also value to their stakeholders and business sort of partners across the organization.
Rafiq Merchant: They were a very, sort of, decentralized organization. And then depending on the region that you are in, the responsibility is different. They wanted to move away from that to having a global structure, being very coordinated and really being able to leverage their buying power across the globe.
Rafiq Merchant: The third component was, sort of, lack of consistent and effective processes and policies. So again, depending on the region that you are in, those policies weren't really aligned to driving maximum value for the organization.
Rafiq Merchant: And the fourth sort of point was around the actual organizational structure, making sure they had the right people in place to be able to deliver on the results that they wanted. Making sure those organizations were right sized. So, there was, you know, appropriate sort of spend per FTE or spend per individual that they were able to target.
Rafiq Merchant: And then sort of finally, making sure that their goal aligned with the goal [inaudible] the overall [inaudible] be able to go out and deliver on savings or drive financial value. However, you know, from a business perspective, their stakeholders that they work with, those goals aren't necessarily aligned. They might have different objectives of growth, for example, versus cost savings.
Rafiq Merchant: And so, working with them to find that middle ground and create sort of that consistent balance where, you know, the goals are aligned between the business, but also procurement as well.
Dawn Tiura: Now was that Connor or Rafiq talking, just now? Rafiq Merchant. So, I should've welcomed you in the beginning. So Rafiq Merchant and Connor Hill are with us today. So, Connor, can you tell me a little bit about what makes this innovation sustainable?
Connor Hill: Yeah, so I think there are a few different things that we really have there. One of the biggest things, I mean kind of jumping off of Rafiq's point, [was] that we really wanted to take this client from more of kind of a tactical look to more of a strategic look, right, is the fact that we really put a lot of time and really kind of focus on change management for this.
Connor Hill: And I think really what we see with a lot of clients especially when doing procurement transformation is the fact that you can really design a great model, but when it comes to actually making it sustainable you need to make sure that your stakeholders are going to accept it at the end of the day.
Connor Hill: So, when we were working of course really to implement our new design is the fact that we really wanted to get or really work closely with a lot of the folks in the client's procurement organization to really get their thoughts. To get them to go out and speak to their stakeholders and get their thoughts on the new model based on kind of a quick description of how roles and responsibilities, process and policies, and things like that would change going forward.
Connor Hill: And so, what we were really able to do is equip the client with a lot of these tools and judge how their folks, their stakeholders on a day to day basis would really feel about this change. And what we really saw over time through good communication, through constantly making folks available to answer questions is that stakeholders became more and more thought into this new model where procurement is going from being very ethical to being more strategic and is really seen as a partner at the table.
Connor Hill: And so through really effectively using this change management as a tool we were able to get buy-in from these other stakeholders. And that's really what's going to make this new model actually sustainable in the long run.
Dawn Tiura: Oh, it sure is. You never underestimate the importance of getting people to buy into it. So, what can other companies learn from this project? What's some good takeaways?
Rafiq Merchant: I think, overall, and I know that sort of Connor hit upon this, and we would really emphasize it, but change management is so critical, right? A lot of companies go through a process of, "Hey, let's complete a design phase. Let's identify what the issues are gonna be. Let's help the client devise [what] this new future state structure's going to look like."
Rafiq Merchant: But then when you deal with organizations that operate on a global scale with multiple business units across different functions and different [inaudible] it's so good to be sure that [inaudible] stakeholders that you're going to work for that change.
Rafiq Merchant: Do they understand the change that's coming down the pipe? What does it really mean for them? Are you able to conduct a readiness assessment, right? To be able to gauge blockers within your organization. Are some people going to fight the change? How do you bring them on board? And this all needs to happen before the change is rolled out, right?
Rafiq Merchant: So, one thing we would really encourage other organizations, really emphasize, is dedicate enough and ample time within your overall sort of transformation goals and process to change management. That could be anywhere from six weeks to even six months depending on how large the organization is and ensuring that all your key stakeholders are ready for the change, understand the change, and then are accepting of it.
Connor Hill: I think-
Dawn Tiura: That's great. That's really good advice. I'm sorry. Go ahead.
Connor Hill: Sorry, Dawn. Just to jump off of that point as well. One of the other things I would say is that procurement transformation at the end of the day it's not the same as a light switch, right? To Rafiq's point, you really do need to put a lot of time into making sure that you have designed this final model where it comes to processes, policies, roles, and responsibility. Who's going to operate in what sense and what region? A lot of points like that.
Connor Hill: But even then, you can roll this whole new kind of org, this new process, new policies all out. But it's not going to happen overnight, right? Really procurement transformation, as with any other kind of change management exercise really takes months, and even in some other scenarios for very large organizations, more than just a year to even complete and really get successful buy-in.
Dawn Tiura: That's a really good point. You can't rush it. So, you've had the ability now to look back at the project. And yes, it was very successful. But is there anything you would've done differently, or approached differently?
Rafiq Merchant: I think, you know, thinking about that, you know, the natural inclination what ends up happening, Dawn, in these situations is that, you know, you work with sort of the region that has the significant sort of, you know, buying power or significant amount of individuals. Yet you're still trying to create this global change, right?
Rafiq Merchant: So I think one thing that we would do differently, right, and if the goal and the vision of the senior stakeholders or the procurement organization is to create a centralized global model is ensuring that on an ongoing basis you're sort of accepting and gathering regional input no matter how big or small those regions are 'cause at the end of the day you want buy-in from them, right? And this is first internally, within the organization. When I say that, I mean the procurement organization. So, making sure we really have an understanding of what these people are doing from a day to day perspective. How are these changes going to affect these individuals? And then making sure externally, when I say outside of the procurement organization, how sort of people are going to react to these changes.
Rafiq Merchant: Now, granted, if you take a look at the client that we worked with almost, you know, a significant—over 50%, 60% of their business—was centric to the U.S. Now, you know, the rest of it was divvied up across regions, but there were regions where there was only 10% or 15% of their sort of annual revenues were sort of driven from those regions. But that doesn't make them any less small in terms of the change that you're trying to get them to adopt, right?
Rafiq Merchant: And so, making sure that regional input is collected, is collected often, and is definitely taken into your thought process when designing sort of a goal solution.
Dawn Tiura: No, that makes perfectly good sense, and I think a lotta people sometimes forget to look outside each queue and look at the different regions and look at their differences. So that's really good.
Dawn Tiura: So, what are your chances of winning? How do you guys feel?
Rafiq Merchant: Connor, you can definitely chime in here as well. I think we feel—look, this was an extremely rewarding opportunity for us as an organization to take this journey, right? Some people like to call it even partnerships, but it's really a journey, right? We enjoyed taking this journey with this organization. It was really working in tandem to understand sort of where they wanted to go.
Connor Hill: When you say winning, Dawn, what exactly do you mean? In what sense?
Dawn Tiura: Well, you're a finalist and we're going to find out who actually has won this category at the awards program. So, I was just wondering: how optimistic are you, and how excited are you?
Connor Hill: What I would say is we're definitely excited to be nominated. It was really good to actually hear from a few of the folks including Imran and the rest of the team. I'm not one to really speak much on the future, but what I would say is that we definitely put [in] a lot of hard work, and really a lot of different folks worked on this project. And that's really what drove a lot of success. Though I mean, regardless of the outcome we'll definitely be looking forward to hearing back from you guys.
Dawn Tiura: Well, and I think I just wanna tell you this, congratulations. You've raced to the finalists. It didn't take the judges long to get you there at all. So, it must've been extremely impressible for them to do that as well. So good job.
Rafiq Merchant: Thank you.
Dawn Tiura: And folks, we're rapping up with GEP Procurement Transformation with a CPG client. And with me today was Rafiq Merchant and Connor Hill. Thank you, guys.
Rafiq Merchant: Thank you so much, Dawn.
Dawn Tiura: That was GEP Procurement Transformation with CPG client. Up next is HERE with internal sourcing transformation as a sourcing team finalist. With me today, I have Jeff Amsel from HERE, and they have been nominated as a finalist in the sourcing team award category, and it's for their internal sourcing transformation project. Welcome, Jeff. I'm glad you could join us.
Jeff Amsel: Thank you, Dawn. Good morning.
Dawn Tiura: Good morning. Let's talk about the nomination and let's start with what problem were you trying to solve?
Jeff Amsel: When I joined nineteen months ago in January of 2017, I quickly realized that we were not being strategic with our approach to global sourcing. In many ways, my team was set up to deliver what I'll call back in tactical type of support to the organization. Part of this was due to legacy, culture and policies that we inherited when we spun off from Nokia in 2015. There was generally a lack of accountability and clarity on roles, and responsibilities throughout the organization and quite frankly, people were in roles that didn't align with their background and experience. What I found was that customers, both internal stakeholders and external suppliers and customers were complaining that it was really difficult to do business with us and this had to change. Our internal satisfaction rating was at an all-time low of about 33% back in 2008. As they say, we only had upwards to go with our customer satisfaction.
Dawn Tiura: Well, it is good when you start at the bottom, you can only go up, so that's true. You went through a complete transformation of the internal servicing project. Can you tell me a little bit about your project team and what makes you think that this innovation is going to be sustainable?
Jeff Amsel: Sure. I think there were a few critical success factors that continue to make the transformation possible that we rely on. First is obviously building a great team that I have globally and this is my leadership team as well as all of my individual team members around the world in our three different regions and APAC in the Americas. It's about getting the right people with the right skills in the right roles as we all know, and it's going to find that what we like to say as sort of the A-team, to make sure that we get the return that you'll get will far outweigh the cost of going to get the top tail end.
Jeff Amsel: Part of building a great team is building a department that fits well with our corporate culture, which is a culture of learn fast, win together, be bold, be true and give back as we like to say. I think the second piece that made the innovation sustainable is building a robust change management plan, and that was working on such things such as... As I mentioned, aligning the roles and responsibilities with clear accountability, communicating constantly about the why and the how and build relationships and trust with our stakeholders.
Jeff Amsel: Another important piece of the change management was to celebrate wins with our team and our global stakeholders on a regular basis and also ensure that we have the highest level of sponsorship from senior leadership, and at HERE Technologies. This really started with our chief operating officer, Angel Mendez, which was one of the critical success factors of why we've been able to make the change and to make this sustainable. I'd also say that another critical component is to build a roadmap and a vision and to clearly communicate the benefits to the team and to the stakeholders. We have to be enthusiastic about what we're trying to do. We have to build a lot of excitement around it and we always want to try to work and motivate and inspire the organization around these efforts.
Dawn Tiura: That's neat. I love the fact that you've had these wonderful results. Can you share some of the results with our audience?
Jeff Amsel: Sure. Last year alone, we are able to save the organization roughly about $30 million in savings, and as we all know, savings is a critical component of what every CPO in their organization is trying to do, and its top management obviously looks closely at that. But I think another important piece was that we were able to drive our engagement model with our stakeholders, right? I think when I walked in the door in January 2017, we were seen as a place where not a lot of work was getting done, and we weren't being responsive to the needs of the organization, and the process was taking too long. We really created a whole new culture and engagement and sort of, if you will, a brand, a procurement brand of what we're trying to do and as we like to say, we want to do it with you and not to you. Really, the whole engagement and how we work together with our organization globally changed, and that's what's really making this happen.
Dawn Tiura: Well, you have an incredible reputation as a leader as well. I think a lot of it was just you bringing all of your talents to the company made a big difference. If other companies want to embark upon this, let's say they have low ratings themselves, what could they learn from you?
Jeff Amsel: In terms of how we're making this sustainable, what I'd say is there's a few points here. One is if you don't measure it and track it, it's hard to drive change. So we put in place a lot of tools to measure the engagement and performance so we can monitor and adjust as needed. We implemented a dashboard to monitor real time performance factors across our entire sourcing process. We also invest in continuous learning for our teams through active memberships such as SIG certifications, conferences, and benchmarking where it makes sense. We've also invested in numerous technologies to date, which have been important, so we're looking at things such as supplier diversity, contract management, spend analytics, supplier risk, savings, dashboards—all the usual areas that an organization will go as we look to uplift our programs.
Jeff Amsel: We'll continue to look at technology such as e-catalogs, supplier onboarding, e-procurement, and supplier relationship management as well to try and automate and bring transparency as well to our program. Then, I'd say we will continue to work closely with our stakeholders and finance as well to track our savings and benefit because these will continue to be a key part of our collective and individual goals and we want to drive management activities to increase adoption across all these different categories that we're working on.
Dawn Tiura: If you were to look back now after you've been on this journey for about a year and half, is there anything you would have done differently?
Jeff Amsel: I would say that because we're a global IT company, we have to move fast in this ever-changing world as we all know. And with that, we have a lot of pressure to run fast on our projects. This all comes with a bit of what we call change fatigue. Being aware of how much work people have on their plates and the pace we're asking the company change can at times be stressful, but also exciting. Perhaps in the future, we better prioritize our work load. I think the other piece, in terms of looking back, is that we're still looking to fill up a few remaining open positions in markets such as Berlin and Amsterdam and I would probably have started developing relationships with colleagues and perhaps search firms in some of these markets a little bit earlier to help build my network and expedite the recruiting process.
Dawn Tiura: Very good. I'm trying to help you with that too. We're going to help you try, and get those positions filled. It's real exciting what you've been able to do and do you think we're going to hear some additional results from this in a year from now if we check back with you?
Jeff Amsel: Yeah. We're certainly not done. We're still on the journey as we say. We're actually going through a benchmarking exercise with our global team, just in a couple of weeks, to prepare for next year's activities in terms of what we wanted to improve upon in terms of people, process, technology, data, all that good stuff. We're definitely looking to continue to raise the bar as we go into 2019 and beyond.
Dawn Tiura: Perfect. Well, I can't wait to see you in October. Jeff, I want to just wish you and your team the best of luck as we get close to naming the winners.
Jeff Amsel: Thank you so much, and we're excited to have been nominated as a finalist and we look forward to attending the awards dinner in California in a few weeks.
Dawn Tiura: Good. We're excited too. Folks, this is Jeff Amsel, and we're talking about HERE Technologies' internal sourcing and transformation project. Jeff, thank you for joining me today.
Jeff Amsel: Thank you, Dawn.

About The Author

Dawn Tiura's picture

Dawn Tiura, CEO and President of SIG, SIG University and Future of Sourcing Digital Publication, has over 26 years leadership experience, with the past 22 years focused on the sourcing and outsourcing industry. In 2007, Dawn joined SIG as CEO, but has been active in SIG as a speaker and trusted advisor since 1999, bringing the latest developments in sourcing and outsourcing to SIG members. Prior to joining SIG, Dawn held leadership positions as CEO of Denali Group and before that as a partner in a CPA firm. Dawn is actively involved on a number of boards promoting civic, health and children's issues in the Jacksonville, Florida area. Dawn is a licensed CPA and has a BA from the University of Michigan and an MS in taxation from Golden Gate University. Dawn brings to SIG a culture of brainstorming and internal innovation.