An Intro to Professionalizing Procurement & Strategic Sourcing

1. An Intro toProfessionalizing Procurement & Strategic Sourcing What • Why • How

2. Strategic Sourcing & Professionalizing Procurement Empowering and inspiring people to embed the change and make it stick INSPIRING CHANGE PEOPLE SUSTAIN TECNOLOGGY PROJECT & PROGRAMME LEADERSHIP PROCESS Changing the way organisations shape, build and run procurement functions PROFESSIONALIZING PROCUREMENT SOURCING STRATEGY TRANSFORM SPECIFICATION & SELECTION SUPPLIER MANAGEMENT Transforming procurement to support business outcomes and set the foundations for success STRATEGIC SOURCING FOUNDATION

3. What and Why Professionalize Professionalizing Procurement Organization Diagnostics, Vision and Functional Model Collaboration Model Operating Processes and Governance Organization Design Capability Development Framework Workforce Transition Building Capability • You don’t have clear ways of working and duplicate effort, systems and processes. • You’ve restructured your Procurement Organization but things have not really changed. • You’ve brought in new capabilities but it hasn’t seemed to have had the effect you were after. • You are reliant on traditional approaches to procurement that don’t deliver real business value. Any of these ring true?

4. The Professionalizing ProcurementRoadmap Organization Diagnostics & Vision Operating Processes & Governance Workforce Transition Building Capability Collaboration, Processes & Governance Collaboration - ways of working, processes and governance Assess, implement & embed technologies to support new ways of working Technology Diagnostic, Vision and Case for Change Workforce Transition Induction, Recruitment & up-skilling Organisation Structure Job Descriptions Organization Design The tools, techniques and consultation to transition staff to the future state organization Bring in the right people with an inspiring on-boarding program and continue to develop capabilities Current state analysis, case for change, and vision for the Procurement department and how it will engage with, help shape and support the Business Team structures, headcount, roles & reporting lines Clarity on expectations for each role Functional Model CareerProgression Capability Development Framework Functional Model Competency Model Learning & Development Career Paths Benchmarking Recruitment Competencies by role & levels Functions by team to determine accountabilities and responsibilities Learning & Development Catalogue Career maps by role, upwards & sideways Learning &Development PerformanceManagement

5. Discussion Points – Professionalizing Procurement Think Feel Do • What does your Procurement strategy say about the future shape, structure and resourcing for the organisation? • What are the key people capabilities and skills you will require to deliver your Procurement strategy and major programs? • What is your people development strategy (covering areas such as competencies and culture) for achieving your Procurement strategy? • Is everyone clear about team accountabilities, responsibilities, involvement and hand-offs? • How could you cover both Procurement and business competencies over a range of levels? • What can you provide people to help them identify and pursue career progression opportunities? • What are the specific skills gaps and development needs across the organisation and the relative priorities? • Have you updated your learning and development program to align with your competency model? • What is your retention and succession strategy? • Do you have clear processes that are aligned to how your systems and organisation works? • Are there opportunities to group roles more effectively?

6. Why focus on Strategic Sourcing? Strategic Sourcing SOURCING STRATEGY A coherent strategy aligned to business priorities, with procurement linked to business performance Improved supplier planning, management and performance underpinned by deep relationships A sustainable, professional procurement organisation that delivers value to the business Part of our established suite of Professionalizing your organisation methodologies and tools. SPECIFICATION & SELECTION CORPORATE FUNCTIONS SUPPLIERS / VENDORS SUPPLIER MANAGEMENT GOVERNANCE COMMS, CULTURE & CHANGE

7. The value of Strategic Sourcing What are the elements of Strategic Sourcing? • Aligning the procurement approach to business strategy and performance • Providing a strategic assessment of costs and strategic business processes • Rationalizing suppliers and governance using a strategic supplier list • Implementing consistent supplier and procurement performance measurement • Developing a consistent approach to supplier relationship management • Ensuring an appropriate mix of suppliers are used for upcoming programs • Providing governance and support in the supplier selection process What are the key benefits? Improve supplier relations and establish strategic partnerships Achieve efficiencies, reducing costs and risks Improve performance and achieve a competitive advantage Deliver best value from procurement spend Meeting the sourcing needs of the business

8. Discussion Points - Strategic Sourcing Think Feel Do • What does your Procurement strategy say about how you are going to support the wider business goals? • Are you getting the best value from your current suppliers? • Have you got the right mix of suppliers? • Have you got visibility of all supplier spend from across the organisation? • How can you engage with the business to ensure that you are managing their demand and expectations and aligning their need with your capacity and expertise? • How can you strengthen the relationships with Strategic Suppliers in ways that increase transparency and better align critical business partners to your mission and objectives? • Are there opportunities to consolidate suppliers or spend across the Organization? • Are there any quick wins that can demonstrate the value of Procurement to the wider Organization? • Can you evolve your procurement processes to deliver improved outcomes, whilst still maintaining rigour, accountability and transparency?

9. APPENDIX

10. Organization Diagnostics, Vision and Functional Model Organization Diagnostics & Current State Analysis What we do Produce Organizational diagnostics to clarify current state, key business drivers and priorities, linking your vision and strategic priorities to a high-level, functional design. Procurement Vision Functional Model What you get A clearly defined vision for procurement that is linked to corporate strategies, a view of the key business priorities and a functional model of where you want to take the Organization.

11. Specification & Selection What we do Focus on the identification and procurement of products, services or people to meet an existing business need or drive efficiencies. What you get How we do it Support in scoping, managing and delivering a complex or large-scale procurementalong with best practice tools, templates and methodologies to improve future procurement performance. • Identify procurement activities • Perform a market assessment to identify suitable vendors and trends • Define functional and non-functional requirements • Establish evaluation criteria • Manage the procurement process through to vendor selection • Finalize the commercials, complete the transition and embed

12. Our approach to Specification & Selection What is our methodology? • Our approach fits within the established Scan, Focus and Act delivery framework • We have an established methodology that can be tailored to a client’s individual situation and requirements SCAN FOCUS ACT • Define Future State &Requirements • Review current state and understand drivers • Run process and manage vendors • Agree procurement route, process & timelines • Capture Business Drivers, priorities & imperatives • Define business objectives and requirements • Evaluate responses against requirements & objectives • Capture Business Drivers, priorities & imperatives • Develop Governance Arrangements • Warm-up identified vendors • Define procurement scope • Develop Functional & Non-Functional Requirements • Select chosen vendor & sign-off • Assess the marketplace and identify vendors • Establish evaluation criteria, tools & team • Finalise commercials • Assess procurement options • Create procurement documentation • Transition to new provider(s) and embed

13. The value of Specification & Selection Key drivers and benefits Key outcomes • Following a robust and comprehensive specification & selection process will ensure that procurement functions focus on balancing cost against a supplier’s ability to deliver their specific goals and requirements • An objective evaluation process will ensure the best option is chosen and not just the cheapest Structured end-to-end vendor selection and procurement support Ability to identify and source specific products or key skill sets Confidence developing &executing successful negotiating strategies Access to knowledge best practice tools, templates & deliverables A reduction in the cost of supplier contracts and arrangements • Identifying, evaluating and selecting the appropriate supplier(s) for a specific contract is critical across all areas of corporate procurement • A coordinated approach from requirements gathering through vendor evaluation, and subsequently to supplier negotiations, helps clients to deliver efficiencies and reduce the costs associated with all procurement activities