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We believe in better. We believe in
CPO institute Oxford University
Alisa Bornstein, 22 Nov. ’16
Category Management Driven Transformation
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AGENDA
§ About Millicom : Who We Are & What We Do § Basics of Procurement Transforma:on § Revolu:on or Evolu:on? § Category Management ReLoaded § Key Takeaways
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In 13 growth Countries
More than 57m customers
$6.7Bn revenue (2015)
16,000 Employees worldwide
Listed on NASDAQ OMX
Stockholm
Mobile B2B
Cable MFS
Online Content
Founded in 1990 25 years of expertise in
mobile and digital lifestyle
PY
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Leading telecom & media company dedicated to emerging markets
Millicom – Who We Are
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Millicom – What We Do
Mobile TV & Broadband
Mobile Financial Solutions (MFS) Business-To-Business (B2B)
Our Partners
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Basics of Procurement Transformation
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What is Procurement Transforma:on? “Nothing is new under the sun”
Procurement Transformation is a concept of change management, well researched during last decades.
• Change management is generally a process which involves complex analytical, political, and cultural
processes of challenging and changing companies core beliefs, structure and strategy
• Procurement transformation refers to a specific type of organizational change management which focuses on strategies to enable major and long-term improvements to procurement and supply management processes, activities and relationships
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GET MANDATE FOR CHANGE & COMMUNICATE
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Transformation Program
Key Steps to Successful Transformation Starting point is to understand the general issues related to successful change management, prepare the case,
engage powerful people, obtain the MANDADTE, implement and create a new culture
Build the case for transformation. Engage people with power to drive the change
Develop a vision and strategy Plan & Design the change.
Execute actions Generate short-term wins Communicate the gains and produce more change
Anchor new approaches in the culture Generate new changes
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Organization People Processes Technology Continues Improvements
Transformation Program
Areas To Address
Example: § Define and align NEW
organisational structure § Develop NEW competence
profiles and Job Descriptions § Set Levels and Develop
Career path § Map current roles and people
against the new competence matrix
§ Stakeholder & Procurement RACI to be defined
Example
§ Define technology strategic road map
§ Bring in set of tools to support all procurement processes
§ Implement § Drive for high adoption
Example:
§ Map current roles and people competences against the new set-up
§ Execute competence shift through
o Moving people to right work areas, roles & levels
o Redundancies o Recruitments
Example
§ Category Mgmt. § Sourcing Mgmt (RFx
process) § Contract Mgmt. § Supplier Mgmt. § Spend Mgmt. § Project Mgmt. § Stakeholder Mgmt. § Performance Objectives § Performance Scorecard/
KPIs § Reporting
Example
§ Develop short- mid and long term vision and strategy
§ Develop the strategic roadmap
§ Measure Performance § Continuously benchmark
against other companies to challenge the work of working, practices and outcomes and drive improvements
X years depending on mandate, budget and capacity to execute the change
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Strategy
Category & Supplier
Mgmt.
Transactional Operations
Mgmt.
Performance Mgmt.
Technology, Tools & Processes
Organization and Training
Complexity of Procurement Transformation
Change the “House of Procurement” is complex and time demanding.
Stakeholder Management
Talent Management – Human Resources desk
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Category Management: Deliver Sustainable Results
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Different approaches toward transformation Many leading organizations have recognized the value of Procurement
Transformation and use different approaches to make it happened.
Revolution? • Procurement transformations programs aims to re-do
the “House of Procurement” and build new processes, practices and structures, bring new technology and shift competences of the teams
• It can be disruptive, with many changes at the same time, too disruptive, “revolutionary” for the business
• A real change is in implementation and adoption of the change, and few organisations succeed in realizing the full benefit of it, in a given time frame ….
Or Evolution? • Holistic approach to Transformation focuses on building a
knowledgeable, strategic & high-performance organisation • An organic growth of Procurement capabilities and
transformation in phases, can give an organization the time needed to implement, adopt and cement the change
Recognizing Understanding Managing Leading the
Change
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Category Management ReLoaded Category Management has being central in delivering financial and other added values for many
organizations. It’s Concrete. Tangible. Proven. Here what we did at Millicom to Reload and Deliver.
What We Did • Category Management methodology material • Training of all teams locally and centrally • On-job training starting with pilot key categories • Design and set-up of Category Governance, with four
operating models, depending on specific category spend, nature and maturity:
² Centralized ² Central-Led ² Coordinated ² Local
• Execu:on of Category Strategies pilots
Results we Delivered • Implemented Category Management methodology • Started the competence shift from generalists to specialists • Aligned the way of working, locally and centrally • Developed new transformational strategies per category • Delivered noticeable procurement benefits to the business • Developed Stakeholders relationships to close partnership
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Case Study -‐ Category Management Driven Transforma:on
Objectives of the team:
• Select a Category to transform, based on priorities and categories opportunity assessment
• Coach category manager • Develop new category strategy, to make a difference • Set right Governance. Build cross-functional teams • Execute the category strategy with P&L effecting results
Contingent Labor Category Case ² ~25.000 contingent workers in Latin America ² ~ 250M+ USD spend ² Green field area
• From unmanned to managed service program (MSP) • Central-Led governance • Strong partnership with the business • Process Re-Engineered and Digitalized • Forecasted 15% savings over 3 years of the contract • CSR assured
Indirect procurement - Contingent Labor Category
Baseline
• Millicom is an multinational telecom company with operations in 13 emerging markets of Latin America and Africa
• Global Spend: $3.5 billion per year, of which Indirect categories spend stands for app. $1 billion
• Business Environment: decentralized and entrepreneurial • Operating model: blended, from decentralised to a central
procurement function • Governance in Direct area: Procurement has made
progress in establishing centralized and central-led category governance.
• Governance in Indirect area: the function was centrally established in 2015 and still perceived as local. Only a few categories are central-led
• Transformation Mandate: “prove of concept” approach
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Key Takeaways
• One size doesn’t feet all – each Transformation is different • Category Management proved to deliver on expectations • But it can do much more • It can change procurement organisation, from inside out
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Contact
Alisa Bornstein Global Indirect Procurement Millicom Group +44 (0) 7818 030 951 [email protected]
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Thank You!
Gracias!
Merci! Tack!
Cпасибо!
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