Presented at :

Zur ich,

June 2014

Managing the Talent of a Central-led

Global Procurement Function from

Switzerland

Giles Breault

2

1. Background Personal: Roche, Aventis, Novartis

The Beyond Group AG

2. Why CH?

3. Challenges for Managing Talent Structure

Mandate

Governance & pull through

Capability

4. Deploying Capabil i t ies program

5. Putt ing it together The other 6-steps

6. Q&A

Overview

3

1. Background Personal: Roche, Aventis, Novartis

The Beyond Group AG

2. Why CH?

3. Challenges for Managing Talent Structure

Mandate

Governance & pull through

Capability

4. Deploying Capabil i t ies program

5. Putt ing it together The other 6-steps

6. Q&A

Overview

4

Professional History Giles Breaul t

Strategic Procurement

Emerges Trail-blazer

A Breakthrough in

Value Creation

Getting Control of

Global Spend

7 8 3 8

1988 1994 2002 2005

Va

lue

D

D D

Business Unit Head

Director WW Purchasing

VP US Procurement

Head of Strategic Proc. SVP - CPO

CPO – Pharma

Head of Productivity

4

I

I

I D

I

5

Research & Publications

Through our global Academic network with leading institutions, seek to understand,

evaluate, publish, and present findings related to top options by industry & geography on

how Procurement can help businesses drive greater company-wide productivity

Advisory

Work with few companies at Sr.

Exec. Level to develop & deploy

next-level productivity strategy

Transformation blueprint to grow

organizational readiness and

Procurement capabilities

Intense, pragmatic and output-

focused, drawing from

experience, practice & research

Centered around personal

relationships, and guidance /

coaching

Industry Think Tanks

Gathering small groups of

Procurement executives (8-12)

in a single industrial sector

Balanced group of peers,

thought leaders, practitioners,

academicians and advisors

Three 1-day sessions to

Assess, Analyze, and Solve a

key question facing industry

Aim to share innovative content,

develop concrete solutions, and

build a close community

Learning Conferences

Open enrolment sessions (100–

150 persons) mixing industry

conference and training seminar

Bring together supplier

executives and Purchasing

decision makers from industry

Covers trends, challenges &

opportunities, and KAM / SRM /

CRM process

Change the value proposition to

create durable, value-add and

interdependent relationships

Our unique offering Strategy & guidance for break-through results in cost optimization

6

We focus exclusively on “what’s next” for

companies to driver wider Productivity Evolut ion, dr ivers, and barr iers

Goals

Key levers

Traditional purchasing

Strategic procurement

Spend Optimization

What's Next?

▪ Secure stable supply at right price

▪ Ensure compliance

▪ Optimize costs/value

generation across

businesses ▪ Generate savings

▪ Generate higher returns per dollar spend

▪ Centralize process

▪ Efficient transactions

▪ Local buying

▪ Little or no category management

▪ Process focus

I

II

III IV

• Top Line Contributor

• Innovation Sourcing

• Total Cost-Base Management

• Comprehensive Risk management

• Global Business Services

• Take over operational activities

• Next Level ”Collaborative Buying”

• Internal Consultant/ Project Managers

• SRM as Value Creation

• Embed function into business

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▪ Drive demand management (what you buy)

▪ Process Management (how you buy)

▪ Internal focus

▪ Category management

▪ Aggregate global/regional volume

▪ Long-term agreements

▪ Maximal use of automated tendering

▪ External focus

Process & Systems Skills Acceptance

1

2

3

4

5

6

7

8

9

Top options identified

Path to master the productivity /cost challenge

7

We cover the entire value-chain including

external supply Our “Top Ten Opt ions ” cover a l l major company dr ivers

Board

Agenda Innovation Productivit

y Growth

SUPPLIER BUYER CUSTOMER Who

Beyond

Procurement

Options

Innovation

Sourcing 2

SRM as

value

creation

1

Total Cost-

Base

Managemen

t

Global

business

services

Comprehen-

sive risk

managemen

t

3

4

5

Take over

operational

activities

“Next level”

collaborativ

e buying

Internal consulting /Project management

Embed

function

into

business

6

8

9

7

Top-line

contributor 10

8

7 Success Factors of High-Output

Procurement Teams

PEOPLE : Ensure organization is adequately structured, staffed,

and skil led

STRATEGY : Functional strategy l inked to business strategy and

plan driving Procurement leadership annual objectives

PLANNING CYCLE : Clear annual process (drumbeat) to drive

your activit ies (projects, targets, objective cascade)

PROJECTS : High-visibi l i ty transformational init iat ives with

impactful results (e.g. >$10mio savings)

PULL-THROUGH : Robust Operating Model to inf luence goals &

objectives of everyone who matters in the chain

REPORTING : Absolute closed-loop tracking, refereed by external

objective organisation

SYSTEM AND PROCESS: Standardised, Harmonised, Globalised

1

2

3

4

5

6

7

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1. Background Personal: Roche, Aventis, Novartis

The Beyond Group AG

2. Why CH?

3. Challenges for Managing Talent Structure

Mandate

Governance & pull through

Capability

4. Deploying Capabil i t ies program

5. Putt ing it together The other 6-steps

6. Q&A

Overview

10

So Why Switzerland?

OK – Company Headquartered in Basel

TAX / Business / Finance Model

Location: Europe is close

Time zone is convenient: US and Asia

Travel Infrastructure

Cultural: Highly Educated

Multi-Lingual – Prevalence of English

Globally Aware Culture

Talent: Easy to attract and retain (within limits)

Challenges: Living Costs, Expatriate Costs, Native Talent Vacuum

Business supportive employment law

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1. Background Personal: Roche, Aventis, Novartis

The Beyond Group AG

2. Why CH?

3. Challenges for Managing Talent Structure

Mandate

Governance & pull through

Capability

4. Deploying Capabil i t ies program

5. Putt ing it together The other 6-steps

6. Q&A

Overview

12

Challenges for a Central-Led Function

Structure - Consistent organisational models across BUs, regions and

countries

Ability to communicate effectively to all levels (goals &

objectives, targets and performance)

Ability to influence objectives of key players

Mandate – Clear mandate from the top as to role and expectations

Backed up by management actions and commitment

Governance – Management model that includes business in decision

making, resources allocation, accountable for performance

and owner of the results

Capability – Talent that can talk the game of the customers (not the

language of category management)

Global project management skills

LSS skills

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Business Interface – Integration with Finance Alignment with Finance at all levels: key enabler to business

partnering

Head of Sourcing

Systems &

Process

Global CFO

Chief Purchasing

Officer

Head IT

Sourcing

Head CS

Sourcing

Head Syst. &

processes

Local CFO

Regional CFO Regional

Sourcing

IT

Head Mrkt

Sourcing

Head Dev

Sourcing

Head

Production

Sourcing

Global

Affiliate

Regional

Procurement Finance

Corp.

Spend Marketing

Clinical /

Scientific Direct

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Size Annual Spend

Spend/ FTE

Strategic Focus Organizational Model

Large countries

>$50 Mio

±$10 Mio

Maximize value delivery (top 10 sites represent 75% of spend)

Active participation in Global Category Projects

Medium countries

>$20 Mio

±$4-7 Mio

2nd wave project implementation through above-site regional leadership

Compliance and full process penetration

Local CatMan initiatives

Small countries

<$10 Mio

±$3-5 Mio

Savings through local tactical gains

Compliance &optimal risk management

Best practice sharing of Global Project

Managed through clusters (e.g. Nordics) or Cross Divisional (Asia-Pacific) wherever possible to build critical mass

Adapting Country Procurement organizations Standard structure ref lect ing spend volume

15

1. Background Personal: Roche, Aventis, Novartis

The Beyond Group AG

2. Why CH?

3. Challenges for Managing Talent Structure

Mandate

Governance & pull through

Capability

4. Deploying Capabil i t ies program

5. Putt ing it together The other 6-steps

6. Q&A

Overview

16

Procurement Talent Development Program Overview of key activities to ensure correct skills

2. Career Map

1. Roles & competencies

7. Mentoring

5. Action learning

4. Training curriculum

8. Hiring process

6. Job rotation

3. Talent Assessment

9. Talent Review Sessions

10. Governance and KPIs

Fo

un

dati

on

D

evelo

pm

en

t M

an

ag

em

en

t

1. Streamlining positions globally, identifying required

competency levels (incl. new ones), and map associates

2. Required and desired country and category experience to

reach key Procurement leadership positions

3. Survey associates skills against current needs and future

positions, identifying strengths and development needs

4. Reach, frequency and alignment of courses in identified

functional competencies.

5. Developing skills and behaviours through assigned

project leadership

6. Consistent approach for short & mid-term assignments of

top talent in countries or head office

7. Pairing high-potential talent within Sourcing and Business

8. Attract high-potential talent, clear selection criteria and

interview process

9. Discuss and calibrate individual potentials, upcoming

open positions, and succession plans

10. Metrics for hiring and developing talent, embed in

Sourcing leadership team’s objectives, review quarterly

17

1. Background Personal: Roche, Aventis, Novartis

The Beyond Group AG

2. Why CH?

3. Challenges for Managing Talent Structure

Mandate

Governance & pull through

Capability

4. Deploying Capabil i t ies program

5. Putt ing it together The other 6-steps

6. Q&A

Overview

18

Headcount

Impact

Sourcing Operating Model overview Increase Strategic resources by consolidating tactical & transactional

activities (through Elimination, Automation, Delegation, and Outsourcing)

Middle Office Front Office Back Office

• Requisition to pay process

• Infrastructure support

• Deliver user requirements

• Negotiation & contract issuance

• Business Interface & Stakeholder Mgmt

• Strategy development; Category Mgmt, SRM Tasks

& Process

- Value execution

- Efficiency

- Business Partnering

- Category Strategy

- Risk Management

- Customer Services

Drivers

65% 35% <1%

To

be

• Opp. Analysis

• Junior Catman

• Bidding / negotiating

• Buying / E-Sourcing

• Spend Analytics

• PO issuance

• Process compliance

• Systems / data

Support

Strategic Tactical Transactional

30% 50% 20%

As is

Outsourced HC

Internal HC

As % of Internal HC

Need definition

Order issuance & Payment

Sourcing strategy

Tactical activities

Outsourced Resources

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PULL-

THROUGH REPORTING

The essential 7-Steps of Procurement Transformation Fulfilling the Board’s expectations to accelerate delivery of productivity

1. Func t iona l

s t ra tegy l i nked

to bus iness

s t ra tegy and

p lan d r i v ing

Procurement

l eadersh ip

annua l

ob jec t ives

2. Clear annua l p rocess (d rumbeat ) t o d r i ve you r ac t i v i t ies (p ro jec ts , t a rge ts , ob jec t ive cascade)

3. High -v i s ib i l i t y t rans fo rmat iona l i n i t ia t ives w i th impact fu l resu l t s (e .g . >$10mio sav ings )

4. Robus t Opera t ing Mode l t o i n f luence goa ls & ob jec t i ves o f eve ryone who mat te rs in t he cha in

5. Abso lu te c losed- loop t rack ing , re f e reed by ex te rna l ob jec t ive organ isa t ion

PLANNING

CYCLE PROJECTS STRATEGY

Capabil i t ies Systems & Process

1 2 3 4 5

7 6

6. Ensure o rgan iza t ion i s adequate ly

s t ruc tu red , s ta f fed , and sk i l l ed

7. S tandard ised, Ha rmon ised , G loba l ised

© 2 0 1 3 T h e Be yo n d G r o u p AG

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“Unless you try to

do something

beyond what you

already mastered,

you will never

grow”

- Ralph Emerson

Huge opportunities to do more But first need to step up…

Q & A