Digital transformation in sales for Procurement

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hello and welcome to the digital insight the technology procurement and supply chain podcast that delivers valuable sea level perspective into the core issues surrounding business transformation and digital disruption each episode will bring you the most inspiring executive insights from those who are leading transformation strategies within the world's biggest and best-known companies the digital insight disrupt transform evolve welcome to the digital insight the official podcast series for cpo strategy and interface magazines today i'm joined by martin lee chief procurement officer of kpmg in this episode martin explores how a procurement transformation centered around spend control brings greater value for the business martin also explores the evolution of procurement and the changing role of the cpo [Music] it started back in 1995 i joined ford motors company as an undergraduate on a scheme moving around the firm on purchasing logistics and that was kind of where i i would say i fell in love with procurement and i've never managed to kind of get out of it as such i've moved across uh having done five years at ford motor company through an opportunity to get involved in a big transformation at baa where i did over eight years um leading technology sourcing and also a big transformation for peter p and i think p2p became ingrained in the way i operate and what i enjoy um moving on to 2010 i moved over to kpmg to lead technology sourcing again across a european remit and also a uk remit specifically and i've led technology sourcing both on a client side as well as an internal side for quite a number of years but a big transformation came at the beginning of 2019 where i was given the opportunity to lead the procurement team as a cpo through our transformation uh of spend control which is effectively p2p and the transformation of the procurement team and i definitely think it's one of the best jobs uh gary really quite frankly because you touch just about every part of the organization to help them unleash you know unlock value um and be able to invest themselves so you touch everything you know from from marketing through to running our buildings through to services we deliver to our clients um it's such an impactful role and i think it's gone are the days of buying uh really how do you work with the business to how they actually invest and how they leverage their selves in the marketplace to get the best uh best price but also the best solution to deliver to the services historically buying was quite simple now you're trying to work with people around what's their business case what's their drive for change and i think you really have to kind of work on what is their need before you start talking to them about how you're going to service that need i think that's shifted quite a lot um it's less so a reactive service but more a proactive working to understand what they're actually trying to achieve and how you might bring either supply base or commercial models to that i think that's a very different case from can i reduce the price from something from a historic point of view i think a cpo needs to make sure that they've got the right skills throughout that and i think the right kind of setup which includes the technology the people the process and the policy to be able to get a seat at the table but also how do you bring that information so that you can help people understand what you're trying to bring to the table and understand what is out there really um i think that's something that is is over the last few years is really kind of ratchet up in terms of data is key to everything now so for me uh having recently stepped up to a cpo role um actually for me it's stepped beyond obviously looking for sources of supply to how do you deliver a wider organization so the right skills the right talent in the right places and working with the right sort of business stakeholders to understand what their their challenges are i think it's also you move into a listening mode and you really have to understand what is it that the business needs before you start providing a service to them so that you can actually find out something that can really take back into the market and look for things that can solve their problems kpmg is currently undergoing significant change transforming its procurement processes in order to bring visibility control and influence across an increasing proportion of spend to drive informed decision making for the business there we partnered with ibm to build in a multi-faceted organization which is across multiple locations uh and multiple operating models to deliver a strategic a tactical and a procurement operations model the reality is we're right at the beginning of that program um implementing the technology implementing the new operating model is about implementing a platform uh in creating the ways of working we are really really at the beginning of the hard work now of leveraging that platform to grow our visibility of the supply chain understand how our business is going to work with us through those systems and help us unlock the opportunities and the visibility creates so really we're in year one of that uh operating uh way of working and we're expecting that the first three years are the main uh periods of almost like embedding it leveraging it and then seeking to grow that uh that capability we've built out with a change of communications team a really engaging model with our business stakeholders looking at what their understanding of p2p of course change in many respects is quite fearful for most uh in the early stages and you really need to help them understand what does that change mean for them so that you can take them on the journey along the way and also one of the key things is about helping them understand that actually it is in many cases their system not procurement system because in many cases we're helping our business functions offer their services to the wider business we were working together actually with our client-facing team called power procurement and they've got a methodology which is about how do you fast start into the understanding of how this is going to deliver the benefits how it's going to go through the change program and how you're actually going to implement the technologies that underpin this by bringing in our additional parties that we brought in through change comms the power procurement team and ibm that gave us kind of a richness of people who'd already done it before so we can understand sort of the pitfalls the opportunities that we can take in the early stages to know that we're on the right course throughout that journey we've had to make a few adjustments whether they were part of our business that had changed how they operate um or in effect the relationships that we'd brought in learning about those in terms of what they were going to do differently to perhaps what we first thought it's it's one of the challenges you have to take during that period i think one of the things you have to do is be very clear about what you're trying to achieve making sure we've got kind of we had a very fixed governance model so that we could operate it with consistency with uh decisions and make sure that they were each of those changes were something that you considered and made a formal decision against rather than we just meandered through a journey and we made a few changes definitely and actually in reality we also learnt along the way that some of the decisions we'd made at the early stage were things that we we hadn't perhaps completely understood at that stage and when you actually get to the completion of the of the project you may have to make slight changes uh to help you adapt um to the to as you say the today's business we've built a team around us that are now owning and delivering our both our technology our processes and our operations and as such that team is kind of working on a more agile basis so that we can make shorter quicker changes so if we learn that our approvals aren't quite right or we learn that our data isn't in exactly the right place we can make quick and easy changes to it and that's one of the benefits actually of today's technology in its own right because technology is changing all the time and we need to be able to adapt and and consume those new ideas working across our business we've also put in place change agents um that enable us to work with key individuals across the business on a more regular ongoing basis to talk about feedback to talk about new ideas to talk about change that we're bringing through and get them to communicate to us about how we uh how we can improve and how we can change things change is really really uh challenging at times our role as the leaders was to help support people understand and appreciate what the opportunity for them is it was quite a challenge we had a lot of new people coming in and we also had a lot of different ways of working as you say to to learn we're not an operational team we're now an operational team and that's something that is completely different to how we've been operating so we had to learn quite quickly i think the important thing was to get the right people in the right place also demonstrating their commitment to the change for me personally it was about leading from the front making sure that people understood that i understood what we were trying to achieve and could communicate to them the vision and they could uh you know understand and appreciate and get excited about that [Music] technology is at the heart of it um in its own right so about creating the efficiencies for how we transact creating the uh visibility of our spend and our third-party engagement and also allowing the business to start to become part of their solution for what they offer to the business in a wider sense as their solutions and services but also how they can influence what the business buys through a control mechanism technology is key to that we've been adopting it for many years of how we operate our sourcing processes but actually this is about how we create the efficiency and the visibility through our end end-to-end purchase to pay um cycle and certainly one of the big areas that we'll be focusing on as we move further and further into technology is actually how do we get to the point we understand our supply base that they become entities that we can interact with in a more efficient way entities that we can quickly and agile bring into our world in a trusted manner because the supply chains of this world are one of the biggest areas we have to focus on to ensure that we as a firm are in a trusted position we have to know that our supply base are safe and capable and also easy to do business with we were certainly not the first to the p2p world and i think that offers us actually a great opportunity because it provided us with the insight of those uh learnings that people could have done before and where we can hone a more efficient and more effective investment from that um in terms of new technology we will be taking a i suppose a a measured approach of considering each one on its own on basis through a proper business case model i think it's it's expected from a user base to see technology and it has to be easy to use and very logical to operate um but you're right we certainly aren't going to rush into new technology for the sake of technology a key part of this transformation saw kpmg partner with ibm to extend its sourcing capabilities the relationship was built around across our whole procurement life cycle so supporting us from a strategic sourcing tactical sourcing and procurement operations that allowed us to deliver a leveraged procurement model across multiple locations of onshore near shore and offshore from an efficient cost model from a skill sets uh capability that procurement uh in kpmg did not have at that stage the relationship is is far greater than just delivering sourcing projects you know really it's an opportunity to provide an agile uh operating model that we can adjust to how our business evolves it labels us a way of getting to skill sets that we didn't have and it also creates a network of they have many many clients that they work with in a similar capacity so it's great i can tap into the knowledge and the insights from their own network and their own procurement capabilities to know that whether it's helping to validate what i'm doing or help to stretch and challenge my team and through insights that kind of create the credibility to be able to help my business if you look at what they can provide to the to myself and my team is they can continue to evolve our ability to understand what the opportunity is where we can focus our efforts but also they can help us expel explore new technology they can look at different complementary areas of the business process outsourcing services that we can wrap around to to continue to evolve our own services [Music] we have a successfully rolled out on time on budget the transformation so i'm now in a situation where positively i know my team has has delivered and has the the solutions and the operating model in place we've ended up with quite a positive adoption of our systems it's generating a significant amount of business and insight and visibility um and actually touchwood with quite limited um amounts of um you know challenge through our business in its own right we have our own uh targeted benefits that we're we're seeking through the relationship we're on track for those benefits for year one um we're already planning our world and our workings and our pipeline for the following uh periods um and that's positive because we're now into the position where we're thinking proactively rather than reactively and that in its own right is a real positive gains so certainly for the next year ahead we're focusing on ensuring that our pipeline of engagement and projects are going to drive us to the right things and make sure that we have uh adjusted where appropriate our teams through the relationship to make sure we've got the people in the place with the right skill sets with the right experience we've set a vision for our team to make sure that they can understand how this is all going to fit together and what role they play within it and actually the biggest part of all of that is then to make the team operate as one to be seen as a procurement service throughout the whole business this program would have achieved nothing without putting the right people in the right place to drive that people who are committed uh people who understand people are excited about it um if without that we would never we would never have achieved where we are thank you for listening to the digital insight podcast in association with the interface.net and cpostrategy.com the digital insight is brought to 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