Diversification through Procurement
Project partners
Diversification through Procurement Manoel Guedes (Procurement Director) and Douglas Klimak (Head of Procurement Transformation), look at how procurement can prove essential to Bradesco’s future...
Written by
Dale Benton
Produced by
Richard Deane
D i versi fi c ati o n through P rocurement
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A
s one of the leaders in Brazil’s private financial sector, a procurement transformation
for Banco Bradesco carries with it a responsibility to unlock real change for procurement throughout the country. Maturity, particularly in procurement, is a key goal that underlines procurement transformation for many organizations and for Bradesco this is no different. Look across the procurement arena across Brazil and the picture is somewhat different when compared to procurement in Europe or the US. For Douglas Klimak, Head of Procurement Transformation at Banco Bradesco, he recognizes the significance of his company’s transformation in moving the procurement needle further to where it should be for both the company and wider Brazil. “I do feel that we have a huge opportunity to elevate procurement function
Procurement, as we know, has spent
in Brazil,” he says. “All businesses are
the best part of the last decade trans-
being transformed aiming to be more
forming in the eyes of the board into a
innovative, digital and cost effective, and
more strategic function that aligns with
Procurement has all tools and disciplines
(and sometimes dictates) the broader
to play a protagonist role in that scenario.
strategic roadmap for organizations the
As a result, Procurement acting strategi-
world over. Klimak has seen this first
cally will drive a more mature education
hand and recalls his earlier days where
process for procurement professionals
he was almost admonished for electing to
in the country. We face a long path ahead
follow a career in procurement. “I’ve been
of us in the next few years to truly elevate
working for a business area and was told
the procurement function in Brazil.”
previously that procurement was a back
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office area inside a financial organization
where increased competition (such
with no protagonist,” he says. “It wasn’t
as fintechs) and a changing customer
until I was inside the function myself that
behavior has forced a rethink as to what,
I began to understand just how important
and how, banks can provide for their
it is for a company and I believe that this
customers. Diversification is not a new
importance continues to grow year by
concept, but diversification through
year which provides huge opportunities to
procurement is most certainly the
establish a protagonist career,” he says.
way forward for Bradesco and this is
For Bradesco, and banking in general,
because procurement is moving away
procurement transforma-
from cost reduction and avoidance
tion is born out of an
and focusing on adding value to the
environment
Business and their strategies. 5
Rethinking the future of Procurement for the new needs
imposed by key business imperatives The role of the procurement executive is changing and all over the world, the maturity of procurement is an evolving conversation. In areas such as the US and UK, procurement sits in a significantly elevated position within an organisation, with a broader and more strategic scope of action. In others, such as Brasil, the procurement maturity conversation to beyond transactional scope, is only just beginning. “The role should be much more strategic,” explains Rodrigo Damiano, Partner, PwC. “Procurement must be the main element of the whole digital transformation that companies are partaking in right now, but with a completely different role, a completely different way of interacting, and way of proposing alternatives to the business.” In Brazil, most of the procurement fuctions is still structured and focused on cost, control, compliance and risk. Procurement is designed to keep the transactional engine running. PwC Brasil is supporting Bradesco’s procurement transformation to become a key cog in achieving innovation and growth.
In order to transform procurement in such a huge organization, a strong partner is required. The first step that was taken together, was a step towards benchmarking. Bradesco and PwC looked across the globe at leading procurement functions in order to truly understand what the company wants (and needs) its procurement to be. In doing this, visiting international companies and assessing Bradesco’s existing infrastructure, PwC and Bradesco identified a vision. The challenge comes from bringing about real change while maintaining business continuity. Disrupt the cog in the middle and the whole system falls apart. To overcome this, Damiano believes that knowledge and level of specialization of the personnel are key. “It’s about possessing a deep knowledge of the business, the pain points and complexities across the business - which procurement is in prime position to possess,” he says.
“Combine that with experience of the categories and the deep knowledge of the suppliers’ market and then you generate great value for the business.” “And then there’s the data, which we use to support the discussions, the prepositions and everything that is part of the life cycle of the procurement. By accessing and understanding quality data, procurement can spend quality time focusing on strategic and tactical discussion, using deep business knowledge, the experience of the suppliers’ market and backing it up with the data.
“Procurement must be the main element of the whole digital transformation that companies are partaking in right now, but with a completely different role, a completely different way of interacting, and way of proposing alternatives to the business.”
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“It doesn’t matter what kind of transformation you have, or what kind of operating model you design, it’s not possible to have the benefit if you don’t change the way, the direction and the board thinking.”
Rodrigo Damiano Partner, PwC Brasil Supply Chain Consulting leader
For me, if we combine these three elements, we can have a procurement function that is well positioned and takes real value to the business.” Change management; two words that can make, or break, a transformation and yet change management is a key part of the way transformation provokes the organization. In procurement, leaders need to communicate this to the organization and show in a structured way that it is generating results. “You are helping the business generate results, to create or increase the business and to meet strategic targets,” he says.
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“Change management needs to be aligned to everything that the procurement is promoting, creating and discussing during the transformation.” With the larger, legacy-laden organisations, global benchmarks and/or partner/consultants can prove key to provoking the conversation. “It doesn’t matter what kind of transformation you have, or what kind of operating model you design, it’s not possible to have the benefit if you don’t change the way, the direction and the board thinking,” he adds.
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“Everything should start from the beginning. Start from a maturity understanding, look at the process, organization and technology. Bring in global, local and industry specific benchmarks and look at both the qualitative maturity level and what your current KPIs are. Then you can see what the main areas of opportunities are, what’s the size of the expected benefits, how long the whole transformation roadmap will take and how to prioritize your movements in order to begin achieving the wins required to gather momentum”, ends.
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“We are the main link between the company and the market,” explains Klimak. “We should have a clear view of business needs and what the market is offering to bring innovation for the company. To achieve that, Procurement should be at a good mature level with a close relationship with business areas. Right now, we are reshaping procurement by looking at the end to end journey, considering all aspects of the change: people, process, governance, structure and system. Not only looking for the purchase side but also establishing demand, contract and supplier management disciplines, procurement is increasing the risk coping in Bradesco. I’m seeing firsthand just how much the procurement department function can add value to the company.” Procurement is the main link between the company and the market, as Klimak highlights, but to think of it as simply like
challenging the way that we have
that possibly reduces the true poten-
done our job and we are willing to do
tial and scope of the function. Manoel
it far earlier. This way, we can start the
Guedes, Procurement Director, believes
procurement planning sooner and
that the procurement area must be part
find out how we can better support the
of the very first moment when businesses
business needs.
are discussing the needs. “In sticking with a traditional view
Guedes continues: “We’re also challenging ourselves to go further. Not only
of procurement, our scope of action
looking at the pricing dimension, but
has been limited and, consequently,
the services that are actually delivered
the added value,” he says. “We are
and the quality of them. This journey is
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about looking at how we can improve the role of procurement and bring more value to business.” So Bradesco is on a procurement journey, one that will see procurement walk hand in hand with all areas of the business and their strategies and be the key cog in achieving innovation and growth. Klimak outlines it as such: when other business areas think about their strategy, procurement needs to participate and play an active role in that strategic discussion. For him, if Procurement departments achieve that level of recognition, it means that the transformation is succeeding. “We are moving closer to the business to add value to their strategy,” he says. “By doing this, we take the company to another level with regards to costs and revenue, innovation and customer experience.”
“ We are moving closer to the business to add value to the strategy. By doing this, we take the company to another level with regards to costs and revenue, innovation and customer experience” — Do u g l as Kli m a k Head of Procurement Transfor m ati o n , B an c o B rade s c o
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Challenge number one is identifying
broken? Bradesco has a strong legacy
the why, which Bradesco did and so chal-
of successful operations and Klimak
lenge number two becomes: how? What
says bringing best practices from the
does it look like and how is the company
hub of Procurement was very important
going to get to where it needs to be?
because it allows people to learn from the
This is where Bradesco worked closely
best of the best and to see for themselves
with PwC as Klimak recognizes that in
the true benefit that will come from the
order to transform procurement in such
transformation.
a huge organization, a strong partner is
“This benchmarking allowed us to
required. The first step that was taken
understand what are the best world
together, was a step towards benchmark-
class procurement standards and the
ing. Bradesco looked across the globe at
principal issues that will be addressed in
leading procurement functions in order
the next future.
to truly understand what the company wants (and needs) its procurement to be. In doing this, visiting international
It’s not only about bringing more efficiency or cost reduction, but actually boosting the innovation process of our
companies and assessing Bradesco’s
organization. Procurement as a strategic
existing infrastructure, Bradesco iden-
part in order for us to add more value in
tified a vision. And Klimak speaks of
our operations and best services to our
another key benefit that comes from
clients,” adds Guedes.
striking a key relationship with a strong
A common challenge that many
partner. “Simply put, it brings a good
procurement professionals face is:
sense for the project,” he says. “What I
procurement knows procurement, but
mean is that I can show the business that
other business areas and disciplines do
we have a strong partner, that we are
not. Klimak is all too aware of this chal-
bringing the best practices in the market,
lenge and that notion of credibility helps
and we know that it works. It solidifies
communicate the value of procurement to
credibility for the project.”
those who simply do not see it for what it
This credibility proves crucial in an
is. But the key for him is recognizing one
organization that has operated success-
thing. “We are specialized in procure-
fully for a number of years. When trans-
ment, but we are not specialized in other
formation enters the conversation, the
business matters,” he laughs.
first question is often why fix what isn’t
“As part of that international
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Manoel Guedes, P r o c u r e m e n t D i r e c t o r, Banco Bradesco
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“ ...if we aren’t a collaborative department, and if the business doesn’t understand our idea or how we can help them to achieve their goals, it means they don’t believe in us...” — D o u gl as Kli ma k Head of Procurement Tra nsform ati o n , B an c o B rade s c o
benchmarking we looked at how those
In order for Bradesco to do this, Klimak
companies moved Procurement from a
speaks of how this movement can only
transactional role to a strategic one and
come once procurement has reached
we saw that all of them even though they
that higher strategic level in the company.
are in a high mature level they are still
“To create that environment where busi-
running long transformation journeys.
nesses understand the Procurement
Also, we looked at how procurement
importance, Procurement should be
works closer with the business and to
customer oriented. What I mean by that
do that they put in place a strong talent
is, all pillars of procurement (people,
management and also create an envi-
process, governance, structure and
ronment to establish the procurement
system) should focus on how we can
business partner role which has a strong
make the business grow. Working with
knowledge about the business and make
this mindset Procurement will become
a link between those areas. Increasing
a more sexy area mainly for talent (both
the business knowledge inside procure-
existing and future talent)”.
ment and having strategic discussions
“Another important aspect that we
with them, the businesses start under-
mapped during benchmarking even
standing how much value procurement
though we are talking about Procurement
can bring to their operations.”
4.0, focusing only in technology doesn’t
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increase the procurement maturity level
waves: fundamental changes – rede-
because it doesn’t solve all procure-
sign the operating model, consolidation
ment problems, especially relationship
– automation; and then evolution – new
matters – firstly it is important to focus on
techs (AI, Blockchain, etc.).
organization redesign, people upskilling
In transformation and change, results
and culture change – those items play
speak the loudest and for Klimak and
an important role to put procurement in
Bradesco these results will continue
another level. When procurement already
to define the road ahead for procure-
defines the business model, technology
ment. While this procurement journey
should come to support that operation
has certain KPIs that are unique to
and of course bring automation, effi-
Bradesco, such as cost reduction or risk
ciency and time to market.”
mitigation, the one overarching achieve-
In order for Bradesco to follow those
ment is that move towards becom-
good practices, Klimak says that the
ing a true business partner. Achieving
transformation is established in three
that status is the key to enabling true 13
innovation, increased revenue and reducing the costs of operation. In the quest to achieve this, Klimak is
reach their needs,” he says. “Our people are really committed to the Transformation Project. We take
quick to highlight that this isn’t HIS story.
good care of communication, what we
Nor is it Bradesco’s story. It’s the people
are doing and goals. We all share the
who make up procurement and those
same desire to elevate our procurement
collaborating and driving the movement
area to a world-class level. Sharing this
forward. This transformation is nothing
journey with our team has been the best
without the people. “When we talk
part of this project.”
about transformation, we are not just
A collaborative culture is all well and
talking about process, system, govern-
good, but it needs to be built on honesty
ance, or structure. We are talking about
and transparency. Procurement sits in
culture,” he says.
a very strong position within the busi-
“We are transforming our procure-
ness, but it’s also a very challenging one.
ment culture, increasing the scope of our
Procurement is an orchestrator for busi-
day-to-day activities. We are working
ness continuity and a conduit which all
very hard in branding our transformation. It’s easy for us to say: ‘This change is good so get on board’ so it’s very important that we take care of the communication and work very closely with our teams, and our people, to help them understand just how key each and every one of their roles are in all of this.” As Procurement Director, Guedes knows full well just how important people are. For him, Procurement will always be a job where people add the greatest value. “We must automatize processes and operational acquisitions, but the value that people add is incredible. People always bring the knowledge about markets, suppliers and the best way to D i versi fi c ati o n through P rocurement
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Douglas Klimak Head of Procurement Transformation at Banco Bradesco Douglas has 14 years of experience working for Financial industry, leading transformations in a diversity of disciplines such as Business Intelligence, CRM, Digital Channels, Information Technology, Procurement and Retail Banking. He holds a bachelor’s degree in Business Administration, a MBA in Project Management, a Master’s degree in Lean Six Sigma and an International Executive MBA with extension classes at University of California, Berkeley and Stanford University.
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business areas run through. Procurement has a connection like none other and it’s important that when it engages with the business it can tackle the key issues that the business is facing. “As a cross-functional team, we should engage other areas on sourcing/purchasing discussions, creating an environment of cross-boundary ownership of tasks and problems and make all involved move to the same direction,” Klimak says. “We are involved in a hard scenario internally; if we aren’t a collaborative department, and if the business doesn’t understand our idea or how we can help them to achieve their goals, it means they don’t believe in us and they won’t open the space or the subject that we need to
“ Seamlessly working with the business to participate in their strategies and add value to those strategies is the best possible KPI we can achieve. If we keep this mentality, then I have no doubt that we will succeed” — D o u g las K limak H e ad of P ro c ure m e nt Tran sfo rm ati o n , B an c o B rade s c o
address value to them.” Guedes reaffirms the significance of
A procurement transformation is a
working closely with the business. “It’s
never-ending process of continuous
extremely fundamental. It’s impossible to
improvement, continuous challenge
add value to our internal clients if we are
and continuously pushing the bound-
not close with them,”
aries of what’s possible and while
“We are implementing business part-
Klimak and procurement at Bradesco
ners to our internal clients to better
are working hard to achieve consid-
understand their needs since the very
erable successes to date, tomorrow
start and manage it through the process.
is a new day. Over the next 12 months,
To do it, we have to be there from the
procurement activities will continue to
very beginning till the end. If we are
accelerate as Klimak looks to continue
distant from our internal clients, we will
to reshape the collaboration between
not be able to reach their needs, and the
procurement and business, implement-
organization will suffer.”
ing a new procurement platform and 17
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looking at how the procurement model
value to those strategies is the
can continue to inform and influence the
best possible KPI we can achieve.
future of the business.
If we keep this mentality, then I
For Klimak, when he started working on Procurement Transformation, he did
have no doubt that we will succeed.” Guedes adds: “At the beginning of this
so with a single belief that he consid-
journey, we knew that it was necessary
ers one key KPI for the transformation
to have a view of the best purchasing
success. He hopes this is a belief that
practices, the potential for the evolution
many others share.
of these functions and the value that
“Procurement, broadly speaking, has become so elevated that it finds
we could add to our organization. Now we know that our main objective
itself involved in the important discus-
is to implement an environment, where
sions because they have a policy in the
our people could continually improve
company, or they have the documents
the pillars of efficiency and innovation,
that make the business involve procure-
through agile and effective purchases.
ment, but I don’t believe that is the best
This journey is like a wheel that we will
way to be involved in Business matters,”
keep turning because procurement will
he says. “I don’t want to be involved
always evolve, but we have gained the
because it’s an obligation. I want to be
hearts of our people and are working and
involved because I add value to you.
we are committed to deliver a world-class
Seamlessly working with the business
procurement function that will play a key
to participate in their strategies and add
role in the future of the organization.” 19