Claro Brazil - Brochure 2021

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Pro cure ment 4.0: b est-in-class p ro cu rement a n d b eyo n d

Procurement 4.0:

best-in-class procurement and beyond

Ivan da Mata, CPO of Claro Brazil, details the telecommunication giant’s journey towards best-inclass procurement...

Written by

Dale Benton

Produced by

Richard Deane 3

W

hat does procurement mean

supply chain relationship management.”

to a business? Does it exist

As a leader in Telecommunications

solely to monitor the costs

in Latin America and one of the largest

and control the spending and look at

multiservice operators in Brazil, Claro

every possible avenue to save company

Brazil is present in over 4,200 Brazilian

money? Once upon a time this was most

municipalities with its networks provid-

certainly the case, but over the last two

ing services to over 96% of the Brazillian

decades the business landscape has

population. As the world continues to

borne witness to a major evolution of this

become increasingly digital first, Claro

once reactive and somewhat dismissed

offers integrated solutions for connectiv-

function. Procurement in 2021 is a very

ity, entertainment, productivity and digital

different beast even if the core principles

services in a truly convergent way, joining

remain the same.

fixed and mobile platforms, firmly estab-

“Nowadays Procurement walks hand

lishing itself as a leader in Pay TV and

in hand with the business areas,

broadband all the while being the fastest

with product development and with

growing operator in mobile services.

go-to-market areas,” explains Ivan da

Innovation then is key to Claro Brazil

Mata, CPO of Claro Brazil. “Time to

and in 2018, the company hired Ivan da

market is key for any organization’s

Mata as CPO to oversee a major procure-

success, so procurement needs to keep

ment transformation journey. With more

the supply chain information and supplier

than 20 years of experience in procure-

relationships up-to-date in order to bring

ment in different industry disciplines, da

solutions and innovation quickly from the

Mata joined the business at a time when

market to the organizations.

it was also delivering a significant digital

“The impact of Procurement is directly

transformation. His mission was clear:

related to the P&L and so procurement

support this digital transformation with a

is now closer to the end consumers

fast, business-oriented and best-in-class

of the organizations. In other words,

procurement function.

procurement went from a ‘cost control

This transformation journey focuses

and savings agent’ to a ‘business enabler

on three main goals for Claro Brazil:

function’, contributing not only to manag-

Category Excellence as a leverage for

ing costs, but also to generating revenue

cost reduction and gathering of business

through innovation, time to market and

insight, Team Excellence as a catalyst

Pro cure ment 4.0: b est-in-class p ro cu rement a n d b eyo n d

5

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Pro cure ment 4.0: b est-in-class p ro cu rement a n d b eyo n d

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and enabler of long-term results and

called ‘Procurement Turnaround’ which

Supplier Excellence as a guarantee of

specifically looked at the elimination of our

competitive advantage by innovation

purchasing process backlog and reducing

and risk management.

lead times all the while improving stake-

“Procurement was not keeping up with Claro’s businesses' fast pace transfor-

holder engagement.”

In defining Category Excellence for

mation and so we laid out a roadmap

Claro Brazil, da Mata highlights that

that would see us achieve Procurement

procurement was internally oriented

4.0 for Claro Brazil by 2021-2022 and

and that it engaged with stakeholders

beyond”, explains da Mata.

So the scene was set and da Mata embarked on a journey of transformation to establish and implement a procurement strategy that will result in significant excellence in procurement, an optimized structure and delivering key savings for the business. How does a journey like this begin? What does day one look like? For da Mata, day one consisted of

“ This greater proximity to business areas was key for gaining the organization’s recognition that procurement is a strategic function and is involved in the decisionmaking process. For me, it was the most important achievement we could get”

reflection and identifying what

— Ivan d a M at a

the business felt was its ‘weak-

CP O, C l aro B raz i l

est’ and biggest ‘pain points’ within procurement. “We really needed to

in a ‘fragmented’ way and therefore it

understand what needed to be resolved

simply was not leveraging spend. This in

through the adoption of proven best prac-

turn created the backlog of purchasing

tices based on benchmarks that resulted

processes, significantly high lead times

in a clear roadmap for the initial transfor-

and what da Mata describes as ‘low

mation with short term process simplifica-

value capturing.’

tion implementation,” notes da Mata. “This initial phase of the transformation was

“Our buyers were loaded with transactional activities and couldn’t see the 7

impact of their activities on companies’

improved value for money and simplified/

results,” he says. “Through our new spend

lean processes to interface with the busi-

categorization towards the marketplace,

ness areas,” says da Mata.

the implementation of Category Plans and Strategic Sourcing we enabled our

These centers are:

Category Managers to consolidate the

Center of Excellence (CoE)

spend, proactively plan their activities

Focused on planning and continu-

and engage with the business areas and

ous improvement through KPIs, lean

suppliers more often, adding value to the

processes and procedures and Systems

solutions developed together with them.”

optimizations / Automation / Robotization

All the best processes and sourcing

/ Digitalization

strategies sound simple and effective on paper, but in practice there iss one

Center of Operation (CoO)

element that's absolutely fundamental

Focused on tactical and transactional

to any organization and any journey; the

activities such as Saving delivery and

people. For a procurement function that

lead time reductions, Rapid Sourcing

promises to be at the centre of the busi-

and Simplified operations

ness and to be aligned with each and every business unit in order to enable

Center of Business (CoB):

efficiencies, realising key savings and

Focused on strategic activities to

unlocking greater innovation, it is neces-

collaborate with the business areas,

sary to invest in its people. Da Mata

Strategic Sourcing, Category manage-

recognises this and so does Claro Brazil

ment, Special projects and Supplier

with its focus on Team Excellence as a

and Business Areas engagement

catalyst and enabler for long-term results.

One of the outcomes of the

While a procurement function is noth-

Transformation Project was the creation

ing without its people, procurement is

of three procurement centers of activ-

defined by its relationships with suppli-

ities in order to segregate the transac-

ers. As the leading telecommunications

tional, tactical and strategic activities

services provider in Brazil, supplier rela-

of procurement. “With clearer roles and

tionships are key to maintaining that posi-

KPIs in place, the teams were developed

tion. As a procurement practitioner for

to deliver value through short lead times,

more than 20 years, da Mata recognizes

Pro cure ment 4.0: b est-in-class p ro cu rement a n d b eyo n d

Ilana Faria, Head of Procurement CoE and CoO, says that the “segmentation of the procurement activities was fundamental to improve all the KPIs of the area year over year.

We have established clear objectives for each procurement individual and implemented a meritocratic people management process making our team far more engaged as they can see themselves as a key part of the business, impacting the companies’ bottom line results.”

Júlio Pinheiro, Head of Procurement CoB – Networks, compliments that “the reclassification of the categories towards the marketplace instead of inwards resulted in a much greater capture of value in the negotiations, especially because of the synergies we have identified between the different purchasing families and subfamilies.”

Márcia Lima, Head of Procurement CoB – Clients, adds that “the implementation of the Strategic Sourcing methodology and the rituals established to follow up the action plans was crucial to gain our internal customers confidence and resulted in a much greater proximity with business areas.”

Washington Gonzaga, Head of Procurement CoB – Corporate Services, highlights “the importance of the Category Planning methodology in establishing a much more organized procurement function, oriented to capture value by directing the resources to a set of prioritized actions along the year calendar and by mapping all categories opportunities.”

Flávia Fernandes, Head of Procurement Special Projects – “being responsible for the interface with Claro’s Corporate Business Unit we could clearly notice that the dynamic collaboration among our CoE, CoO and CoB teams have contributed significantly in achieving the speed and negotiation results that this internal customer demands.”

9

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Pro cure ment 4.0: b est-in-class p ro cu rement a n d b eyo n d

this and highlights that supplier rela-

Very often in a transformation of this

tionships can be and really are the key

size in an organization such as Claro

competitive advantage for any business,

Brazil, the very first challenge in procure-

regardless of industry.

ment is one of operational buy-in. After

“Supplier Excellence, as a guarantee of

all, procurement plays a key role in the

competitive advantage by innovation and

revenue streams of the business and for

risk management, is key to our transfor-

the CEO and the executive board they

mation journey,” he says. “We introduced

will need proof that this journey is the

a new P2P platform to engage with and

right decision for the business. For da

transform our relationships with suppliers

Mata, he was blessed to find himself in a

and integrate them into our supply chain

position of confidence and extreme trust

workflow, enabling improved control, risk

from day one. “We had strong support

management, performance management,

from the top management, especially

contracts compliance and spend analy-

our CEO, from the very beginning,” he

sis for continuous improvement. It also

says. “There was a clear comprehension

allows for increased automation and digi-

of the opportunities to be captured by a

talization, freeing people’s time to focus

strong Procurement function. They knew

on added value activities.”

that getting closer to the businesses and

“ Procurement was not keeping up with Claro’s businesses’ fast pace transformation and so we laid out a roadmap that would see us achieve Procurement 4.0 for Claro Brazil by 2021-2022 and beyond” — Ivan da M at a C P O, C l aro B raz i l

11

bringing them on board was crucial for

are often the breeding ground for great

the transformation success.”

success. Overcoming the challenge is in

Not only was this vote of confidence

itself a success but learning from them

important for da Mata to start this jour-

and using that insight and experience to

ney knowing he had the backing of those

prosper is where the real successes lay.

in charge, but it also allowed him to be

For da Mata, success has come in many

honest and to work with the business in

forms already. One key success for him

a way that delivered real tangible change

has been one that has allowed for greater

as opposed to lofty goals that continued

focus on value added activities.

to be just out of reach. As with any trans-

“For one, the implementation of

formation journey, there's a balance that

segregated teams (CoE – Center of

needs to be struck between transform-

Excellence / CoO - Center of Operations

ing and performing. With Claro Brazil,

/ CoB – Center of Business) within the

time to market is and always will be key

Procurement area and it working in

to the business, but how can da Mata go

perfect consonance was key to free-

about implementing change in a business

ing buyer’s time to focus on added value

that has already experienced incredible

activities, such as Strategic Sourcing,

success? How can he attempt to change

Category Planning and Strategic

the mindset and working culture without

Negotiations,” he explains. “Those added

causing disruption to that success?

value activities enabled buyers to better

“Changing people’s mindset was for

understand the categories and to be

sure the biggest challenge of our trans-

closer to the stakeholders, working head

formation journey,” reflects da Mata. “We

to head with the business areas.”

had many people doing the same thing

It’s no secret that, despite its moment

for many years and the change propo-

in the spotlight, procurement is a func-

sition touched pretty much everyone in

tion that must establish its credibility to

procurement. The introduction of a meri-

the wider business. While this is a notion

tocratic and self-developing environment

that is indeed changing, procurement

and highlighting a clear purpose for the

has a clear impact on the bottom line of

procurement professionals was key for

a company and so CPOs need to ensure

them to embrace the change and enabled

that the changes they implement and the

us to surpass this challenge.”

processes they bring in are right for the

While challenges are unavoidable, they

business at all times. In order to bring

Pro cure ment 4.0: b est-in-class p ro cu rement a n d b eyo n d

13

change, trust is key. Results establish

Given the story of procurement, it

trust and credibility and this requires a

would be remiss of us not to look at the

lot of communication with the board-

significant role that supplier relationships

level. Deliver key successes and the

play in the procurement ecosystem. Just

credibility you now have means that the

as technologies and processes evolve,

pathway to delivering further success is

so do the relationships that an organiza-

a little smoother.

tion has with suppliers and vendors and

“This greater proximity to business

this is something that cannot be taken for

areas was key for gaining the organi-

granted. Not only that, when a company

zation’s recognition that procurement

undertakes such a significant transfor-

is a strategic function and is involved in

mation it requires the eye and the expe-

the decision-making process. For me,

rience of a key partner in order to ensure

it was the most important achievement we could get,” says da Mata. “Nowadays procurement has its seat in order to contribute in discussions to build up annual budgets and has a clear view of the strategic projects that the procurement work will have to support to enable their viabilization and implementation.”

“ The journey has not ended and perhaps it never will as we are always evolving and seeking for excellence in our sector” — I va n d a M at a C P O, C laro Bra zil

Pro cure ment 4.0: b est-in-class p ro cu rement a n d b eyo n d

the direction it takes and the decisions it

achieve,” he says, “They have supported

makes are indeed the right ones. Da Mata

us throughout the entire implementation

recognises this and speaks to the key

process, from processes redesign right

relationship Claro Brazil has with Kearney

up to organizational structure. Put simply,

and Statesys in realizing the vision of this

working with Kearney was absolutely key

procurement journey.

in gaining momentum and credibility in

“Kearney has been instrumental in mapping the maturity level of our procure-

our transformation journey.”

With all the talk of technology and

ment then comparing with benchmarks

an industry awash with a never-end-

within our sector and designing the path

ing selection of tools and suites, Claro

for our transformation, where we would

Brazil looked to Stratesys for the imple-

like to get and what we would like to

mentation of its P2P suite. Like any good

15

working relationship, the value of the

could get speed on the implementation

connection will not end once the tool

project and best usage of the suite. We

will be implemented, it grows and

can’t ignore the role they have played in

evolves. “Stratesys has added a lot of

helping us with Change Management and

value with their knowledge, not only with

adopting an agile methodology. These

the suite itself but marrying their knowl-

are two things that can easily be taken

edge of market best practices to our real-

for granted in a transformation journey,

ity as a telco company and to our pre-es-

but Stratesys were there for us when we

tablished process” says da Mata. “This

needed them.”

process had to be redesigned so that we

It’s easy on paper to say that a partner

Pro cure ment 4.0: b est-in-class p ro cu rement a n d b eyo n d

really stood tall and went above and

journey planned for 2019 and 2020 with

beyond the traditional relationship

great success, there’s no denying of that,”

model of service and solution and

beams da Mata. “The journey has not

da Mata is all too aware of this. He

ended and perhaps it never will as we

highlights that the way in which a rela-

are always evolving and seeking for

tionship transcends that perspective

excellence in our sector,”

is through transparency, openness and

“We need to be bold and lean to keep

honesty. After all, the decisions you take

up with our business needs and mission

together are ones that could cost you

to offer the best services and solutions to

a lot of money or unlock major savings

our customers,” he adds. “The fast pace

across the entire organization.

of technology in our sector demands

“An open relationship with these

procurement to always be up to date,

partners was key for our achievements.

faster, simpler and effective in contracting

Problems were exposed transpar-

and delivering materials and services. In

ently and discussions seeking the best

order to keep the transformation alive, we

solutions and alternatives were widely

have a Strategic Planning of two years that

explored and coordinated together with

establishes where we want to be in this

our teams of experts,” he says. “When

period of time and which is unfolded in an

entering a transformation journey with a

annual action plan to capture the benefits

level of complexity such as ours, it was

of the transformation as soon as possible.

crucial to count with these reliable part-

“Our 2021-2022 plan will require us to

ners, that brought experience of dozens

have our P2P suite fully implemented in

of similar sizable projects that enable

the first year to enable a fully automated

speed and assertiveness to our journey.”

purchasing process further. In this way our

The future is uncertain, that’s for sure,

buyers will be able to engage more and

but what da Mata and procurement has

more with the business areas working truly

been able to do so far in its journey has

as consultants and influencers in the deci-

laid down solid foundations in which

sion-making process in what regards to

Claro Brazil can continue to build upon

engaging with our partners, vendors and

and unlock the door to greater innova-

service providers.”

tion through a best-in-class procurement function.

“We have completed our transformation 17