CPOStrategy – Issue 17

Train your people to engage with consultants I s sue 17 • www.cpostrategy.com

Procurement transformation & communication Lockdown and Leadership: Phil Clayson on the CIO’s perspective

Enable, Empower and Encourage: Procurement teams reach higher level of performance at Lufthansa Group Angela Qu, Senior Vice President, Chief Procurement Officer at Lufthansa Group tells us how procurement is becoming a true business enabler

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Welcome to issue 17 of CPOstrategy!

TH IS MONTH W E are delighted to see Angela Qu, Senior Vice President, Chief Procurement Officer at Lufthansa Group grace the front cover of CPOstrategy. In this exclusive feature, Angela tells us how procurement is becoming a true business enabler.

With a focus on strategic enablement, Qu has been able to see significant improvements across the Group’s procurement performance and believes empowerment is key to delivering on any strategic vision. “We empower our group category managers by letting them understand what they’re responsible for and what their mandates are.

EDITOR IN CHIEF Andrew Woods

Empowerment means that they are truly aligned to the

EDITOR

procurement vision and understand how they can play a key

Dale Benton

role in the transformation. In the end, the team has to deliver the requested results.”

Elsewhere, we continue to explore the impacts of empowering procurement as Ben Van Zyl, Group Executive Procurement and Contract Management, at Telkom, discusses the procurement journey for business and how the internal stakeholder sits at the very heart of it.

“When you listen to business owners, you are able to translate their vision and strategy for their business into a sourcing strategy that will enable them to succeed,” he says.

“It’s about getting the language right.”

Rounding out the magazine; Rich Ham, CEO of Fine Tune, tells us how the time is now for you to teach your team how to engage third parties to optimally advance the business’ interests, and award-winning CIO Phil Clayson provides the CIO’s perspective on on navigating the challenges of a pandemic by bringing IT and procurement closer together.

Enjoy the issue!

SOCIAL MEDIA MANAGER Callum Rivett

CONTRIBUTING EDITOR Nell Walker Kevin Davies

CREATIVE LEAD Mitchell Park

VP GLOBAL FINTECH & INSURTECH Alex Page

VP TECHNOLOGY Andy Lloyd Craig Daniels

VP PROCUREMENT Heykel Ouni Greg Churchill

PRESIDENT & CEO Kiron Chavda

Dale Benton, Editor content@b2e-media.com

PUBLISHED BY

3

CONTENTS

Lufthansa

6

22 Telkom

Phil Clayson: Lockdown & Leadership

54 Fine Tune: Train your people to engage consultants

44

Five ways Unilever is championing sustainability in procurement

Sustainability during COVID19: An opportunity to start a new, greener chapter?

74 66

Enable, Empower and Encourage: Procurement teams reach higher level of performance at Lufthansa Group Angela Qu, Senior Vice President, Chief Procurement Officer at Lufthansa Group tells us how procurement is becoming a true business enabler.

WRI T T EN BY PRODUCED BY

6

D al e Bent o n Hey kel Ou n i

7

M

any people have a classical perception about procurement. To them procurement is

an administrative function hidden away in the back office. Procurement is simply to get the right things for the right time in the right quantity. “This is just a starting point,” explains Angela Qu, Senior Vice President, Chief Procurement Officer at Lufthansa Group. “Procurement can provide more added value to the business, if we become much more strategic, and are able to bring valuable market information and alternative solutions to the decision table. Further, we should be able to facilitate collaboration with internal and external stakeholders, connecting the dots of the whole supply chain. Ultimately, procurement should drive supplier innovation and sustainability at the top of its agenda. Thus, we can support the company’s growth and become the key enabler of value chain

in mind as she started her tenure at

creations. However, there is a long way

Lufthansa Group: to create a better align-

to go from where we stand today, even

ment on long-term objectives across the

knowing where the final target is, as we

different procurement teams within the

head towards where we want to be in a

group, and to bring procurement to a

5-year horizon.”

much more strategic level. As part of this, she also looked at making the procure-

Procurement vision 2025

ment contribution much more visible from

Like many procurement profession-

a P&L context while also upscaling and

als, Angela Qu had a very clear mission

skilling people across the group.

8

LUFTHANSA GROUP

This mission started in April 2019 and

Right after that first week, Qu organ-

she recounts that ‘day one’ proved to

ized a series of strategic workshops with

be one of the most significant. “I met my

her leadership team that consisted of the

whole procurement leadership team and

various heads of procurement from differ-

was asked by one of the colleagues:

ent airlines within the group. Collectively

‘What is your vision here? What do you

they defined their long-term goals of

want to achieve?’” Qu replied: “It’s not

the procurement function (i.e. where

about what I want to achieve, but rather

they wanted to be in five years). Thus,

what we want to achieve. Let us work it

a vision was born. Procurement Vision

out, together!”

2025 will see procurement become a key w w w . c p o s t r a t e g y. c o m

9

Photo by Annie Huss Kearney, Chicago

Smaller.

Smarter.

Speedier.

Disruptive Procurement is a radical new approach to creating value and innovation by challenging the status quo across the entire product and service line. It requires going far beyond conventional desk­ top procurement to under­ stand the value the company brings to its customers as well as the value that suppliers bring to the company.

This is the first procurement book with a special focus on the board level

de.kearney.com/disruptiveprocurement

For almost 100 years Kearney has firmly established itself as one of, if not THE true market leader, when some of the world’s foremost organisations are looking for trusted advisors to support them in delivering real strategic change.

As a leading global management consulting firm with more than 3,600 people working in more than 40 countries, organisations undergoing significant procurement transformation journeys turning to Kearney is something of a no brainer.

“With clients ranging from automotive, commercial and retail, right through to aerospace and defence, we at Kearney have a simple promise: to deliver the guidance our clients need to make real progress and impact” says Kai Engel, Partner and MD. “In this new world where we are seeing truly disruptive procurement and going in completely new directions in terms of challenging the product and service portfolio of companies to drive cost reduction, Kearney can call upon its incredible heritage and expansive partner ecosystem to deliver results,” says Michael Strohmer, Partner at Kearney.

“But while we possess the leading edge know-how, we very much work in a very pragmatic way together with the client and so they feel inspired about what we bring to the table in terms of innovation but they know that we understand their specific issues and we always find ways to optimize a cost and value.”

Strohmer identifies three main areas of change for procurement: 1) The standing of procurement has increased significantly over all industries meaning there is a necessity to have good procurement, that goes beyond simply being compliant with the process, but really drives value.

2) An increased focus on strategic topics in procurement and a decrease in operational workload.

3) Procurement has a seat at the table and, in some corporations, is much leading innovation and driving change in products.

So how does Kearney ensure that its services continue to serve this changing landscape? “This is a big challenge,” admits Strohmer. We have dedicated people identifying future trends and following what’s happening in the startup area.

We are fortifying our ecosystems to have the leading edge solutions and know-how developed by ourselves and coming from the market and creating this ecosystem and we have plug and play situations, where we can really collaborate with one of our partners for the client.”

At the real heart of Kearney is its people. The company is extremely proud of its people and the way they listen to clients and understand their challenges and develop creative, innovative solutions and ideas to succeed. These relationships are built by working hand in hand, having fun together, and sharing great success together. “It is something which is highly important for us,” he says. “to work with the client and also the different functions of the client and so we train the people, how to work with engineering, with finance, how to market people and so on, so that this becomes a kind of network of true collaboration.”

No one has the keys to success, but there are steps that can be taken to ensure that however challenging the road ahead can be, it remains the right direction to grow and to succeed. For Kearney, this requires commitment from all sides of the business. “We need to be excited about what the clients are doing. With excitement comes commitment,” he says.

“The people, the product, the journey, the challenges, we need to be excited together by all of it. For us, it’s incredibly important for the success of a project.”

Learn More

www.kearney.com

contributor to the overall growth of the company and the associated value creation.

The Vision is built on three pillars: Strategic Foster next level strategic sourcing, supported by automated and digitalized processes and tools to procure products and services with best-in-class quality and cost

Professional Enhance competence and entrepreneurship amongst procurement staff; ensure a high-performance driven organization and create a professional image to internal and external stakeholders and suppliers

Sustainable Build partnerships with internal partners as well as suppliers; retain knowledge and talent while providing sustainable solutions to business units and include sustainability aspects into decision-making process With these three key pillars in place, the team has identified their strengths and weaknesses in terms of current organization, structure, process, tools etc. Qu could then begin to launch short-term and long-term actions.

Enable and Empower the procurement teams to reach higher ambition of performance In procurement, particularly in times of transformation, results speak louder than anything else. Qu recognizes this and she can point to some considerable successes 12

LUFTHANSA GROUP

“ Facing the current challenges across aviation industry, procurement teams at Lufthansa Group are focusing on three topics: ensure smooth operations; maintain competitive cost base; and generate profits for each flights” — ANGELA QU, SENIOR VICE P R E S I D E N T, C H I E F P R O C U R E M E N T O F F I C E R AT L U F T H A N S A G R O U P

w w w . c p o s t r a t e g y. c o m

13

that she has overseen in her time

Along with rolling out NLSS across

with the company. In 2019, Qu’s team

different categories, Qu also focused

achieved a significant growth in savings,

on strategic empowerment of group

representing almost a 50% increase on

category managers. Qu notes that: “We

2018; a testament to the work that Qu

empower our group category managers

and her procurement team achieved

by letting them understand what they’re

in a short time. The key success factor

responsible for and what their mandates

was the launch of “Next Level Strategic

are. Empowerment means that they are

Sourcing - NLSS”, which is the founda-

truly aligned to the procurement vision

tion of Vision 2025’s strategic pillar. The

and understand how they can play a key

aim of NLSS is to enhance the plan-to-

role in the transformation. In the end,

strategy process, with a standardized

the team has to deliver the requested

procurement methodology (using the

results.”

“Kearney Purchasing Chessboard”) in a continuous improvement approach to generate sustainable value for all stakeholders.

It is a simple five-step approach: 1) Spend transparency: understand spend through data and market analysis 2) Benchmark: set benchmark, define gaps, analyze root causes and aim for innovation 3) Develop: define category strategy and action plans with product owners/ process owners/ demand organizations 4) Implement: execute strategy and improvement plan 5) Sustain: review, reflect, and prepare for continuous improvement 14

LUFTHANSA GROUP

“ I truly believe engaged and empowered employees can deliver higher level of performance” — ANGELA QU, SENIOR VICE P R E S I D E N T, C H I E F P R O C U R E M E N T O F F I C E R AT L U F T H A N S A G R O U P

On top of that, Qu looked at those “enablers”, including advanced tools, data analysis capabilities, functional trainings, cross-industry best practice sharing programs and working collaboratively with other partner functions to find the best solutions for the business. At the same time, Qu spent significant time building the large talent base “Spotlight on Talent for Procurement”, which is a group wide program, identifying talents and giving them insight regarding procurement as a function. She ran numerous dialogues and one-on-one talks with potential talents from other functions, explaining why procurement is a great place to be. Through those active communications, she was able to attract talents into her organization with new ideas and new ways of doing things.

“I am very proud to see that, through this journey, our own organization has transformed from a disparate procurement community to a more aligned and performance-driven procurement team! Together we became stronger as a function, as we can build upon our competences and knowledge from each other. Through our Next Level Strategic Sourcing processes, we have w w w . c p o s t r a t e g y. c o m

15

become a valued business partner rather

to drive innovation and sustainability.

than simply waiting there until we receive

Alas, 2020 saw the world gripped by the

a request to negotiate,” says Qu.

COVID-19 pandemic and companies have been forced to act fast in order to miti-

COVID19 and crisis management With key successes under her belt, the

gate the impact as best as possible.

“It was a unique situation for me and my

future looked bright for Angela Qu and

team,” affirms Qu. “Without much warning

procurement at Lufthansa at the begin-

in advance, in early March the Group’s

ning of 2020, with Qu and her team

cash inflow suddenly dropped by 90%.

well on their way to another 30% saving

This was a challenging time for my team

increase compared to 2019. Qu was

and me. First of all, we were worried

about to launch a supplier innovation

about the health and safety for ourselves

campaign that would see Lufthansa work

and our loved ones. We also had to keep

closely with its suppliers to redefine and

a functioning supply chain for on-go-

reinvigorate the relationship model and

ing operations, such as Lufthansa Cargo

16

LUFTHANSA GROUP

who flew masks and medical equipment

when to protect and support the most

around the clock, and also the many

fragile parts of the supply chain in these

rescue flights which the Lufthansa Group

turbulent times. Whatever we do has to

performed for our home countries. The

be within the legal framework and based

most challenging part has been the 3rd

on mutual agreement with our service

pillar: sustain cash within our company in

providers and suppliers.� Lufthansa Group

order to weather the storm.�

has taken corporate responsibility espe-

Looking back to the last few months,

cially seriously during this challenging

Qu speaks of the importance of acting

time. A special approval process was

fast, calmly, and professionally, particu-

established for small and mid-size enter-

larly when dealing with supplier relation-

prises, or private owned companies in

ships. As Qu says, “The value of procure-

urgent need, so that they received their

ment has been particularly effective in

payments on time.

knowing when to aggressively conserve

In mid-July Lufthansa group received

cash to meet internal liquidity goals, and

state-aid support. The procurement team

w w w . c p o s t r a t e g y. c o m

17

ABOUT US The Lufthansa Group is the leading aviation group with operations worldwide, with a revenue of €36.4bn Euro in the financial year 2019.

The group is composed of three segments: Network Airlines, Eurowings and Aviation Services. The Network Airlines segment comprises of Lufthansa German Airlines, SWISS and Austrian Airlines, which offers its passengers a premium, high-quality product and service and a comprehensive route network combined with the highest level of travel flexibility.

Aviation Services comprises the segments Logistics (Lufthansa Cargo), MRO (Lufthansa Technics), Catering (LSG Group) and Additional Businesses and Group Functions. The latter also include Lufthansa AirPlus, Lufthansa Aviation Training and the IT companies. All segments occupy a leading position in their respective markets.

A considerable amount of the Lufthansa Group's costs come from external suppliers.

The procurement team led by Angela Qu, has responsibilities for several tasks…

- Group procurement guidelines, process and procedures - Group wide category management, definition and implementation of sourcing strategies, and managing supplier relationships - Supply chain sustainability and risk management - Performance management and procurement tools development

- Functional competence and people development

has played a key role to mitigate insol-

open and transparent way. “I am grateful

vency risk. “It was essential to have a

for those corporation partners and suppli-

high degree of transparency,” she says.

ers who have supported us with special

“It was important to look at all purchas-

contributions and prolonged payment

ing requisites and identify what is in the

terms during the past months. Those

pipeline, and cancel purchase orders on

who demonstrated great willingness to

time. We also lowered down the thresh-

support and collaborate with us in the

old of approval so that every external

difficult times will remain our strategic

spend request went through a special

partners for the future,” says Qu.

controlling approval process. We worked extremely hard to ensure that our buyers

Going Forward

were equipped to communicate the

Procurement has transformed significantly

complexity of what was happening and

at Lufthansa, and the crisis has meant

to communicate with our suppliers in an

further transformation is afoot. As the

18

LUFTHANSA GROUP

topics: ensuring smooth operations; maintaining competitive cost base; and generating profits for each flight. Throughout the crisis time, Qu notes that she and her teams are changing their role from the traditional cost-cutting role into a true enabler of business. “We have to enable smooth operations, in a fast-changing environment, The flight plan is not stable, and we need to have a high degree of flexibility in our supply chain planning and commercial agreements. We have to ensure our cost base becomes even more competitive. We are looking at how we leave out complexity and how we as procurement can be true enablers to our internal partners. We need to help our requesting departments, which have very limited pandemic continued, so did the impact on

budgets to get the services and products

business continuity and Lufthansa had to

they need.”

look at its plans for the future - both long-

Qu reflects that the COVID-19 crisis has

term and short. Initial successes were

not been a distraction from those initial

crucial, but it was time for Qu and her

goals set in 2019, but instead has been

teams to differentiate what crisis mode

a catalyzer and an accelerator. Whereas

was and what the next phase was going to

‘Procurement as an Enabler’ was a key

be. “We are okay, we managed our crisis

focus prior to 2020, it now becomes THE

well, but now we have to move into the

focus moving forward. “It will go hand in

next stage, which is the ReNew phase,”

hand with our strategic business partner-

says Qu.

ing,” she adds. “This will be our key focus

Facing the current challenges across the

in the near future and I believe we can truly

aviation industry, procurement teams in

enable the organization to grow again as

the Lufthansa Group are focusing on three

we navigate and move beyond this crisis. w w w . c p o s t r a t e g y. c o m

19

“ I am very proud to see that, through this journey, our own organization has transformed from a disparate procurement community to a more aligned and performance-driven procurement team!”

— ANGELA QU, SENIOR VICE P R E S I D E N T, C H I E F P R O C U R E M E N T O F F I C E R AT L U F T H A N S A G R O U P

What makes a successful procurement organization?

Prior to COVID and indeed throughout, Qu and her team have achieved an incredible amount of success.

Is there a secret to this success, a silver bullet that could guarantee success both now and in the future?

Unfortunately, there is not, but Qu is keen to highlight there are things we can all do to ensure that whatever path we take, the road ahead remains a step in the right direction. “Procurement managers need to understand the company’s overall strategies and top priorities; we must align procurement strategy accordingly to support the business. Going forward, we must remain flexible, fast and responsive towards market changes, including better analytics skills, stronger forecasting visibilities on cash management and informed decision making which are the keys to achieving success. Ultimately, it all starts with proper communication towards our own team, our internal stakeholders and our supplier base. That will forever be crucial to being a true enabler and delivering true value to the business.”

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LUFTHANSA GROUP

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Telkom: Procurement transformation and communication Ben Van Zyl, Chief Procurement and Contracts Officer, discusses a significant procurement journey for Telkom, and how the internal stakeholder sits at the very heart of it...

WRI T T EN BY PRODUCED BY

D al e Bent on Hey kel Ouni

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T

he challenge in any procure-

But the reality is that change is neces-

ment transformation is one

sary and procurement has transformed

of enacting true, tangible

significantly.

change. As many organisations seek to

Take Ben Van Zyl for example, Chief

realign their procurement and supply

Procurement and Contracts Officer of

chain functions, to make them more

OpenServe and Telkom. Van Zyl, who

strategic and key drivers of growth, the

has built a 20-year career in strate-

journey that’s required is one defined by

gic sourcing, procurement and supply

constant change and increasing pres-

chain management for leading finan-

sure to deliver. This is in part, thanks

cial and telecommunications organisa-

to often antiquated views that see it as

tions around the world, was tasked with

merely a cost centre and a back-office

lending his expertise to deliver a true

function designed to sign the invoices

procurement transformation for Telkom.

and in some cases, police spending.

One thing that he acknowledges as

24

T E L KO M G R O U P

a common concern for procurement

delay them.”

professionals in his position is communi-

“That’s how you create resistance

cating the true value of procurement to

because they have objectives and in

an organisation. “I think when you listen

their performance plan, there isn’t a

to the business, you can really translate

dependency on procurement. Whatever

what their vision and strategy for their

I bring forward has to have a client focus

business is and approach it in a way that

in mind to talk to how we are going to

will enable them to realize that,” he says.

enable them.” Van Zyl beams that he has

“It’s about getting the language right.

been blessed to be in a business made

You do not say that you’re going to come

up of people and a board that under-

in and implement new control because

stands the critical role procurement

honestly, what really scares people is the

plays and welcomes the changes he has

idea that you are here to police a policy

recommended.

and put in new processes that’s going to

Van Zyl had already worked with Open Serve for a number of years but was tasked with a specific goal for Telkom; to “fix” procurement and supply chain issues that had arisen within the business. The bottom line for procurement first and foremost is one that focuses on the bottom line and to streamline and tighten up a number of performance issues around cost reduction. But, as is a common question raised by many procurement professionals, why stop there? Van Zyl very quickly came on board and resolved a number of issues presented by previous failed implementations and misfires or in his own words he “steadied the ship” but even he acknowledges that really, it was only the beginning for procurement. “We were w w w . c p o s t r a t e g y. c o m

25

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under pressure from a cost perspective,”

very cumbersome supplier onboarding

he says. “I was asked to come in and

process that was in place,” says Van Zyl.

steady the ship but also to try and take

“Alongside this was a focus on identi-

our procurement and supply chain envi-

fying any big opportunities from a cost

ronment to the next level.”

savings perspective and the key deals

Defining that next level was crucial in

that the business required to enable

order to make lasting and meaningful

them with their business objectives and

change for the business going forward

the business strategy and realizing that.

and so the first steps were to look inward

It was a challenge but I think listening to

and engage with stakeholders in order

the stakeholders and sharing with them

to identify the real pain points that the

to say this is where we are, here are the

business had and outline the “building

things that are critical and this is going

blocks” that would enable that change.

to my approach and my timeline - which

Running parallel alongside this initial

they approved - was key to getting things

assessment was a dedicated maturity

started.”

assessment that allowed Van Zyl to paint a clear picture as to the challenges that procurement and supply chain as well as the wider business faced and how the two went hand in hand. This, he notes, allowed the business to expose the gaps and design a plan to achieve key objectives and targets. On top of this there was an audit coupled with the pain points raised by suppliers enabled a prioritizing of required actions moving forward.

“My initial focus was on getting the basic building blocks in place like a center of excellence, operating model, a new procurement governance framework and policy and then at the same time fixing the big pain points like the 28

T E L KO M G R O U P

One of those building blocks, a center

“ This model also allows for improved knowledge management so that you can create step changes in the skills of the team” — B E N VA N Z Y L , C H I E F P R O C U R E M E N T A N D C O N T R AC T S O F F I C E R

of excellence, was the key to all of this. Successfully establish and implement this at the very heart of this journey and the road ahead will look that little bit easier.

But what is meant by a center of excellence? Well, a core team of procurement experts that play a holistic procurement role within the organization that can drive scale and repeatability and best practice. Van Zyl highlights an example of this in action where the business has multiple ERP systems and processes which this team of experts can take on the responsibility for and advise on the implementation and the use of new technology. “They can also provide knowledge base services across the different procurement processes, platforms and standards designed to drive that scale and focus on delivering that value added performance throughout the procurement organization to enable the growth strategy,” he says.

“This model also allows for improved knowledge management so that you can create step changes in the skills of the team.” This is of particular interest to Van Zyl as there is a notable shortage of sourcing talent and so knowledge management is critical. Talent comes and goes and the people within the business, w w w . c p o s t r a t e g y. c o m

29

Deliver the extraordinary

Plan now for 5G, says Nokia Communications service providers must ensure that they have the right foundations, or transport in place to take full advantage of 5G. This is the view of Mark Baptiste, director of the IP and optical business for Africa at Nokia.

“There are so many moving parts at the moment,” he says. “You have your transport or the mechanism to carry your traffic which includes Optic’s, IP and Microwave on the one side, but then we have things like virtualisation, public and private cloud, automation, software-defined networking (SDN) and security that are also fundamental to the network operations. That is why it is not only critical to get the transport right at the outset, but also to build it so that it can deliver today, while also catering for the requirements of the future.”

The CSPs have massive investments that they have made over the past 20 years, and this is not something they can just switch off. Baptiste believes this is where transport becomes so important.

“From a transport perspective, we do not distinguish between the existing and the future. What we are saying is that we must build networks that can operate securely, handle massive scale, and provide seriously high performance,” he says. “The biggest challenge for CSPs is balancing the present while investing in the future. We all know that 2G and 3G will be around in Africa for a long time. For operators in Africa, it is about striking that balance between keeping existing customers happy, while looking at the business case for 5G, because everyone wants to be the first to make it a reality.”

Baptiste says the most important thing for CSPs right now is to get a strategic blueprint in place that determines how they evolve their network from where they are today, to cater for the requirements of 5G and their network evolution. “Here Nokia is strategically positioned to work with CSPs to build this end-to-end architecture where we would look at each of these elements, firstly holistically, and

then we would strip them down in isolation to determine how we build each of these elements to meet their specific requirements. Then we would put it all together again in terms of a blueprint that provides the CSP with the Future X solutions Nokia always talks about.”

Nokia has recently revolutionised data centre networking by launching our new Data Centre switching fabric. Our DC Fabric provides generational steps in data centre networking; new operating system, tools and gives cloud builders unprecedented ability to adapt, automate and scale keeping up with the increasing demands from 5G. “Nokia’s DC Fabric also redefines openness, application development flexibility, robustness and operational tools for rapidly building and confidently operating data centre networks at scale. This puts Nokia in a unique position completing our end-to-end portfolio for 5G,” he says.

Baptiste concludes that CSPs must focus on getting the basics building blocks of their transport platforms right early on. “If you have an under dimensioned transport platform, it does not matter what you build, it will have a serious impact on your ability to deliver at scale on the rapidly evolving requirements of networking. So, the key thing is to build that transport platform that can address security, massive scale, high performance and gives you all the automation and end-to-end requirements that you need. Nokia is proud to be a partner of Telkom in South Africa and, together, we look forward to building next generation transport networks, which are the bedrock for enabling digital services for consumers, enterprises and the public sector in South Africa.”

Mark Baptiste

critical procurement experts, may leave and leave an organisation with key information within the hard drive.

“Then you end up having to redo and relearn the same things that that individual learned when he was there and you have to do everything from scratch,” adds Van Zyl. “Again, what’s critical for us as well in the center of excellence model, is that it helps us with improving our knowledge management along with everything else.”

When discussing procurement transformation, it’s not long before we fall victim to subscribing to the notions of trendy buzzwords that professionals like (and dislike) to hear. Flexibility and agility are two of the biggest and oft used words, but why? What do they mean to a business?

“I’ll be honest. These were not words that’s normally associated with procurement for Telkom,” Van Zyl boldly states. “It used to be an organization with structured and strict procurement processes and gateways, so those words were not normally associated with the whole procurement process environment.”

There is sound reasoning for this. Telkom has a number of unique and different business units within its portfolio. These include but are not limited to: a fixed line business and mobile business, a mast and tower, a property business, a commerce platform business with some financial services and an IT outsource business.

Each unit has its own strategy, size and cost plans. For Van Zyl and procurement, it was vital to acknowledge that one-size-fits-all process was out of the question.

“A standard recognized procurement process with no flexibility that is unable to respond to the individual business unit will become unnecessarily controlling 32

T E L KO M G R O U P

w w w . c p o s t r a t e g y. c o m

33

and restrictive. It would create a direct

ultimately will never be ‘perfect’.

negative impact on the individual busi-

Improvements have been made but this

ness units that would struggle to achieve

is an ever evolving journey and so he

and maintain a competitive advantage

and his team will continue to acknowl-

in the open market,” he says. “We really

edge any emerging gaps in order to be

had to consider that in our development

able to adapt fast.

of the new procurement governance

Procurement is a numbers game. It

framework policy and processes, as well

always has been. The numbers and

as the selection of our digital tools that

indeed the successes count now more

we would like to implement. It allows us

than ever when undergoing significant

to be more flexible and more holistic in

transformation. Van Zyl can already point

our approach to shorten that timeline

to the addressing of the control envi-

for either the contracting process or that

ronment through the design and imple-

transaction.”

mentation of a new procurement policy,

Easier said than done and Van Zyl admits that this is a process that

34

T E L KO M G R O U P

governance framework and processes that enables the business to move

faster and provide flexibility. Elsewhere,

of the CFO and in turn the CEO? These

by building a spend queue system it

are, ultimately, the key stakeholders for

allowed for a far greater understanding

procurement. Van Zyl has implemented

of spend and analysis by creating dash-

a supply chain financing platform to free

boards for performance, cashflow views,

up cash flow and reduce working capi-

and savings reports in order to track

tal. A very important focus for the group

real savings. “It sounds like basic stuff,”

CEO and CFO, this changed the payment

says Van Zyl. “But we had some contra-

terms for suppliers from 30 to 90 days,

dicting views on the spend. Depending

the industry standard for telco companies

on whether you look from a supplier

in South Africa. “By implementing the

perspective or contracts perspective

supply chain financing platform it allows

or business perspective you could get

the suppliers and even the small supplier

different numbers so we had to fix that so

to immediately trade their invoice at a

that. Now, there’s only one version of the

low interest rate where they could imme-

truth that can allow you consistency to

diately get the cash injection,” he says.

make the right decision as well as track

“That was also very helpful during this

deliverables.”

COVID period and a great achievement

But what of the successes in the eyes

in terms of our year-end result.”

“ The procurement function is able to develop and create innovative business models and become a valuable strategic business partner” — B E N VA N Z Y L , C H I E F P R O C U R E M E N T A N D C O N T R AC T S O F F I C E R

w w w . c p o s t r a t e g y. c o m

35

Success is one thing, but failure is

process we’re engineering may succeed

another and admitting that things haven’t

due to acceptance of the solution, but

gone according to plan is often the place

the human factor too. Dramatic change

where real change is found. Van Zyl

brings tremendous resistance and it

recognizes this as an incredibly impor-

requires ongoing change management

tant part of any journey. “It’s a journey

to ensure that success.”

and there’s always room for improve-

Technology and process digitaliza-

ment,” he says. “It’s critical to contin-

tion play a real key role in the procure-

uously review and evaluate the new

ment transformation journey. Established

processes and tools that you implement.

and emerging technologies enable

We will implement new processes and

businesses like Telkom to become far

tools, which should bring significant effi-

smarter and more scalable.For Van Zyl

ciencies but let’s create checkpoints and

and procurement, digital innovation

evaluate and make improvements where

will enable a move away from a repet-

necessary. The procurement or the

itive manual task environment to a mix

36

T E L KO M G R O U P

of more analytical and creative thinking

a people and relationship oriented

roles that’s focused on driving a compet-

function. This is nothing new, but as

itive advantage and strategic value. “The

we discuss transformation through

procurement function is able to develop

processes and digital tools one can

and create innovative business models

be forgiven for forgetting that they are

and become a valuable strategic busi-

worthless without the right people strik-

ness partner,” he says. “We become a

ing the right relationships. “The people

partner backed by real time access to

in your team are the biggest asset that

data and market trends to advise and

you can ever have,” he says. “If you

support strategic decision making in the

don’t have experienced, reliable, strate-

business, but also significantly improve

gic sourcing professionals, and not even

on timeline for contracting and transact-

only strategic sourcing, really in every

ing and approvals. That’s what digital

corner of the value chain, whether it’s

procurement means to us.”

somebody that focuses on analytics that

Procurement and supply chain is

can drive the insight for you, or whether

w w w . c p o s t r a t e g y. c o m

37

38

T E L KO M G R O U P

the person actually needs to look at your procurement operations environment, you rely so much on them.”

With the right people, the right process and ongoing discussions with the suppliers, the relationships between both Telkom and said suppliers can evolve and take on new and more fruitful forms. Through a contract and supplier relationship management program that allows Telkom to navigate geopolitical tensions and restructuring of the global trade dynamic. As well as individual supply management account plans based on the supplier risk segmentation and joint balance performance scorecards, Telkom can continuously assess performance across multiple factors. Van Zyl points to substantial improvement of raw supply performance and noteworthy reductions in contract value leakage. “It also opened the communication between us, the suppliers and the internal business partners, because everybody is now seeing that value,” he says. “We’re also doing an annual supplier survey, to really understand their experience in dealing with us. So we’re looking at the entire process from onboarding, the RFP process, the engagement with the procurement team, transaction right through to the payment process. That helps us identify and address the pain points and to make the interactions with Telkom as seamless as possible.”This model truly enables Telkom to continue to improve the supplier experience because, as Van Zyl notes, Telkom wants to be viewed as the customer of choice, and thereby gaining access to the best offers from the best suppliers in the market.

In early 2020, the world stood still as the COVID-19 pandemic swept the globe. Even now, the ramifications w w w . c p o s t r a t e g y. c o m

39

are still being felt, but through adversity

where there are single points of failure

comes opportunity and Van Zyl, along

on critical supply material or equipment.

with many procurement professionals,

In acting fast, Telkom were able to put

this crisis has highlighted the call for a

alternative sources in place where viable.

new approach where agility and change

Thanks to business continuity plans in

are not only essential but unavoidable.

play for its strategic suppliers and the

Telkom were able to identify concen-

suppliers where there’s significant risk,

trated risk with certain key suppliers, and

and the work that Van Zyl has been

40

T E L KO M G R O U P

doing these past few years, Telkom was

understanding of our suppliers and the

able to thrive.

supply networks allowed us to make

“We were quite fortunate in that, thanks

sound decisions based on a comprehen-

to what we had in place, the disruption

sive understanding of the current poten-

to our business was actually not that

tial future supply sources, and develop-

significant,� he says. “Our analytical capa-

ing trends, all supported by detailed cost

bility and the role of analytics will play a

and risk analysis.

more important role, as a more detailed

Given the tumultuous path that 2020 w w w . c p o s t r a t e g y. c o m

41

has put many on, how much has that changed the road ahead? Many can and have speculated that we will see a new world of procurement and supply chain thanks to a rethinking of what is truly effective and strategic in light of COVID-19. For Van Zyl and Telkom, the road ahead remains one of continued strategization. Cash flow will continue to be managed, cost reductions and further seamlessness in the process remain the core targets and further implementation and development of the analytics and automation of reporting and insight developing too. But what will be key for Van Zyl in order to succeed?

“If you always look for that opportunity to provide more value to the business, then you’ll earn your seat at the table,” he says, acknowledging this oft used expression. “It doesn’t take away that you need to be competent, and you need to execute well. But unless you have a seat around the table, you don’t even get the opportunity to deliver value, and you remain a support function to a support function. Seek that opportunity to provide value to the business, have a blind focus and you can do your job and deliver value.”

42

T E L KO M G R O U P

w w w . c p o s t r a t e g y. c o m

43

Train engage

your people to

consultants

WRI T T EN BY

Ri c h H am, CE O, F in e Tu n e

The time is now for you to teach your team how to engage third parties to optimally advance the business’ interests, so they can help your department hit its goals while delivering on urgent short-term needs...

44

T R A I N Y O U R P E O P L E T O E N G A G E C O N S U LT A N T S

w w w . c p o s t r a t e g y. c o m

45

Y

ou’re a CPO who rose up the ranks in your organization over a 20-year career. Aside

from the CPO role, your department used to have a VP, a Director, three Managers and 20 Buyers.

Since the Great Recession, that team has been leaned out quite a bit. The VP role was eliminated. You’re down to two Managers and twelve Buyers. And yet, this team manages 20% more annual spend than the vastly more robust team you had in mid-2008.

And now, amid a pandemic, you’ve been handed a host of new and urgent responsibilities. And two of your twelve buyers just left the company, and there’s no prospect for filling their roles anytime soon.

Lean resources and new, urgent priorities have left you drinking from a fire hose.

You’re not alone. As we referenced in a late 2019 press release, “Fine

got to engage some outside experts to

Tune Identifies a Growing Corporate

help.

Procurement Predicament,” many of

As a procurement leader, this is the

our clients have seen spend-per-buyer

time for you to teach your team how

approach and exceed $100MM/buyer/

to engage these third parties to opti-

year. There’s no hope of truly managing

mally advance the business’ interests,

(i.e., strategically contracting and then

so they can help your department hit its

owning what happens throughout those

goals while delivering on urgent short-

contracts) even half of these spend levels

term needs. Here’s a start—a few high-

on a per-buyer basis, so you know you’ve

level teaching points:

46

T R A I N Y O U R P E O P L E T O E N G A G E C O N S U LT A N T S

Decide which expenses to outsource

“Widget procurement” propositions where

There’s no one right way to do this.

fundamental use of the marketplace is

Do you have buyers with back-

likely to yield results which will stick?

grounds within certain industries—

These probably won’t take a ton of time to

whether on the supplier side or simply

manage and don’t require subject matter

with extensive experience managing

experts (SMEs) to drive value. Might want

these categories? OK…keep those

to keep these in-house, too.

in-house, in the hands of your experts.

Do you have certain expenses that are relatively straightforward and static?

Have certain expenses been a perpetual “thorn in your side?” Some expenses, whether due to sheer complexity, w w w . c p o s t r a t e g y. c o m

47

constant changes in your requirements,

that your starting point involves a sober

or supplier practices, tend to create

assessment of your resources. Your

frustration and friction between the

buyers aren’t going to work 80-hour

procurement department and end users/

weeks. Based on 40-50 hours/week,

internal customers. Are there other cate-

figure out what you can truly, effectively

gories which require multi-year commit-

manage. For each buyer, make deci-

ments, making it tough to drive savings

sions on which expenses should garner

in non-contract years? Perhaps you can

that buyer’s time and attention. Then,

look outside the organization to find help

implement strategies for the remaining

with these.

categories which not only drive results

Whatever you do, though, make sure 48

in the areas you can’t really engage in,

T R A I N Y O U R P E O P L E T O E N G A G E C O N S U LT A N T S

but also protect your buyers from distrac-

in their own interests. If you find an

tions when they arise in those categories.

expense management or auditing solution

Failure to do this will ensure a worse fate

which looks good on its face, it is abso-

than “no savings” in these categories. It

lutely critical to make sure your interests

also ensures the erosion of your team’s

and theirs will be aligned in a healthy way.

effectiveness when they get sucked into issues in these areas.

Your team needs to get into the weeds of the proposed engagements and ask themselves: “If we have a bad month (or quarter,

Alignment of incentives is everything

or year) under this engagement, will our

Businesses will almost always act primarily

good month, will our consultant also have a

consultant also suffer? And if we have a

w w w . c p o s t r a t e g y. c o m

49

good month?” The answers must be yes.

This is critical not only for the readily apparent reasons (we all understand healthy alignment of interests is generally a good idea in business relationships). It is critical now more than ever because your resources are so precious, and when you adopt a strategy designed to protect those resources from distractions so that they can remain more mission-focused, they simply must have the peace of mind that their outside partners will be acting in your team’s interests. If any doubt about this lingers, time will be lost inspecting and auditing the consultants and auditors, which defeats the purpose of the engagement in the first place.

Understand the alignment of incentives in any consulting proposal. If they’re not aligned in a healthy way, try to add elements such as contingency-based compensation, shared benefits or other similar arrangements, or walk away and find a partner that shares these ideals.

“Baseline” facts are critical Many of the sorts of relationships we’re talking about will have contingency-based elements, where the consultant’s compensation (or performance evaluation at minimum) will be linked to actual results as measured against a certain starting point—a baseline. This should be a healthy and extremely low-risk strategy…but a flawed “baseline” can undermine the integrity of the entire arc of the relationship.

Here’s what’s important in this realm: don’t let a fear of baseline imperfections paralyze you into inaction. We’ve seen over our nearly 20 years in business that despite the parties’ best efforts to get all the facts of the relationship baseline perfectly dialed in, it is almost inevitable 50

T R A I N Y O U R P E O P L E T O E N G A G E C O N S U LT A N T S

w w w . c p o s t r a t e g y. c o m

51

that the any “baseline” will need to be

consultant to accept language surround-

discussed—and potentially adjusted—as

ing baseline adjustment protocol in

time passes, new facts come to light, and

the event your baseline proves flawed

business conditions change.

or obsolete over time. Ask for the

The best way to deal with these inev-

right to terminate the relationship if—

itabilities is via broad language assur-

after a good faith effort at reaching

ing your comfort level throughout the

mutual agreement on a revised base-

engagement. Ask your prospective

line—you’re unable to reach such an

52

T R A I N Y O U R P E O P L E T O E N G A G E C O N S U LT A N T S

agreement. If your prospective partner

marketplace offers myriad solutions to

won’t agree to that, it might be a red flag

help accomplish this, and it’s incumbent

for the relationship, anyway.

on CPOs and Procurement leaders to

In these times, the best procurement teams will find ways to maximize limited

teach their teams how best to pursue and implement these strategies.

resources, driving results not only in the areas they’re actively working on, but also in the areas they’re not. The

w w w . c p o s t r a t e g y. c o m

53

&

Lockdown Leadership The CIO perspective on navigating the challenges of a pandemic by bringing IT and procurement closer together

In a bid to survive and prosper, businesses are either moving forwards

through innovation while others are hunkering down to secure initial and long -term survival. Which approach proves more successful remains to be seen, but as we move together, cautiously or optimistically, we need to consider our actions of today. Starting with leadership, IT and working closer with procurement...

WRI WRIT TT TENENBYBY PRODUCED BY 54

Kev P hiiln ClD av ay iseons xxxx

LOCKDOWN & LEADERSHIP

w w w . c p o s t r a t e g y. c o m

55

L

ockdown is a word we all now share. But lockdown means far more than simply staying

at home. Lockdown is a behaviour which many companies have adopted in recent months, a behaviour that is required to enable survival.

This lockdown behaviour is, in part, demonstrated by looking at the job market. The first ‘hot’ roles that grew sharply soon into the UK pandemic were in finance, followed by procurement.

Across sectors, roles which could ensure structure to finances, conserve immediate cash and renegotiate to save some money in the mid and long term, all grew sharply. Companies were effectively managing their financial risk exposure.

Managing down this risk of exposure

employees who perhaps previously

by limiting activity to core activities, limit-

hadn’t really had a wider lens on the

ing cash, and cutting spend, gives more

businesses in which they work in, are

financial headroom, but will it provide a

now becoming more aware. The agenda

future for those same companies? That

in many businesses has been about

future is one that will be measured by

customers and that remains as true

stakeholders, shareholders and criti-

during these tough times as it ever was.

cally the actual teams of employees who

But, perhaps the wider ‘IT’ engine room

need to feel confidence that they will

of the business had been less interesting

get the funding, latitude, investment and

to some parts of some of our teams.

accountability to grow again.

In addition to finance, bigger constraints came into play as the land-

Widening the business lens

scape continued to change. Some organ-

This, interestingly, is a time when

isations have seen a game-changing shift

56

LOCKDOWN & LEADERSHIP

in their competitors and are in defence

the face of competitive disputers taking

mode, protecting their businesses from

full advantage of change in customers’

both new and existing competitors in an

demands due to the pandemic, requires

urgent bid to maintain cash flow, remain

IT platforms capable of balancing short-

solvent and survive the events of 2020.

term focus against long term growth

Radical and sudden operational and

opportunities in a business. This, without

supply chains have also been impacted

overplaying it, is a major challenge for

and disrupted. Some companies are

senior technology leaders. The propen-

struggling to leverage distribution chan-

sity for historic underinvestment in tech-

nels and to provide enough product/

nology, that same technology which

service availability to keep up with

now safe-guards the future, might mean

demand. The ability for IT systems

any current near-term gains might well

to accurately predict customer/client

become rapidly eroded as today’s tacti-

demand for products and services, in

cal gives way to tomorrows’ strategic w w w . c p o s t r a t e g y. c o m

57

catch-up.

These company lockdowns are being

diversifying supply chains across multiple vendors and partners, to enable more

seen by many of us. So, more than ever,

transparency and security across supply

having a responsive IT team with defin-

chains. The complexity this adds to IT

itive and exemplar leadership driving

platforms can in some legacy IT stacks,

survival in some technology led compa-

be exponential.

nies who are consolidating revenue

This technology complexity is overlaid

streams, divesting businesses, rational-

with another major contributor, and key

ising products and reducing proposition

strategic partner to IT, procurement.

of services to help to drive a simpler

Procurement teams are actively review-

business, is going need high emotional

ing IT and other framework contracts,

engagement, experience and intelli-

scrutinising big spend items, and assur-

gence, and exceptional collaboration.

ing contractual performance with suppliers. Investigating cost reductions due to

IT and Procurement: hand in hand

the scaled back operations of product

Along with simplifying, many compa-

removing over-licensed software, match-

nies are reducing their trading risk by

ing capacity that was built into contracts

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LOCKDOWN & LEADERSHIP

or services outlined above, as well as

with actual need and achieving other

This ‘what matters’ approach was

low-hanging fruit to reduce ongoing

achieved through a rigorous and trans-

expenditure is a joint collaboration where

parent process involving team members

IT and Procurement will only succeed

through the organisation, at all levels,

together.

working in collaboration with partners

In recent work I have led ( before

and suppliers to look at creative ways to

the pandemic) I have been able to

finance payments, defer spend, extend

achieve year-on-year savings in operat-

contractual Terms and to avoid ‘hang-

ing expense in excess of 50% through

ing-on’ to platforms which, in the very

partnering effectively with Procurement.

near term, will become exposed as

By adopting a focused strategy on

obsolete. In my recent conversations,

what products and enhancements can

one CEO said to me that we have a

deliver proper near-term and lasting

world class ERP platform but it’s about

value, and by challenging and removing

ten times the size we need – we’re

legacy IT, outdated working practices

massively over-engineered’. He is acutely

and processes, reducing the ‘belt-and

aware this needs to be dealt with. In my

braces’ culture and implementing a ‘what

own recent past, I have taken over 20%

matters’ culture.

out of the cost base for a single large

w w w . c p o s t r a t e g y. c o m

59

business-wide platform. A reduction of

not all we need to consider as senior IT

millions of pounds. This was achieved by

leaders.

being focused on right-sizing the plat-

Our teams, especially in times of

form the business needs for now and not

immense change, also need support. The

allowing vendors to charge for licenses

investment made in supporting people

for future growth when that growth, right

in time of need pays dividends in the

now, is uncertain.

future. The key to this is allowing flexibility within the operations of the busi-

A culture of change

ness. During the pandemic, a number of

In driving this change there is a huge reli-

my team worked split days, early morn-

ance on having the best possible people

ing to mid-morning and then evenings.

engagement, exceptionally high amounts

It worked well and was well received,

of transparency and trust, and a culture

allowing for home schooling and other

which embraces the uncertainty openly,

home life challenges. But, this flexibility

and with empathy. Being transparent and

is not something for a few months, this

operating with empathy will give busi-

is change for the long term. How then,

nesses more of a license to do the right

as our businesses rely on being more

things and the hard things and get as

agile, can IT teams be collaborating yet

much support as possible.

separate and discontinuous in time?

Businesses that operate counter to

The role of IT leaders going forwards is

this, with secrecy, obfuscating their think-

to provide a far clearer outcome-based

ing and sharing their decision making

approach to working, enabling people

until as late as possible, will lose trust of

to organise themselves not just to meet

their teams, both in the short term and

when needed, but to work when needed.

long term. How many of us have seen

This needs new skills and behaviours.

M&A activity destroy value because of

Skills of collaboration, not being afraid to

the wrong behaviours of an acquiring

ask for help and readiness to be flexible

company? Good leaders in good compa-

to expand in tangential roles. This new

nies remove information silos within their

way of working is going to take time to

organization (including those among

settle in organisations; employers, lead-

leadership roles) and focus on more

ership, managers and their teams will

cross-functional collaboration, but this is

need help long into the future of how to

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LOCKDOWN & LEADERSHIP

adjust, while working productively and

distant from deep rooted emotional

collaboratively.

intelligence thinking they are, also need to become significantly more aware.

Change is necessary

Development will be needed as part of

Productively and collaboratively is not

basic early-career management educa-

enough anymore. We also need to keep

tion in a range of topics as far ranging

everyone safe, both physically and

as diversity and systemic bias in deci-

mentally. Leaders and managers, no

sion making in the workplace, to building

matter how functional and historically

products with sustainability and carbon w w w . c p o s t r a t e g y. c o m

61

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LOCKDOWN & LEADERSHIP

neutrality in mind; maybe with objectives

with this technology issue showing us

and performance linked to this more

some of the possibilities of our future, I

extensively than is found today.

think deeply about the ever-growing chal-

Having recognised that functional skills alone are likely to be a smaller percentage of the competency of the

lenges of being a technology leader in society, both in industry and globally.

The once simple(r) operating model

next generation of first-time leaders, what

of developing great products, wrapping

other capabilities are needed in the best

great service around them and giving

of the next generation of leaders?

great value would likely mean success.

Characterising these skills has been

Alas, this is a formula that has long since

driven forward by the pandemic, but

passed and the final bastions of compa-

clear expectations would include criti-

nies that could operate in that way, have,

cal thinking, creativity, and inclusiveness

in no small part to Covid, been rapidly

driven from both curiosity and a growth

eroded.

mindset all deployed in an organisation that shows both flexibility and adaptabil-

The future is ours to see

ity. These operations must be prepared

Having started with a conversation about

to be courageous and challenge the

finance, procurement and risk, we return

status quo in an empathetic and technol-

to the conundrum; How do keep the spirit

ogy inspired way.

of innovation, effectiveness and efficiency

Being a next generation leader in this

in our teams alive, whilst at the same time

new and complex world will take some

cutting cost, driving wastage down and

investment. Being a current generation

surviving?

leader living with today and developing

Will we see a resurgence of command

teams for tomorrow will require all of us

and control style operating models?

to draw on everything we have learned

Or will waterfall style driven deliveries

to date and double it up, This is certainly

prevail? For the Agile proponents reading

the case if we want to be the beacons

this, will we see a reversion to less itera-

of hope, inspiration and confidence

tive, less accountable, less empowered

for those we lead, coach, mentor and

teams of technologists, and arguably less

develop today.

innovative thinking?

As we all think about the new world w w w . c p o s t r a t e g y. c o m

63

Phil Clayson – CIO Philip Clayson is an award-winning turnaround and transformation CIO. Philip is passionate about inspiring technology teams to engage quickly to create and deliver effective customer-centric transformation in business critical turnarounds, complex digital transformations, in high growth and M&A environments, including all forms of digital acceleration.

In recent roles Philip has delivered value from an IT portfolio modernisation, reducing operating costs from £80m to £40m inside 12 months for a FTSE, a legacy IT removal programme (removing 400 of 600 IT systems, saving £18m per year for another FTSE), introducing new agile development, shrinking delivery cycles from 12 to 2 weeks, and recovered a FTSE company after a large cyber breach.

Philip is experienced operating across all phases of the business lifecycle including investment planning and early stage funding, M&A, product and service launch, growth acceleration, and scaling to worldwide 24x7 operations. He has operated across large private and public organisations, in the UK, and internationally, and across sectors including Retail, Telco, Energy, Utilities, Broadcast and Media, in both B2C and B2B.

Or, as some are demonstrating, will fortune favour the brave and the courageous?

blockchain, cloud, ML, IoT, edge comput-

Will we see encouragement to experi-

better transparency and security?

ment and invest in new ideas, with quick

Will we see changes internally unlock-

adaptation, pivoting in response to the

ing more efficiency through new models

recent disruptive events?

of operations? models that complement

Will we see a further acceleration of the latest thinking, the use of AI, 64

LOCKDOWN & LEADERSHIP

ing, at every level of our operations from changes in our supply chain to enable

new technologies platforms and underpin remote working

Out of the shadows

might lead to initial and long-term

Regardless of the delivery model, approach

survival, but as we move together,

and style, it’s clear several companies are

cautiously or optimistically, we need to

pushing forwards on some big-ticket inno-

consider our actions of today.

vation items in readiness for their futures.

Never has the shadow we cast as IT

Others are hunkering down.

leaders been so evident. Never has IT

No strategy can yet be judged as right or

output, and the trust in IT, been so high.

wrong, it is too early to tell.

Never has IT been so central to the

Both hunkering down and investing

future, as it is now. w w w . c p o s t r a t e g y. c o m

65

Five ways Unilever is championing sustainability in procurement

WRI T T EN BY

D al e Bent on

With brands in nine out of every 10 UK homes, Unilever has a huge responsibility in the way it disposes of its products and that they are successfully recycled whenever possible.

Here, CPOstrategy looks at five key ways Unilever is championing sustainable best practice...

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F I V E WAY S U N I L E V E R I S C H A M P I O N I N G S U S TA I N A B I L I T Y I N P R O C U R E M E N T

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The Five Point Plastic Plan:

“#GetPlasticWise"

When it comes to disposing of its products, Unilever has a huge responsibility to ensure once they’ve been used, that they are successfully recycled whenever possible. Unilever has become the first major global consumer goods company to commit to an absolute plastics reduction across its portfolio and as it looks to accelerate this and drive progress in tackling plastic waste, it created it’s five-point plastic plan - ‘#GetPlasticWise'.

• I ncrease the amount of recycled content we use and the recyclability of our packaging • Reduce the amount of plastic in our products and business, and ensure that the plastic we do need can be reused, recycled or composted • Seek alternatives to plastic • S upport positive behaviour change with our consumers and employees • Work collaboratively with a range of partners to affect change

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F I V E WAY S U N I L E V E R I S C H A M P I O N I N G S U S TA I N A B I L I T Y I N P R O C U R E M E N T

“ Plastic has its place, but that place is not in the environment. We can only eliminate plastic waste by acting fast and taking radical action at all points in the plastic cycle” — ALAN JOPE, UNILEVER CEO

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Halving virgin plastic use by 2025

In late 2019, Unilever announced that it plans to halve its use of virgin plastic, by reducing its absolute use of plastic packaging by more than 100,000 tonnes and accelerating its use of recycled plastic while also helping collect and process more plastic packaging than it sells. Unilever will deliver this commitment through investment and partnerships in waste collection and processing, purchasing and using recycled plastics in its packaging and by participating in extended producer responsibility schemes where Unilever directly pays for the collection of its packaging.

This new initiative sits alongside the company’s existing existing commitments to ensure all of its plastic packaging is reusable, recyclable or compostable by 2025, and to use at least 25% recycled plastic in its packaging, also by 2025. w w w . c p o s t r a t e g y. c o m

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3

Industry-leading global plastic commitment

One of the largest and best-loved beauty brands in the world, Dove, recently committed to following the ‘no, better, less’ framework: NO PLASTIC: In 2020. Dove’s iconic beauty bar single packs will be plastic-free globally, and development is underway to replace the plastic outer-wrap of its beauty bar multipacks with a zero-plastic material.

BETTER PLASTIC: Dove launched new 100% recycled plastic (PCR) bottles where technically feasible, in Europe and North America, at the end of 2019 – across all ranges (Dove, Dove Men+Care, and Baby Dove). Dove continues to search for solutions where recycled plastic is not currently technically feasible, including for caps and pumps.

LESS PLASTIC: Dove will leverage the technology behind its new reusable, refillable, stainless steel format deodorant sticks: minim. This technology minimises waste by radically reducing the amount of plastic required. The launch date is not yet confirmed, and launch markets are being decided, but work is well underway.

The amount of virgin plastic Dove will save globally per year would be enough to circle the Earth 2.7 times and new commitments are part of Dove’s 2025 commitment to reduce plastic waste, which will see the brand avoid the use of more than 20,500 tonnes of virgin plastic globally per year.

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Removing 1.5 million plastic bottles from UK supermarkets

“ As a founding member of The UK Plastics Pact it is great to see continuous innovation by Unilever in their commitment to ensure all plastic packaging is reusable, recyclable or compostable by 2025� — H E L E N B I R D , S T R AT E G I C E N G A G E M E N T M A N A G E R AT W R A P ( W H I C H M A N A G E S T H E U K P L A S T I C S PA C T )

In 2019, Unilever launched Cif ecorefill, a new at-home technology that allows consumers to refill and reuse their Cif spray bottles for life. Research for Unilever had shown that 62% of people believe that reuse is even more important to them than recycling, more than eight in ten (83%) people wish they had access to more refillable products and only one in six (16%) are currently buying refills. For Unilever, the time to act was now. Made with 75% less plastic, attaching to current Cif Power & Shine bottles, ecorefills are 100% recyclable once the plastic sleeves are removed and, by the end of 2020, the ambition is for all Cif ecorefills and spray bottles to be made from 100% recycled plastic w w w . c p o s t r a t e g y. c o m

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Plastic pollution in the takeaway sector

Through its Hellman’s brand, Unilever has partnered with Just Eat to roll out a trial of Notpla’s seaweed sauce sachets to continue tackling plastic pollution across the takeaway sector.

The seaweed-based, Notpla sachets are 100% biodegradable and naturally biodegrade in approximately six weeks. The sustainable sachets are opened just like normal sachets and can be thrown into the home compost or even a normal waste bin, to fully decompose.

Notpla is a sustainable packaging start-up that uses seaweed and other plant extracts to make packaging materials that biodegrade naturally and Just eat, alongside the latest partnership with Unilever and Notpla has already significantly worked to stop selling single use plastics by trialling a pre-ticked box on its app and website to encourage customers to opt out of receiving single use plastic items such as cutlery that they don’t need and working with the Sustainable Restaurant Association to create and distribute a series of resources for restaurants to help them and their customers reduce plastic usage over time.

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F I V E WAY S U N I L E V E R I S C H A M P I O N I N G S U S TA I N A B I L I T Y I N P R O C U R E M E N T

“ I n partnership with Just Eat and Notpla, we’re creating a new and exciting experience for Just Eat customers who can enjoy the same great tasting Hellmann’s – but with zero plastic waste.

Squeezing sauce out of a seaweed sachet will be a first for many, but it’s one small change with potential for big impact” — H A Z E L D E T S I N Y, V P M A R K E T I N G F O O D S & T E A A N D M A N AG I N G D I R E C TO R O F U N I L E V E R FOOD SOLUTIONS, UNILEVER UK & IRELAND

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Sustainability during COVID-19: An opportunity to start a new, greener chapter?

WRI T T EN BY Al ex S ar i c , s m a r t p r o c u r e m e n t ex p e r t , I va lu a

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SUSTAINABILITY DURING COVID-19: AN OPPORTUNITY TO START A NEW, GREENER CHAPTER?

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A

fter global climate protests swept the world in 2019, it’s become much harder for

organisations to hide from the issue of sustainability. Environmental considerations now lie at the heart of many purchasing decisions, meaning businesses need to start taking steps to reduce the impact they have on the environment.

Some have already started – we’re seeing companies such as Sainsbury’s lead the way on sustainability, pledging to reduce net carbon emissions to zero by 2030. But when it comes to addressing environmental concerns, it is important that suppliers play their part – Sainsburys also said it would work with suppliers to ensure they are reducing their emissions.

However, COVID-19 has changed

Even the best laid plans can go awry Currently, 95% of UK businesses say they

everything. According to new research,

have plans in place to address environ-

60% of UK businesses say they have

mental concerns in the supply chain in the

decreased investment in sustainabil-

next 12 months. For example, M&S worked

ity initiatives as a result of the pandemic.

with produce suppliers to decrease water

Businesses have been forced to focus

wastage, helping to reduce the risk of low

on keeping the lights on, but in time, the

food yields – an effort that will ultimately

focus must return to improving sustainabil-

help bring down costs and keep suppliers

ity. COVID-19 offers businesses a chance

in business.

to reset their priorities to collaborate with

However, many of these plans are being

suppliers on sustainability – a vital role

hindered by UK businesses not focusing

played by the procurement team – and

on sustainability when deciding whether

evaluate what can be done to address

or not they work with a supplier. UK busi-

environmental concerns in the supply chain.

nesses say the most important factors

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SUSTAINABILITY DURING COVID-19: AN OPPORTUNITY TO START A NEW, GREENER CHAPTER?

they consider when it comes to working

not as prepared as they could be to

with suppliers are quality (38%), cost (31%),

monitor for environmental concerns in

with sustainability (15%) a distant third.

the supply chain.

Being able to collaborate with suppliers on sustainability initiatives is vital for success, but focusing on cost means

Visibility is an essential key to sustainability

these conversations fall by the wayside.

The main reason businesses are

For UK businesses to truly make

unprepared to address environmental

progress in addressing environmental

concerns is that they face several chal-

concerns and collaborate with suppli-

lenges in gathering these insights. The

ers, they need to be able to gather

vast majority (93%) of UK businesses

insights from the wider business land-

say it is challenging to gain visibility into

scape, including suppliers. However,

suppliers to track the environmental

not all are able to do this, with over half

impact of their supply chain. This leaves

(51%) of UK businesses saying they are

businesses without a view of supplier w w w . c p o s t r a t e g y. c o m

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risk, as well as the true extent of their

foundation from which they can evaluate

supplier ecosystem.

sustainability.

Businesses also find it difficult to iden-

To drive environmental action, it is crit-

tify and mitigate against environmen-

ical that UK businesses build a complete

tal concerns in the supply chain due to

picture of their suppliers and the supply

poor data quality. Whether it’s breaking

chain. But a lack of visibility and poor data

down data silos between organisational

quality makes this impossible at many

systems or a lack of consistency between

businesses, leaving them unable to iden-

data sets, UK businesses must be able

tify and mitigate environmental concerns.

to draw on reliable data to build a solid

This is reflected in how prepared UK

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SUSTAINABILITY DURING COVID-19: AN OPPORTUNITY TO START A NEW, GREENER CHAPTER?

Organisations need to join the sustainability revolution COVID-19 will be a tipping point for a sustainability revolution. As companies work on developing environmental initiatives, procurement can be the vital ally needed to push environmental change across the business, as well as collaborating with suppliers to ensure longterm change.

But to do this, procurement needs to get smarter, so that it can refocus to foster, rather than block, sustainability initiatives. Organisations that take a smarter approach to procurement will have a truly holistic 360-degree view of all suppliers.

This will provide a solid data foundation from which UK businesses can evaluate sustainability, supplier capabilities and identify opportunities to collaborate on environmental initiatives.

Armed with this visibility, organisabusinesses are to plan and manage

tions can set about making sustaina-

sustainability. Fewer than three-in-ten

bility a compulsory part of their culture

(29%) of UK businesses have comprehen-

and their supply chain, turning being

sive and fully developed plans in place

‘green’ into a competitive advantage.

to tackle electronic waste in the supply

By making procurement smarter, UK

chain, while just 26% have plans to deal

businesses will be able to react to and

with carbon emissions. This means the

proactively address sustainability in a

majority of UK businesses appear to still

post-COVID-19 world.

be implementing their plans or are in the process of developing them. w w w . c p o s t r a t e g y. c o m

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