Amer Sports

Sven Novak highlights Amer Sports’ need to transform indirect procurement operations in recent years and the drive to elevate the world through sport.

A direct approach to indirect procurement transformation MAGAZINE

AMER SPORTS

The Business Profile

A DIRECT APPROACH TO INDIRECT PROCUREMENT TRANSFORMATION Sven Novak, Director of Global Indirect Procurement, alongside Antonio Battista who was until recently the Global Head of Procurement Excellence, outlined the need for Amer Sports to transform indirect procurement operations in recent years.

For the global group of iconic sports and outdoor brands with a purpose to elevate the world through sport, the transformation was necessary to ensure each brand meets its own customers’ expectations, while keeping the wider group on track with strong sustainability targets in the years to come.

Hi Sven and Antonio. Amer Sports has a global reach, an abundance of leading sports brands and a history that stretches back decades.

How would you introduce the company, bringing us to the modern day?

Indeed, Amer Sports has been in business for more than 70 years and has evolved to a global group of 11 sports and outdoor brands. These include the likes of Arc’teryx, Salomon, Wilson, Atomic and Peak Performance, confirming the company’s global influence and the Sven Novak

journey which originally began during the rebuilding of Finland back in 1950.

Transformation is in the company’s DNA, later expanding into shipping operations, publishing and printing, before international acquisitions led the organisation into the manufacturing world with ice hockey equipment. This new focus on sport focused attentions in that area of outdoor leisure.

And the transformation continues today. The

company’s focus on sports is stronger than ever, albeit with a new mindset which is built around consumer needs, sustainability and – where we come in (or used to come in, in Antonio’s case) – a fresh procurement model.

We will certainly come to this innovative and efficiency-driven procurement model.

However, could you first confirm the broader operating model that now epitomises Amer Sports’ continuous improvement?

It’s all about putting brands in the forefront – encouraging autonomy in their own brand strategies and working closely with them to know which building blocks to put in place. Of course, these always align with grouplevel ambitions, but it’s important for our brands to cut through category siloes and ensure they are meeting their own specific customers’ needs.

Transformation is in the company’s DNA, later expanding into shipping operations, publishing and printing, before international acquisitions led the organisation into the manufacturing world with ice hockey equipment.

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AMER SPORTS

The Business Profile

Where the group comes in is to focus on overall strategic guidance and governance for brands, while also taking a biggerpicture overview of potential scaling opportunities or synergies to explore. Support services are brand-neutral to provide bespoke commercial guidance, support each brand’s growth, and to reach their respective potentials.

It’s important to have this clear way of working so there is never an overlap in responsibility or

accountability, and so each brand is working with clear definitions of specs and service level expectations.

And finally, to set the scene, how would you describe Amer Sports’ purpose and values when it comes to both customer and brand fulfilment?

We boil it down to four values.

First is to always be authentic as that’s the only way to guarantee trust with brands who depend on our decisions and group operations.

This leads into a belief that we’re better together, taking diverse expertise and making the most of it. We are also committed to impact, always keeping an eye on what’s up ahead and considering people and the planet in our decisions.

And the fourth value is that the company is driven to excellence – playing fair, aiming for excellence and celebrating wins.

All of these are overarched by a purpose to elevate

Absolutely, and that leads nicely to an introduction of what it is you’ve been embarking on across procurement in recent years…

In a sentence, Amer Sports has been on an indirect procurement journey. As you can imagine, with so many products and services across the brand portfolio, this implicates many suppliers and stakeholders, and we realised digital intervention would be vital to keep up with the change of pace.

It has been an exciting journey so far that can perhaps be defined by three main solutions that we have introduced to make our indirect procurement activities more seamless, efficient and user friendly.

These three areas span sourcing and delegated procurement courtesy of Mercanis; procure-to-pay via SAP Ariba; and category management thanks to Cirtuo.

I guess it makes sense to take us back to explain the timeline of progress so far?

Well, from a digital integration perspective, it would perhaps be better to pick up the journey in 2022 when the first team members joined our newly professionalised indirect procurement function.

Our global indirect procurement journey was propelled from that, as mere months later the indirect procurement intranet pages went live internally, and this is where some of our solutions and key digital service providers began to integrate the new-look infrastructure.

First came Amazon Business to manage our tail spend in a more effective manner, building up to a critical moment later in the year when the Global Indirect Procurement policy came officially into effect.

Emphasising the speed of implementation and the success of all preparatory work that had gone before this period, our team’s first calendar year ended with a strong level of sourcing projects and subsequent

savings – figures that have only improved over the course of 2023, and that will be even stronger this year.

AMER SPORTS

the world through sport.

Each of the four values are quite critical right now, and especially in the context of a quite drastic, recent, procurement transformation.

Over the course of 2023, all brand category managers were onboarded with this new way of working, business travel was incorporated into the new suite via TravelPerk, and the Global Indirect Procurement policy e-learning was launched. More recently, in the past few months, Cirtuo has gone live with its category management tool to help with analysis and strategising.

Finally, SAP Ariba has come online in 2023 to elevate our spend management activities ahead of another exciting year in 2024.

I’m intrigued by how these new tools are decided upon and assessed, and indeed the delegated procurement side of things; but it would also be great to get a bit of perspective on how this transformation has occurred from an internal perspective?

Yes, this is where the journey does go back four years.

It started with heavy due diligence and consulting assessments to see quite how much time and www.BusinessSocial.org

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The project is divided into several workstreams: Business Process Management The team is dedicated to aligning the business processes with the system's capabilities, ensuring that SAP Ariba effectively supports Amer Sports’ operational requirements.

In 2019, Amer Sports initiated the implementation of the SAP Ariba solution, extending its deployment to an additional twenty entities during the subsequent two years. The establishment of the Global Indirect Procurement team towards the end of 2021 marked a strategic move to refine procurement policies and reassess the system's configuration, with a particular emphasis on leveraging the SAP Ariba Guided Buying solution.

In a notable step toward system and process improvement, 2023 marked the beginning of a collaborative optimization project between LeverX and Amer Sports. This initiative aimed to enhance the system's user experience and ensure its alignment with updated procedures and policies. In October 2023, the enhanced solution was successfully launched. Simultaneously, efforts were initiated to expand the tool's utilization to an additional ten entities across Europe and North America.

Technical Implementation This team oversees the SAP Ariba optimization, further rollouts, and migration from CI9 to CIG, and conducts impact analyses during the optimization process.

Content Management and Supplier Enablement Tasked with enabling suppliers into the Business Network and enhancing catalog enablement and user interface visualization.

Change Management The team facilitates effective communication, engagement, and motivation among Amer Sports’ group functions, brands, and entities, ensuring smooth adoption of the changes.

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Change Management stands out as the backbone of Amer Sports project success.

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The real power of Change Management is how it ensures everyone is ready and able to use all the new features of SAP Ariba. It's about making sure the technology change is smooth and everyone can be onboarded easily. This approach helps us make the most of what SAP Ariba offers, making the change as much about the people as it is about the tech.

From a Change Management perspective, the launch of SAP Ariba at Amer Sports was an exercise in precision, focusing on people as much as process. Recognizing that high user acceptance stems from inclusion, we ensured that communication was both targeted and comprehensive, which is vital for maintaining cost and quality within scope.

This was achieved through a strategic communication component, ensuring that each message was crafted with the audience in mind. An internal Change Management liaison became integral, leveraging intimate knowledge of Amer Sports' culture and communication channels to effectively disseminate information.

We committed early to audience-specific communication, pinpointing stakeholders through careful analysis. Our plan delivered tailored information packages via the channels most likely to reach and engage each group, a method proven more effective than the standard email barrage.

The project team went beyond emails, using the Intranet for active project marketing to frame the initiative in a fresh, positive light. Amer Sports' openness to innovation led to a series of interviews featuring a diverse group of stakeholders, from the project sponsor to key users. This approach not only placed current topics at the

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forefront but also humanized the project, driving its success as a communication channel.

In terms of participation, we designed events allowing comprehensive project understanding and dialogue, preemptively addressing concerns. Motivation, often overlooked, was also a cornerstone of our strategy.

Recognizing its importance, we took advantage of the holiday season to spread cheer—and information— globally, with treats and personalized sponsor letters acknowledging exceptional contributions.

Change Management, while sometimes operating silently, is never to be taken for granted. It’s a deliberate investment in the project's social fabric. Our weekly Change Management meetings allowed for a dedicated space to craft, debate, and refine our strategies, setting a standard for project collaboration that ensured efficiency and success.

In summary, Change Management at Amer Sports was a testament to the value of thoughtful, well-executed strategy and its ability to shape the course of a project positively.

As we move forward with the rollout of SAP Ariba Guided Buying in APAC and Canada, we remain mindful of the challenges encountered in past implementations, leveraging our experiences to navigate future initiatives with greater insight and efficiency.

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Besides the technical complexities, we faced some challenges and worked on their mitigation strategies Resistance from the brands and entities

Challenges in automated invoice processing

Addressed through comprehensive change management initiatives, including clear communication about SAP Ariba's benefits, stakeholder training, and involvement of key influencers in decision-making.

Mitigation involved robust testing and pilot phases, close collaboration with stakeholders for customization, and ensuring compliance with regulations and internal policies.

Competing priorities on the project's engagement from the Customer project team

Lack of understanding of the processes in other group departments, brands, and entities

Mitigated with a project governance structure, regular communication to ensure alignment and resolve conflicts, and dedicated project management resources for coordination.

Addressed with a comprehensive communication plan, sharing best practices, cross-functional workshops, appointing process champions, and establishing support and feedback mechanisms for continuous improvement.

The implementation of SAP Ariba at Amer Sports brought significant benefits, enhancing their procurement processes and driving tangible value across the organization: Mitigated procurement risks SAP Ariba helped mitigate procurement risks by providing greater visibility into procurement processes, ensuring compliance with regulations and policies, and facilitating better decision-making through data-driven insights.

Improved approval flows, transparency, and governance SAP Ariba enhanced approval workflows by automating approval processes, increasing transparency into procurement activities, and strengthening governance mechanisms to ensure adherence to policies and regulations.

Avoided payment delays By automating and streamlining invoicing and payment processes, SAP Ariba helps Amer Sports avoid payment delays, ensuring timely payments to suppliers and fostering positive relationships with them.

Created efficiency and savings SAP Ariba helped Amer Sports achieve greater operational efficiency and realized cost savings by streamlining procurement processes, reducing manual tasks, and optimizing supplier relationships.

Increased compliance with procurement policies SAP Ariba enforced procurement policies and procedures, ensuring that purchasing activities aligned with organizational objectives, regulatory requirements, and industry standards, thereby reducing the risk of non-compliance and associated penalties.

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We have extensive knowledge and expertise in business solutions and technologies as well as comprehensive understanding of industryspecific requirements.

Unlike most companies, we distinguish ourselves by introducing and maintaining a team of LeverX employees rather than hiring independent consultants. This approach ensures alignment with our methodologies and values, providing you with a cohesive and dedicated team throughout the implementation process.

The relationship with SAP is crucial during SAP Ariba implementations, and our deep connection with SAP was solidified when LeverX became an SAP Global Strategic Supplier for Technical Services in 2020. Our multiple projects worldwide, including developing SAP Ariba standard functionalities and integrations, showcase our capabilities. Our Architecture Community can provide support and advice in case of any questions regarding standard solutions and customizations that are available.

We possess a comprehensive understanding of business processes and industry-specific requirements.

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Service Industries:

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Banking, Insurance.

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AMER SPORTS

The Business Profile

money would be saved by professionalising indirect procurement.

Little more than a year later, the decision to create an internal indirect procurement department was confirmed after realising through our due diligence that substantial savings would be possible.

It was then important to decide on the operating model between brands and group as discussed earlier, so everyone was reading from the same page; and then to discuss how the department should be set up as a result Once this was decided, the new team started in 2022 as mentioned, the consultancy support we had been receiving stepped aside, and the new way of working began.

And I understand you’ve altered the way procurement tools are assessed in keeping with this new way of working and new model?

Yes, a formal assessment on procurement tools has been launched to help identify major issues and to work on potential solutions accordingly.

To explain, it begins with identifying a problem, pinpointing possible solutions and evaluating the pros and cons of each, analysing each’s impact on current processes, estimating the level of effort and cost required for integration against the time and money that would be saved on the other side of its implementation, before validating and including as part of our optimised ‘ToBe’

framework. Within this framework we can analyse each solution with external partners, and also weigh up how it fits in the overall procurement landscape – a landscape that must always remain coherent within procurement strategy and the new look policy.

Ultimately, the assessment seeks to prove which issues need addressing, where improvement can be achieved, and how each proposed solution would integrate alongside our other new functionalities.

The final solution you mentioned earlier but haven’t touched upon yet is Mercanis’ delegated procurement proposition?

What have been the benefits of this particular step change?

AMER SPORTS I think you can pinpoint the benefits in five different areas. First it has helped us to focus more on strategic procurement, which has inevitably been crucial given the wider transformation journey we’ve been on. It has also helped us to improve productivity, which again aligns with the broader aims of the group and all of our brands of course.

However, beyond that, it has been a huge benefit to our sustainability missions.

– The three benefits here being to reduce resource usage, to implement more of a greenfield model, and to – ultimately – make our organisation more efficient.

Delegated procurement thanks to the solution provided by Mercanis is pivotal to our indirect procurement journey and

the evolution of Amer Sports as a forward-thinking organisation committed to sustainability.

Critical to your recent success and transformation has been the renewed group structure as well as the introduction of LeverX? Absolutely. Their flexibility and technical background have been instrumental to our recent successes. Of course, they are also a key partner of SAP Ariba, which allows us to optimise our use of this solution.

From a structure perspective, our steering committee and core team now have a strong balance of Amer Sports and LeverX personnel representing at each rung of the ladder. This includes collaborative representation

in areas of the steering committee itself, project lead positions, process and transformation strategising, technical and IT divisions, content management and – vitally, given the past few years – change management.

LeverX’s role in our ongoing development can’t be overstated. And as far as that latter change management aspect goes, they are aligned with our key focus on sustainability.

Again, it is this reliance on strong partnerships, while remaining to our values and purpose that have helped drive our Global Indirect Procurement transformation, and that will continue to do so over the course of a successful 2024, and beyond.

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