Future Proofing the organisation through World Class Procurement Practices

Smart Procurement World

Speaker details:Meshern GovenderChief Procurement OfficerStandard Bank South Africa

Presentation Outline

2

• The Evolution of the SBSA Procurement Purpose• The Capability Landscape

– People– Process– Technology

• The Measures of Success

The Evolution of the SBSA Procurement Purpose

3

RiskMgt

Legislative Compliance

Continuous Improvement(Quality of Service)

Cost Management(Reduction in Total Cost of

Ownership)

Back Office, transactional

focused - buying/ fulfilment function

A quantum leap forward!

Past View

Present State

Elevated status of Procurement – considered a value enabler for Business units across the Organisation

Logistics Management Services

SUPPLIERSBUSINESS PARTNER

Strategic Sourcing

Contract Management

Order Fulfilment – Procure to Pay

Inward Mgt Focus:• Demand mgt• Compliance• Service delivery

Outward Mgt Focus:• Performance reviews• Compliance• Supplier development

The Capability Landscape

People Process Technology

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Analytics/ Business Intelligence

Relationship Management

Delight Index/Feedback

Investment in People (The Prosperity Partnership)

Time

Peop

le D

evel

opm

ent

Conti

nuum

Basics:Get the basics right:• Job descriptions;• Performance

contracts;• Personal

Development• Induction pack

CompetencySet the minimum standards:• Document the

Framework – map the career progression path;

• Define the competency levels – minimum standards;

• People Assessment

Culture of Continuous ImprovementHelp your people get things right:• Competency based

training – CIPS, SLA’s, Essentials of a Contract, Financial Management;

• On the job training – classroom based learning, e – learning, training manuals, proficiency assessments

Career PathingThe path of progression:• Maturity curve per

capability;• Cross-skilling and up–

skilling through job rotation;

• Personal development plans

Alignment Development Progression

Creation of a talent nursery through a defined procurement competency framework. The framework underpins the career progression path of our people.

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Process Framework

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Process Framework

Process Blue Prints•Level 5 - Conceptualisation•Level 6 – Activity/Execution

Process Proficiency•Minimum standards for proficiency – both basic and advanced;•Training – Classroom Based, E – learning;•User Manuals and knowledge repository;•On the job coaching;•Process adherence audits

The Value•Coherency in service delivery – greater advocacy;•Defined metrics – alignment to KRA’s•Risk mitigation and value creation – minimum standards;•Lean principles in operation – removal of wastage/reduction of transaction

costs;•Continuity of operations – documented ways of working;•Supplier segmentation

Business Premise: Scalable and Transportable Blue Print

Information Technology

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Information Technology

Integrated•System Integration•Master Data clean up – get the foundation right•Procure to Pay Hub

Optimised•Contract Life cycle management;•Vendor managed master data•E-sourcing;•Reverse Auctions

The Value•Spend visibility;•Standardised Metrics;•Reduced transaction cost of service;•Improved procurement turnaround times – greater advocacy;•Reduction in wasteful expenses

Measures of Success

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Defined Hard metrics: Legislative Compliance (BBBEE):

All BEE Suppliers

QSE & EME Black Owned

Black Women Owned

0%

10%

20%

30%

40%

50%

60%

70%

SBSA B-BBEE Performance YTD December 2009

SBSADti Target

Purchase Order Spend (PO): Creates spend visibility; Guards against payment hijacking; Promotes good procurement

governance.

Total Cost of Ownership Savings: Aims to unlock sustainable value in the organisation;

2008 2009 2010

35% 40%

63%

Comparative PO Spend

Comparative YTD PO SpendLinear (Comparative YTD PO Spend)

2008 2009 2010 -

5,000

10,000

15,000

20,000

25,000

0%

50%

100%

150%

200%

250%

300%

No. Of Suppliers Savings

The Measures of Success

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Voice of the Customer Voice of the Supplier

Mutually Beneficial

SBSA Service Delight

Supplier

Service Delight

May'09 Nov'09 May'10

71.10%82.98% 87.50%

Supplier Satisfaction Score

Formal measures in place to track Business Partner satisfaction.

2007 2008 2009 2010

57%61%

69% 71%

Business Partner Satisfaction IndexSeries1 Linear (Series1)

The Measures of Success

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Voice of the IndustryIndustry

Recognition

Best Process Improvement Award (CIPS

2010)

Best Green Organisation Award (CIPS

2010)

Logistics Enviro Award (22nd

Logistics Achiever Awards)