Galp Energia and WPP Explain their Procurement Journeys at BravoConnect

Today, we’ve got a couple of customer stories from the recent BravoConnect event in Madrid (BravoSolution's main customer event).  Those sessions are often a highlight at conferences; there’s nothing like hearing from someone who has actually implemented software and is doing something valuable and practical with it.

Alfredo Figueira from Portuguese oil and gas firm Galp Energia took us on their procurement maturity journey. That started from a largely paper-based procurement process in 2008 through the introduction of BravoSolution for eSourcing, the launch of other capabilities and now the full end-to-end platform and process, incorporating analytics, contract management, vendor management and performance; that also includes using e-Program Management within procurement.

Business intelligence is a priority – analytics focused on procurement alignment with the business, providing the information that supported their activities. But while the journey in terms of process and technology was interesting, Figueira was probably most thought-provoking when he spoke about people issues and the future.

“As technology keeps evolving, finding the right people to work with it will be increasingly difficult”, he claimed. The number of procurement staff has grown with greater spend coverage but will now start to decrease with automation. “We need people who are more strategic, who can adapt to the new role and new environment. And procurement can be seen as a good area for training people for other roles in the organisation”.

He also believes that “one to one price negotiation will decrease because price detail will be more visible”. Procurement experts will look at global supply chains to identify threats and opportunities to create value. They must be capable of working with suppliers positively, abut also able to handle large amounts of information.

And finally, “digital is here to stay, but transformation needs strong commitment from organisation, and effective change management is critical” We should prepare for process automation now, and “find the right people to take advantage of it”.

Then we had the excellent Louise Tyldesley from media giant WPP. She leads on procurement technology at the firm, and talked about moving from “spend visibility to delivering actionable insights”. That is a challenge at WPP, a huge firm with billions of third-party spend, much of it in tricky “people-related” categories such as professional services, contingent labour and travel. There are multiple businesses within the group, who sometimes even compete with each other, so getting the holistic view of spend that procurement seeks is not easy.

In the past, she said that spend analysis has been 80% about visibility, and 20% true analytics. The programme has involved 17 implementations, 100+ extract sources, and has achieved 80% coverage. The basics are now in place – procurement can “answer spend questions, record savings, track compliance, and use the data to inform decisions about procurement priorities”. So for instance, in one division, recruitment of their first CPO was justified through analysis of the spend data.

“We should be the people looking at the data and coming up with ideas and activities”, said Tyldesley, who is now focusing on visualisation and insights. Visualising data helps to make it actionable and engages the audience, and the aim is to broaden procurement scope and support demand management in strategic categories. But, she said, the decisions reside in the operating companies and units, not in procurement.

Categories where visualisation and use of spend dashboards have worked well include travel, where users can look at details of spend, benchmark data across WPP companies, examine missed opportunities, and dig down into further detail.  That can get as far as the “top travellers by missed savings” analysis, which must be interesting! Similar work is going on in the contingent labour / freelance management area to look at both costs and analyse risks.

So finally, some key recommendations from Tyldesley in terms of developing an analytics programme.   “Set clear objectives, consider design with interactivity, hire the right people, don’t be afraid to get it wrong but be agile. And make it count”!

While it is clear that the journey towards procurement success at both Galp and WPP has taken time – years not months – these were two pretty inspiring stories for the audience in Madrid, from two impressive practitioners. Critically, both understand that getting the most from procurement technology means focusing on how it can support the business – this is not just about clever systems that operate in a vacuum.

(You can see me doing some interviews with speakers and giving summaries of the event on the BravoSolution Facebook page here by the way).

 

 

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