The Fujitsu Procurement Transformation Story (Part 1)

I’ve known Clive Rees for many years, going back to his time at Abbey National, working for our friend Guy Allen, but he’s now in the role of European and Americas Chief Procurement Officer for Fujitsu, the giant IT firm. Unusually for such businesses, the US is actually a relatively small market for the firm, so Europe is Rees’ main focus.

We caught up for a chat about the procurement transformation programme he has put in place over the past couple of years. We think It’s particularly interesting for other organisations in terms of the “people” and internal stakeholder engagement aspects of what he has done, which are certainly replicable in other sectors and industries. More on those soon.

What was also interesting in this case is that we spoke to both Rees and (independently) to Nic Walden of The Hackett Group, who supported Rees as advisers to the programme. That gave another perspective on the work that has been undertaken.

But some background first. Rees - or Dr Rees, as we should say, as he holds a Ph.D. which focused on “commercial relationships” - has been at Fujitsu since 2014, became CPO for Europe in late 2015 and took on the US responsibility last April.  He has around 150 people in the team, mainly across Europe, and manages a spend of some $3 billion annually.  The recent work has involved creating a single European team, whereas previously procurement was country-focused.

The objectives for the function are not unusual or surprising, with six key areas of focus – cost, risk management, responsible procurement, professional service, bid support (as many of the firm’s bids include a significant element of cost that comes directly via the supply chain), and increasing value from suppliers.

His work has been helped, he says, by the procurement function in the parent company HQ in Japan becoming more open to global collaboration – “when you are dealing with firms like IBM or Microsoft, being close to the parent company certainly helps the discussions in terms of overall volume and relationships”, he explains. It is important to present a single face to that sort of supplier.

Equally important is procurement presenting their value to stakeholders. Nic Walden of The Hackett Group positions the programme and the message being communicated like this:

“Procurement are achieving a unified culture, and communicating their ‘brand’ to stakeholders. This lays out what they stand for, what their services are, and how they plan to engage and collaborate with stakeholders. It tells them how they can deliver supplier value, cost reductions and the traditional benefits, but also much more. And importantly, it tells them how they will do this and the services they provide to achieve it”.

That’s important – it isn’t enough just to do good things, it is also important to map out exactly how procurement can deliver benefits and communicate that to stakeholders.

But the big push for Rees has been around developing the procurement function through a focus on people, skills and culture. “Our aim is to enhance our people’s worth and value”, Rees says, and that has included the introduction of an internal training programme called “passport to procure”, as well as a major drive on communications.

“We are looking to change the perception of procurement in the business. That means listening and learning, but also having the confidence to work with senior colleagues. We say that the aim of our team members is to be a business person working in procurement – not a procurement person working in the business”.

He sets great store by that issue of confidence. His team members should be comfortable making their voices heard. “I want people who challenge, who are not shrinking violets”. His own confidence has been helped by a supportive boss, the COO.

And perhaps the most interesting initiative for us is the way Rees and the team have engaged with internal clients. We’ll have more on that tomorrow …

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