The Merger – a Procurement Short Story (part 4)

(In part 1 of this short story, written by Peter Smith and  Steve Cobley of Ivalua, the procurement software provider, CPOs Jim and Gabrielle agree to share spend and procurement information as their two firms prepare to merge. In part 2, Jim discovers that his data is not quite as good as he thought it was, and in part 3 he confesses to Gabrielle ... and fears for his job.  Now read on!)

The Future

“It’s very good to meet you in person.” Jim raised his cup of coffee. “Cheers”!

“Cheers! Maybe next time it will be a nice glass of wine,” Gabrielle replied. “But it’s no problem to come over to London, you know. Anyway, that’s where the bosses are meeting, so we need to be here – I think it is better we talk to Raj and David in person.”

Jim stirred his coffee.

“Look Gabrielle, I’ve been thinking, I’m quite happy to go, leave you as the CPO for the organisation. You are more than capable of running procurement for the new business, I’ve been here a while, maybe I need a change. They’ll give me a reasonable cheque if I disappear, I’m sure.”

Gabrielle looked at him.

“That would be a shame, I think. We have a big opportunity here. I believe we can make this the best procurement function in the world – not just in our industry, but in any sector. Why not? If we hit all the synergy targets, and do the things we want to do with supplier development, innovation, people, then – we can be famous! In the procurement world at least. But I think that needs both of us.”

“I’m not sure I bring much to the table.”

“Jim, you have done some great things here. You have strong internal stakeholder relationships, I can see that already, your team respects you, I can see that too, and remember what I said when we first spoke – your SRM programme inspired me years ago!”

Gabrielle was back in her animated mode now.

“I have an idea. Why don’t we suggest a two-year programme to bring the organisations together, with a big focus to sort out our systems, data and so on. A common procurement platform across the business, a single new operating model, taking the best ideas from both firms.”

“A new people strategy – an incredible development programme, a global graduate trainee scheme maybe. The best supplier innovation anyone has even seen, a corporate social responsibility programme that the shareholder and customers will love! And big savings as well of course.”

“And there is work for both of us! We are equals, we both have the job title ‘co-CPO.’ I know, it is unusual, but I think we can make it work if we stand together. You manage the delivery of procurement, all the sourcing and category teams, including the SRM and innovation programme. I will lead on what I call the operating model - the systems approach, planning, data, reporting ... I have some big ideas already. We have our own responsibilities, but we are both accountable for the whole performance. What do you think – I know it will only work if we both want it to, we cannot have politics between us all the time. So you must be positive.”

Jim hesitated. “I don’t know. And I’m not sure Raj will go for it.”

“I mentioned it to my boss, just as an idea – he thinks it is a good one. I’m sure he can persuade Raj. Look, they don’t want to lose either of us, we are on the hook for $250 million – and so are they!”

“And after two years? What happens then?”

“Jim, two years is forever! I don’t want to stay in procurement for my whole career – perhaps I will go and run our business unit in Africa. Or maybe I will become CPO for Nestle! If we are successful, we will both have many options, I think. This is a good solution.”

Jim looked serious.

“OK. You’re almost right. But it’s not a good idea, it’s a great idea! But just one thing. I’m very happy to let you lead on the technology – but I have to be involved too. Properly involved. You’ve made me realise I was not close enough to what we were doing here and as the CPO, I just didn’t understand how critical it was to get our systems approach right. It took someone from outside – well, you – to show us just how far short of best practice we really were. I don’t want to make that same mistake again. And to be honest, I want to learn from you and your experience.”

Gabrielle smiled. “That’s great. And I know we can learn from what you’ve been doing in lots of areas too. OK, we’re agreed. Let’s go and see these finance guys and tell them what we’re doing. Remember - the best in the world by 2018 - and the wine when we toast will be French, of course!”


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