Ardent Partners analysts have written extensively on the value of supply management solutions to the enterprise at large, including the cost savings the organization can accrue from procurement having better insight into and control over enterprise spend. While Ardent’s research has shown that the benefits of a successful deployment can be very compelling, a strong plan and focused efforts are needed to make it a success, especially in a global enterprise. This was the topic of the “Best Practices for Deploying a Global Spend Management Solution” roundtable at the Ivalua on Air – Episode III conference in Paris in happier days just last month, where Ivalua brought to the stage representatives from Whirlpool and Generali to discuss their experiences in deploying a global spend management solution (Please note a second article discussing many of the announcements made by Ivalua at their conference will be following soon).
The roundtable, moderated by Ivalua General Manager EMEA (and an all-around spend management star) Gérard Dahan, featured insights from Blaine Hurley, senior director for the Sourcing Excellence Group at Whirlpool; Matteo Perondi, procurement excellence head at Generali; and Paul Noel, senior vice president of procurement solutions at Ivalua, and a star in his own right. The half-hour roundtable touched on several best practices involved in successfully implementing a spend management solution in a global enterprise, including balancing global mandates and local perspectives, performing due diligence ahead of beginning any implementation, and which internal departments should be involved in the project.
Think Globally, Act Locally
One of the main issues with any new technology implementation is accounting for the concerns of all the stakeholders that the change will impact. In global organizations like Whirlpool and Generali, however, this issue is magnified because regional offices are frequently different from a reporting, operations, and cultural standpoint. Even if the differences are slim, they can often appear dramatic in the context of a technology deployment. These regional offices, which in Whirlpool’s case include locations in Europe, North America, Latin America, and Asia, must also contend with distinct regulatory environments as well as unique workflow and approval processes.
As a result of this, Hurley said, Whirlpool took a blended approach to deploying its Ivalua suite. Hurley and the central team defined basic functionality and output in order to drive global standardization, but sat down with the regional teams to understand what their unique needs were so that the final project plan could incorporate those requirements. Whirlpool also allowed each regional office to pick which spend management module they deployed first, which gave the local offices ownership in the program’s success and showed that the central procurement team was interested in their concerns.
Noel said that this “think globally, act locally” mentality is critical to deploying a global solution, likening the process Whirlpool went through with what he called “California cuisine,” a type of fusion cuisine that combines various foods into unique dishes. According to Noel, this means that enterprises should have a global vision and a global idea, but it is also critical to listen to local folks and what they need in order to ensure that everyone succeeds.
Perondi, on the other hand, said that because of time constraints, they centralized everything at Generali. They managed this transition, however, on a step-by-step basis. At Generali, according to Perondi, they split things up based on module or country and started with the most difficult modules or countries first so they could run into every possible issue ahead of time. For spend management in particular, Perondi said they decided to start with a small amount of data and then add to it as time went on.
Consider and Involve All Stakeholders
Ardent Partners research has, for many years, shown that improving procurement performance can have an extensive impact on the enterprise. In deploying Ivalua’s spend management suite at Generali, Perondi made sure to involve other departments and constituents — in particular the CFO — because they believed that one of the most crucial points in a spend management implementation is data management. Involving the CFO meant that Perondi could have access to financial data and ensure that financial and procurement systems could “talk” to each other. Moreover, Perondi said he engaged employees at large by convincing them of the benefits of the Ivalua solution from both an operational and cost-savings perspective.
In Hurley’s experience at Whirlpool, Blaine said that the process partners involved can change based on which modules are included in the launch. As a result, he said, finance may be a key partner in one instance, while IT is another, and even legal can get involved in the case of contract management. Hurley also noted that, as part of involving non-procurement stakeholders, he believes that the procurement team needs to account for employee churn. When talking about a global long-term project, Hurley said, it is not unusual for entire departments to change practically overnight. As a result, managing through organizational change is something that must be considered as part of a supply management technology project.
Time Can’t Change You, But Good Management Can
Keeping a global tech deployment in line can be challenging, not least of which because of the fact that employee churn happens constantly. Part of ensuring the project goes off without a hitch, according to Hurley, is doing due diligence upfront before the project even begins. This includes getting the right groups involved in the process, as well as getting the right people on those teams, and making sure that the organization understands what the desired outputs are.
This is also key to keeping the project on schedule, Hurley said, especially when it comes to keeping the number of change orders and revisions to a minimum, as well as keeping everyone on task. Hurley said that this means having the right people on your team to drive the project is a fundamental necessity. This includes staff that really understand the business process and the technology solution—it is only with both sets of skills, Hurley said, that a project can truly succeed.
Deploying a global supply management solution suite takes effort, skill, and focus; from engaging employees spread throughout different time zones and local regulatory environments, to convincing other departments that change is to their benefit. While the process can be challenging, it is not without reward. The Best-in-Class procurement organizations that succeed by managing more spend and driving more savings bear out the importance of supply management technology to their success. Whirlpool and Generali are two more examples, in a long line, of global procurement organizations that have driven great value because they successfully launched a supply management suite that met their requirements.
And, speaking of industry events, CPO Rising 2016 is right around the corner. Have you booked your ticket?