Luca Guzzabocca, the Director of Procurement, Logistics, HSE and Security Management at Banca Monte dei Paschi di Siena S.p.A. (of the Montepaschi Group) has returned with us today to join the CPOs on the Rise series for a quick Q&A posed a short time ago. Luca is a leading Italian Chief Procurement Officer and the co-founder the non-profit organization, Acquisti & Sostenibilità which focuses on sustainability and corporate responsibility.
Luca was profiled in a 2010 series found here, here, and here. We welcome this “friend of the site” back today.
1. Tell us how the role of procurement has changed over the last few years in your company and since you have become the CPO or a leader in the department.
(Luca Guzzaboca): The procurement function has extended its traditional role of negotiator to a wider role in having governance over demand and consumption. Since the competition across the supply base, adoption of technologies (like reverse auctions tool), and economies of scale (or leverage) approaches have been completely explored, we have initiated constructive dialogue with internal customers and technical functions (for instance IT and Real Estate departments) to review the current demand of products and services (volume) purchased and rationalize their specifications to see if we can modify them to actual requirements and help support our aggressive expense reduction programme.
2. What are your department’s top priorities and objectives for this year and what are the biggest risks in achieving them?
(LG): Our expenses reduction programme is still at the top of the agenda. With so much emphasis on this area in our engagement with internal customers and suppliers, our major risk is to hit the “point of no return” with a partner, where we could jeopardize what we have built in the previous years in terms of the relationship building we have invested in and our holistic approach to category management
3. What will be key to your success this year?
(LG): Aligning the goals of the procurement department with those of the business and those of the larger enterprise are our keys to success.
4. Who do you as the Chief Procurement Officer report to in the organization? How is your performance and that of the procurement department measured (i.e. what are the metrics, how are they measured, and by whom?)
(LG): I report to the Deputy General Manager. Some of our key performance indicators are: savings (which is measured by finance department); service levels – (which we measure internally), and environmental, social and economic sustainability (which is tracked by the sustainability department).
In 2011 we will introduce a full brand new Vendor Rating System which becomes an additional KPI for my department.
5. Innovation will be one of the big themes in our research in 2011 — What are your thoughts on procurement-led innovation within the enterprise and beyond it?
(LG): Actually, innovation is already on the list of our procurement organisation! We believe that we can boost innovation through true supplier engagement and involvement. One key trick is to become a facilitator among internal customers to help identify opportunities and bring the best ideas to life. In our opinion, the work we are doing on sustainability issues provides a great opportunity to enhance collaboration and drive innovation projects with suppliers.
