Ardent Partners is pleased to welcome John Zagata, Director of Indirect Goods and Services for Enbridge, back to Boston in a week for The CPO Rising 2017 Summit. John will deliver a presentation entitled, “From Inception to Success: A Three-Year Contingent Workforce Journey,” in which he will share how he and his team developed, implemented, and enhanced a global contingent workforce management (CWM) program for one of the world’s largest energy delivery enterprises.
How a Juris Doctor Got into Procurement
John is a seasoned professional with over 20 years’ experience in procurement. His legal background has served him well, having worked in government, business consulting, government contracting, and now the oil and gas industry. John received a Bachelor of Arts in Public Affairs from the State University of New York at Albany, then went on to earn a Juris Doctorate from Temple University. While in law school, he began working for the Philadelphia Parking Authority as Assistant General Counsel. But pretty soon, he realized that he did not want to pursue a career as a corporate attorney and began to investigate other careers that would allow him to leverage his law degree and business expertise.
John graduated law school and moved into consulting, first with Ernst & Young where he worked for the company’s internal procurement contract team, and was eventually persuaded to move into the consulting side of the house. One of his first project was consolidating contingent labor and IT contracts from 30 down to five and saving the company a lot of money. After some time, John moved over to Accenture, which is where his procurement career blossomed. He became engaged in managing procurement projects and became an expert in procurement technology, as well as strategic sourcing. He developed a broad perspective on how eSourcing, supplier contracts, supplier management, and procure-to-pay (P2P) all work together within the procurement value chain. Pretty soon, he was developing procurement organizations, to include indirect category management like contingent labor.
Eventually, John’s track at Accenture took on a broader role of managing business process outsourcing (BPO) projects for accounts payable and P2P, as well as larger procurement outsourcing projects. But after a four years at Accenture, John decided he wanted to get off the road and he moved onto Cendant where he oversaw the implementation of a new set of procurement solutions. After a few years, John started and ran his own consulting practice for eight years while building his sourcing and procurement skillsets, like his familiarity with p-cards, as well as a strong network to support his business.
In 2014, John made a personal decision to leave the consulting world when he joined Spectra Energy, a Fortune 500 oil and gas company based in Houston, Texas, as the Director of Indirect Goods and Services. In February 2017, Spectra was acquired by Enbridge, a Calgary-based energy distribution company (NYSE: ENB). Since assuming the role three years ago at Spectra and continuing with Enbridge, John has aggressively branded and marketed his group to get company stakeholders to notice and leverage them. Perhaps most significantly, he was halfway through developing a procurement policy when a change mandated a new purchase order policy – a big change since it compelled people to leverage his group rather than independently purchase. John is also focused on effectively managing complex spend, like contingent labor, by rolling out a MSP solution.
For the Oil and Gas Industry, the Future of Procurement Means Being Strategic
As someone who has worked in the energy industry for a few years now, John has seen the rise and fall of oil and gas prices and the effect that this has had on business operations. He has also seen how it has changed the way that the business views procurement within the organization. Before John joined Enbridge in September 2014, oil was trading around $100 a barrel; cutting costs and realizing savings were not priorities for the organization. Procurement was viewed as being very good at negotiating but still very transactional with suppliers. Their true strategic value was lost in their tactical utility.
As oil prices continued to fall (eventually bottoming out at less than $30 a barrel in January 2016), Enbridge executives looked to procurement to find cost savings across the organization. Procurement was compelled to become more strategic. This meant extending their value beyond negotiation and process execution to more strategic matters. It meant taking a look at everything – like tighter contingent labor management, and partnering with enterprise stakeholders to select the best-fitting IT solutions that would generate the highest return on investment.
Being strategic for the oil and gas industry also means strategic acquisition. As John said, “Developing infrastructure is challenging no matter the president,” and he gave the example of how difficult it has been to build gas pipelines and compression stations here in the Northeast. As a result, energy companies are more likely to acquire infrastructure (when it’s available) than build or develop it because buying is easier than building.
A Sneak Peak at John’s Session: A Three-Year Contingent Workforce Journey
John will give a very interesting talk on Enbridge’s three-year journey towards revamping its contingent workforce management program. When he joined Spectra Energy (now Enbridge) three years ago, the company was among its peers in the oil and gas industry in handling change poorly, and being late to adopt new processes and technologies. As a result, John’s team had been managing their supplier base one supplier at a time. The team lacked quality data on their contingent labor programs and providers. The demand for data, to better understand (and manage) their supplier base, and to manage the spend better drove his and his team’s quest to manage contingent labor as a whole.
“It’s a significant part of our workforce and it had gone unmanaged for years,” said John. Meanwhile, “costs had gotten higher and higher, and our suppliers were managing us, more than we were managing them.” John will take the audience from the beginning of his team’s transformation journey through the evolution of how they got their arms around the data, and how they implemented processes and technologies, like managed service providers and vendor management systems. He will also describe what it was like for his organization to get halfway through its transformation project and then be acquired by Enbridge; what change management looked like from within the organization as it became part of another company.
Final Thoughts
It’s always great to talk with John Zagata and we’re excited to have him back for CPO Rising 2017 in just one week. In the meantime, you can learn more about him and his presentation by clicking here. And if you haven’t registered yet, now is definitely the time to do it. Tickets are still available, but don’t delay, they won’t be available for much longer!
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