20120329 EGP General Presentation
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Transcript of 20120329 EGP General Presentation
Erste Group Procurement (EGP)
The Procurement Company of Erste Group (EG)
Page 2EGP – Member of EG © 2012All rights reserved
� Erste Group went public in 1997
with a strategy to expand its retail
business model into CEE
� Acquisition of more than 10
banks between 1997 and 2008
� Erste Group now runs market
leading retail banking operations
in the new EU member states,
which remain underpenetrated
compared to their Western
European markets
2000
2001
2005
2006
2007
1997
2004
2003
New holding structure improving
Group Governance
2008
History: Austria’s first savings bank: Founded in 1819
� Erste Group’s customer base
grew from 600 000 in 1997 to
17,3 million in 2011
Page 3EGP – Member of EG © 2012All rights reserved
Erste Group in Central and Eastern Europe
Page 4EGP – Member of EG © 2012All rights reserved
Czech Rep
Procurement
Dept. Serbia
Procurement
Dept. Montenegro
Int. & Austria
Slovakia
Hungary
Croatia
Romania
Procurement Dept.
Ukraine
Erste Group Procurement: Procurement of the Erste Group
Functio
nal
Leade
rship
by E
GP
Erste Group Bank AG - Holding Board
CEO CFO COO CRO Group Markets Group Retail
Group Property
Group Org/IT
Erste Group Procurement(Procurement Services GmbH)
Operations/Processing
EGP AT(incl. Centre Functions, as Finance,
HRM, Org/IT)
EGP RO
EGP CZ
EGP SK
EGP HU
EGP HR
Procurement RS
Procurement ME
Procurement UA
SPV DRUCK
Finance
Sourcing AT
Sourcing CZ
Sourcing SK
Sourcing HU
Sourcing HR
Sourcing RO Erste Group Procurement RO
Erste Group Procurement SK
Erste Group Procurement HU
Erste Group Procurement AT
Erste Group Procurement CZ
Erste Group Procurement HR
RS2)
1) Department of Erste Bank AD Podgorica - Montenegro
2) Department of Erste Bank Novi Sad3) Department of Erste Bank Ukraine
SPV – DRUCK
EBSPK
Sourcing RS
Sourcing
Sourcing UA
Board Division Team in Matrix
UA3)
Org/ITHRM
ME1)
Management Board
Erste Group Procurement – (Procurement Services GmbH)
Established 2006
Erste Group Procurement Facts & Figures:
� Central procurement function within Erste Group
� Headcount approximately 180 employees
� Process owner for group-wide S2P process
� AT: Warehouse with more than 3 000 sqm
GCIB
Page 5EGP – Member of EG © 2012All rights reserved
EGP in Erste Group
EGP Cooperation with clients based on:
� Contract (SLAs)
� Responsibility (NDAs)
� Code of conduct
� Purchasing Policy & Handbook
Aligned priniciples within Erste Group:
…The central and single competence for procurement activities within Erste Group lies in Erste Group Procurement (EGP)…
…EGP has to be involved in any external spend of any Erste Group majority owned entity. Any exception has to be agreed between EGP and the respective Erste Group entity…
…All external spend should follow the principle of Total Cost of Ownership (TCO) and Quality, Cost and Delivery. In balance with socio-economic, ecological and customer relationship factors the assignment of a contract has to follow the highest added value for Erste Group principle…
…EGP owns, defines and aligns with the local entities the purchasing processes within Erste Group...
Page 6EGP – Member of EG © 2012All rights reserved
EGP Focus
Before
RFxP/RFQ
RFx
Supplier Relation Management
Contract Management
Category Management
After
Foundation andCore
Supplier Relation Management
Contract Management
Category Management
Implemen-tation
Page 7EGP – Member of EG © 2012All rights reserved
Our Way to World Class Procurement
Financial Perspective:
- COA < 1%
- CR/CA > 4,4%
- 20 mio av. spend by buyers
Financial Perspective:
- COA < 1%
- CR/CA > 4,4%
- 20 mio av. spend by buyers
Learning Perspective:
- A team of good purchasers
- Pro-active working
- Willingness of responsibility
- Good working atmosphere
Learning Perspective:
- A team of good purchasers
- Pro-active working
- Willingness of responsibility
- Good working atmosphere
Vision: World Class Procurement
organisation in the financial area
Vision: World Class Procurement
organisation in the financial area
Customer Perspective:
- Our customers adhere to our vision and support it
- Our customers see high value added
in EGP services and are ready to pay for this
- Our strategy supports customers targets
Customer Perspective:
- Our customers adhere to our vision and support it
- Our customers see high value added
in EGP services and are ready to pay for this
- Our strategy supports customers targets
Processes Perspective:
- Paying PO’s only
- Maverick spend < 10%
- Spend coverage > 90%
- Delivering core processes
- Fully integrated AR/CM/CR-CA/PM/eSourcing
- Mature Category Mgmt and SRM
Processes Perspective:
- Paying PO’s only
- Maverick spend < 10%
- Spend coverage > 90%
- Delivering core processes
- Fully integrated AR/CM/CR-CA/PM/eSourcing
- Mature Category Mgmt and SRM
Move away from
`Tender Factory´
Page 8EGP – Member of EG © 2012All rights reserved
EGP Services in Scope
Sourcing
International/Local
Tactical
PurchasingOrder
Management
Business
ProcessOutsourcing
Operations of support
processes for the local entities, i.e.
• Travel Depart.• Print Shop• Warehouse
Provide cost-efficient
services
Purchasing Project
Contract Creation
Category MgmtVendor MgmtContract Mgmt
Requisition
&Ordering
Documentation
&CR/CA Calculation
Receipting&
Evaluating
InvoiceProcessing
Erste Group Procurement
Purchasing Project
Contract Creation
Category MgmtVendor Mgmt
Contract Mgmt
Requisition
&Ordering
Documentation
&CR/CA Calculation
Receipting
&Evaluating
InvoiceProcessing
Purchasing Project
Contract Creation
Category MgmtVendor Mgmt
Contract Mgmt
Requisition
&Ordering
Documentation&
CR/CA Calculation
Receipting&
Evaluating
InvoiceProcessing
CustomisedProcurement
Services
Additional requirements
requested by customer
and are not in the scope ofpurchasing
Customer Satisfaction
Compliance with Outsourcing
Policy Provisionof Outsourcing
Project Documentation
Compliance to regulatory
and internal
requirements
OutsourcingCompetence
Center
Strategic, monitored purchasing in a team
approach
Ensure fast, easy and efficient execution
By EGP By EGP or Customer
On Customer’sDemand
Additional Servicesfor the customer’s benefit
Invoicing as a % of 3rd party spend Invoicing in a separate fee (SLA)
Page 9EGP – Member of EG © 2012All rights reserved
Sourcing
• Analysing the spend of
entity/supplier/category
• Strategic basis for the
purchasing project
Reporting Package(SAP FI / QLIKVIEW)
• Allows the linking of information
to a 360°view of projects,
contracts, product categories
and suppliers.
• “In-house” development
Vendor / Country / Project Management tool (“CAP”)
• Live eAuctions
• Collecting of informationen (RfI*)
and offers (RfQ*) in a defined
specification form
eAuction, RFx(Electool)
Sourcing is the strategic process of identifying potential suppliers, conducting
negotiations, and agreeing on supply contracts in order to achieve a sustainable cost
reduction and meet the customer’s expectations.
Supporting tools
*RfI = Request for Information*RfQ = Request for Quotation
Demand analysis
based on
Category ManagementVendor Management
Contract Management
Identificaton of potential suppliersto conclude a GMA
support through
eAuction / RFx / negotiation
GMA
Page 10EGP – Member of EG © 2012All rights reserved
Sourcing International/Local
Category Management/Matrixorganisation
Sourcing Specialist, the first contact for the customer and groupwide Category Manager and Supplier Relationship
Manager.
145 categories divided according to local and international opportunities.
Find opportunities, create & implement a strategy in a team approach with the Business Line.
Matrixorganisation Category Classification
Category Management
FM Facility Management (FM) IT Informationstechnology (IT) S&O&M Service & Operations & Marketing (S&O&M)
FM FM Maintenancerelated Services/Work IT Personal and Office Computing S&O&M Car Fleet
FM FM Investmentrelated Services/Work IT Telephony and Communication S&O&M Cards
FM Goods IT Networks S&O&M Consulting
FM Energy IT Branch Equipment S&O&M Logistic
FM Security Equipment IT Servers/Storage/Host Components S&O&M Marketing
FM Property Management IT Infrastructure Software S&O&M Office Equipment & Office Operation
IT Direct Application Software S&O&M Personnel Management
IT IT Services S&O&M Travel
IT Indirect Application Software S&O&M Security Service
Sourcing Categories
Page 11EGP – Member of EG © 2012All rights reserved Page 11
Sourcing International/Local
Contract Management/Spend Data Analysis/Data Reporting
Structure spend by vendors, categories, countries and entities
Real-time Business Intelligence Tool for management
Define Spend categories, analyse it (spend & vendors)
In a team approach with the Business Line.
Budget and Category Analysis Tool Data Reporting
Integrate all vendor contracts in Contract management solution and establish proactive & timely contract activity plan
Contract Management
Page 12EGP – Member of EG © 2012All rights reserved
Sourcing International/Local
Supplier Relationship Management Tools
• Standardised Questionnaire for Assessment and Self Assessment
• Document Management System, Reminders periodically and automatically
• Scoring through Business Line
• Risk Management
• Ethics
Supplier
Audits
• Similar to Category Management
• Long Lists and Short Lists
Supplier
Strategies
• Escalation management
• Single Point of Contact and coordination of all participants (Business Line, Legal, Countries, Suppliers)
• Identification of disqualified suppliers
Escalation
Identify and focus on key suppliers. Implement supplier relationship model in cooperation with Business Line.
• HYR/QBR
• Standardised presentations
• Participants: Business Line, Supplier and EGP
• Measuring the cooperation
• Search out further cooperation/collaboration
Business Reviews
Page 13EGP – Member of EG © 2012All rights reserved
Tactical Purchasing (TP) and Order Management (OM)
Purchasing Project
• In 3 countries available
• Integration with MM / Accounting
• Covering about 55% of the spend
SAP SRM
The fast, easy and efficient execution of routine administrative tasks. These are day-to-day buying activities, which are low volume with no strategic importance or based
on agreements that have been set in place.
Supporting tools
Demand(online or catalogue) Offer
Purchase requisitionthrough GMA or catalogue(OM)
Tender Project (TP)
Agreement or
• In all EGP countries available
• Efficient eAuction through webbased
forms
• Supplier’s self registration for saving
resources
eAuction(Electool)
• Standardised articles
• Order Processing for low purchases
• Integration in Warehouse Management System
Catalogue / OM Software(ITAM – Office Asset)
Page 14EGP – Member of EG © 2012All rights reserved
KPIs
Page 15EGP – Member of EG © 2012All rights reserved
The Measures of Success
Key Achievements Q3 Missed Achievements Q3
• XXX% of contracts in the system for
the Top 50 vendors (achieved: XX%)
• On time delivery of projects: XX%
(achieved XX%)
� Lean Management workshop for all 2nd liners
� Business reviews with XX major vendors
� Purchasing policy approved by X local boards
Status: XXX out of XXXX weight points were to be achieved (due) by end of October
Overall achievement� XX% fully achieved� XX% closed late� XX% open and late� XX% missed
Not achieved
Open and lat e
Achieved lat e
Not yet approved
Achieved
Objectives/Strategies/Tactics (OST)
Page 16EGP – Member of EG © 2012All rights reserved
The Key Messages for a successful Procurement Organisation
Organisation & Structure
� Centralized procurement in one seperate company with clear groupwide organisation structure and an agreed and
approved Power of Attorney (PoA)
� Unique systems and tools applied in all subsidiaries in all countries
� Unified processes with locally optimised deployment
� Service Agreement structure and hierarchy applied in all countries
Transparency & Communication
� Full costs transparency through analytic tools and reporting
� Quarterly Business Reviews with clients and suppliers
� Defined communication and escalation process
SustainableRelationship
� By using spend analysis tool the bypassing/‘maverick spend‘ procurement activities are identified and tracked
� High compliance through common cooperation with budget owners on the product groups strategies and/or
supplier strategies
Procurement Process
� Through active management of product groups and suppliers EGP creates a bond between suppliers and budget
owners
� EGP is involved in the whole procurement process with clear tasks and responsibilities
� Educated procurement specialists (Sourcing Matrix)
Goals & Incentives
� Transparency in the level of achieved goals of the cost reduction through one clear methodology and tool-based
measurement
Page 17EGP – Member of EG © 2012All rights reserved
Thank you!
Erste Group Procurement(Procurement Services GmbH)
Email: [email protected]