A Case Study - SIG - Sourcing Industry Group€¦ · A Case Study: JLL Maureen Ehrenberg Executive...

DE

NV

ER FALL

SU MMIT

2014

How Effective Risk Management

Drives Global Supply Chain

Optimization

A Case Study:

JLL

Maureen EhrenbergExecutive Managing Director

Hiperos

Michele FlynnFounder & Vice Chairman

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DE

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SU MMIT

2014

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A Case Study:How Effective Risk Management

Drives Global Supply Chain Optimization

4

Speakers

Maureen Ehrenberg

Jones Lang LaSalle, Executive Managing Director,

Integrated Facilities Management

Maureen Ehrenberg recently joined JLL to lead its Integrated Facilities Management (IFM) service line in the Americas, and also will lead the firm’s IFM Global Specialty Board as of early 2015. Her focus is on coordinating and optimizing the delivery of global solutions to clients while driving the growth of JLL’s IFM group, its largest service line within Corporate Services. Most recently, she served as Executive Managing Director of Facilities Management at CBRE, and previously Senior Managing Director for Global Corporate Services and Client Strategies. Before that, she was a Principal at Expense Management Solutions and also Executive Vice President and President of Global Client Services at Grubb & Ellis Company.

Michele Flynn

Hiperos, Founder & Vice Chairman

As Vice Chairman, Michele provides leadership and guidance in driving Hiperos’ vision and strategy of third party management that addresses risk and costs while driving value. She is also involved in expanding adoption of Hiperos’ third party management platform through the company’s growing partner eco-system. A recognized industry visionary, Michele is best known for her development of performance based contracting and at risk fee methodologies and practices, both of which have become industry standards today.

© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved.

© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved.

Agenda

Introductions

Risk Management Today

JLL’s Strategy

Historical Challenges

Implementing the Vision

Things to Consider

5

Hiperos

Leader in Third Party Management software

Purpose built to minimize risk and maximize value

Partner with customers to implement forward-thinking,

best-practice based solutions

Designed for the way you work—departmental and

enterprise-wide scale across all business processes

and stakeholders

Single, lowest total cost SaaS product

Protect contract value, Control Supplier Risk, Optimize

Resources

© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 6

JLL

Americas

7 countries

95 offices

EMEA

29 countries

69 offices

Asia Pacific

15 countries

64 offices

2013 fee revenue

$4.1BS.F. under management

3.1BEmployees

52,700Corporate offices

200+LEED APs

1,300+Six Sigma Green or Black Belts

390Suppliers managed

50,000Client spend managed

$26 billion

Platinum 400 Best Big Companies

2006, 2007 and 2008 (U.S.)

2014, 2013, 2012, 2011, 2010, 2009 Global outsourcing 100 list

Only real estate firm listed seven years running

Excellence Award (2008, 2009, 2010, 2013)


Why Now? – What’s Changed?

>60% of revenue driven by third parties

Huge increase in regulatory pressure, regulations,

agencies and fines

Increasing worldwide domestic enforcement of

bribery and corruption compliance

Pace of business, speed of change ever increasing

Customer/consumer expectations on transparency

Board/shareholder expectations of corporate risk

management

Interconnected - local action leads to global reaction

Due diligence – third party management is a process

not a one time action


http://www.consumerfinance.gov/

3rd-party 3 - TPM

Business

ProcessesOnboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

3rd-party 2 - TPM

Business

ProcessesOnboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

3rd-party 1 - TPM

Business

ProcessesOnboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

Regulatory

forces

• Increased regulations

• Demonstrate initial

and ongoing due

diligence

• Prove risk controls

vs. status controls

• Third-party impact to

business processes

• Demonstrate

consistency in TPM

approach

• Spreadsheets are no

longer good enough

Business

perspective

• Third parties are

critical to our

business

• Increased exposure

to sub-contractors

• Vendor management

is not a core

competency

• Current regulatory

environment is

incremental burden

• Access to real-time

reports and analytics

• Cost constraints in

the organization

The complexity of TPM is significant considering the average Fortune 1000 company has between 20-40K suppliers, which is

further extended by sub-contractors exposure – all of which must meet risk, compliance, and performance requirements.

Managing Exposure is Challenge

TPM Business

Processes

Onboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

TPM Business

Processes

Onboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

3rd-party N - TPM

Business

ProcessesOnboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

TPM Business

Processes

Onboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

TPM Business

Processes

Onboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

3rd-party N - TPM

Business

ProcessesOnboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

TPM Business

Processes

Onboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

TPM Business

Processes

Onboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

3rd-party N - TPM

Business

ProcessesOnboard

ingComplia

nceTraining

Risk

Mgmt.Perf.

Mgmt.Quality

Enterprise

TPM

Burden


3PM Business Processes

Information Privacy and Security

OCC 2013-29, CFPB, SEC +

Contract Management

Sub Contractor Compliance

Information Management/Diversity

Risk Assessments

Financial Viability Assessment

Insurance Compliance

Background Checks Compliance

SAS 70 / SSAE 16

ABAC / FCPA Compliance

Business Compliance

Anti-Money Laundering

New Supplier Onboarding Physical Security

Supplier Performance

Ongoing Risk Management

Onboarding Compliance TrainingRisk

Management

Performance

ManagementQuality

3PM – Business Process Coverage

I-9s W9 Tax Payer ID

3PM – Solutions Approach

Top 5 priorities in 3PM customer business process according to 2014 ranking in proprietary Hiperos customer survey.


JLL Strategy


Goal: First in Corporate Real Estate Services and Outsourcing Solutions

Suppler Risk/Performance Management• Dun & Bradstreet Supplier Risk Management

• SRM through E1/Ariba

• KPIs and Balanced Scorecards

• Hiperos

JLL Historical Context

Agency vs. Principal Contract Structures

Risk Transfer

Transparency

Regulatory Requirements

Third-Party Oversight

Guarantees


JLL Compliance Framework

13 © Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved.

Managing Supplier and Third-Party Relationships

Due Diligence

BusinessGovernance

ContractManagement

1 Prohibited entities

2 History review

3 Procurement /

requirements review

4 Vendor Code of Conduct

5 Standard terms

6 Insurance

7 Warranties and Indemnities

8 Payment alignment

9 Legal review

10 Audit plan

JLL Vision


Onboarding- Supplier registration- Contact finder- Vendor portal- Vendor management support

Compliance- Information security- Code of conduct- Diversity management- COI tracking- Social accountability

Risk Management- Business continuity- Risk scoring- Reputational risk- Contract management- Regulatory risk

Performance Management- Balanced scorecard- Innovation tracking- KPIs- Vendor health assessment

Supplier Master Data Management (MDM)- Spend Management

JLL Opportunities

15 © Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved.

Managing Risk Better Enables Growth in our Business

Productivity

IntelligenceCompliance

Performance

Margins

Transparency

Reputation

Takeaways

Third party management isn’t about compliance – it’s about good

business practices driving good results

The only constant is change – flexibility is key to success

This is bigger than just your suppliers or vendors – its all of the

third parties with whom you interact

Automation enables you to drive consistency, execution and

auditability across the entire portfolio

This isn’t about data – it’s about transforming data into actionable

intelligence

Effective third party management is not an “option” – it is a must –

driven straight from the Board


Thank You

Maureen EhrenbergJones Lang LaSalle Executive Managing Director, Integrated Facilities [email protected]

Michele FlynnHiperos Founder & Vice [email protected]


DE

NV

ER FALL

SU MMIT

2014

Session #3

A Case Study: How Effective Risk Management Drives

Global Supply Chain Optimization

Speakers:

Maureen EhrenbergJones Lang LaSalle

[email protected]

Michele FlynnHiperos

[email protected]

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