EGP Marketing Folder

Erste Group Procurement (EGP)

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What is EGP? (Erste Group Procurement) 04

Principles of EGP 05

Erste Group Procurement Service Pillars at a glance 05Sourcing International/Local 09Tactical Purchasing 11Order Management 13Customised Procurement Service (CPS) 14Outsourcing Competence Center (OCC) 14Business Process Outsourcing (BPO) 14

Glossary of Terms & Definitions 15

Contacts 16

Table of Content

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Erste Group Procurement (EGP) contributes the most in S2D in your S2P process.

Erste Group Holding Board decision on the Erste Group Purchasing Policy (PO 1008-PUR-A approved on 10 May 2011)

– The central and single competence for procurement activities within Erste Group lies in Erste Group Procurement (EGP).

– 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 principle of highest added value for Erste Group.

– 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.

– EGP owns, defines and aligns with the local entities the purchasing processes within Erste Group.

What is Erste Group Procurement (EGP)?Erste Group Procurement (EGP) has been established as the first address for the group’s external supply needs and man-ages the whole external spend of all majority owned entities

within Erste Group with exception of personnel expenses. Its mission has been approved by the Erste Group Management Board and local Boards and is as follows:

Purchasing project and

contract creation

Requisiton and Ordering

Receipting and Evaluating

Invoice Processing

(not in scope of EGP)

Category Contract Supplier Demand

Management

Source to Pay (S2P)

Source to Delivery (S2D)

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Services

EGP – Member of EG © 2012All rights reserved

EGP Services in Scope

SourcingInternational/Local

TacticalPurchasing

OrderManagement

BusinessProcess

Outsourcing

Operations of support

processes for the local entities, i.e.

• Services AT• Print Shop• Warehouse

Provide cost-efficient

services

Purchasing Project

Contract Creation

Category Mgmt

Contract Mgmt

Requisition &

OrderingDocumentation

&CR/CA Calculation

Receipting&

Evaluating

InvoiceProcessing

Erste Group Procurement

Purchasing Project

Contract Creation

Category Mgmt

Contract Mgmt

Requisition &


&CR/CA Calculation

Receipting&

Evaluating

InvoiceProcessing

Purchasing Project

Contract Creation

Category Mgmt

Contract Mgmt

Requisition &


&CR/CA Calculation

Receipting&

Evaluating

InvoiceProcessing

CustomisedProcurement

Services

Additional requirements

requested by customer

and are not in the scope ofprocurement

Customer Satisfaction

Compliance to regulatory

and internal

requirements

OutsourcingCompetence

Center

Strategic, monitoredpurchasing in a team

approach

Ensure fast, easy and efficient execution

By EGP By EGP or CustomerOn Customer’s

DemandAdditional Services

for the customer ’s benefit

Invoicing as a % of 3rd party spend Invoicing in a separate fee (SLA)

Supplier Mgmt Supplier Mgmt Supplier MgmtCompliance with

Outsourcing Policy Provisions

and maintenance of

outsourcing project

documentation.

Erste Group Procurement Services at a glance

Service o ut of scope

Service i n scope Service in scope

Service out of scope

Principles of EGP– Transparency in procurement decision making – Service Quality is selection on best value not lowest cost – Sustainable and measurable Cost Reduction and Cost

Avoidance

– Highest ethical standards in all activities and interactions – Fraud Prevention

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The following sections gives a short descriptionabout the procurement steps within EGP

Step 1 – Demand Analysis

Category Management EGP uses a scheme which clusters currently 145 categories on three levels and assigns responsibili-ties, activities, contracts, key suppliers and strategies to those categories. Together with the respec-tive customers a category strategy is aligned and approved.

Supplier Management In order to have more efficient processes between EGP, customers and the suppliers. EGP is identify-ing and focusing on key suppliers. EGP is jointly implementing supplier relationship models including Business Reviews, Supplier Audits, Supplier Strategies and Escalation paths.

Contract Management Contract management is a structured and organised storage of contracts and the according meta-data. It allows rapid access to both contracts and aggregated information. Objectives are to provide a central point of information, distribute the contracts and enable their usage, link spend information to contracts, support the contract lifecycle management and allow analysis of suppliers or categories.

Step 2 – Purchasing Project/Tender Project

RFx Package An Rfx Package contains at least one of the components RFI, RFQ or RFP. The process can range from a simple one-time RFQ to a complex multi-stage RFI/RFP/RFQ process, depending on the needs of the project. The complexity of the RFx process is then determined by the completeness of the require-ments, the number of suppliers that have been qualified, expected competition in the supplier base, inherent risk in the sourcing effort, and projected savings or cost avoidance opportunities.

Evaluation Matrix The key objective is to collect bids from suppliers, negotiate terms and conditions with the sup-pliers and to award winning suppliers. There is no regulation that all activities in this step have to be executed in each project. Depending on the specific demand several steps can be skipped and/or there can be directly a project finalisation after the clear specifications and evaluation criteria have been defined and approved by the project team.

Supplier Offers To provide an offer is the legal act by which the supplier manifests its will unilaterally to be legally en-gaged in a purchase contract in determined conditions. The offer must be firm, unequivocal, precise and complete.

Project Team The responsible EGP specialist organises the project team members that can include employees from EGP and from the requesting entity, covering commercial and technical expertise. In addition, the roles and responsibilities within the project team will be defined.

eAuction An eAuction is the tool by which suppliers can place bids for a contract via the internet. An e-auction or reverse auction allows suppliers to compete for your business by outbidding each other in terms of quality, price and/or other criteria. The eAuction allows this to take place ‘real-time’ on the internet. The eAuction tool is provided by EGP with defined specifications.

PO creation A Purchase Order is the concrete request towards a supplier to deliver clearly specified goods or services according to defined conditions. A PO needs to be confirmed by the supplier. A PO can also be requested by the customer directly, if it is a call-off from an existing agreement.

Category MgmtSupplier MgmtContract Mgmt

Purchasing Project

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Step 3 – Contract Creation

Template To support the alignment of activities, roles and responsibilities within the purchasing process it is mandatory to utilise a common set of templates. These will be provided via EGP Governance Department.

Negotiation Perform commercial and technical negotiations with the short-listed suppliers after RFx rounds have been completed and evaluated. The goal is the final terms and conditions of the short-listed suppliers.

Approval Approval process of the contract/PO has to be in alignment with the group standards, set by EGP and the local regulations. The output is the draft contract for supplier approved by all certified approvers.

Signature Correctness of the content is always confirmed by the project responsible EGP Buyer. The signature depends on the obligation out of the contract and has to be undertaken in alignment with the existing Power of Attorney and Delegation of Authority guidelines.

Step 4 – Requisition & Ordering

The transactional part of the Source-2-Deliver process is the core responsibility of Order Management but also an integral part of Sourcing International/Local and Tactical Purchasing.

Purchase requisition is a written order or a formal demand of a good or service, made available after a specific request. EGP generates a document that authorises a purchase transaction. After acceptance of all involved parties, it becomes a binding contract.

Step 5 – Documentation & Calculation

Project completition Information about finalised GMA/SLA has to be added in the system in order to be available also in the countries for local implementation (Participation Agreement). Rate supplier based on the perfor-mance provided in course of this project.

CR/CA documentation Close project in respective EGP tools by inserting project data, activity recording data and CR/CA results.

Step 6 – Receipting & Evaluating

The Goods Receipt activities are decentralised, as the delivery of goods and services is directly to the beneficiary (e.g. business unit). Nevertheless the feedback to EGP about the completeness and quality of goods and services is needed to execute a supplier quality appraisal and as input or future sourcing activities.

Step 7 – Invoice Processing

Invoice Processing based on Purchase Orders (POs) is in tasked to determine the payment for goods and services including invoice processing and resolving discrepancies. This step is not in scope of the regular Procurement Services.

Receipting

&Evaluating

Contract Creation

Requisition

&Ordering

Documentation

&CR/CA Calculation

Invoice

Processing

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Your first choice provider for procurement related services.

Sourcing International is the strategic process of identifying potential suppliers, conducting negotiations, and agreeing on supply contracts in order to achieve sustainable cost reduc-tion/cost avoidance on group level and meet the customer’s expectations.

Sourcing Local is the fulfillment of purchasing for commodities that have either a strong local dependency or where no major leverage on group level can be expected. Sourcing Local is done individually in each of the countries and ensures efficient strategic coverage of local demand.

Sourcing International/Local

What are the benefits for you?

– Sourcing Specialist, one single contact and groupwide/local Category and Supplier Lead.– Transparency in the level of achieved goals of cost reduction and cost avoidance through one clear methodology and tool-based measurement.– High compliance through common collaboration on the product groups strategies and/or supplier strategies.– We can help you decipher which solutions are applicable to your specific needs. – Value-driven services designed to enhance strategic sourcing efforts and tactical processes– Identification and focus on key suppliers. Implement supplier relationship model in close collaboration with you.

A structured process with clear responsibilities.

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The Action PlanSourcing International/Local

An integrated project team collaborates to achieve the best possible solution.

Process owner of following steps is EGP.

Jointy conclusion of a GMA and achieving sustainable Cost Reduction/Cost Avoidance.

You have a requirement/demand with a value above € 30.000?

Contact EGP in your country

Step 1. Demand Analysis

Step 2. Purchasing Project

Step 3. Contract Creation

Step 4. Purchasing Requisition

Step 5. Documentation & Calculation

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The fast, easy and efficient execution.

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.

Tactical Purchasing


– Tactical buyer one single contact.– The tactical buyer overviews the tender and RfX process. – In collaboration with you to find the best available solution for your request in a tender process coordinated by EGP‘s specialised buyers.– EGP is searching for the best practise operation and focusing to gain maximum efficiency for minimum cost.


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The Action PlanTactical Purchasing

An EGP buyer is searching for the best practise solution to execute the request.Process owner of following steps is EGP.

Delivering of the requested good or service.

You have a requirement/demand in the specific threshold?

Contact EGP in your country

Step 2. Purchasing Project


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The convenient execution of routine administrative tasks.

The convenient execution of routine administrative tasks. These are day-to-day buying activities, which

are low volume based on call-offs from existing contracts.

Order Management


– EGP is providing the necessary systems.– EGP has optimised systems in place in order to execute your request in a minimum of time.– Process contract information implementation to enable call off from agreements– The opportunity for you to handle your requests on your own in a fast and efficient way. EGP is supporting the service by providing the necessary environment and systems. – A convenient execution of your lower procurement requests.


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The Action PlanOrder Management

Purchasing Requisition by EGP or by Customer

Delivering of the requested good or service.

You have a requirement/demand in the specific threshold?

Call-off from an existing contract. OR

Create a Purchase Order.OR

Contact EGP in your country.


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CPS/OCC/BPO

Customised Procurement Services (CPS)

Do you have an additional request, which is not already service in the scope of Sourcing, Tactical Purchasing or Order Manage-ment?

Please contact the appropriate person within the local EGP entity (See page 16).

Outsourcing Competence Center (OCC)

EGP ensures compliance with the Erste Group Outsourcing Policy with any internal and external outsourcing activity.

Business Process Outsourcing (BPO)

EGP is supporting the operational processes for the local entities. Do you want further information on the local BPO’s, i.e. Travel Management or Warehouse in AT?

Please contact the appropriate person within the local EGP entity (See page 16).

We give our commitment to continuous improvement in efficiency and effectiveness:

EGP increases its levels of customer satisfaction.

EGP is reducing financial and environmental risk.

EGP is driving for more CR/CA in big spend areas and faster execution in smaller projects.

EGP is achieving sustainable Cost Reduction and Cost Avoid-ance.

EGP’s solution draws on the significant experience of its experts.

EGP creates a bridge between budget owners and suppliers through active management of product groups.

EGP uses unique systems and tools applied in all subsidiaries in all countries.

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Glossary of Terms & Definitions

The document contains a number of terms that may be unfamiliar to non-procurement person. The following table, provides a glossary of terms in alphabetical order:

Category Lead The Category Lead is the purchasing expert for a specific category/commodity, owns the according strategy and the in depth knowledge about all purchasing activities in the respective category.

Category Strategy A Category Strategy is a document, which describes how to approach a specific commodity from the purchasing perspective. It is based on market data and supplier analysis, defines next activities to be undertaken and contains also the framework for approaching new demand (i.e. using a dual supplier strategy). It is established by a Category Lead for the commodity aligned and approved by the responsible cooperation partner.

Cost Avoidance (CA)CA means that new costs can be reduced or avoided through procurement activities. CA can be achieved for goods or services in case of a first time buy. CA can be achieved if a price increase is completely or partly avoided.

Cost Reduction (CR)CR means that existing costs have been reduced through procurement activities. CR can be achieved for goods or services that have already been purchased previously. Negative CR is possible (i.e. in case of a price increase). CR can be achieved in case of a contract with duration longer than one year also for the years after the first year.

eAuctionAn eAuction is the tool by which suppliers can place bids for a contract via the internet. An eAuction or reverse auction allows suppliers to compete for your business by outbidding each other in terms of quality, price and other criteria. The eAuction allows this to take place ‘real-time’ on the internet.

Group Master Agreement (GMA)/Master Agreement (MA)A GMA/MA is a special type of contract that regulates the general conditions (i.e. rates, payment terms) for all Group entities for assessing goods and services from a contracted supplier. Due to the broad range of possible contract users, the level of detail varies and more concrete specifications are defined in a separate Participation Agreement or the according Purchase Order.

Matrix Management OrganisationThe Matrix Management Organisation applies for sourcing operations. It means that for sourcing the four-eye principle will be applied in a way that each Sourcing Specialist reports both to the Country Manager and the Head of Sourcing. Adherence to this strict principle will guarantee close and decisive appearance of EGP towards its suppliers in order to achieve all possible benefits for Erste Group.

Order Management (OM)OM is placing and chasing Purchase Orders, based on exist-ing contracts or using preferred suppliers provided solely by EGP. Purchase Request is either based on existing catalogue items or it is described in a free-text form in case that required product or service is not in a catalogue. The core responsibility of OM is to generate Purchase Orders which are fulfilled by a supplier.

Source to Delivery (S2D)S2D covers all processes required to ensure that a demand is covered by an optimal good or service. These S2D processes include the fields of procurement and category management as well as support for transactional buying.

Service Level Agreement (SLA)A SLA is a part of Service Contract between a service provider and customer, where the level of service is formally defined. The goal is to make the control options for the customer transparent by guaranteed performance characteristics such as a scope of services, priorities, responsibilities, guarantees and warranties

Supplier Long ListThe Supplier Long List considers all potential suppliers that shall be considered in the project execution phase. The list is determined by the category strategy, the market situation and existing business relationships.

Supplier Short List Evaluate RFx responses according to evaluation criteria and generate and approve a supplier short-list if necessary. Define ranking within this short-list.

RFI – Request for InformationAn RFI is a document that is used to obtain non-price informa-tion from suppliers. RFI’s are most commonly used in purchases that are complex or of significant value. Often times RFI’s are used when the procurement organisation needs information to ensure that its specification is feasible or the organisation wishes to narrow down its field of potential bidders to the most qualified candidates. Procurement departments usually follow a RFI with one of the other solicitation documents (RFQ, RFP).

RFQ – Request for QuotationAn RFQ requests that suppliers respond with only prices, lead time, and terms from suppliers based on fixed specifications. Generally, RFQ’s do not allow for changes to the specification. The lowest price is usually the determining factor in awarding an order based on RFQ responses.

RFP – Request for ProposalLike an RFQ, an RFP requests pricing, delivery, etc. However, unlike an RFQ, an RFP allows, sometimes requires, supplier input on specifications. RFP’s are often used to find solution to a problem. Orders based on RFP responses are generally awarded based on the best overall value and not necessarily on price alone.

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Key Contacts

EGP – Erste Group Procurement HeadquarterAm Heumarkt 4, 1030 Vienna, Austria

Managing Director, CPO Erste Group AG Leopold IVAN +43 (0) 5 0100 - 28300Managing Director, CPO Erste Group AG Robert SEMETHY +43 (0) 5 0100 - 28222

EGP Austria – Procurement Services GmbHAm Heumarkt 4, 1030 Wien, Austria

Country Manager AT Jörg STRAUSS +43 (0) 5 0100 – 28140 Support Center AT +43 (0) 5 0100 – 28000 [email protected]

EGP Czech Republic – Procurement Services CZ, s.r.o.Budejovická 1912/64b, 140 00 Praha 4, Czech Republic

Country Manager CZ Tomáš ZATLOUKAL +42 0 956 78 2700

EGP Croatia – Procurement Services Croatia d.o.oIvana Lučića 2, 10000 Zagreb , Croatia

Managing Director HR Darko SEPIC +385 62 37 – 5345Director Procurement Department Montenegro Ivan CERDIC +385 99 237 – 2441

EGP Hungary – Procurement Services HU Kft.Népfürdő str. 24-26., 1138 Budapest

Managing Director HU Nikoletta KOVACS +36 1 373 - 2780

EGP Romania – Procurement Services RO srl155 Calea Victoriei Stree, bl. D1, Sector 1, Bucarest, Romania

Country Manager RO Calin VALCEA +40 37 2269 111

EGP Slovakia – Procurement Services SK, s.r.o.Tomášikova 48, 832 75 Bratislava, Slovakia

Managing Director SK Ivan UJČEK +42 1 910 684 410

Erste Bank Serbia – Procurement Department SerbiaBul. Milutina Milankovića 11b, 11070 Belgrade, Serbia

Director Procurement Department RS Milan GASIĆ +381 11 201 5046

Erste Bank Ukraine – Procurement Department Ukraine24-d Polyova St., Kyiv, 03056, Ukraine

Director Procurement Department UA Eduard MATULA +38 (050) 41 31 460

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Erste Group Procurement – Procurement Company of Erste Group

www.erstegroupprocurement.com

Czech Rep

Procurement Dept. Serbia

Int. & Austria

Slovakia

Hungary

Croatia Romania

Procurement Dept.

Ukraine

Erste Group Procurement Facts & Figures:

Central procurement function within Erste Group

Headcount approximately 180 employees

Process owner for group-wide S2P process

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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 Sad - Serbia 3) Department of Erste Bank Ukraine

SPV – DRUCK

EBSPK

Sourcing RS

Sourcing

Sourcing UA

Board Division Team in Matrix

UA3)

Org/IT HRM

ME1)

Management Board Erste Group Procurement

Imprint:We have prepared this advertisement and verified the data and information herein with the greatest possible caution. This folder reflects our current state of knowledge and is intended to inform customers about our products and possible applications for them. However, errors arising from rounding, transmission, typesetting or printing cannot be excluded. Responsible: Erste Group Procurement – Procurement Services GmbH, Am Heumarkt 4, 1030 Vienna, [email protected]. Print: SPV-Druck, Grimmelshausengasse 1, 1030 Vienna

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