Make your Procurement and Innovation professionals aware of the collaboration potential to improve innovation effectiveness

1. Innovation Driven Procurement is about improving innovation effectiveness
and efficiency by changing the role of Procurement
The Innovation Driven Procurement Awareness Workshop
 Innovation is becoming more and more open: companies seek to benefit from the technology capabilities of the supply base
 Procurement is focussing more on value extraction beside traditional targets such as savings and security of supply
 Product life cycles decrease making a swift translation of (future) customer needs into products increasingly important
 In the IDP Awareness Workshop we will:
 Explore what the benefits are of optimal collaboration between Innovation and Procurement professionals
 Explore the dynamics of that collaboration, and the organisational requirements to make it a success
What is the agenda of the workshop? Who is the workshop for?
 Trends in Innovation & Procurement  Procurement (primarily direct materials)
 Traditional Procurement & Innovation  R&D
 Innovation Driven Procurement  Marketing
 Business model re-design  Innovation project leaders
Copyright © 2011 Capgemini. All rights reserved. 1

2. The 2-hour Awareness Workshop shows the benefit of improved collaboration
between Procurement and R&D and gives directions for organizing it
Trends & Cases Traditional Procurement
 Trends in innovation & Procurement  Procurement maturity Recognizing
Price
Understanding
Spend
• Objectives and plans
Managing
Performance
• Procurement strategy
Mastering
TCO
• Strategy co-developed
Leading
Value
• Integrated strategy for
limited to departmental aligned with overall with internal customers
Procurement Strategy • Non-existing the E2E value chain
actions business strategy • Cross-functional
• External integration
• Savings realization • Functional optimization integration
 Open innovation case(s)
• Sourcing • Analysing spend • Network, connect and
Core Activities • Manage internal & • Align internal &
manage value
• Negotiating • Managing P2P process external compliance external parties
extraction
Cost reduction
opportunities
Traditional
Procurement
 Typical Procurement involvement
Involvement
Strategieën om de recessie door te komen Supplier Involvement
Increase procurement's contribution / value
Contract re-negotiation
Value
Define / Implement procurement operating model
determination
Supplier management strategies
Contract compliance to reduce spend leakage Idea Concept Prototype Revision Product
Effective demand management stage stage stage stage stage
Global Sourcing / Low Cost Country Sourcing
Multi-sourcing to reduce supplier disruption
Commodity hedging
Implementing cost effective technologies
Internal Shared services model
Currency hedging
Layoffs from the procurement function
 Typical barriers to collaboration
Outsourcing of non-strategic activities
Spot buying
Others
0 20 40 60 80 100
Alle sectoren TME
Business model design IDP
 Different Procurement business models  Change in orientation by Procurement
 Effect of business model variations Cost reduction
opportunities  Change in the Procurement
Business model
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATION SEGMENTS Increase in required Procurement maturity KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATION SEGMENTS
Strategy What key activities do What kind of relations do
you need to perform and your client expect and What key activities do What kind of relations
how easily can you do which kind do you
you need to perform do your client expect
What can partners do to this? Which of your maintain?
Who are your customers and how easily can and which kind do you
leverage your business customer’s problems do and what are your you do this? maintain?
Business What can partners do Which of you What are your
model (better, at lower you solve and which customer’s needs,
Business Model to leverage your customer’s problems customer’s needs,
Model cost)? KEY needs are satisfied? problems, desires, and
RESOURCES CHANNELS ambitions? Value business model do you solve and problems, desires, and
(better, at lower cost)? KEY which needs are ambitions?
determination
RESOURCES satisfied? CHANNELS
Through which means do
What key resources
your clients want to be
does your business
reached and which Idea Concept Prototype Revision Product
model require? What key resources Through which means
Operating Model means do you utilize? stage stage stage stage stage does your business do your clients want to
model require? be reached and which
means do you utilize?
COST REVENUE
STRUCTURE STREAMS
COST REVENUE
What is the cost structure of your business What value are your customers willing to pay STRUCTURE STREAMS
Management model and is this in line with the core values for and what is the preferred payment
of the business model? mechanism?
What is the cost structure of your What value are your customers willing to
business model and is this in line with pay for and what is the preferred
the core values of the business model? payment mechanism?
Copyright © 2011 Capgemini. All rights reserved. 2