In moving purchasing from a tactical function to a strategic driver of value within the enterprise, Chief Procurement Officer Patricia Moser focuses on marketing the transformation throughout the business.
[From Supply & Demand Chain Executive, June/July 2004] Patricia J. Moser joined Canadian communications giant Rogers Communications in February of this year as vice president and chief procurement officer with a charge, in part, to transform the enterprise's procurement function, which is a shared services organization serving Roger's cable, wireless and media divisions. (Rogers also owns baseball's Toronto Blue Jays.) Officially, Moser's purview is to oversee company-wide procurement activities, including process improvement, negotiations, sourcing and supply management at the US$3.7 billion organization, which is headquartered in Toronto, where Moser is based.
Moser's career in materials management and operations spans more than 20 years and includes senior positions at companies in such diverse industry sectors as pharmaceuticals, consumer-packaged goods, health care and technology. Immediately prior to joining Rogers, Moser held a position at EDS as vice president, procurement services, automotive, for Canada and the U.S. government. In 2001, iSource Business (now Supply & Demand Chain Executive) recognized Moser's thought-leadership by including her among the magazine's Top 50 Pros to Know in the supply management field.
Interestingly, Moser holds an M.B.A. in marketing along with bachelor's degrees in psychology and chemistry. It is not surprising, then, that, in a recent interview with Supply & Demand Chain Executive, as Moser discussed the changes that she is leading in the procurement organization at Rogers, she focused much of her attention on the need to market the transformation throughout the entire enterprise. In doing so, Moser said there is the opportunity to change the way that a company thinks about its procurement organization and to generate the kind of chemistry between purchasing and other functions that can turn procurement into a truly strategic driver of value for the company as a whole.
S&DCE: Could you describe your approach to driving transformation in the procurement organization at Rogers?
Moser: Basically we're moving from being reactive to proactive, from being tactical to more strategic, and the intent is to become a more integral part of the business. The first step in that process is ensuring that the procurement team understands that they need to move away from the mindset of just being a support organization to become a vital, indispensable and value-added part of the business. Too often procurement organizations don't understand that they bring much more to the table than what is traditionally viewed as the purchasing function. They need to understand that they have lots of value to add to the company beyond just the sourcing activities, beyond the negotiations, beyond getting the best price, if you will. It's about working with the businesses to understand the motivators, the drivers and the strategies, and providing input, ideas and creativity to the enterprise.
Of course, one of the most difficult challenges that procurement faces is that they are seen as support by other organizations within the business. Beyond that, procurement is not seen as a function that involves a high degree of professionalism. Part of the reason is that everybody thinks they know how to negotiate just because they believe they got a good deal on their car. Well, you can play chess at an amateur level, but to be a master chess player you have to truly understand the intricacies of the game and bring a strategic level of playing to that game. Procurement professionals bring that same level of understanding to the table. They understand how to work with suppliers, how to craft creative business models and partnerships, and that's what makes them experts or, if you will, masters.
That's why you actually need to sell procurement to the organization in the same way that we get sold to by vendors. You have to create a marketing plan to build awareness of the benefits that procurement brings to the enterprise, and, inevitably, you have to define an appropriate value proposition for the organization that engages people throughout the company and makes them seek you out, makes them want to work with you. Because, at the end of the day, as much as you would like to mandate that people work with you, organizations can be exceedingly creative in getting around mandates and not necessarily even because of any malicious intent, but because procurement is viewed as an obstacle and not necessarily a value-add.
From a practical standpoint, you need to work with your internal clients to identify their needs and requirements. So, in addition to meeting with your team and getting feedback from suppliers, you have to go around and meet with the stakeholders in all the various areas of your company. That's how you can create client delight, which inevitably creates client loyalty. Your internal clients will continually come back for more services and also talk to others within the organization about the benefits that you have brought to them.
One of the unique things that I've done in this organization is to create client executives. Of course, we've developed the strategic sourcing and contract group, defined by category, which is basically what most organizations do. But we also have three unique roles, the client executives, who basically are my sales team and my business development group a relationship-building group to the organization as a whole. They are aligned by operating unit, with a cable/VoIP client executive, a wireless/media client executive, and a client executive who has responsibility for those areas of high integral spend, such as information technology (IT), human resources and facilities.
The client executives don't have any direct reports, and their sole purpose is to sell procurement to their respective clients. They're sitting at the meetings with their respective client groups. They're constantly mining for opportunities for the operating units to utilize procurement's services, and they're defining the benefits of working with procurement and what we bring to the table. Then they are the feeder back to the strategic sourcing team.
One benefit of having this kind of role in the organization is that people will often go off and negotiate something or engage a supplier on their own because they really don't know who to contact within the procurement team. Now our people have a singular point of contact that can direct them appropriately and then follow up to see how things are working out. Inherently, this enables procurement to be part of the business up front, as opposed to an afterthought.
The other aspect that we're working on as part of the marketing plan is re-branding our group. Previously the group has had the moniker of purchasing. Purchasing is a well-worn phrase; it is an older type of terminology for an older type of procurement organization. Now we're in the process of re-branding and moving from being called Purchasing to being called Procurement Business Services. The reasoning behind that is that procurement is obviously what we do, services are what we provide, and business is what we are an integral part of. So the naming convention has meaning for both the team as well as the organization as a whole.
S&DCE: Could you talk a little more about the value that procurement brings to the organization?
Moser: That goes back to one of the earlier statements that I made, which is that procurement is a profession. We bring a significant level of subject-matter expertise, negotiating skills and knowledge across the enterprise. We have fairly good knowledge of what worked in one area, what didn't work in another, as well as the potential to help one business unit do something creative because of what we've seen elsewhere.
We also are an extremely objective entity. There's an inherent need to work with stakeholders and bring folks together as a team. But when the stakeholders need to work with vendors on a daily basis, we can come in and, because we don't have those day-to-day relationships, bring a level of objectivity to the table.
Generally there's a trend toward having the procurement team expand beyond the strategic sourcing and supplier/vendor relationship aspects toward influencing and assisting organizations as a whole in getting to the next level in their relationships with partners. That's where we're talking about positioning organizations in strategic alliances by being at the table not only when the account representatives are meeting with suppliers but when the senior-level representatives of corporations are meeting with each other; we're moving up to the next level.
In this respect, one significant benefit at Rogers is that the CEO, Ted Rogers, understands the importance of procurement at the senior levels and supports the procurement organization in its development. This includes ensuring that procurement is at senior-level meetings with the CxOs of major global operations. That's visionary to a certain extent because there are very few CPOs who have as much continual interaction with the president and CEO of the organization.
S&DCE: As you go through the transformation at Rogers, what are the primary challenges and risks that you are confronting?
Moser: The challenges for procurement transformation are no different than the challenges in any transformation that you undertake, and, in a lot of ways, it's about managing the change. In general, people will always say that they want change until it affects them. Well, I'm a change-agent in general, so when I come into an organization, there inherently will be change. In fact, the first thing that I give to a team that I take responsibility for is a copy of the [Spencer Johnson book on dealing with organizational change] Who Moved My Cheese. I probably am responsible for very good sales of that book. [Laughs]
The whole idea here is that people need to understand where they are in the change paradigm and understand what some of their obstacles might be to embracing change. You need to show them how to get to the next level, work with them to attain that and redefine the organizational construct to get them there. If an organization has been tactical, many people will embrace the opportunity to move to the strategic, to work in a professional organization. But others will take a lot more convincing because there is just a level of comfort in staying where you are.
When you look at it from a marketing perspective, there are the early adopters, and then there are those that you have to work a little bit harder to convince. What you want to do as an organization is find those people that are the early adopters; you demonstrate the value, and they become what I have named "FOPs," which are "Friends of Procurement." Then they tell two friends, and so on. That's how you create a dynamic where organizations start to seek out the procurement function and understand the value that it brings.
S&DCE: What, from your perspective, is the role of technology in procurement transformation?
Moser: We currently are planning to have a number of e-sourcing events. That is something that the organization had not engaged in previously. In general, technology is a tool, an assistant to transformation, but it is inherently not the transforming entity. What the technology allows you to do is gain a lot more information with regard to spend visibility, spend management and compliance, understanding what your total relationship is with a supplier both from a base procurement perspective and also from a total business perspective. Technology gives you all this data and information so that you can go in and do your job not blindly, with assumptions, but with facts. It also allows you to do the tactical without as much intervention as the manual processes have done. So you have the information; you rid yourself of a significant amount of the tactical; and you can do a lot more of the sourcing exercises, relationship management and market analysis because now you have the tools to support it. But if people are looking for technology to be the panacea, it isn't; it is an adjunct and an assist to the entire transformation process.
S&DCE: What do you see as the future of procurement and supply chain management, especially as a business process? Where is supply chain management heading?
Moser: Procurement and supply chain management have been moving over the last few years toward becoming an integral part of the business rather than being seen as a support organization. When I got into the supply chain profession way too long ago, it just wasn't the sexy place to be. But I was drawn by the fact that when you're in operations, materials management and supply chain, you inherently have to understand the organization as a whole. Supply chain requires an understanding of the markets and marketing, of finance, of negotiating. It is a full-scope profession. That's why now you have business schools actually teaching supply chain, as opposed to ignoring it. And
that's why I think that within the next five years, instead of having chief financial officers or chief information officers or the top marketing people ending up being the CEOs of organizations, you're going to start seeing chief procurement officers moving into those roles, because the understanding and the knowledge of the organization as a whole will bode well for those kinds of positions. I don't know of anyone at this time that has made it to that level, but I think that is the next stage.
Organizations as a whole woke up a number of years ago to the fact that there is a lot of potential for enhancing an organization by effectively utilizing the supply chain arm. Many years ago, supply chain was more an elephant burial ground where people were put on the assumption that there wasn't much harm that they could do to an organization, and that is where they would be until retirement. That's no longer the case. If you think just of the billions of dollars across all the major sectors that the procurement organization touches, it's massive, just absolutely massive. And although in numerous cases we are part of the decision-making team [with regard to an organization's spend], in all cases we are significant influencers on the decision. We have a tremendous amount of inherent power, and with that comes a significant amount of responsibility, accountability and a requirement to understand the business as a whole.