1. Effective Category management focus to deliver more
November 2016

2. FOCUS ONLY ON PROCUREMENT
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3. Procurement teams are increasingly asked to deliver MORE
TOPIC OVERVIEW
Procurement teams are increasingly asked to deliver MORE
Leading Procurement organizations turn to Category Management to help them deliver against their new, increasingly complex objectives
Organizations need to understand what it takes to successfully institute a sustainable Category Management approach

4. Making the case for category management
Procurement is increasingly asked to do MORE. In order to meet these new demands and increase value for the business, a fundamental change is required in the way that Procurement is executed.
“Traditional Savings Focus”
“Total Value Generation”
Focused primarily on cost savings
Reactive
Driven by Procurement Goals and Metrics
Year-to-year focus
Tactical execution of projects
Drive results based on business objectives
Proactively align with the business needs
Measured on business goals
Long-range vision and planning required
Execution based on established strategy
Procurement increasingly looks to adopt a Category Management approach, in order to meet their new objectives. However, it is not enough to simply brand a Procurement organization as following a Category Management approach.

5. Category Management transformation is a Journey
Transforming procurement to a category management-based approach drives significant benefits for the business, but it does not happen overnight. Successful companies use a multi-year vision to build, scale and sustain Category Management within their organizations.
Scale & Globally Optimize
Collaborative, Results Oriented Culture
Fully Integrated Business Planning, Budget Cycle
Advanced Strategies Drive Lifecycle Alignment
Globally Aligned Process, Technology, Knowledge
Global Category Councils Manage All Spend
CM Mastery Training, Project Competition
Category Coaching, Targeted Skill Development
Developing Business Leaders, Category Expertise
Business Results
Accelerate & Consistently Apply
High Business Engagement & Decision Making
Updated Vision/Roadmap, Linked to Bus. Objectives
Enablers / Core Foundations Improved, Optimized
Consistent Governance with Risk Measurement
Global Multi-Year Category Roadmaps, Pipeline
Robust Strategies, Deep Market Understanding
CM Excellence Training, CategoRise CM Game
Category Coaching, Targeted Skill Development
Build Foundation
3-5 year Procurement Vision and Roadmap
Clear Org Roles, Aggressive Yet Achievable Targets
CM Process, Tools and Templates Established
Category Roadmaps, Multi-year Project Portfolio
Assess CM Capabilities, CM Competency Plans
CM Foundations Training, eLearning, Exercises
Category Coaching, Application Workshops
Intentional Comm & Change Mgmt (ongoing)
Build Foundation
3-5 year Procurement Vision and Roadmap
Clear Org Roles, Aggressive Yet Achievable Targets
CM Process, Tools and Templates Established
Category Roadmaps, Multi-year Project Portfolio
Assess CM Capabilities, CM Competency Plans
CM Foundations Training, eLearning, Exercises
Category Coaching, Application Workshops
Intentional Comm & Change Mgmt (ongoing)
Failure to Scale
Failure to Sustain
Time
Failure to Launch

6. Category management success factors
Transforming procurement to a category management-based approach impacts all of the dimensions of Procurement, from direction setting through processes and enablers.
Dimensions of Procurement Effectiveness
Category Management Factors
Vision & Strategy
Multi-year Vision and Organization Structure
Linkage with business planning cycles
Prioritized Category Roadmap established
Category Plan Review process
Governance and cross functional Category Councils
Communication & Change Management Plan
Direction
Setting
Organization & Culture
Governance
Stakeholder Engagement and Participation
Best practice Process, Tools, Templates
Project Portfolio Management and Compliance
End-to-end Lifecycle Integration
Supplier Performance and Risk Management
Category Management
Work
Processes
Sourcing
Contracts
Supplier Mgmt
P2P
Competencies and Performance
Capability Assessment and Performance Metrics
Training, Coaching and Targeted Skill Development
Data, Analytics, Market Intelligence Enablers
Knowledge Management
Align Technology to Strategy and Process
Enablers
Market Intelligence
Data
Technology

7. EXAMPLE: high level Procurement Roadmap Toward Future CM Vision
Year 1
Establish Foundation
Year 2
Accelerate & Consistently Apply
Year 3
Year 4
Scale & Globally Optimize
Future Vision
“Best-In-Class” Category Management
5-Year Roadmap to reach Best-In-Class Category Management Vision
Category Management is engrained in culture
Clear and proven framework, tools
Many Category Managers are category experts, drive thought leadership
Incremental value consistently delivered
Broad adoption and culture forming
Refined processes and tools at category level
Annual CM Training and Application Workshops
Incr. Value Delivered
Stakeholders shifting from customers to partners
Refresh and refine processes and tools
CM 301 Training and Application Workshops
Incr. Value Delivered
Adoption of discipline gaining momentum
Core processes & tools established and tested
CM 201 Training and Application Workshops
Incr. Value Delivered
Launch Category Management Discipline
Build core methodology, processes, and tools
CM 101 Training and Application Workshops
Incr. Value Delivered
Define and communicate details within each area to set expectations and define success for each step.

8. Operating in a category management mindset
Establishing Category Management Methods and Tools enables a consistent delivered experience to the business.
Internal Assessment
External Assessment
Strategy & Planning
Internal Assessment Activities
Who are the stakeholders?
What does the business require?
What is the scope of the category?
What have we spent previously?
Where do we think we will spend?
How mature is the category?
What is the category maturity goal?
Tools and Templates
Internal Assessment Questions
Stakeholder Map
Category Map
Spend Analysis Systems & Tools
Business Requirements
Maturity Model
External Assessment Activities
What are the key value drivers?
What is the supply base dynamic?
Who has the power in the market?
What is the risk profile?
What is contract profile & strategy?
Who are top suppliers?
What are relevant benchmarks?
Tools and Templates
External Assessment Questions
Category Trend Report
Porter’s Five Forces
SWOT Analysis
Contract Summary
Supplier Performance
Strategy and Planning Activities
What are the strategic options?
What is a clear category vision?
What is the full opportunity range?
What is the portfolio of activities?
What is the business case?
Can you tell a compelling story?
Do you have a multi-year Plan?
Tools and Templates
Strategy and Planning Questions
Category Positioning (Kraljic/Supplier View)
Strategic Option Review
Opportunity Assessment Tools
Category Plan Template
Phase 1 -- The first step in developing a category plan is to understand category details, with an internal focus.
Phase 2 -- The next phase takes an external perspective in developing a thorough understanding of the relevant market information, trends and dynamics.
Phase 3 -- The Strategy & Planning phase defines the future state, including SMART objectives, the strategic options to achieve those objectives, and the information and documents required to initiate the implementation phase.
Ongoing Stakeholder Engagement and Continuous Improvement

9. Category manager competencies
Developing methods and tools is not enough; team members need to have proper training and support to meet the new expectations and objectives placed upon them.
Identify stakeholders and develop a communication plan
Establish and participate in Category Councils to manage against plan
Participate in annual planning process
Deliver high-quality, written and approved strategies
Analyze data and market intelligence; draw conclusions
Project manage the strategy creation process
Stakeholder Management
Documented Strategies
CM Skills
Planning & Portfolio Development
Vision & Governance
Facilitate identification of a prioritized, actionable portfolio
Conduct appropriate opportunity assessment steps
Provide planning visibility toward business and procurement objectives
Produce a clear, documented Vision, supported by specific strategies
Demonstrate journey progression and maturity; establish a roadmap
Identify metrics and drive governance through process and performance measurement
Strengths and areas of opportunity will vary across each Category Manager. Practical application coaching is key.

10. Simplifying the category manager competencies
Adopting a Category Management approach can be overwhelming to newly branded Category Managers; simplifying the new role into a few critical imperatives may reduce concerns and confusion.
Be with stakeholders
Intimately know their business needs (AQSCIR)
Establish true alignment
Sell YOUR vision
Bring new, meaningful opportunities to the table
Plant seeds with Stakeholders
Your category knowledge will grow with time, and your credibility with stakeholders…
KNOW YOUR STAKEHOLDERS 1
Get dirty with the data
Get to true insights
Be curious
Be intentional
Be “in the market”
Network with category peers
Understand your suppliers
Knowledge grows with time – but should not delay execution…
UNDERSTAND YOUR CATEGORIES 2
Take a portfolio approach
Know your targets
Eliminate extraneous work
Don’t let perfection keep you from starting
Leverage all available resources
Sustain the value
Have a sense of urgency, with a bias towards execution
DELIVER RESULTS 3

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