Roche - The Agile Journey of Roche Procurement

Roche - Global

Colm and Mirko were invited to talk at the European Summit of the World Commerce & Contracting about the Agile Journey of Roche Procurement. It’s an inspiring session where Colm is giving us with several stories some insights in the new ways of working at Roche Procurement.

The slide deck

The Slide Deck could be #free download here: https://bit.ly/3tQwfGy

More about the Speaker

• Colm Diamond, Productivity Lead, Global Procurement, Roche

Agile Contracts - The only Template you’ll ever need!

Agile collaboration became the new normal to deal with the ever-changing demands of today’s business. Often this collaboration isn’t supported enough  with an as agile contract. 

In this blog post you’ll learn about the only template you’ll ever need.

Agile Collaboration - Houston we have a problem!

With Lean-Agile Procurement we’re fostering collaboration and co-creation of e.g. the solution design, a joint agile roadmap, the proposal, etc. between all parties even before signing a contract. This is also because it turned out that the social- and cultural fit are as important success criterias, then the business fit. Nobody chooses his partner in life just because of her/his looking too. If we’re looking closer to an agile collaboration we’re constantly re-agreeing because of an ever changing environment. The interdisciplinary team consisting of internal- and external people is e.g. re-agreeing and improving their collaboration model, their joint agile roadmap, their joint business objectives of the next iteration, down to the concrete implementation of a customer need, etc. with every feedback cycle. These good practices e.g. applied with the help of Scrum became the new normal. So all good? Unfortunately not, Houston we have a problem!

The problem is that a lot of agile cross-company delivery teams lack of a legal foundation based on agile values & principles, that supports this kind of agile collaboration. Furthermore there hasn’t been a „standard“ yet, what an Agile Contract really is and what not. This made it difficult to onboard the legal community and even worse created an even bigger confusion in the agile community.

The Solution - The only template you’ll ever need!

The easiest solution for defining a standard would be creating a, or even better THE template of an Agile Contract. This has served us very well up till now, where the things have been predictable. As Agile Collaboration tries to embrace uncertainty every contract became very contextual. To put it on one extreme: Sometimes the only thing we have is a vision like e.g. how Artificial Intelligence (AI) could support our business?-So time-n-material is the only way to go?-A clear NO!-T+M is just one possibility. But there is a whole spectrum of potential agile contract types e.g. driven by the level of risk-sharing. 

The only solution for a standard left is to take it to the next level of abstraction: Values & principles. Please welcome the Agile Contract Manifesto (ACM), created by a global group of experts from agile-, commercial- and legal communities.

It consists of 4 main values..

Image source: agilecontractmanifesto.org

.. and 10 principles

Image source: agilecontractmanifesto.org

ACM in Practise - How to apply the ACM?

Similar to an Agile Contract are values & principles contextual too. So as a first step it’s recommended to create a joint understanding. The easiest is e.g. by sharing examples. Then you could take an existing „agile“ Contract and assess and improve it based on the ACM. It’s recommended to include all parties in that exercise such as e.g. Product Owner, delivery team members, agile coach or Scrum Master, lawyer, etc. as development of this legal foundation becomes a team effort as well to create the maximum ownership and minimizing risks at the same time. Tipp: Check out the Lean Procurement Canvas, which gives a lot of guidance to ask the important questions. 

Furthermore it’s very important to understand that an Agile Contract is not just the Statement of Work (SoW). It includes all parts of a contractual framework such as e.g. None-disclosure Agreement (NDA), General Terms & Conditions (GTC), Master Service Agreement (MSA), etc. If you think of e.g.  your latest NDA you’ll agree there’s a lot of improvement to assign agile values.

Conclusions

In other words if Agile Contracts embrace the values & principles of the ACM we could create an even bigger impact than just supporting a more agile collaboration. The potential is huge. Take the example of an outcome-based contract by the New Zealand Government. They took the outcomes of the partnership to society and sustainability into consideration of the services and goods they’re buying. Read more about it here:  https://bit.ly/3H1iFnw

Become part of this movement and sign the ACM:  https://bit.ly/34IVuS7

Be the change you wanna see in the world. As an agile coach / Scrum Master get in touch with your legal team or the other way round!

Wanna become an Expert in Agile Contracts?

The LAP Alliance offers a unique Certified Advance LAP Module on the topic, where you learn the different agile contract types, how to apply the ACM and coach your peers in this important topic.

Find out more, or register: https://bit.ly/3I0B6tM  

ACCONOLOGEMENT

A Big thanks goes to my peers of the ACM Creators Group!

Author

Sources:

• ACM https://agilecontractmanifesto.org

• Original Article in German flowdays.net

Zalando - How to introduce Procurement into an Agile Culture?

Zalando - Germany

Alejandro told the audience from quite a different story introducing more Professionalism in Procurement into a purely Agile Company like Zalando.

The recording

To hear Alejandro’s talk jump right to 40:25 in the video.

The slide deck

Zalando - How to introduce Procurement into an Agile Company? from Mirko Kleiner

Our Conclusions

• Zalando is a 10 Years old Startup with more than 10,000 Employees, which is already Agile as an organization and introducing more “structure” in Procurement needs to be adapted to the current culture & mindset

• Also at Zalando the Procurement has applied Scrum in their commercial organization, while swarming cross-functional e.g. for making negotions more effective, etc.

• Zalando also applied agile practices such as Scrum in development of their P2P Implementation with awesome impact to time-to-market and customer satisfaction

More about the Speaker

• Alejandro Basterrechea Head of Procurement Excellence Zalando

Author

AGCO Int. - How Collaboration with Vendors / Competitors increases Innovation

AGCO International GmbH - Global

Konstantin introduced us in the world of direct sourcing and how agile principles such as collaboration & transparency with partners / competitors could foster innovation & improve business success.

You might know AGCO’s Brands of Tractors such as e.g. Fendt, Valtra, Massey Ferguson, etc.

The recording

To hear Konstantin’s talk jump right to 1:12:46 in the video.

The slide deck

AGCO Int. - How Collaboration with Vendors / Competitors increases Innovation from Mirko Kleiner

Our Conclusions

• AGCO’s approach of Agile Product Clinics where they bring together current Partners & Competitors to review the current m modules / components of their tractors turned out as a very effective way to come up with new ideas / improvements and also to select alternative vendors

• Those Agile Product Clinics need a cross-functional support lead by a team consisting of Product Management / Marketing, Engineering, Production and Procurement. What a surprise that AGCO uses Scrum as operating model for this cross-functional team - the most effective way to organize a team.

• Combining those workshops with revisiting / improving the current agreements will boost the outcomes for both parties at buyer and supplier side even beyond.

More about the SpeakerS

• Konstantin Meier-Kulenkampff, Vice President Purchasing & Materials EME at AGCO

• Jan-Henner Theissen, CPO-Advisor & Interim Manager targetP!

Author

AGILE BUDGETS. AGILE CONTRACTS. WHAT HAPPENS WHEN FINANCIAL NEED MEETS MARKET REALITY?

Market and business uncertainty has created an unprecedented need for agile and adaptable systems and processes. Finance is at the forefront, struggling to set and manage budgets, forecasts and cash flow in today’s unpredictable conditions. 

Contracts are fundamental management tools and sources of information. For most industries, they drive revenue and for all industries they control spend – both external with suppliers and internal with employees and contract staff. But can they really become adaptive in ways that will better support the challenges that Finance faces? Is ‘agility’ achievable – and if so , how? 

Join us as we bring together three experts from the fields of finance, contracts and agile methods to discuss how we can best respond to the challenges of the market.

The recording

To hear the panel with Tim Cummins, Rikard Olsson & Mirko Kleiner watch the video.

Our Conclusions

• Commercial functions is a design from the past and needs to be adapted too to achieve true Business Agility

• Automatization & Digitalization will support the need for real time information / performance and decrease traditional reporting

• Relevant informations will be defined much more outcome-based by the business, while e.g. forecasts depend on empirical data and yearly budgets will become a too static thing from the past

• Ownership of financial needs more and more needs to be transferred to the value creation part of the organization

• Commercial Capabilities are still important but might be organized much closer to the market as today

• To react even faster to changing market needs the contracts / contractual frameworks need to become much more flexible than today

• our suppliers need to become our strategic partners, that co-develop / -server the market needs jointly

More about the Panelist’s

• Tim Cummins is founder and President of the global Alliance World Commerce & Contracting (formerly IACCM), Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

• Rikard Olsson is Managing Director at Beyond Budgeting Ltd (Beyond Budgeting Roundtable and Beyond Budgeting Advisory) & Board Member at Ekan Management

• Mirko Kleiner is the President of the Lean-Agile Procurement Alliance, Thought Leader in Lean-Agile Procurement, CIPS Award Winner 2018, international speaker and co-founder of Flowdays – The Agile Cooperative. Mirko supports their customers as an Agile Enterprise Coach on their journeys to create a positive impact for their employees, customers and shareholder. 
  

OUR PARTNER

A big thank you goes to the WCC team who supports us in increasing the global awareness of agile in Procurement. 

To learn more about WCC check their website: https://www.iaccm.com

To learn more about Beyond Budgeting check their website: https://bbrt.org

Author

SwissCasinos - Is it possible to source an ERP System in just 4 Weeks?

SwissCasinos Group - Switzerland

Daniel started his talk with the question “Is sourcing of an ERP System in just 4 Weeks possible”?-Obviously it is and his story was recently awarded as the Winner of the World Procurement Awards 2020!

The recording

To hear Daniel’s talk jump right to 18:37 in the video.

The Slide deck

SwissCasinos - Is it possible to source an ERP System in just 4 Weeks? from Mirko Kleiner

Our Conclusions

• Having all 3 competitors in the same room to co-create their proposals, talk about any concerns / assumptions / questions / etc. was very beneficial also to get the right social- & cultural fit

• The commercial “negotiations” took place as well and because having the RIGHT people their from all the parties a WIN-WIN could be agreed on, with significant savings

• Scrum turned out as the optimal operating model for executing a cross-functional sourcing team

• improving an Agile Contract together with all participants helped to align / setup the delivery team, so that they could start the day after and keeping the partnership as flexible as needed

More about the Speaker

• Daniel Pellegrini, Former Head of Finance SwissCasinos Group

Author

APA Group - How Agile is changing an Industry & Lives!

APA Group - Australia

APA is a leading Australian energy infrastructure business. Henriette introduced us in how applying Agile is currently changing a whole Industry and also her Live!-In other words she’s talking us trough how Lean Agile Procurement has helped to shape significant change in individuals, teams, organisations and supply chains within the energy industry 

Henriette Kampfer & Marcus Ward talked about how agile in procurement changed their way of working / thinking at APA Group the major Gas supplier in Austral...

Source of video: APA Group, recorded for CIPS Meetup 25.1.2021

Our Conclusions

• Agile is more than just a new way of working, it changes lives of the people involved

• Instead of just following the sourcing process procurement became part of innovation, with e.g. impact on how people in Australia see their energy consumption

• the inclusive approach and applying scrum to the core-team consisting of all capabilities / functions needed helped to align with the strategy faster and to find the optimal partner

More about the SpeakerS

• Henriette Kamfer Category Specialist at APA Group

• Marcus Ward Agile Coach & Certified LAP Trainer Twenty2 Collective

MORE

• About the APA Group

• Join the CIPS Switzerland Linkedin Group here

• FREE Download of the global annual report State of Agility in Procurement & Supply

AUTHOR

6 Success Stories - Agile in Procurement just Talk or Reality?!

The COVID-19 crisis has emphasised the importance of new -more agile- approaches in procurement. But is it just another buzzword, or has it become reality?!-Learn from 6 cases all around the world how agile in procurement impacted their business positively. One of the stories just won the World Procurement Award 2020!

This is a short review / summary of the 6 talks at the joint Online Meetup with CIPS Switzerland. More details such as e.g. recordings / Slides / follow-up’s with the speakers / etc will follow - STAY TUNED!

Intro & State of Agility in Procurement & Supply

John & myself kicked off the event with more than 250 participants from all around the world.

It was my honor to give an even bigger picture what’s going on in terms of agility all over the world and presented a summary of our global annual report State of Agility in Procurement & Supply.

Find the Report for FREE download here.

Our Conclusions

• Business Agility became of strategic importance for all companies no matter on the buyer or supplier side

• More an more commercial functions are or will be including in their company-wide Agile Transformation Initiatives

• Lean-Agile Procurement is THE agile approach for Procurement beside standard agile approaches like Kanban / Scrum

• Minority of companies includes their partners in their journey becoming more Agile together yet

• Also is the value of more agile Contracts still underestimated

• Finally for 2021 respondents concluded that Education in Agile Practices / Approaches / etc. is the number 1 strategic Priority

More about the Speakers

• John Everett, Head of Procurement, BU Pigments at Clariant

• Mirko Kleiner, Thought Leader in Lean-Agile Procurement, co-founder flowdays

SwissCasinos Group - Switzerland

Daniel started his talk with the question “Is sourcing of an ERP System in just 4 Weeks possible”?-Obviously it is and his story was recently awarded as the Winner of the World Procurement Awards 2020!

Our Conclusions

• Having all 3 competitors in the same room to co-create their proposals, talk about any concerns / assumptions / questions / etc. was very beneficial also to get the right social- & cultural fit

• The commercial “negotiations” took place as well and because having the RIGHT people their from all the parties a WIN-WIN could be agreed on, with significant savings

• Scrum turned out as the optimal operating model for executing a cross-functional sourcing team

• improving an Agile Contract together with all participants helped to align / setup the delivery team, so that they could start the day after and keeping the partnership as flexible as needed

More about the Speaker

• Daniel Pellegrini, Former Head of Finance SwissCasinos Group

Zalando - Germany

Alejandro told the audience from quite a different story introducing more Professionalism in Procurement into a purely Agile Company like Zalando.

Our Conclusions

• Zalando is a 10 Years old Startup with more than 10,000 Employees, which is already Agile as an organization and introducing more “structure” in Procurement needs to be adapted to the current culture & mindset

• Also at Zalando the Procurement has applied Scrum in their commercial organization, while swarming cross-functional e.g. for making negotions more effective, etc.

• Zalando also applied agile practices such as Scrum in development of their P2P Implementation with awesome impact to time-to-market and customer satisfaction

More about the Speaker

• Alejandro Basterrechea Head of Procurement Excellence Zalando

AGCO International GmbH - Global

Konstantin introduced us in the world of direct sourcing and how agile principles such as collaboration & transparency with partners / competitors could foster innovation & improve business success.

You might know AGCO’s Brands of Tractors such as e.g. Fendt, Valtra, Massey Ferguson, etc.

Our Conclusions

• AGCO’s approach of Agile Product Clinics where they bring together current Partners & Competitors to review the current m modules / components of their tractors turned out as a very effective way to come up with new ideas / improvements and also to select alternative vendors

• Those Agile Product Clinics need a cross-functional support lead by a team consisting of Product Management / Marketing, Engineering, Production and Procurement. What a surprise that AGCO uses Scrum as operating model for this cross-functional team - the most effective way to organize a team.

• Combining those workshops with revisiting / improving the current agreements will boost the outcomes for both parties at buyer and supplier side even beyond.

More about the SpeakerS

• Konstantin Meier-Kulenkampff, Vice President Purchasing & Materials EME at AGCO

• Jan-Henner Theissen, CPO-Advisor & Interim Manager targetP!

Gazprom Neft - Russia

Boris introduced us how to deal with finding the right partner in a huge country like Russia and that applying LAP is also much more fair to all the parties.

Our Conclusions

• Lean-Agile Procurement workshops, to negotiate with multiple vendors simultaneously, can be done 100% online. It even makes a lot of sense if the spend is not so big and the vendors would have inadequate expenses

• the principles of Lap could be applied to sourcing in the public sector too

• in many cases with a high promotion of innovation it’s recommended to run a proof-of-concept in parallel

More about the SpeakerS

• Boris Zobnin, Head Procurement Digitalization Program

• Ivan Dubrovin Agile Coach & Certified LAP Trainer ScrumTrek

Air France KLM - France/Global

Frédéric introduced us in his world of Cargo and how to outsource a strategic product development at AirFrance KLM.

Our Conclusions

• Social- & Culture fit turned out as important than the hard facts such as price / quality / etc.

• Just by bringing together the right people and forming a cross-functional team they could ensure that all interests are covered

• Instead of eliminating the less promising offers they have been able to improve all of them in the big room event together with all the vendors / competitors and choose the best out of it!

• It’s not just about fast sourcing, but also faster delivery value to the business.

• LAP has create much more than just a relationship, we became friends!

More about the SpeakerS

• Frédéric Jaques CARGO IT MANAGER Air France KLM

• Sophie Durand Agile Coach & Certified LAP Trainer Goood!

APA Group - Australia

Henriette introduced us in how applying Agile is currently changing a whole Industry and also her Live!-In other words she’s talking us trough how Lean Agile Procurement has helped to shape significant change in individuals, teams, organisations and supply chains within the energy industry 

Our Conclusions

• Agile is more than just a new way of working, it changes lives of the people involved

• Instead of just following the sourcing process procurement became part of innovation, with e.g. impact on how people in Australia see their energy consumption

• the inclusive approach and applying scrum to the core-team consisting of all capabilities / functions needed helped to align with the strategy faster and to find the optimal partner

More about the SpeakerS

• Henriette Kamfer Category Specialist at APA Group

• Marcus Ward Agile Coach & Certified LAP Trainer Twenty2 Collective

MORE

• Join the CIPS Switzerland Linkedin Group here

• FREE Download of the global annual report State of Agility in Procurement & Supply

Author

There are NO Agile Contracts!

Similar as there are no unicorns, even no cats with one :-), there also don’t exist agile contracts!-In my opinion we not just need get rid off this term, we also need to rethink how we come to an agreement.

In this blog post you’ll find out why and learn alternatives to overcome the dilemma of Business Agility and handling the legal aspects with your partners.

Unfortunately we need to inform you, that there’s been a big misunderstanding the last 15+ years. The agile community has come up with new concepts around contracting, even contractual templates have been developed, etc. However, there is no silver bullet and for sure there are NO agile contracts!

Why an Agile Contract doesn’t make any sense?

Have you ever thought about the words „Agile Contract“?-„Agile“ (1) stands for values & principles where we act on the same eye level, looking for people, partners, etc, that are able to respond to change more effective together. While „Contract“ has the word „Contra“ in it, which means against or opposite (2). 

“Contract is legally an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration.”

— legal definition of the term contract(2)

However „agreement“ is part of the definition, in practice it’s much more of the „against or opposite“ behaviors we recognize. Borders of responsibilities are usually cemented in a contract, so that lawyers increase the chances to win at court if something goes really wrong. In fact a contract is more of saving the buyer’s, or vendor’s interest and tries to reduce it’s risks as much as possible. Btw. There’s nothing wrong about that. However, it’s more of the way it’s getting approached. We’ve somehow lost the aspect of „agreement“. I often experience „take it or leave it“-situations, predefined contracts with penalties, etc. in place where there’s no opportunity to improve it together. Doing so we are not applying any agile values & principles to the process of agreeing even though we refer to it often in the contract. How weird is that?

Even if we’ve put good practices such as „money for nothing“, „changes for free“, a more outcome based focus of the contract, etc. it’s still missing the collaboration aspect of an agreement!-Even worse than that put people who aren’t so deep in agile think by such good practices of a silver bullet and put everything in one new big template and call it an agile contract. Or others call a true agile contract has been based on time and materials. All of those are wrong!

The reason why nobody has found the silver bullet yet is there is none!-It depends on the context, the parties involved, the people and their values/cultures, etc.

So, what’s the alternative?-Goodbye Agile Contract, welcome Lean-Agile Agreement

First of all we’d like to change the term „Contract“ into „Agreement“, because it has „agree“ in it and if we’re believing in true agile values such as trust, honesty, etc. we’d also respect a co-creation of the legal agreement. In our cases with Lean-Agile Procurement we’re applying this principle of co-creating very successfully which leads to more honest conversations between all parties about each others concerns, risks, cost-drivers, etc. A CEO of one of the vendor’s recently even said, this is the fairest agreement we’ve ever signed!

“This is the fairest agreement we’ve ever signed!”

— CEO of a Vendor while applying Lean-Agile Procurement

We also  need to understand, that there are no agreement, that are evil. We should more think of all the different agreement types as of a continuum, or different meals we can choose from depending on our context. Find some listed the following.

Time & Materials is one of those agreement types, that could make sense in certain contexts. But and there is a big BUT, we need to have a honest conversation about the risks we’re transferring to the buyer side and how to handle those. Of course there are quite radical agreement types, such as e.g. „Outcome-based with profit sharing“, service subscription, etc. that might even change the business model. Do you remember, that e.g. Rolls Royce - one of the biggest suppliers of aircraft engines and services - switched to a service subscription where the airlines „just“ pay per flying hour?-But that’s another story.

On the continuum you’ll not find fake agile agreements such as e.g. Story point based agreement or Sprint-based agreement. Just think about who is in control of story point estimation and you’ll realize that this makes no sense. If any kind of estimation point makes sense it would be Business Value Point estimation. Or why should we create more legally overhead at the end of a sprint e.g. every week as an iteration is more an opportunity to test our assumptions and learn together.

As we’re also not looking for 100-pages legal documents we also should consider to keep an agile agreement as lean as possible. That’s why we’d like to introduce to the community a new term „Lean-Agile Agreement“!

Goodbye Negotiation, welcome Commercial Conversation

As mentioned above a key aspect of a Lean-Agile Agreement is collaboration between the parties and taking this to an even further level of co-creation. On the other hand we need to say goodby to endless negotiations, approvals, etc. Here Lean-Agile Procurement as an approach could be beneficial. We often spend less than 20min for finalizing the agreement with a 3rd party thanks to the fact, that we have all the right people in one room simultaneously.

We’d like to have honest commercial conversations where we act on the same eight level and improving of the Lean-Agile Agreement together is not an exception but more of the new normal. To foster collaboration and this commercial conversation we’ve asked ourselves what are the key aspects that drives, or blocks an agreement. Find a collection of topics as cards for self-printing the following. 

Get a joint understanding what each of the topics means to you, what other topics might be important to you and try to prioritize the LAP Agreement Cards together to get an understanding about each others values, concerns, etc. Btw. have I mentioned that „negotiation“ is a term from the past too :-)?-We’re also looking to improve this wording into „Commercial Conversation“.

Our key take-away

• Agile Contract is an unfortunate term because it consists of „Contra“, that doesn’t fit really with agile values & principles.

• We therefor should start using Lean-Agile Agreement, that pushes the principle of lean, joint agreement, co-creation more explicit.

• There are no agreement types, that are evil. We should more think of all the different agreement types as of a continuum to choose from depending on our context, people, culture, etc. The LAP cards are supporting us here.

• The LAP Agreement Cards also support us in the commercial conversation based on agile values & principles instead of traditional negotiations.

Find out in our next blog post why we need a major upgrade of the agilemanifesto.org

Author

Sources:

• Header image: https://cutecatsinhats.com/unicorn-cat-hat/

• 1) agile https://agilemanifesto.org

• 2) https://dictionary.cambridge.org/de/worterbuch/englisch/contra

• 2) Legal dictionary https://legal-dictionary.thefreedictionary.com/contract

Big Room Event - How to co-create an Agile Contract in less than 2 days with 3 parties simultaneously

The fascination with Lean-Agile Procurement lies definitely in the big room events, where we gather customer needs with 100+ end users or co-create a Lean-Agile Agreement (Contracts) with e.g. 3 parties each or even let them form alliances as they go. People that hear that often think this isn’t possible, it sounds like magic because up till now it took us months to just finalize a contract!-In this blog post we’d like to share with you the secret sauce and some tipps-n-tricks around it, preparation! 

PLEASE NOTE: First of all we need to set a disclaimer. Not a single case in a complex space we operate in was the same. In other words look at this blog post as well as on Lean-Agile Procurement in general more of a framework. This framework might inspire you, in rare cases it even solves exactly your problem, but it’s definitely no checklist. Use your brain-power of the cross-functional team, take bits and pieces and adapt it to your needs!

Introduction

If you are the one, or part of an organization, that likes to organize a Big Room Event to decide on a partner, their service/product, etc. this seems like a huge challenge. Get inspired how it looks in reality in this fast-motion video with the CKW Group. They called it internally Pocathon (Proof-of-Concept + Hackathon).

A lot of people from various parties are swarming in the room and work on something. It looks like in a beehive and yes there are some similarities with it. We arrange the shortlisted vendors around the queen bee, or in our case the buyer’s cross-functional team, their decision taker, etc. (table in the center of the room). Everybody (vendors) should have always a direct access to the customer to ask questions, etc..

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The reason we organize such an expensive event is to get the maximum alignment out of it and so minimize risk by talking about all assumptions, risks, etc. Doing so we improve each of the proposals and the contract. We even try to use the expertise in the room of the vendors to let them come up with their ideas (wow the first time we’re getting Innovation through collaboration), or let them challenge an intermediate result from their competitors. This might sound unfair, but basically our intend is different. We wanna make them learn and improve, so that not just the buyers risk get decreased, but both sides win.

“None of us is as smart as all of us.”

— Ken Blanchard

It’s all about Alignment

Beside the traditional Business Fit around pricing, quality, timing, etc. we introduce with Lean-Agile Procurement also a Cultural- and Human Fit!-From our experience this is in complex sourcing cases as important than choosing the right product/service. However the vendors often experience this as assessment and it really is one. Similar to a Speed-Dating we wanna test our collaboration even before we get married!

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Source: LAP Alliance, by Philipp Engstler

Another big difference is the set of values we apply during Lean-Agile Procurement and which become the new values for the cross-functional team for delivery. As we’re looking for a true partnership agile values like transparency, honesty, commitment, or fairness apply e.g. also while the „negation“ and co-creation of the contract.

“This is the fairest contract we’ve ever agreed on!”

— various parties joined a Big Room Event

Everything you need to know

So before we give you some insights about how we’ve organized Big Room Event in the past you need to ask yourself:

WHO & WHAT’s needed to agree in a minimum amount of Time?!

Just answer this question in your context and you’ll get the RIGHT setup and agenda for your case. You’ll realize that this means a lot of preparation, where you’ll need the full attention of the cross-functional team.

Agile Organization of your Big Room Event

It turned out a good practice to apply to the facilitation of a Big Room Event agile practices as well and that’s why we usually sprint in several iterations through all the topics below. Sprinting allows us to get and share fast feedback and learn for the next iteration. This improves every vendor’s results with every iteration and at the end we’re able to choose the best of it!-You need an Agile Roadmap as an appendix to your contract?-Well then iterate on it and improve it together until it’s “Good enough”!

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Source: LAP Alliance - Principle Big Room Organization

Depending on your preferred Lean-Agile Agreement (Contract type) you might not need some of the topics below. Also a Proof-of-Concept (PoC) sometimes isn’t appropriate, but I wouldn’t miss to let the vendors create at least a presentation, or a solution design or similar. If we’re sprinting, why not introducing the results to the real end-users again from time to time and get their feedback too?-Or let the vendors pull their topics in a joint planning and test their commitment right away.

Backlog of possible Topics

• Introduction: Getting in touch, who’s here, in what role, what 

• Approach & Agenda incl. Definition of Done (DoD)

• Alignment/Context: Vision, business objective of product/service (buyer/vendor)

• Persona’s: Customer segmentation, it’s importance & needs

• Agile Roadmap incl. Objectives & Key results

• PoC: Delivery/Presentation of most challenging aspects

• Lean-Agile Agreement: Improving draft of agile contract, it’s commercial-/collaboration-model, etc.

• Solution: Technical design/-conditions

• Estimation: Putting the numbers together & agree on risk-share, assumptions, etc.

• Demo’s: Presentations of intermediate-/results/content for the participants or with the main stakeholders

• Peer-feedback: intermediate feedback/decisions

If this is your first Big Room Event it’s recommended to include at least a facilitator that is used to handle 20+ people. Furthermore I always create a script with a detailed estimation for each time box so that it’s more feasible how long it really takes. However, you always should expect the unexpected at any time and then react!-We once realized that the license model was super complex and we immediately stopped the workshop and let the 3 competitors co-create the optimal license model together. 

Good Practices

Find some more good practices below:

• Sprinting: Iterating on above topics with joint events such as Sprint Planning, Review, Retro

• Fixed Time-boxes: Strict facilitation of time-boxes 

• PULL: Self-organization of vendor teams

• Facilitation: Mix up with various big group facilitation technics

• Co-location: All in 1 room all the time, except for confidential topics private sessions

• Transparency: Immediate sharing of new insights

• Collaboration: Let the people work together that might become partners and will ship the product/service together

• Surprises: To test behavior’s under stress insert some surprises and pitfalls too and see how they react on those

• No Secrets: Put anything on the table you recognize such as bad behavior, strange solution, etc. to clarify it immediately

• FUN: Don’t forget to make and keep a good atmosphere 

Management Summary

At the end a short management summary for your decision takers:

• Investment: It’s worth it spending 1-2+ days with so many people so that they all will be aligned and ready to deliver immediately. Imagine the costs, if they aren’t instead?!-An incremental sourcing minimizes risk and maximizes business value at the same time!

• Time-to-Market: Time-to-Market only could improved if we change the way we currently work. As leader you’re in the position to make this work and support the business in keeping up with the market demand. In avg. we have a lead time of 2-4 weeks per case (Big Room Event included). This is an improvement of 400-800% to traditional approaches!

• Constraints: This new way of working doesn't come for free. It needs a high support from you as a leader because we need to rethink and bend a lot of existing rules. However, as we have all experts e.g. from compliance, procurement, business, etc. in the cross-functional team we ensure to stay complaint all the times. So no worries!

• Presence: Being present as a leader makes a huge difference and gives the topic it’s importance and you could support with an introduction in business objectives, the vision, or support the cross-functional team with your experience e.g. during negotiations, critical questions or situations, etc. If you’re not needed you could just be there and enjoy working without disturbance :-)

I wish you all the best with your application of a big room event. Let us know how it went!

Author

Sources:

• Image: https://www.fotocommunity.de/

• Video: CKW Group

• Content: LAP Alliance, all rights reserved

Rolling out Lean Agile Procurement at BNP Paribas: A retrospective.

GUEST Blog Post: We’re proud to co-publish and share with you a very honest retrospective by Reeve Randriamananjara rolling out Lean-Agile Procurement at BNP Paribas. He described his journey from being infected by the LAP virus in one of our public workshop, over convincing his stakeholders at BNP Paribas to actually executing a first pilot. Thanks so much for sharing your story and we’re keen on your further developments with LAP@BNP Paribas :-)

The training

1 March 2018: Snowstorm in Switzerland. All planes going to Geneva had been grounded. Luckily my plane was heading to Zurich. However I only had confirmation that I was going to fly a couple of hours before the check-in at Brussels airport. From Basel, I had to take the train to Rotkreuz, home to the pharma giant, Roche. Rotkreuz was also where my one-day Lean Agile Procurement training was going to take place on the following day. But what was I exactly looking for?

Well, I was on a mission to challenge myself and take my 15-year IT procurement experience to another level. For over a decade, I had always been facing the same challenge: lengthy sourcing processes (request for proposals or RFP's, that is), poor alignment with project teams and, occasionally, conflicts with the vendors around the signed contracts.

There was a permanent debate between us, buyers, who demand that our IT colleagues wrote down 100% of their requirements as a condition to send out an RFP. My colleagues, on the other hand, needed a fast sourcing or procurement process, seeing it as necessary pain. Something was structurally wrong and it was high time we changed our ways. This is where I had decided to embrace Lean Agile Procurement.

What is Lean Agile Procurement?

 "I took a speed-reading course and read War and Peace in twenty minutes. It involves Russia.” - Woody Allen.

As Woody says it, Lean Agile Procurement is difficult to put in a nutshell.

It is an Agile procurement or sourcing framework that allows businesses to find solutions for complex and/or strategic IT projects; complex as in "we don't know what our customers want exactly and there isn't an off-the-shelf piece of software for that".

What it takes is a clear vision and part of the required features. More importantly, Lean Agile Procurement vows to reduce the time it takes to search, find and select the most appropriate vendor for a project. It claims to do so in days or weeks instead of months. And that's bold!

Lean Agile Procurement basically merges the RFI (request for information), RFP and contracting processes in a couple of daily workshops with the vendors. It invites people on either side of the negotiation table to fully cooperate by being transparent, focused and bringing the right people around. Last, the canvas is Lean Agile Procurement's keystone.

The framework is heralded by the folks at Flowdays. Mirko Kleiner tirelessly preaches all over the world. Interestingly Mirko doesn't have a buyer profile at all.

Complex projects have the following features: Those who sponsor them take strong commitments vis-a-vis the top management who, in turn, take commitments with the market and customers. Additionally innovation is the bottom line. So there is a huge constraint and expectation in marketing the right output the sooner the better. If either the deadline is missed or the deliverable is of poor quality, your competitor will move ahead and the organization will be left behind dealing with project cost overrunning, litigation with vendors and more stress on extended project team members to fix things.

Lean Agile Procurement promises to satisfactorily address the issue. Yet, to paraphrase the definition of Scrum: Lean Agile Procurement is simple to understand and difficult to master.

What Lean Agile Procurement is not or can't do

Lean Agile Procurement is not a miraculous therapy for dandruff, stinky armpits and smelly feet.

•  It isn't advisable if the product or service you are looking for is neither complex nor strategic. On the contrary, using it for everything will be counter-productive for your organization.

• It can't be the last resort to hastily shortcut procurement processes for ill-thought projects.

• It takes a huge toll on your workload; meaning that all other topics will have to be postponed until the process is done. Believe me when it is, all other topics will pop up again and hit you hard.

• If Agile values and principles are neither fully understood nor shared nor trusted, don't go for it. You will end up perverting the system and cutting corners.

So now, how did we do for our first project?

Finding candidate projects

Once I have received my Lean Agile Procurement certificate, I was full of hope and eager to implement the method as soon as possible. I quickly identified a first project in the same month. Of course, the project team was in a hurry and they asked me to advise on the best sourcing approach. I gave them the choice between the classical RFP and the experimental Lean Agile Procurement. They shrugged off the latter and eventually opted to stick to the standard process. Eventually, 8 months later, the RFP was dropped. What a disappointment.

Later in October 2018, a colleague asked to brief him about the standard procurement process and lead times for a strategic project. I told him to start filling the Request for Information (RFI) template documents with his requirements. I also warned him that it may take up to 6 months to have a contract ready for signature. He shared my warnings to the project team members. One of them called me back asking me if there was a way to make it in 2 months because they had to select a vendor by end of December.

So I took a poker face and told her quietly that I had a solution. The only trade-off I requested was everybody's full availability and dedication during those 2 months. And it worked.

From my initial procurement plan…

 Initially my plan was:

1. Send out a concise RFI with our vision, a description of our project, what we are looking for with a handful of requirements and leave the vendors 2 weeks to reply.

2. Analyze the answers and shortlist vendors for the workshops.

3. Invite the shortlisted vendors to come and attend a 1st workshop and share their questions with us and their competitors.

4. Prepare the Lean Agile Procurement canvas in order to share it with the vendors during the 2nd and 3rd workshops.

5. Invite all shortlisted vendors to come and attend a 2nd workshop and start collaborating using the canvas as the guidelines for the negotiations. The draft of contract would also be filled in. At the end of the day, we would share our feedbacks with the vendors and shortlist a few (i.e. 1 or 2) for the 3rd workshop.

6. Invite the shortlisted vendors to come and attend a 3rd and last iteration of the workshops. Again feedbacks to the vendors right at the end of the sessions.

7. Submit our vendor recommendation to the steering committee and confirm the award to the selected vendor.

8. Sign the contract and kick the project off.

… to our final procurement plan.

This is what we eventually did:

1. We wrote a 6-page RFI. The project team felt more comfortable with annexing a spreadsheets that contains requirements such as a fair list of features, a high level project, technical, operations, legal, commercial, ethics and vendor due diligence (i.e. financial risk assessment).

2. We elaborated an RFI balanced score card for the requirements we have listed. The format I have suggested has been discarded in favour of an old one everyone else was comfortable with.

3. We invited all vendors to attend the 1st workshop. However we didn't anticipate that vendors wouldn't speak their minds as they were surprised to find each other in the same meeting room!

4. Broadcasting the Lean Agile Procurement canvas received a lukewarm welcome among the team. In other words, nobody wanted to leave it in the clear. So we used the RFI score card structure as the guideline for our negotiations.

5. We held one workshop per vendor. The project team thought it was disrespectful to vendors to have them all in the same session and do a beauty contest. This was obviously more exhausting: Instead of one day with all vendors, it was a full week of 4-hour workshop with each. Also our legal team didn't wish to participate leaving the contracting as the last step of the process. As I expected it, this added another two intense weeks after the December deadline.

6. The last workshop worked well but was equally demanding.

7. There were a few requests from the steering committee that led to an extra-negotiation over the phone and via e-mails with the selected vendor. I expected this so no specific issue there.

8. The contract negotiations added some delay but it was great to see that those who participated to the workshops earlier on either side were perfectly aligned. So two weeks to close a contract in a fair constructive way wasn't bad at all.

The check list for success

 Here are my recommendations for a successful Lean Agile Procurement:

• Ensure people are available and focused during the workshops. This is a strong prerequisite. This entails everybody to be in the same place and participate (no multitasking).

• Prepare sufficient training and communication for the people who will be involved.

• An reciprocal non-disclosure agreement (NDA) is compulsory as usual. Your organization must have a template available. Note that a vendor that is too picky at NDA stage must be discarded. It is usually a bad sign.

• Keep your RFI content concise. 5 pages are recommended. Sentences must be clear and short. Avoid unnecessary (procurement and legal) jargon.

• The canvas is a must. It is difficult to draft if your mind is unclear. If you can't fill then you are neither ready to share your vision and objective nor ready to engage in a transparent and constructive conversation with the vendors. All your organization project documents must serve as annexes to the canvas.

• People (including all vendors) must be in the same room. Forget concerns about a vendor stealing new features from their competitors and releasing it fully-tested by the time the RFP is awarded. It is very unlikely to happen.

• The sponsors must participate to the workshops. They can't just be the "second negotiation table behind the scene" acting like the hidden puppet masters of the negotiations.

• Brief your project team members that they have to be very demanding with the vendors. Similarly, prepare them to be equally put on the grill by the vendors. Gone are the days where the mighty client knows it all and the vendor just executes.

• Still, it is acceptable not to have all vendors attending the same workshops. Keep in mind that this is more exhausting and vendors will attempt to regain control over the process by playing the game they know (i.e. the sales rep running the show and the other guys remaining silent for 4 hours).

• A 4-hour long demo is the best basis for the workshop interactions. So request your vendor to come ready. The canvas will be filled in by the buyer and the sales person.

• The inputs of the workshops must immediately fill the annexes of the future contract. So again, have the contractual structure ready and shared. Leave the main body of the contract to the lawyers though.

Lessons learnt and achievements

•  Lesson #1: Don't assume that those who blame lengthy procurement processes are ready to change them and adhere to Lean Agile Procurement.

• Lesson #2: Use the project's time constraint as an advantage to market the Lean Agile Procurement method internally.

• Lesson #3: Keep in mind that anything in Agile can adapt and improve. So procurement dogma don't always apply here.

• Lesson #4: Vendors are wary of their competitors. You have to factor that in when explaining the process and the project. Keep reminding them what the process is good for.

• In just one attempt, we managed to reduce to procurement lead time from 6+ months to 4 months. 1 cumulated month was sufficient for all workshops and contract negotiations. Also, Lean Agile Procurement has demonstrated that the Procurement department is a trusted partner for ambitious projects. To my surprise, we received very positive feedbacks from both sponsors and… vendors. And the word is spreading around faster than expected.

Conclusion

 I reckon I did find what I was looking for when I attended the Lean Agile Procurement training on a snowy day in Switzerland. So I will keep pushing. You might try it too.

For more information about Lean Agile Procurement, get in touch with Flowdays (https://flowdays.net/en/home) (https://www.lean-agile-procurement.com/#home/comparison).

From more information about Scrum (an Agile framework), read the Scrum guide (https://www.scrumguides.org/docs/scrumguide/v2017/2017-Scrum-Guide-US.pdf) 

Before you leave this page:

I have enrolled for a User Experience course. Will you help me?

Users are often neglected when organisations decide to implement new projects. I have decided to do something about it whether it is for my daily job or for a longer term career plan.

I am building an airline booking system (desktop website and mobile app) for my portfolio. And I need your help to progress.

Right now, I need to have this online survey form filled: https://www.surveymonkey.com/r/MMX8SLG.

Could you please take some time to fill it in? It takes approximately 5 minutes.

Thank you!

Original source of the blog post:

https://www.linkedin.com/pulse/rolling-out-lean-agile-procurement-retrospective-randriamananjara/

Author

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Reeve Randriamananjara

IT Procurement Specialist.
BNP Paribas Asset Management

Linkedin Profile

Agile@Procurement - Down under takes over!

During our exciting 2-days Lean-Agile Procurement certification workshop in Auckland some of the participants came and said to us: „Wow this is so awesome, but our boss/peers/etc needs to know about that too!“-As agile we are we setup some FREE one hour slots called Lean Coffee’s, where those participants could invite wherever they liked. This blog post is about what we’ve experienced & learned during those coffee sessions. Be aware, down under is about to take over the Lean-Agile Procurement movement!

As usual we had a very diverse group of 25 attendees in our 2-days certification workshop Lean-Agile Procurement (short LAP) in Auckland. Consisting of procurement and sales professionals, agile coaches, digital experts, even some lawyers. We haven’t had just a big diversity between roles and companies, but also on levels. From c-suite, CPO’s over strategic buyer/account manager to Program Managers, etc. we had almost the whole value stream represented. A very good base for open minded exchanges and one of the reason I personally like to work in that domain. Did I mentioned that we've been SOLD OUT!?

However, during the workshop 2-3 attendees came across and told us, that their peers should know about LAP too, because they thought it would bring so much value to their work/business/etc too. That was the moment, where we decided on the spot to offer some 1-hour FREE Lean Coffee sessions. Within minutes the slots were taken by the attendees for various reasons I suppose: Convincing their boss/peers, inspiring other departments, or getting some like-minded people together to start their first pilot project using LAP right away.

We had a comprehensive list of businesses from private and public sector to visit:

• Air New Zealand

• Tower Insurance

• Vodafone

• University of Auckland

• ASZ

Day after the workshop we started our first lean coffee session.

Air New Zealand

Jakub Jurkiewicz an enthusiastic Agile Coach at Air NZ asked for this session and made it happen, that we’ve been part of the team meeting of the whole #procurement team of Alistair Prebble, Head of Procurement Air NZ. Some more guys from the digital department squeezed in too so that the room was full.

Each party shared their current status, learnings and pitfalls. It felt like we‘ve cooperated already for years.

It turned out that the procurement team and their digital team has experimented much more as the average company we‘ve met so far. For commodity sourcing cases they‘ve invested in Lean Procurement and digitalization from source to pay as many other company. 

In digital initiatives they‘ve experimented with more collaborative tenders as we did with LAP. They haven‘t gone as far as we did but they for sure will now they‘ve seen how!

Even more interesting to see was that the procurement team of Air NZ has started to make their work visible using Kanban Boards. They are just one step before creating cross-functional teams as Barclays did.

Vodafone

Right after the Business Agility Meetup I went with Jörg Breitenberger, Agile Coach with Vodafone, to a Lean Beer and we had a good exchange about agile transitions, pitfalls and how this could drive enthusiastic employees into demotivated ones. Our key conclusion was we need to onboard everybody, especially the top management so that everybody understands why we‘re becoming agile and how.

Tower Insurance

Bruce McClintock, an extraordinary person with a background in law, economics, IT and Agile wanted to get us in touch with Stu Waddington a like-minded program manager at Tower Insurance. He runs currentely one of the biggest program at Tower in digitalization and we had a lot of stories to share about. One key takeaway was that getting the #RIGHTpartner is key. Especially if we have to deal with a lot of uncertainty and surprises as we go. They‘ve shared their current contractual setup where Tower has agreements on packes of story points with their partners. It works out very good with them, but we shared our concerns about it with them. Because it might be a risk if the partner is in control of the kpi he gets mesured and payed. 

The way how they currentely source is quit traditional and takes a lot of time in a complex environment, what a surprise. They’ve might got some inspiration from LAP for future projects.

University of Auckland 

Xian Fu organised a session with David Rees‘ procurement team and representatives from project management. The university of Auckland is under #publicLaw and we had very interesting and open minded discussions how to apply LAP at #GOV. They run all digitalization already in an #Agile setup and to our surprise David spoke about how they’ve source in a more collaborative approach even before the agile movement 20-30 years ago. We encouraged them to publish the way they did and they definately toke some inspiration out of LAP. Such as to improve the collection of customer needs in a more collaborative approach.

ASB Bank

Last but not least Lean Coffee session was organised by Kerry Walden and she brought us in touch with Mark Jones, General Manager Procurement ASB Bank and Chris from their digital department.

They started the exchange we #DONT run classic tenders any more. We tend to get in touch with our partners, agree on just 3-4 pages contracts and gather customer needs eg. via design thinking workshops.

On the other hand they do have room for improvement in automization of commodity sourcing cases. Or may be I‘ve got them wrong?

What they did naturally we‘d call the #futureOfProcurement. They‘ve started to establish #businessPartnerships and supported the business on site as part of their cross-functional team. It worked out very good with them and after a 6 month experiment they look forward what to do next. That the whole bank is under an Agile Transition definitely helped to encourage running such experiments.

Conclusions

What we‘ve seen and heard about Agile@Procurement in these couple of hours was more promising then what we‘ve seen so far in Europe or the States all over!-The Kiwi's might be still be behind in terms of Business Agility, but if it comes to being open minded in procurement we'd wish, that more companies and leaders are behaving like them. Beware the Kiwi's taking over the lead in the movement Lean-Agile Procurement :-)

We‘d like to encourage you to connect to these leaders and exchange about their learnings. Take an examples of a more customer centric procurement and overcome the classic traps. Or as Ross recentely said, at least similar :-): The future is now, what are you waiting for!

Special thanks goes to Andrea Gregory, Head of Procurement Tower Insurance, who connected the dots and brought us over to New Zealand!

One more thing: We learned a lot to and will definitely repeat it as we think it was a win-win for both parties. Also we will have another 2-days certification workshop in Auckland and may be in Melbourne again end of 2019. Stay tuned and check our workshop calendar

3D-Printed Aircraft Engine - Is your Procurement as agile?

This week GE released this great GIF of its 1,300-horsepower advanced turboprop (ATP) engine in which more than one-third of the components have been built through additive manufacturing, or 3D printing. The company is showing off its creation in real life at this week's big air show in Oshkosh, WI. In other words hardware development is getting more and more agile, is your procurement as agile?

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Background

Already in 2016 GE reported the first 3D printed jet engine. They made a simple 3D-printed mini jet engine that roared at 33,000 rotations per minute.

In contrast to traditional machining methods that typically cut parts out of larger pieces to get to a finished shape, additive manufacturing uses lasers to fuse thin layers of metal on top of each other to build parts from the ground up. This advanced technique means less material waste and more complex parts that can be built precisely to optimize how they work inside a machine.

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“This is not a matter of simply replacing one production method with another, but of reinventing the way aviation engines are conceived and designed”

— Giorgio Abrate, engineering lead at Avio Aero, the GE subsidiary that developed the ATP.

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"There are really a lot of benefits to building things through additive,” says Matt Benvie, spokesman for GE Aviation. “You get speed because there’s less need for tooling and you go right from a model or idea to making a part. You can also get geometries that just can’t be made any other way.“

As Joe Justice, creator of Scrum@Hardware, Scrum Inc. recently mentioned: „Thanks to the new technics it’s no problem any more in hardware development to build an engine (working increment) within one iteration!“. One iteration is by definition of scrum less than 4 weeks, modern teams usually use 1-week sprints. 

Conclusions

If hardware development is getting that fast and flexible procurement has to adapt too. It’s predictable, that we will change our partners in a much more adaptive way as we'll do with the production method depending at the current customer needs. In other words we need to close the gab regarding speed (DAYS instead of MONTHS) and become as innovative in sourcing a new partner as the product development is.

Read more about how you could do that with lean-agile procurement

Sources:

http://www.ge.com/reports/reengineering-elevators-transform-21st-century-cities/
http://www.ge.com/reports/treat-avgeeks-inside-look-ges-3d-printed-aircraft-engine/
GE Made a Real 3D-Printed Plane Engine and Here's a Gorgeous Look at It

Does the RfP Process need a MAJOR Upgrade - Episode 3: RfP 3.0 'Request for Participation'

Looking back in the history of the RfI/RfP process we see, that it’s source was developed in another time at the end of the 19th century. Of course the new channels like phone, email, web, etc. allowed new possibilities and increased efficiency. However the core of the process stayed nearly the same. Do we may be need a major upgrade after almost 120 years?

Lets have a look at the RfP 3.0, the request for participation and how this improves competitive advantage of buyers and suppliers.

<< Previous blog post: Does the RfP Process need a major Upgrade? - Episode 2: The Facts

Please note: This blog posts is focusing just on the RfP process. We are aware of the fact that modern procurement is much more than this. We hope you enjoy another perspective!

“Lean-agile procurement reduces and distributes risk through incremental and value-added funding for improved business outcomes.”

— Pete Behrens, Board Member of Scrum Alliance

In previous blog post we’ve learned, that the RfP 2.0  doesn’t work with complex tenders . What we all assumed is underlined with facts. We can’t predict, nor estimate the unknown and so we can’t specify the scope without creating waste. We would need so much time for investigation, that we already could start probing iteratively. Furthermore, we’ve learned to focus to the end user/customer needs, constantly validate those and look for a future-proof partner instead of a predefined solution. If we don’t reinvent RfP 2.0 fundamentally we might loose more and more  potential partners interest and with that we’ll also loose opportunity for unexpected innovations and so a potential competitive advantage.

All this leads us to the conclusion, that we need a major upgrade of the RfP, the RfP 3.0!-An upgrade, that  fosters collaboration and innovation. We call it „Request for Participation“. But how does it look like?

The thing with trust

The fundament of a partnership is trust and transparency. Have you noticed?-We’ve said partnership instead of relationship, that’s the first fine but big change with RfP3.0. In an ideal world we would just choose a partner and  start probing iteratively. Unfortunately, our current culture and believes are not yet there. So we need something in between. The funny thing with trust is, it works in both ways. This often gets forgotten. In other words we need to establish trust and reduce risks for both sides (buyer and partner) at the same time. Therefor we can create sophisticated agile contracts, that describe and handle collaboration, scope, timing, budget, quality, warranty, etc. Personally, I don’t believe in that way and I’m more with Marco Zoppi.

“If the customer is starting to quote from the contract the cooperation has just found it’s end”

— Marco Zoppi  († 2015), CEO youngculture

Sure, we have to manage the basics in a contract, no doubt. But I’m a strong believer in the good idea of men (theory Y, source 1) and we should not punish the majority, because of some few bad theory X cases from the past. By the way, Niels Pflägin said: "There are NO X-er by default, the system / organisation makes them behave like X-er". 

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Source: Douglas McGregor, Theory X/Y

Instead we should find lean and agile cooperation models and -contracts, that are fair and foster trust by e.g. 

• risk share
• bonus / money for nothing, if we achieve the goal/s earlier
• work / fund just stages, with the option of an early exit at any time
• partnering / open books / joint venture
• etc.

So that the partnership stays adaptive instead of fixed.  In my opinion, that’s true agile contracting!-But that’s another story.

Paradigm changes

Currently agile is the only approach we know, to deal with complexity. Its built in approach of build <> measure <> learn brings us iteratively towards the right solution. For the RfP 3.0 this means, that in complex tenders for innovation, business services, ICT, etc. it makes no sense any more to think off solutions (features / functions) or wants in advance. Instead we need to focus on the customer needs and with whom we could solve them best. All this is a creative development, that we only could achieve in a participative approach. The potential partner and all stakeholders from both sides (business, executives, lawyer, buyer, customer / user, developer, etc) need to be involved at once. YES, that means we do this all together in ONE room. This allows both sides to align with the customer needs, but also check if the partner is future proof, if we have a culture-/technical match (soft-/hard skills), etc. Only with this participative, creative development we will create real innovation and get first validations with the stakeholders available. Further advantage of this approach is speed (Time-to-Market). If we get all stakeholders in one room we can immediately decide and achieve results in DAYS instead of Months. We see this from other examples, like e.g. Design Thinking, Hackathons, etc. where time-to-market was improved with such a participative approach dramatically.

Acceptance of uncertainty

But how can we cope with this uncertainty of an „unknown“ solution (scope gets variable)?-Well, there are other disciplines out there, that face a similar challenge. If we think about business development they’ve used to write big business plans and switched over to the business model canvas (a structured page that describes a business model, source 2) and lean startup (an agile approach for early validation of the hypotheses with the customer, source 3). 

The general advantages of a canvas are:

• it’s just one page and we have to focus to what really matters
• it’s a good overview / summary, that makes the essence transparent
• it makes things comparable
• it keeps us aware, that everything is connected and influences each other
• it’s a tool, that fosters collaboration and we could use every day to update our validations with customers /users

Source: Lean Procurement Canvas, Version 1.22 by Mirko Kleiner

What if we use the business model canvas for ideation and overtake the concept for procurement with RfP3.0?-We’ve created the lean procurement Canvas, that has basically 3 areas: 

1. Focus - Strategic themes / goals (WHY we need this partnership)
2. Customer facing - Customer needs, timing, conditions, etc  (WHAT we’d like to solve with this partnership)
3. Partner facing -  Capabilities, USPs, etc. (HOW we’d might solve the customer needs)

After  ideation with the business model canvas it’s very easy to overtake the strategy (WHY) and the customer needs (WHAT) and add the timing (WHEN), the people (WHO) and the conditions (WHERIN) within hours. With this we have the basic informations to start a participative event with one, or multiple potential partners. On this joint event we workout, whatever is valuable for us to decide starting an adaptive partnership. We could work out together more concrete customer needs and appropriate solutions, an agile roadmap of the next stage, etc. Basically we complete together the procurement canvas and decide.

“The lean Procurement Canvas is an agile Contract”

— Ursula Sury, Lawyer lic. iur, Vice Director Lucerne University of Applied Sciences & Arts

Start early, validate often

What counts for a business model and in more details for the customer needs counts also for a partnership. Instead of loosing time in non-valuable work we start as early as possible and constantly validate the joint achievements stage by stage and so the partnership. Therefor the lean procurement canvas becomes the tool for management of your adaptive partner ecosystem.

Conclusion

It turned out, that the lean procurement canvas can be used in all areas and industries, that have to overcome complex tenders, adaptive partnerships, etc. We get increased business value with RfP3.0 (increased time to market, reduced and distributed risk, incremental and value-added funding, improved business outcomes, etc). But for us most important, with the participative approach of RfP3.0 we’ve seen returning fun in the faces of all stakeholders!

Want to know more?

If you’ve got infected by the approach RfP 3.0 ‚Request for Participation‘ feel free to share your opinion and/or similar cases with us. More detailed information about the approach, success stories, the community, upcoming workshops and talks, etc. you’ll find under http://www.lean-agile-procurement.com - Stay tuned!

Author
 

Sources:

1. Idea of men (Theorie x/y) by Douglas McGregor
2. Business model canvas, by Alexander Osterwalder
3. Lean startup, by Eric Ries
4. Title image source: pinimg.com

Going Digital, Procurement in Kanton Zug

Repeating last year’s very successful event, CIPS-Switzerland is teaming up with the Technologie Forum Zug and the Economic Promotion team of the Kanton Zug for this special Procurement & Supply Chain (P&SC) event. Speakers include leaders from companies with regional or global headquarters in the Canton around the theme of “Going Digital, flowdays took place with a booth to represent the disruptive approach lean-agile procurement.

Procurement in Kanton Zug”. It is well known that Zug is fast emerging as a leading P&SC cluster in Europe. In addition to hosting drinks and snacks to facilitate participant networking – several Zug-based Procurement Service Companies with be available for follow-up discussions (including Consultants and Headhunters).

The speakers where:

Mr André Wismer, Biogen Switzerland AG, Product Specialist
André Wismer holds a Bachelor degree in BA with a focus on International Management and Economics (IM&E) from the Lucerne University of Applied Sciences and Arts (HSLU), Switzerland, and an MSc in Logistics and Supply Chain Management from Cranfield University, UK. His presentation at this CIPS event was about his research obtained during his MSc thesis project and provide interesting insights based on Swiss based companies.

Conclusions: Find his main findings below:

Mrs. Leong, Cecilia, Olin Corporation, Head of Regional Purchasing EMEAI & APAC and Global Business Excellence
Head of Regional Purchasing EMEAI & APAC and Global Business Excellence Leader with Olin Corporation, Cecilia has throughout her career provided the transformational leadership. This has enabled operations to become effective and efficient commercial organizations. She has excellent cross-functional global program and project management skills, and has built a year-over-year portfolio of achievements includes million-dollar revenue and profit gains, operational improvements and innovative solutions that set the stage for both immediate and long-term growth.

Conclusions: Before introducing a new, expensive system for procurement check what your CRM could serve you. Cecilia showed, that the roles and the requirements towards a system are quite similar for a marketeer and a procurement manager.

 
Mr Adrian Doyle, Amgen Europe, Global Strategic Sourcing, Head of Region Europe
Having over 17 years of procurement experience in the pharma industry Adrian has a wealth of commercial category, regional and global sourcing expertise. Starting in the UK with GlaxoSmithKline, about 4 years ago he moved to Switzerland to join Amgen’s Strategic Sourcing leadership team.

During the Networking and Interaction session flowdays was present to introduce the procurement experts into lean-agile procurement. The echo was awesome, as we've got even 5 feedbacks like this:

“lean-agile procurement is a real disruption, you should have been talking about before”

— various procurement experts

a special thank to John Everett, Branch leader at CIPS and organizer of the event!

The agenda was:

17.30  Event Registration and Refreshments

18.00  Event Start and Introduction

18.05  Mr Andre Wismer, Biogen Switzerland AG - Digital Transformation of Swiss Procurement

18.35  Mrs Cecilia Leong, Olin Corporation - Procurement can be early adopters

19.05  Mr Adrian Doyle, Amgen Europe - Procurement enabling digital engagement 

19.30  Networking and Interaction with Zug based companies including:

   Customer Value Management GmbH

   EMEA Recruitment GmbH

   Deloitte Consulting AG

   Flowdays

   BSMA-Europe

   Performex Consult GmbH

21.00  Event Close

Drinks and snacks will be provided during the newtworking session.