succes in samenwerkingsrelaties...succes in samenwerkingsrelaties: een juist sourcing business model...
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Succes in samenwerkingsrelaties: een juist sourcing business model
Jeroen van de Rijt
Director
Best Value Group
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Nieuwe luchthaven
Spoedaanpak €800M
Complex IT project
Parkeergarage €55M
Catering
Routine producten
Stratenmakerij
Cataract operaties Sociale domein
9–jarig contract Asset management
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Strategic Sourcing in the New Economy
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Welk spel spelen we eigenlijk?
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MakeBuy
Create
“Corporate
Hierarchy”
Use
“The Market”
Conventional “Buy” Approaches Use “The Market” and
Rely on Transaction Based Contracts and Economics
The Conventional Approach: Make vs Buy
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Transactional “Buying” Has Inherent Weaknesses
Source :Scott Adams, creator of popular Dilbert cartoon. Please see dilbert.com site to purchase Dilbert books, office gadgets, and cartoons.
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Sourcing Business Model Theory
“Market” “Hierarchy”“Hybrid”
BUY MAKE
TRANSACTIONAL RELATIONAL INVESTMENT
BasicProviderModel
ApprovedProviderModel
PreferredProviderModel
PerformanceBased/
ManagedServices Model
VestedBusinessModel
SharedServicesModel
EquityPartnerships
SOURCING CONTINUUM
Source: STRATEGIC SOURCING IN THE NEW ECONOMY: HARNESSING THE POTENTIAL OF SOURCING BUSINESS MODELS FOR MODERN PROCUREMENT, Keith, Vitasek Manrodt & Kling, Palgrave 2015
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Sourcing Business Model and Innovation
SOURCING CONTINUUM
TRANSACTIONAL RELATIONAL INVESTMENT
Basic Provider Model
Approved Provider Model
Preferred Provider Model
Performance Based/
Managed Services Model
Vested Business Model
Shared ServicesModel
Equity Partnership
Productivity Driven Improvements
Innovation
Market Driven Core Improvements
Driven by a formal Innovation
Process and governance.
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Systems Thinking is Key
A well designed
system creates
feedback loops
and creates
desired results
Slinky image by Clare Bell via Flickr CC
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We need “Rules” for creating each system
Business
Model
Scope of Work
Performance
Management
Pricing
Approach
GovernancePURPOSE
OF
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The Rules of the Game
Transactional (Market) Relational (Hybrid)Investment
(Hierarchy)
BUSINESS MODEL
Economic
Model
Relationship
Model
Vision
& Intent
SCOPE OF WORK
Statement of Work
& Objectives
PERFORMANCE MANAGEMENT
Performance
Focus
Performance
Measures
PRICING
Pricing Model &
Incentives
GOVERNANCE
Relationship Management
Improve, Transform
& Innovate
Exit
Management
Compliance &
Special Concerns
Basic
Provider
Approved
Provider
Transaction-based (per
transaction, hour or unit)
Transaction-based (per
transaction, hour or unit)
Transactional /
no relationship
Transactional / supplier
vetted on “Approved” list
Supply at
lowest cost
Recurring commodities at
fair or lowest cost
“Who” and / or “How” “Who” and / or “How”
Simple three-way
accounting match
PO
requirements
Right quantity, right price,
damage-free
Basic provider metrics +
increased quality emphasis
Fixed price / typically no
incentives / volume rebates
Fixed price / low-no
incentives / volume rebates
Delivery & pricing validation
(3-way PO match)
Some performance &
pricing oversight
None /
market-driven
Limited /
market-driven
One-way / limited
commitment to buy
One-way termination for
cause & convenience
Compliance-driven /
survey-based
Typically compliance-driven
/ survey-based
Preferred
Provider
Perf.-Based /
Managed Services
Vested
Relationship
Transaction-based (per
activity, hour or unit)Output-based Outcome-based
Relational contract /
emerging collaboration
Relational contract
(collaborative)
Relational contract
(highly collaborative)
Value-added capabilities
at best value
Performance to SLA /
process efficiencies
Shared Vision, Desired
Outcomes & Value Creation
“Who” and / or “How”
(jointly defined “How”)
“What” and limited
emphasis on “How”“What”
Activity-based
service level agreements
Output-based service
level agreements
Strategic
Desired Outcomes
Operational +
customer satisfaction
Operational + relational
(Values & Behaviors)
Ops + transformational +
relational system-wide KPIs
Fixed price / low incentives /
volume rebates
Price with incentives
and / or penalties
Pricing Model with value-
based incentives
Limited Supplier
Relationship Mgt
Beginning to focus on
incremental improvements
Supplier-driven to meet
SLAs / price glide path
Joint & proactive
Transformation Mgmt.
One-way termination for
cause & convenience
Perf.-based termination for
cause w/ safeguards
Joint Exit
Management Plan
Typically market-based /
minimum audit requirements
Corporate-based
audit requirements
Outcome-based
joint requirements
Investment (Equity
Partner / Shared Services)
Transactional, output-
based or outcome-based
Investment-based
Sustainable Value
“What If”, “What For”
and “When”
P&L-based
Measures
Joint Measures
of Success
P&L-based
Equity Sharing
Shared control and
management
Core innovation
capabilities
Divestiture
Investment-based
joint requirements
Oversight emphasis:
Supplier Relationship Mgt
Insight emphasis: Strategic
Relationship Mgt
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Transactional (Market) Relational (Hybrid) Investment (Hierarchy)
BUSINESS MODEL
EconomicModel
RelationshipModel
Vision& Intent
SCOPE OF WORK
Statement of Work& Objectives
PERFORMANCE MANAGEMENT
PerformanceFocus
PerformanceMeasures
PRICING
Pricing Model & Incentives
GOVERNANCE
Relationship Management
Improve, Transform& Innovate
ExitManagement
Compliance &Special Concerns
Basic
Provider
Approved
Provider
Transaction-based (per
transaction, hour or unit)
Transaction-based (per
transaction, hour or unit)
Transactional /
no relationship
Transactional / supplier
vetted on “Approved” list
Supply at
lowest cost
Recurring commodities at
fair or lowest cost
“Who” and / or “How” “Who” and / or “How”
Simple three-way
accounting match
PO
requirements
Right quantity, right price,
damage-free
Basic provider metrics +
increased quality emphasis
Fixed price / typically no
incentives / volume rebates
Fixed price / low-no
incentives / volume rebates
Delivery & pricing validation
(3-way PO match)
Some performance &
pricing oversight
None /
market-driven
Limited /
market-driven
One-way / limited
commitment to buy
One-way / termination for
cause & convenience
Compliance-driven /
survey-based
Typically compliance-driven
/ survey-based
Preferred
Provider
Perf.-Based /
Managed Services
Vested
Relationship
Transaction-based (per
activity, hour or unit)Output-based Outcome-based
Relational contract /
emerging collaboration
Relational contract
(collaborative)
Relational contract
(highly collaborative)
Value-added capabilities
at best value
Performance to SLA /
process efficiencies
Shared Vision, Desired
Outcomes & Value Creation
“Who” and / or “How”
(jointly defined “How”)
“What” and limited
emphasis on “How”“What”
Activity-based
service level agreements
Output-based service
level agreements
Strategic
Desired Outcomes
Operational +
customer satisfaction
Operational + relational
(Values & Behaviors)
Ops + transformational +
relational system-wide KPIs
Fixed price / low incentives /
volume rebates
Price with incentives
and / or penalties
Pricing Model with value-
based incentives
Limited Supplier
Relationship Management
Oversight emphasis:
Supplier Relationship Mgmt.
Insight emphasis: Strategic
Relationship Mgmt.
Beginning to focus on
incremental improvements
Supplier-driven to meet
SLAs / price glide path
Joint & proactive
Transformation Mgmt.
One-way / termination for
cause & convenience
Perf.-based termination for
cause w/ safeguards
Joint Exit
Management Plan
Typically market-based /
minimum audit requirements
Corporate-based
audit requirements
Outcome-based
joint requirements
Investment (Equity
Partner / Shared Services)
Transactional, output-
based or outcome-based
Investment-based
Sustainable Value
“What If”, “What For”
and “When”
P&L-based
Measures
Joint Measures
of Success
P&L-based
Equity Sharing
Shared control and
management
Core innovation
capabilities
Divestiture
Investment-based
joint requirements
Outcome-based
Relational contract
(highly collaborative)
Shared Vision, Desired
Outcomes & Value Creation
“What”
Strategic
Desired Outcomes
Ops + transformational +
relational system-wide KPIs
Pricing Model with value-
based incentives
Insight emphasis: Strategic
Relationship Mgmt.
Joint & proactive
Transformation Mgmt.
Joint Exit
Management Plan
Outcome-based
joint requirements
Transactional / supplier
vetted on “Approved” list
Recurring commodities at
fair or lowest cost
“Who” and / or “How”
Basic provider metrics +
increased quality emphasis
Fixed price / low-no
incentives / volume rebates
Some performance &
pricing oversight
One-way / termination for
cause & convenience
Transaction-asked (per
activity, hour or unit)
Activity-based
service level agreements
Supplier driven to meet
SLAs/Savings Glidepath
Typically market-based /
minimum audit requirements
PastRelationship
CurrentRelationship
Source: Kate Vitasek and Bonnie Keith
Changing the Game
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• Mix and matching “best practices” without understanding the system implications creates a Business Model mismatch
• Instead architect the “best fit” solution for your solution using a well structured agreement following the Sourcing Business Model rules
“Cherry Picking” the Rules creates chaos
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Lessen
• Diverse vormen van onderhoud vereisen een `eigen` sourcing aanpak
• Er is geen “beste” sourcing model
• Er is een ontwikkeling naar relationele contracten
• Het mixen van modellen leidt tot onstabiliteit
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KEEP YOUR SWIMMING LANE!
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Best Value Group
Jeroen van de Rijt
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