10 April 2014 | Robert Booth
Over the past two decades, shared services became a prominent operating model for business support services. One evolution, referred to as an IBS model, can deliver greater value and returns within procurement – specifically as it relates to innovation, R&D, and manufacturing.
The IBS model incorporates five key integrations – the back, middle and front offices are integrated end-to-end; functions and processes are integrated into client-meaningful services; service delivery is integrated to enable global strategies; sourcing is integrated with strategic partners and IBS strategy is integrated into the C-suite agenda to achieve sustainability.
Accenture has worked with consumer goods companies as they built their global operating model for procurement, using the front, middle and back office approach. Some companies built middle offices that are in-house captive centres or outsourced centres, or a hybrid of both. In other cases, technologies supported the move to a new operating model, as part of a wider business transformation.
Benefits derived from the integrated models include increased efficiency and savings, better risk management and greater client centricity. To capitalise on the ‘digitisation agenda’, companies want a highly integrated digital/IT strategy which focuses human intervention on value-add activities, while automating transactional compliance.
Companies may want to consider:
• Developing an operating model, with clear requirements of the front, middle and back office for procurement
• Uniting the procurement operating model with the IBS journey
• Building a simple governance model that resolves how procurement and IBS will co-exist in the interim
• Developing a clear business case for the procurement and IBS business transformations which includes benefits demarcation
• Acknowledging it is a multi-year transformation (allowing budget for technology and people transformation; and aligning procurement and IBS common technology such as ERP and ticketing systems)
• Raising it to the boardroom agenda to gain the right level of support; and
• Anticipating transformation fatigue, allow the business to be nimble, not constrained, by the journey.
Upgrading to an IBS model, integrated into corporate strategy, can contribute to procurement excellence.
☛ Robert Booth is sourcing and procurement lead for Accenture’s products practice