“Who do you think Global Procurement reports into?” asked Kevin Giblin to 80 language industry executives attending SlatorCon New York on October 12, 2017. The Chief Procurement Officer at Dun & Bradstreet, which has the largest global commercial database of over 280 million business records, was giving delegates a deeper look into the often misunderstood business function of procurement.
The clear majority attendees voted for finance over legal, sales and marketing. They were all surprised that, at many multinationals like D&B, procurement reports into the people function – or more commonly human resources. “What the human resources and procurement function of today have in common is the focus on the customer experience and engagement and I mean that on both sides of the desk,” said Giblin. “It’s both internal and on the side of our supply base.”
This ensures that Giblin and his team, who manage over USD 1 billion in spend annually, develop the strategic relationships that can add value to the business beyond cost reduction. They do this by harnessing the transformational nature of business and supplier innovation.
Collaborative Resource Partnerships
As globalization and technology are rapidly transforming multinationals like D&B, the procurement function must change as well. This presents an opportunity for language service providers (LSPs) to be much more than a tactical vendor or supplier. “A Collaborative Resource Partnership (CRP)” advised Giblin “means if we’re looking to do things differently, globally, and we don’t have the capability today, how can you, on the other side of the desk, help us get there?”
Giblin shared some of the key outcomes that he looks for in a CRP such as an improvement in top line revenue, value creation through collaboration and a reduction of tax expense. He added that the partnership works both ways and that his team “has a lot of supplier relationships where we’re helping them grow their product, because if we’re on the buyer side we may think of things that they’re not thinking of and vice versa. So we like to have that collaborative innovation that helps drive it.”
Watch a video interview with Kevin Giblin on the importance of creating a Collaborative Resource Partnership.
Chief Value Officer
The five-year trend to focus on value creation beyond cost reduction is now so strong that Giblin predicts the role of Chief Procurement Officer won’t exist in 10 years. “It’ll be replaced by a Chief Value Officer, and there’s a big difference between the two,” he advised.
“Procurement is mostly operational, sometimes tactical. It’s ensuring the company’s money and the budget is addressed effectively. But the value goes way beyond cost savings.”
With this future in mind, D&B have now modified their analysis of CRPs from traditional sourcing and risk assessment to projecting where partners are adding value going forward. Demonstrating this process, Giblin took delegates through an actual assessment of LSPs at D&B, where the names and dates had been anonymized but all other metrics were real.
“It’s not about procurement, it’s not about price, it’s about making sure that the relationship is solid and actually people want to do business with us regardless of what the spend is” — Kevin Giblin, CPO, Dun & Bradstreet
Notably absent from the assessment criteria was price or cost. “What’s really important is the interest in potential partnership value,” said Giblin, “so we ended up selecting the supplier that provided the best future value for growth.”
Giblin concluded: “I think the more that I talk to people, the more they understand that the engagement and the experience is critical to anyone whether you’re selling or you’re buying. If you don’t have that, then any cost savings you’re negotiating on procurement is going to erode over time.”
Reflecting on Giblin’s opening question, May Habib, CEO, Qordoba, asked in the panel session, “So you report into HR because it’s a relationship management function?”
Giblin replied: “the reason why we aligned with the people team or HR is because we share a common interest in engagement and improving the customer experience. About a year ago, I undertook an initiative for onboarding new suppliers. And internal customers found that it was very difficult. Suppliers found it was difficult. So we said, how do we improve that process for both?”
“The more that we went through this,” added Giblin, “we found that this is really about contrast. It’s not about procurement, it’s not about price, it’s about making sure that the relationship is solid and actually people want to do business with us regardless of what the spend is.”
The deeper understanding of procurement provided by Giblin will be valuable to LSPs as they engage with clients to add value, defend pricing and become a Collaborative Resource Partner.
Join us at SlatorCon Zurich on December 5, 2017, for further engagement with global end-clients. Dr. Germán Basterra, Translation Manager at Nestlé GLOBE, has more than 15 years of experience in the localization industry and leads their Language and Translation Competence Center. He will be presenting on Translation Quality within the Content Lifecycle.
For a copy of Kevin’s presentation, register free of charge for a Slator membership and download a copy here.
Inside Global Procurement