Posted by Christine Ferrusi Ross on November 4, 2010
“Re-creating the way we work.”
That’s Michael Chaney’s vision for procurement at Cisco in an era of Empowered users. Next week at Forrester’s Sourcing & Vendor Management Forum in Chicago, Michael, who heads up Cisco’s procurement relationship group at Cisco, will talk about procurement’s role in the innovation engine at Cisco. I recently caught up with Michael, who is also a member of Forrester’s Sourcing & Vendor Management Council, to discuss procurement’s role in innovation at Cisco.
Ross: How has your role evolved in the past year and how do you see it changing over the next?
Chaney: At the beginning of 2010, I was running the global IT VMS (Vendor Management Services) team. My team and I are now part of Global Procurement Services (GPS) helping to drive the value we created within IT across all of Cisco’s global enterprise. Though the operating models are similar, the challenges in connecting with all business functions, developing a broader set of suppliers and actioning a significantly higher level of spend are different. And other groups have also been consolidated in to drive the new GPS model. Our goal this next year is to recreate the way we work and still deliver the incremental value Cisco needs from procurement (like re-building the airplane in flight).
Ross: Empowering technologies – mobile, video, cloud, and social – are introducing new vendors to the business. What challenges do you face bringing new vendors into your business?
Chaney: At Cisco, we are in many cases driving this change in the Industry. That means we are typically on the leading edge in regard to what we need from our global suppliers. Thru our Category & Supplier Management (CSM) capability in conjunction with our Procurement Relationship Management (PRM) team, we have an advanced view of what the business might need (from PRM) and an engine (CSM) to work with new and existing suppliers to create / deploy the supplier solutions needed for the business. The challenges often involve the suppliers ability to deliver the products/services at the price, quality and security levels we need around the world. The key is to have the right connection between demand and supply to provide the best available capabilities to drive Cisco’s success (today and in the future).
Ross: Empowered users are self-provisioning and altering the business landscape. How does sourcing stay ahead of the business and its needs?
Chaney: Part of our new model includes a Procurement Relationship Management (PRM) capability which becomes our connection to the business. It allows for a more strategic and proactive dialog versus transactional and reactive. As our business expands into new business models and markets, having a deep trusted advisor relationship across the enterprise is even more critical.
Ross: Michael, your department, Global Procurement Services, is enabling Cisco’s innovation program. How vocal are Cisco’s business leaders in driving your agenda?
Chaney: From a top’s down perspective, Cisco senior leaders are strong supporters of the new GPS capabilities. They realize we are a critical enabler to Cisco’s growth, agility, productivity and new business model objectives. The key is to secure the buy-in from the rest of the organization. Some absolutely see the value, but others are not as clear how we can help. We are not traditionally a command and control culture, so expanding our focus and impact across the enterprise is achieved through transformational change management.
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