General presentation of EGP capabilities and services.

1. Erste Group Procurement (EGP)
The Procurement Company of Erste Group (EG)

2. History: Austria’s first savings bank: Founded in 1819
Erste Group went public in 1997
with a strategy to expand its retail New holding
structure
business model into CEE 2008 improving
Group
Governance
Acquisition of more than 10 2007
banks between 1997 and 2008
2006
Erste Group now runs market
leading retail banking operations
2005
in the new EU member states,
which remain underpenetrated
2004
compared to their Western
European markets
2003
2001
2000 Erste Group’s customer base
grew from 600 000 in 1997 to
17,3 million in 2011
1997
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3. Erste Group in Central and Eastern Europe
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4. Erste Group Procurement: Procurement of the Erste Group
Erste Group Bank AG - Holding Board
CEO CFO COO CRO Group Markets GCIB Group Retail
Erste Group Procurement Facts & Figures: EGP AT
Erste Group Procurement
Central procurement function within Erste Group (Procurement Services GmbH) (incl. Centre Functions, as Finance,
HRM, Org/IT)
Headcount approximately 180 employees Group Org/IT
EGP RO
Process owner for group-wide S2P process Group Property
EGP CZ
AT: Warehouse with more than 3 000 sqm Operations/Processing
EGP SK
EGP HU
Erste Group Procurement – (Procurement Services GmbH) EGP HR
Management Board SPV DRUCK
Leadership by EGP
Procurement RS
Functional
HRM Finance Sourcing Org/IT Procurement ME
Procurement UA
Erste Group Procurement AT Sourcing AT
EBSPK Sourcing SK Erste Group Procurement SK
Established 2006
Erste Group Procurement CZ Sourcing CZ
Procurement Dept.
Sourcing HU Erste Group Procurement HU Ukraine
Czech Rep
Slovakia
Erste Group Procurement HR Sourcing HR
Int. & Austria
ME1) Sourcing RO Erste Group Procurement RO Hungary
Romania
Croatia
RS2) Sourcing RS
Procurement
Sourcing UA UA3) Dept. Serbia
SPV – DRUCK
Procurement
Dept. Montenegro
1) Department of Erste Bank AD Podgorica - Montenegro
2) Department of Erste Bank Novi Sad Division
Board Team in Matrix
3) Department of Erste Bank Ukraine
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5. EGP in Erste Group
Aligned priniciples within Erste Group:
…The central and single competence for procurement activities within Erste Group lies in Erste Group Procurement (EGP)…
…EGP has to be involved in any external spend of any Erste Group majority owned entity. Any exception has to be agreed between EGP
and the respective Erste Group entity…
…All external spend should follow the principle of Total Cost of Ownership (TCO) and Quality, Cost and Delivery. In balance with socio-
economic, ecological and customer relationship factors the assignment of a contract has to follow the highest added value for Erste
Group principle…
…EGP owns, defines and aligns with the local entities the purchasing processes within Erste Group...
EGP Cooperation with clients based on:
Contract (SLAs)
Responsibility (NDAs)
Code of conduct
Purchasing Policy & Handbook
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6. EGP Focus
Before
RFxP/RFQ
Supplier Relation Management
Contract Management
Category Management
After
RFx Implemen-
tation
Supplier Relation Management
Foundation
Contract Management and
Core
Category Management
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7. Our Way to World Class Procurement
Processes Perspective:
Processes Perspective:
-- Paying PO’s only
Paying PO’s only
-- Maverick spend < 10%
Maverick spend < 10%
-- Spend coverage > 90%
Spend coverage > 90%
Move away from -- Delivering core processes
Delivering core processes
-- Fully integrated AR/CM/CR-CA/PM/eSourcing
`Tender Factory´ Fully integrated AR/CM/CR-CA/PM/eSourcing
-- Mature Category Mgmt and SRM
Mature Category Mgmt and SRM
Financial Perspective:
Financial Perspective:
Vision:
Vision: Learning Perspective:
Learning Perspective:
-- A team of good purchasers
A team of good purchasers
-- COA < 1%
COA < 1% World Class Procurement
World Class Procurement -- Pro-active working
-- CR/CA > 4,4% Pro-active working
CR/CA > 4,4% organisation in the
organisation in the -- Willingness of responsibility
Willingness of responsibility
-- 20 mio av. spend by buyers
20 mio av. spend by buyers
financial area
financial area -- Good working atmosphere
Good working atmosphere
Customer Perspective:
Customer Perspective:
-- Our customers adhere to our vision and support it
Our customers adhere to our vision and support it
-- Our customers see high value added
Our customers see high value added
in EGP services and are ready to pay for this
in EGP services and are ready to pay for this
-- Our strategy supports customers targets
Our strategy supports customers targets
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8. EGP Services in Scope
Erste Group Procurement
Customised Outsourcing Business
Sourcing Tactical Order Process
Procurement Competence
International/Local Purchasing Management Services Center Outsourcing
Category Mgmt Category Mgmt Category Mgmt
Vendor Mgmt Vendor Mgmt Vendor Mgmt
Contract Mgmt Contract Mgmt Contract Mgmt Compliance with Operations of
Additional
requirements Outsourcing support
Purchasing Project Purchasing Project Purchasing Project requested Policy Provision processes
by customer of Outsourcing for the local
and are not in Project entities, i.e.
Contract Creation Contract Creation Contract Creation the scope of Documentation
purchasing
• Travel Depart.
Requisition Requisition Requisition • Print Shop
& & & • Warehouse
Ordering Ordering Ordering
Documentation Documentation Documentation
& & &
CR/CA Calculation CR/CA Calculation CR/CA Calculation
Receipting Receipting Receipting Customer Compliance to Provide
& & & Satisfaction regulatory cost-efficient
Evaluating Evaluating Evaluating and services
internal
Invoice Invoice Invoice requirements
Processing Processing Processing
Strategic, monitored Ensure fast, easy and efficient execution On Customer’s Additional Services
purchasing in a team Demand for the customer’s benefit
approach By EGP By EGP or Customer
Invoicing as a % of 3rd party spend Invoicing in a separate fee (SLA)
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9. Sourcing
Sourcing is the strategic process of identifying potential suppliers, conducting
negotiations, and agreeing on supply contracts in order to achieve a sustainable cost
reduction and meet the customer’s expectations.
Demand analysis Identificaton of potential suppliers
based on to conclude a GMA
GMA
Category Management support through
Vendor Management
Contract Management
eAuction / RFx / negotiation
Supporting tools
Reporting Package Vendor / Country / eAuction, RFx
(SAP FI / QLIKVIEW) Project Management tool (“CAP”) (Electool)
• Analysing the spend of • Allows the linking of information • Live eAuctions
entity/supplier/category to a 360°view of projects,
• Collecting of informationen (RfI*)
contracts, product categories
• Strategic basis for the and offers (RfQ*) in a defined
and suppliers.
purchasing project specification form
• “In-house” development *RfI = Request for Information
*RfQ = Request for Quotation
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10. Sourcing International/Local
Category Management/Matrixorganisation
Matrixorganisation Category Classification
Sourcing Specialist, the first contact for the customer and
Find opportunities, create & implement a strategy in a
groupwide Category Manager and Supplier Relationship
team approach with the Business Line.
Manager.
Category Management
145 categories divided according to local and international opportunities.
Sourcing Categories
FM Facility Management (FM) IT Informationstechnology (IT) S&O&M Service & Operations & Marketing (S&O&M)
FM FM Maintenancerelated Services/Work IT Personal and Office Computing S&O&M Car Fleet
FM FM Investmentrelated Services/Work IT Telephony and Communication S&O&M Cards
FM Goods IT Networks S&O&M Consulting
FM Energy IT Branch Equipment S&O&M Logistic
FM Security Equipment IT Servers/Storage/Host Components S&O&M Marketing
FM Property Management IT Infrastructure Software S&O&M Office Equipment & Office Operation
IT Direct Application Software S&O&M Personnel Management
IT IT Services S&O&M Travel
IT Indirect Application Software S&O&M Security Service
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11. Sourcing International/Local
Contract Management/Spend Data Analysis/Data Reporting
Budget and Category Analysis Tool Data Reporting
Structure spend by vendors, categories, countries and entities Define Spend categories, analyse it (spend & vendors)
Real-time Business Intelligence Tool for management In a team approach with the Business Line.
Contract Management
Integrate all vendor contracts in Contract management solution and establish proactive & timely contract activity plan
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12. Sourcing International/Local
Supplier Relationship Management Tools
Identify and focus on key suppliers.
Implement supplier relationship model in cooperation with Business Line.
Supplier Supplier
Business Reviews Escalation
Audits Strategies
• HYR/QBR • Standardised • Similar to Category • Escalation management
Questionnaire for Management
• Standardised • Single Point of Contact
Assessment and Self
presentations • Long Lists and Short and coordination of all
Assessment
Lists participants (Business
• Participants: Business
• Document Management Line, Legal, Countries,
Line, Supplier and EGP
System, Reminders Suppliers)
• Measuring the periodically and
• Identification of
cooperation automatically
disqualified suppliers
• Search out further • Scoring through
cooperation/collaboration Business Line
• Risk Management
• Ethics
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13. Tactical Purchasing (TP) and Order Management (OM)
Purchasing Project
The fast, easy and efficient execution of routine administrative tasks. These are day-
to-day buying activities, which are low volume with no strategic importance or based
on agreements that have been set in place.
Purchase requisition
through GMA or catalogue(OM)
Demand
(online or catalogue) or Offer Agreement
Tender Project (TP)
Supporting tools
Catalogue / OM Software eAuction
SAP SRM
(ITAM – Office Asset) (Electool)
• In 3 countries available • Standardised articles • In all EGP countries available
• Integration with MM / Accounting • Order Processing for low purchases • Efficient eAuction through webbased
forms
• Covering about 55% of the spend • Integration in Warehouse Management
System • Supplier’s self registration for saving
resources
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14. KPIs
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15. The Measures of Success
Objectives/Strategies/Tactics (OST)
Not achieved
Open and lat e
Achieved lat e
Not yet approved
Achieved
Status:
XXX out of XXXX weight points
were to be achieved (due) by
end of October
Overall achievement
XX% fully achieved
XX% closed late
XX% open and late
XX% missed
Key Achievements Q3 Missed Achievements Q3
• XXX% of contracts in the system for
Lean Management workshop for all 2nd liners
the Top 50 vendors (achieved: XX%)
Business reviews with XX major vendors
• On time delivery of projects: XX%
Purchasing policy approved by X local boards
(achieved XX%)
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16. The Key Messages for a successful Procurement Organisation
Centralized procurement in one seperate company with clear groupwide organisation structure and an agreed and
approved Power of Attorney (PoA)
Organisation & Unique systems and tools applied in all subsidiaries in all countries
Structure
Unified processes with locally optimised deployment
Service Agreement structure and hierarchy applied in all countries
Full costs transparency through analytic tools and reporting
Transparency &
Quarterly Business Reviews with clients and suppliers
Communication
Defined communication and escalation process
By using spend analysis tool the bypassing/‘maverick spend‘ procurement activities are identified and tracked
Sustainable
Relationship High compliance through common cooperation with budget owners on the product groups strategies and/or
supplier strategies
Through active management of product groups and suppliers EGP creates a bond between suppliers and budget
owners
Procurement
Process EGP is involved in the whole procurement process with clear tasks and responsibilities
Educated procurement specialists (Sourcing Matrix)
Goals & Transparency in the level of achieved goals of the cost reduction through one clear methodology and tool-based
Incentives measurement
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17. Thank you!
Erste Group Procurement
(Procurement Services GmbH)
Email: communications.EGP@erstegroup.com
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