Changing the game of procurement Project partners
Changing the game of procurement Ahmed A. Alblaly, Director, Procurement and Contract of Elm, looks to answer the question; what kind of function does procurement need to be for Elm?
Written by
Dale Benton
Produced by
Heykel Ouni
E l m: C han g i n g th e game of p rocurement
3
W
hat does procurement
Procurement and Contract. “Companies
maturity mean? We often
used to deal with procurement as a
hear it spoken of as we
tool to record purchasing and do some
navigate the procurement transforma-
saving. In recent years we realised that
tion discourse, but how do we define
we need to change the model and the
maturity? Is it through benchmarking
role of procurement. A lot of compa-
against other procurement functions?
nies faced declines on their revenues
Is it through our own strategic defini-
impacting their profitability and so a
tions based on our own KPIs and goals
procurement function based on strategic
as decided through a collaborative effort
sourcing agreements and following the
from the entire c-suite? It’s a key ques-
broader strategic roadmap of the busi-
tion for any procurement practitioner
ness and truly partnering with the busi-
and most certainly forms a core compo-
ness is key to improving that profitability
nent of Elm Company’s procurement
and adding true value.”
transformation journey. Elm Company, the leading provider of innovative secure services and solutions to both public and private sectors in Saudi Arabia, is currently undergoing a significant transformation of procurement. While the journey is ongoing, it has already allowed the company to implement faster processes, enable greater agility and create a culture that unlocks true innovation and creativity across the entire organisation. As a provider of e-services, customised IT solutions, governmental support services and consultations, agility and speed are crucial to the business and procurement is the key to that. “The game has changed,” explains Ahmed A. Alblaly, Director, E l m: C han g i n g th e game of p rocurement
By its very nature, Elm is a truly digital company which provides digital solutions and digital services to its customers.
Technical procurement makes up around 70% of procurement activity as a spend and so the transformation looks to enable agility, higher quality and better costs for both its government contracts and the private sector. In order to achieve any form of change and growth, it’s crucial that you start at the very beginning and ensure you have the information you need in order to put the right foot forward in that first step. Alblaly spent a lot of time with the organisation identifying what they felt were pain points in the procurement process. This took the form of workshops with senior management, wider business units and external vendors and suppliers.
5
E l m: C han g i n g th e game of p rocurement
“ There was also a key conversation as to what kind of function that we needed procurement to be for Elm? Is it just to support the business or to be a hub for our clients (as outsourced services)?” — Ahm e d A . Al b la ly D i re c to r, P ro cu rement a nd C o nt ract of Elm
Doing so allowed Alblaly to obtain a holistic understanding of the business and not focus solely on procurement for procurement’s sake. “This can be broken down into three stages; Understanding the Corporate vision and goals, identifying the pain points and gaps and setting up a procurement strategy that is aligned with the corporate strategy and addressing the gaps and issues.,” he says. “There was also a key conversation as to what kind of function that we needed procurement to be for Elm? Is it just to support the business or to be a hub for our clients (as outsourced services)? With a strategy and roadmap laid out before him, Alblaly began this transformation journey. Like many, one of the first steps was to look for and achieve quick wins as to build momentum. A pain point for Elm, prior to this journey, was cycle time. In the fast moving worlds of both public and private sector, speed with quality is everything and so Alblaly looked to improve the cycle time that would see 7
Rayz’s
Collaborative Synergetic Partnership with Elm The evolution of procurement is the topic that defines the current strategic roadmaps of many organizations. It is no secret that agility, technology and speed are crucial components of any modern successful procurement function, but why? For Rayz, strategic partner to Elm throughout its significant procurement transformation, agility, speed and efficiency are the cornerstones of its value proposition. “Procurement can often fall victim to slow RFP processes and in some cases they come in beyond a certain deadline,” explains Yazeed AlGhuraibi, Co-Founder and Acting-CEO at Rayz Co.. “So that's why the agility, speed, and the efficiency from the procurement department needs to be aligned with the project owner that’s requesting the scope for their department.”
To achieve this, organizations such as Elm look to strike key strategic relationships with partners they can truly rely on. In times of great change, these reliable partners are key to business continuity thanks to the existing successful relationship in place. Elm’s transformation journey since 2015 has seen the company utilizing technology to improve and streamline the procurement process, and Rayz has been heavily involved in this journey. Leading players in the Saudi market have driven a shift in vendor management that has pushed the procurement needle further forward. Technology, such as innovative new ERP and procurement systems, have been adopted and are widely used by private companies and the government alike.
“These electronic portals are improving the relationship between the entity and the vendor in a very transparent manner,” he says. “This goes a long way in driving maturity and will be the baseline from here and moving forward.” Through technology and transparent communication, Rayz’s strategic relationship with Elm has grown considerably. Elm has invited Rayz on a number of occasions to be fully integrated into projects at every stage of the cycle. “If they have a challenging matter and need to think about how to utilize their budget in a well-planned efficient systematic way, Elm turns to Rayz for consultation and guidance,” says AlGhuraibi. “With Elm, we work in a collaborative and synergetic manner on how to organize our procurement cycle, examining how we can organize receiving RFP’s other than those from project owners, this in turn is a continuously growing and achieving process.” Procurement has been and will continue evolving, as organizations and their transformations are a
continuous journey. For Elm, and in turn Rayz, the future is a journey, where the partnership evolves further through better pricing, better quality of service, and further transparency and efficiency. “Rayz will continue to be a dynamically reliable and strong partner for Elm,” says AlGhuraibi “Our relationship will continue to be a win-win for both ends, where we continue to leverage each other’s expertise and resources to reach shared successful accomplishments together.”
Yazeed AlGhuraibi
Co-Founder and Acting-CEO at Rayz Co.
all of the completion of all of the tender-
customers and our internal business in
ing and sourcing process end to end. Not
an area where they expressed a key pain
only that, but to do so with greater visibil-
point,” says Alblaly. “What we’ve managed
ity of the process while satisfying internal
to do is remove that pain and make it a far
and external customers. This quick win
more enjoyable journey. Our customers
opened the doorway to a midterm goal
can see and feel the value that procure-
of overall improvement to the contract-
ment is providing. In fact, many of our
ing and operating model of procurement
clients outsource their procurement or
while initiating new types of purchase
sourcing to Elm as a result of this.”
orders (POs) in order to better serve the needs of procurement at Elm. “We were trying to please our E l m: C han g i n g th e game of p rocurement
Alblaly is a firm believer that buy-in, or sponsorship, form the internal and external customers is the key cornerstone of
that when discussing some issues related to the improvement and proposals in procurement, the first people supporting us were people who are dealing with us on a daily basis,” he says. “Sometimes a change is sensitive, difficult and outside of our comfort zones. We give more authority to the business and with that comes more liability. But this isn’t a case of being left alone to deal with that. The processes and model allows them to be connected to the organisation through procurement. It’s truly collaborative” Transformations can often be dominated by talk of process, new operating models and even new technologies being put in place. But those transformation stories forget what makes the procurement function truly tick; the people. All of the greatest technologies any transformation and so these “small
and new ways of working are nothing
wins’’ go a long way in showing them that
without the people in place to realise
procurement is working with them, not
the true potential. So what is Elm doing
against them. Procurement has histori-
to ensure that it is bringing the people
cally gained a reputation as a policer of
along with it in this journey, and not leav-
spending, which we know not to be true,
ing them behind?
and so Alblaly is working with procure-
Alblaly speaks of the way in which Elm
ment to facilitate a new understanding of
really cares about its resources and its
procurement. Procurement, and all of its
employees from top to bottom and he
processes, are here to add value, not to
considers them a key asset to success
control requests or demand. Empowered
- something that Alblaly truly values in
by their trust and understanding, we found
times of great change. “When we started 11
E l m: C han g i n g th e game of p rocurement
“ What we’ve managed to do is remove that pain and make it a far more enjoyable journey. Our customers can see and feel the value that procurement is providing. In fact, many of our clients outsource their procurement or sourcing to Elm as a result of this.” — A h m e d A . Albla ly D i recto r, P ro curement and Contra ct of E l m
this huge change in procurement we
it puts the organisation in a fantastic posi-
had to keep all of the employees around
tion to continue to move forward.”
us, and those of our external clients and
Transformation and change is a jour-
vendors, right here with us in the same
ney and it is a constantly evolving one at
boat. I think one of the challenges we
that. While there are timelines embed-
faced was the fear of having more
ded within the overall roadmap, Alblaly
process; changing to another or a newer, more controlled, operating model,” he says. “These are the fears
is quick to highlight that you cannot look at it as simply as moving from point A to point B in a set amount of time. There are far too many intricacies and complexi-
that we had from
ties inside (and outside) of the procure-
our employees, not
ment ecosystem for that to be possi-
just procurement. Through
ble. Unfortunately, 2020 saw one of the
an awareness programme, we reached all
biggest external challenges faced by Elm
of the employees with clear messages of
and many others procurement functions
why we are changing, how we are chang-
the world over: the COVID19 pandemic.
ing and what value we (and they) will gain
The disruption from the pandemic is still
from such changes. Today, we are in a
being felt to this day, but we have seen
very good position with a mature level
over the last 12 months how procurement
of acceptance and buy-in of our change
has helped many overcome and mitigate
journey both internally and externally and
some of these challenges, so what has 13
Tawuniya & Elm Partnership... Our Way To Optimizing Operations Offering over 60 insurance products and serving more than 2.5 million clients in three distinct market segments – medical, motor, and property and casualty – Tawuniya boasts the largest range of insurance programmes available in the Kingdom of Saudi Arabia. The publicly-traded company, founded in 1986 and now the kingdom’s pioneering insurer, maintains an exceptionally strong financial position and the attendant top international recognition and credit rating – sustained for over a decade. Our positioning fortified by our technical expertise, prompt claims processing, high standards customer service, perfect valueadded services and innovative products & programs, the company preserves a leading
edge over the competition. Tawuniya, one of the Saudi Arabia’s most admired brands, offers its products and services through advanced digital channels and a network of more than 60 branches and claims centers that reaches all regions of KSA. As part of our effort to keep pace with modern technological developments and to adapt them to serve our customers and to improve our operations, we partnered with Elm Company since 2013. Through this successful partnership, we have exploited the digital solutions that Elm offers to modernize many aspects of our business and operations including our Data & IT environment as well as handling millions of transactions yearly. T: 9200 19990
www.tawuniya.com.sa/en
Thanks to Elm. Using the integrated technical solutions such as Yakeen, Natheer, and Basher to serves our LOB nees, Tawuniya managed to accelerate and enhance its operations, and have able to: 1. Optimize issuance process, as Elm services help to facilitate our client journey by saving time spent on paper work. 2. Increase retail client’s satisfaction and keep them highly satisfied. 3. Enhance sales quality services, since Elm services enhances the client journeys as it enables Tawuniya employees to carry out a large number of requests from various kinds of clients within assorted channels and minimizing client efforts. 4. Increase the accuracy of customer information data. Elm services assures
the validity and accuracy of provided information, since the company is associated with NIC “National Information Center” to provide and support Tawuniya with accurate information. 5. Reduce customer waiting time, by providing the required data instantly within Seconds, through Elm Web Method Technology. 6. Reduce risk such as fraud and corrupted data, and increase profitability of insurance policies. The partnership with Elm, reflects our abilities in understanding the latest DT trends in the local market and allow us to utilize modern technologies to create insurance solutions that protect various customer segments and enable us to focus on one of our strategic pillars “Customer Centricity”.
Elm’s own procurement journey done for the business in this regard? “We are far more mature as a procurement function than we were three or four years ago. And we have reached a very acceptable level of maturity and satisfaction for what we’ve done,” he says. “But I am a big believer in improvement. We have to improve every time. We are welcoming and hunting for more opportunities and more challenges for better improvement. When Elon Musk, CEO of Tesla, participated and decided to invest in the spaceship business, he came up with a solution for SpaceX with a cost that was $300 million cheaper than the standard Space Shuttle. The improvement can never end. There is a space to improve things. With the pandemic, changes happened and we had to deal with them. We had to change our methodology and improve our services, because everything changed so rapidly. Unbelievable things happened last year and we needed to work with
checks for all internal and external activities. Like many, Elm found itself looking at spend as either a
these changes and get the best results
cost centre or profit centre, determining
out of these dilemmas.”
which spend it had to keep to maintain its
Cast your mind back to early 2020 and
corporate activities. This can be, and was,
nobody could anticipate that the world
a difficult process of having to consider
would face such a challenge. The role of
which spend Elm needed to adapt, which
procurement for Elm was very important
projects it could spend more and invest
in order to maintain the spend in each
in, and which projects it would have to
organisation, to keep the cash flow and
slow, or even, stop the spend. It’s here
to participate in major analysis and health
where the work Elm has achieved as part
E l m: C han g i n g th e game of p rocurement
of its transformation journey allowed it to get through what could have been, and indeed was, a difficult time. “These things cannot be decided very
feel the true value
easily unless you have a collaborative
of what Elm is as a busi-
effort from all of the areas of the busi-
ness, not just as procurement.
ness,” he says. “Because of our process
Being seen as a driver of activities
and our model, we were able to work with
that brought real value for people within
our vendors and clients in order to iden-
Saudi Arabia and sometimes outside,
tify and outline the best way forward for
during the pandemic, shows that what we
all involved.In many ways, it opened the
do as a business and how we do it goes
door for more opportunities. We played a
far beyond improving our bottom line or
key role in the distribution of the COVID19
focusing on cash flow.”
vaccination project and were central play-
As a procurement function, partner-
ers in mass testing projects across the
ships and the supplier relationship model
Kingdom. These are projects that we can
can be the ultimate deciding factor when 17
it comes to success and successful outcomes. For Elm, the strategic relationships it had in place with its strategic partners long before the pandemic were a testament to the value it placed in those partners. As the pandemic hit and attention turned towards unique challenges with a varying degree of complexity, Alblaly knew that he and Elm could depend on these partners to go above and beyond in order to deliver. “We worked together with the Saudi Ministry of Health and our partners to prepare, for example, the vaccination centers across Saudi Arabia. This required a 24 hours workdah from all the resources in this project, including the procurement, in order to maintain the needs and the demands of these centres,” he says. “When the call went out for these centers to be built, there were a matter of days to build it, to prepare it, to hire people and to provide the supply chain necessary in order to run these vaccination and test centres,” he explains. “I’m incredibly proud that, together with our customers and partners, we could achieve this. All these activities were done with alignment and partnership with our partners in a very short time in a very tough environment. This alignment, and the success, would not have been possible without the work we have been doing E l m: C han g i n g th e game of p rocurement
“ I am a big believer in improvement. We have to improve every time. We are welcoming and hunting for more opportunities and more challenges for better improvement.” — A h med A . A lblaly D i re c to r, P ro c ure m e nt an d C o ntrac t of E l m
externally in a world where face to face engagement has been limited. So what does the future hold for Elm and how has the last 12 months shaped and reshaped its procurement roadmap? “With the pandemic, everything changed and so what we are targeting overall in the end is to reap the benefits of these changes. We are adopting now, for example, remote working as an option for the business (and maybe permanently in the future as a way of work), which is now made possible thanks to the changes we’ve made this last year,” he says. “There’s also the digitisation angle, which is something that was on the radar prior to the pandemic, but has of course accelerated during it. to foster and maintain those strategic
So, we’re trying to increase the level of
relationships. What we achieved now, will
the digital communication and processes
act as a catalyst for future successes.”
with our vendors and clients.
As Elm, and the world, navigates its
“But I guess the main goal from all
way out of this pandemic and into the
of this is agility and flexibility. We see
new normal it can do so with a manner
that we can improve and adjust our
of confidence in its own abilities. The
operating model to quickly react and
procurement journey has, perhaps, faced
adopt any changes in the future. As I
its biggest test, and so the future looks
mentioned before, there’s always room
to be one of hope for the business as it
to improve and to challenge your think-
continues its procurement transforma-
ing. That’s the key to realising new
tion. Key lessons have been learned from
opportunities for both procurement and
the pandemic around data and the role
for the wider business.”
it plays in risk management and compliance, remote working conditions and how we communicate both internally and 19