Procurement Transformation
Project partners
H CT ’s pro cure m ent revolut ion
R PROCUR E MENT V O L U T I O N Mahmoud Al Alawi, HCT Director of Procurement & Contracts, catches up with CPO Strategy, two years after launching a significant procurement transformation...
Written by
Dale Benton
Produced by
Heykel Ouni
3
T
he Higher Colleges of
In tandem with HCT 2.0, 2018 saw
Technology, the largest applied
HCT set itself a strategic mission to bring
higher education institution in the
upon a “revolution in procurement”, led
UAE, developed its transformative HCT
by Mahmoud Salem Al Alawi, Director of
2.0 strategic plan (2017-2021) in line with
Procurement and Contracts. When we
the future aspirations and vision of the
spoke in 2019, HCT was already 30% of the
UAE’s wise leadership. Subsequently, this
way through this bold mission, achieved
strategic plan evolved into HCT 4.0, in
through its Annual Procurement Plan in
2019, to further support the international
the first quarter. As 2020 drew to a close it
challenges and changes brought about
proved to be a pivotal year in defining the
by the “Fourth Industrial Revolution.”
future of HCT’s procurement function.
H CT ’s pro cure m ent revolut ion
As we speak in 2021, the world has
When we started we had the seeds of a
changed dramatically, thanks to the
strategy for the department. Today, we
further digitalisation of procurement and
have a robust and improved strategy. We
the seismic ramifications of the COVID-19
have a long-term strategy that’s aligned
pandemic. So what has this done for the
with our organization and which is linked
procurement revolution within HCT?
to the UAE government strategy, espe-
“The strategy that we put in place has
cially for the education sector. We are
really started to show results,” says Al
further aligning ourselves with the HCT
Alawi. “The pandemic accelerated and
4.0 strategy, where we have created
helped achieve our strategy, especially
Procurement 4.0, as well. We now have a
when we talk about digital transformation.
procurement strategy that’s concentrating on people and the organization.” Elsewhere, HCT has invested in training its employees and hiring qualified human capital to create a veracious competency framework. These trainings are delivered through a partnership with the Chartered Institute for Procurement & Supply (CIPS), where HCT continues to leverage the global expertise of the organization in order to achieve a best-in-class procurement function. “We talked about our procurement processes back in 2019 and how we were looking to shorten the process. Well, today I can confirm that we have completely streamlined and re-engineered the whole process, down from two weeks to being able to complete and close a process within one day,” beams Al Alawi. “This isn’t just transformation, this is revolution.” 5
This revolution of procurement extends to HCT’s supplier relationships, something that proved particularly important throughout the COVID-19 pandemic. Here, through enriched supplier relationships, HCT has been able to provide full support to its vendors during some of the most challenging moments, over the last 12 months. As Al Alawi describes, ”they are our partners in success and partners in our journey”. From the start of the pandemic, HCT provided cash flow for its vendors and shortened, or reduced, payment terms; extending the same terms for any SMEs with which it worked. For servicebased vendors, HCT also established special agreements, whereby it could match the salaries and benefits of their employees, so as to ensure the employees’ jobs were secure during difficult and uncertain times. “We never used force majeure. We
revolution in its procurement relation-
preferred to use business continuity,”
ships with external vendors, but also
says Al Alawi. “So, we helped our vendors
in its relationships with internal stake-
and the business with us by supporting
holders. Procurement, as a function, is
them in shipments, revising the deliv-
evolving all over the world and, at HCT,
eries and revising the service scope to
the Procurement Department has grown
be aligned with the situation during the
significantly, developing and maturing
pandemic. We came up with good results.
exponentially to where it is recognized
We have partners who are supporting us
as a vital strategic function. Most notably
more than ever before.”
for Al Alawi, a man who has always recog-
HCT has not only witnessed a H CT ’s pro cure m ent revolut ion
nized and valued procurements’ true
We showed them the challenges and the procurement process, so that they understand what they should expect as being part of our process when they place a request with us.” “It’s all about the engagement with our internal stakeholders to make sure that they are aligned with the process and to make their lives easier when they create any request.” Another key area of development for both HCT, and indeed procurement, is digitalisation. In 2019, Al Alawi spoke of the need for a new ERP system and dashboard. As HCT looked to increasingly focus on excellence, performance management through KPIs proved key. Here, the COVID-19 pandemic actually helped accelerate this conversation. “We work in a very dynamic organization and a very dynamic country. The decisions here can be made within a worth, he is confidently assured that the
minute. Leadership has a very clear strat-
business sector understands and appre-
egy about where they want to go, where
ciates just how important procurement is
they want to be and so the implementa-
to the institution’s optimal operation.
tion should be done with no time to spare,
“We also understand the business
with good quality. It’s a big challenge for
requirements more,” he says. “Believe it
us, as procurement, to match this triangle
or not, in the pandemic, we spent more
- the quality, time, and to give the proper
time with them. Everyone was working
cost,” explains Al Alawi.
from home and so we had more time to
“When the pandemic hit, management
talk, to understand their requirements
needed us to be ready within a week, to
and to really put ourselves in their shoes.
work from home and to support the whole 7
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business 100%, without any disruption.” Naturally, the Procurement Department
manually until the day they called for the lockdown. So, within a week, we came up
found itself receiving an extensive list
with the solution. We worked hard with
of requirements from internal business
IT, day and night to get this part done
units, essential to maintain a seamless
because this was the most critical part.”
continuity of operations. It needed an
Once this new solution was in place,
ERP system, but doing so within a single
the work was only just beginning for HCT,
week is a challenge that even the greatest
as it needed an ERP system that could
procurement leaders will admit is practi-
handle both internal and external sourc-
cally impossible. But that wasn’t part of Al
ing with vendors. Once again, time was
Alawi, and his team’s, lexicon. Al Alawi and
everything and so it needed to find a solu-
his team were able to source temporary,
tion with a quick implementation period
alternative solutions to support a digi-
and at a price that was fair. It is here
tal transformation remotely. Even so, Al
where HCT entered into a key partner-
Alawi knew this was a short term fix.
ship with Cloudia.
“Very early on we began customizing
Initially, this system was only required
our portal to receive, for example, the
for sourcing and commercial evalua-
technical and commercial pieces through
tion. HCT’s biggest concern was centred
an online portal,” he says. “For compa-
around tenders, and commercial and
nies who had ERPs, it was easier mainly
technical evaluations within the system
because the system was already there
itself to maintain control of the process.
and they could use it. But for us, we were still handling this part of the process
“We told Cloudia what our requirements were and they were more than
“This isn’t just
transformation,
this is revolution”
— M ahmoud Al Alaw i
HCT Director of Procureme nt & C o ntrac ts
9
excellent with us in implementing the system. Within two weeks, to a month, we had the system live with the basic functions that we needed,” he says. “But once we went through the system, we pushed it to do more.” This involved solving challenges around its document management systems and, by collaborating with another vendor, HCT was able to create an E-Procurement Committee (EPC). By digitalising each step of the process (sequence, quality control, procurement director and procurement committee secretary) it made for quicker, and more effective, approvals and move towards the authorized signatory stage before final closure. “I’m very proud to say that today, we have the only solution in the UAE government that has end-to-end approval for the Procurement Committee,” beams Al Alawi. “The Procurement Committee is fully automated.” “This database is something that we are very proud of and together with the digital procurement system from Cloudia, our lives are now easier,” he adds. This acceleration of digital procurement, together with the key relationship with Cloudia, has done an incredible amount to add further cachet to what Al Alawi and the Procurement department are doing for HCT. H CT ’s pro cure m ent revolut ion
11
Al Alawi continues: “We are very lucky
effective ERP system because now we
to have Cloudia with us as a partner. After
have everything that we want customized,
we finished the sourcing, we expanded
based on our requirements.”
with them. So, now we have the Annual
One could be forgiven for thinking that,
Procurement Plan completed on the
due to the incredible changes success-
system and instead of planning annually,
fully implemented within HCT, the last
now we have a three year plan.”
few years have been completely hurdle-
“We can see the project, and the bigger
free. However, Al Alawi is the first to
picture. Through a solution, called the
admit that this has not been the easi-
Big Data solution, we link Cloudia with
est of journeys and that procurement
our PR and PO system and our document
transformations are far too complex
management system to create a holis-
to expect a simple journey from A to B.
tic system, which operates as a more
The pandemic has proven to be one of
H CT ’s pro cure m ent revolut ion
the biggest unforeseen challenges in
challenges were in the physical nature of
many years; the impact of which we are
procurement and tenders. Due to quaran-
still experiencing to this day. While it
tines and travel restrictions, the tendering
has presented great opportunities for
process was significantly impacted, lead-
procurement to step into the spotlight
ing to delays and businesses having to
and mitigate disruption, the challenges it
shut down entirely.
has thrown up cannot go unnoticed. As Al Alawi has mentioned, HCT had to
“Once again, we utilized our good relationships to work with our end-users to
work in a different way with its vendors
find new vendors,” he says. “Rather than
and suppliers, providing cash support
accepting that we are going to be late
in order to maintain business continuity
in delivering their requirements and we
and significantly altering its procurement
don’t provide what they need on time, we
terms to allow for greater flexibility. The
work with them to develop a new list that 13
we could call Plan B at that time. Now it’s our Plan A.” “We came up with a new process to qualify the vendors from the beginning, where we float a tender and once we do the technical evaluation we will consider that technical evaluation as part of the vendor’s profile, as a pre-qualification and evaluation for the vendor during the tender,’ he says. “We built a new database of new, pre-qualified vendors, saving both our time and the end-users’ time. Instead of a problem, we came up with an innovative
“I’m very proud to say that today, we have the only solution in the UAE government that has end-toend approval for the Procurement Committee. The Procurement Committee is fully automated” — Mah mo u d A l A lawi H CT D i re c to r of Procu re m e nt & C o ntrac ts
H CT ’s pro cure m ent revolut ion
solution that’s now our plan A. We do this
“We need to go further. So we have
process with all our tenders. It’s now the
reduced the cycle from 120 days to 66
norm instead of a solution for a problem.”
days for the public tender. Today the
Once significant changes are made,
public tender is 66 days, we can get it
and successes achieved, on the procure-
down from anywhere between 40 to 50
ment journey, it is usually the stage
days, and even less. With the system we
where an organization stops and asks:
have control,” he says.
“What next?” As Alawi has noted, with
“It’s about making procurement much
a new ERP system the team is already
easier for the end user. We want to
making strides on its next three-year
make use of a solution, with Cloudia,
plan for procurement to further align with
where users can find their require-
the HCT 4.0 strategy. So what does the
ments ‘on the shelf’ through a digital
immediate future look like for HCT?
store. They purchase their requirements 15
and, through a seamless experience, it arrives in their canvas or their department, without going through the step-bystep procurement process. Just like the Amazon experience.” Sustainability in the procurement function, and wider supply chain, is an immediate and growing concern for all procurement professionals and organizations, and it’s certainly a key topic for HCT. Sustainable best practice is a topic that hits close to home for Al Alawi, as he takes both a personal and professional interest in exploring what more can be done to leave a lasting, positive impact on the world through procurement and supply chain. As an MCIPS - CMILT (Chartered) Sustainable Procurement Ambassador, Al Alawi is in a position of great influence to help drive sustainable best practices across HCT. “We’re working on creating a truly sustainable procurement function and
we are helping the world in so many ways.
process. We’ve already been work-
It’s in our agenda and it’s going to be a key
ing closely with our Health and Safety
part of the future transformation for HCT.”
department, as well as aiming to achieve
As the largest applied higher education
ISO and sustainable procurement certifi-
institution in the UAE, HCT’s successful
cation in the near future,” he says.
procurement transformation has a larger
“We are constantly exploring how we
impact on the wider region. As Al Alawi
can look at resourcing and procuring
has noted already, the work that HCT has
wisely and how we can procure green
done around business continuity through-
supplies from vendors to make sure that
out the pandemic has enabled SMEs and
H CT ’s pro cure m ent revolut ion
local industry to thrive in a time where force
HCT recently achieved the CIPS
majeure was the more favourable option for
Ethical Procurement and Supply certif-
many procurement professionals all over the
icate and were recognized at the CIPS
world. The organization’s key partnership
Middle East and North Africa awards
with CIPS is another pivotal element in the
where we received the 2021 Best
procurement story of the Middle East, where
response to Supply Chain Resilience
HCT uses CIPS to benchmark against
Award. The organization was among
global best practices. Consequently, it has
nine other competitors from the region,
already been recognized as an influential
including Turkey, Kuwait, Bahrain,
procurement model in itself.
Saudi Arabia, and the UAE - a testament 17
“ We built a new database of new, pre-qualified vendors, saving both our time and the end-users’ time. Instead of a problem, we came up with an innovative solution that’s now our plan A. We do this process with all our tenders. It’s now the norm instead of a solution for a problem” — Ma h m o u d A l Alaw i HCT Di rector of Procurement & Contrac ts
H CT ’s pro cure m ent revolut ion
to its excellent work with its vendors during the pandemic. But, as with HCT 4.0 and Procurement 4.0 strategies, the journey doesn’t end there. To quote Al Alawi; this has been a journey or revolution, not simply transformation and while these accolades are richly deserved the challenge now is to take procurement further. “Now we are working with CIPS to explore how we benchmark ourselves internationally,” says Al Alawi. “We are participating in the CIPS Excellence in Procurement Awards - a real truly global benchmark.” But it’s not all about the accolades. “Of course we want to get the award, but we want to position ourselves internationally. We want to build our function and to build our standards to be at the very best international standards,” Al Alawi stresses. “So, when we deal with vendors, or with suppliers from Europe, North America, Asia or from Africa, our standards are leading-edge and up there with the best standards around the world, not only within the UAE, or within the government. This, for me, will be a true sign of what procurement can be, and what it is on the road to becoming for HCT.”
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