The Necessity to reshape Procurement

The Necessity to reshape Procurement

Elvire Regnier-Lussier is an Expert in Procurement, promoting a very specific vision built from her experience in different sectors and with several companies such as Unilever as Global Vice-President. She is today providing us with her insights on how the Coronavirus crisis has revealed the criticality of partnering with suppliers.

We will need “a drastic change in the way in which we source our suppliers”

Decades of buying strategies driven by the only objective of reducing costs have rendered companies vulnerable to all kinds of pandemics such as the one of Covid-19.

For decades, companies’ procurement departments have been instructed to reduce the negotiated costs when signing contracts with their suppliers. This was the result expected from lead buyers, who were then evaluated and proportionally rewarded along the amount of savings which had been made. To achieve this, the method used was the systematic and head-to-head forced competition between suppliers.

Today, the world economy finds itself in front of the unthinkable, the unimaginable and the unquantifiable. A report from the study office Dun & Bradstreet indicates that amongst the Top 1 000 world companies, 938 have a 1st or 2nd rank supplier which is impacted by the Covid-19! Decades of buying strategies oriented towards the reduction of costs and of relentless competition have contributed to the destruction of the western industrial system benefiting countries with low production costs. Today, these decisions have led to disastrous consequences which have arisen without notice.

Yet a different approach does exist. It consists of considering the “Total Cost of Ownership” before deciding to grant a contract to a supplier. Beyond only taking into consideration prices, it consists of considering the costs in their entirety, meaning internal costs linked to usage of the good which will be bought, as well as the costs shared between the client and the supplier, the cost of some unpredictable risks, the value of innovation, etc.

A time of reconstruction is awaiting us

Nowadays, in the mist of the Covid-19 crisis, the companies which have taken into consideration the costs and not only the prices, as well as having built their buying strategies in collaboration with their suppliers, while acting respectfully towards them, benefit from supply chains being considerably more resilient. These companies will have the capacity to bounce back, while the ones centered on prices will have added difficulties.

For a creative cooperation

Sometimes companies fuel a chronic defiance towards their suppliers, partners and subcontractors. History in its entirety, and not only the recent events, proves us that innovation arises in most cases when a harmonious collaboration exists between partners, resulting in an efficient distribution of value. This win-win contract will only be possible through dialogue, transparence and mutual confidence. The idea that 70% of innovation should come from suppliers is not new, time has come to make it happen.

Building the most transparent ecosystem possible

However, we need to keep our mind open enough to have the humbleness to accept, the desire to take advantage of and the willingness to build with our innovative partners a truly transparent ecosystem, where each and every individual’s role is well defined, as well as the allocation of profits.

In this field, unlike in others, the statesman is powerless. Cooperative spirit cannot be decreed or impose itself. It is something practical. We can only urge our top executives- strategy, development, finance and procurement departments- to change their point of views and mindsets, to have them shift towards this modern inclusive and collaborative spirit. If this change is not operated, we will continue on carrying this burden for the years to come, inevitably forcing us to gradually but surly lose strength and resilience in the global economic race.


The response of the Entertainment Production Technology and Telecom industries, by Frédéric ROSE

The response of the Entertainment Production Technology and Telecom industries, by Frédéric ROSE

Frédéric Rose is an Expert in Telecoms and Entertainment Production and Animation Technology. Former CEO of Technicolor and ex-President of Alcatel for Europe Asia and Africa, he gives us today his insights on the key take-away of the effects of the pandemic on both sectors.

"The COVID crisis will not impact all business segments and geographies equally, but all will have to adapt rapidly:

Production and Post Production Services:

  • Theatrical and streaming services are massively impacted by the shutdown in production shootings, which will obviously be temporary but it is far from clear how most service providers (e.g. Deluxe, DNeg, Framestore, Technicolor,...) will be able to manage the massive short term pressures on their balance sheets. Consolidation and fundamental changes in workflow and employment practices will have to occur, as well acceleration of cloud based practices.
  • The high-end advertising market is strongly impacted this year. It is a real question whether the large advertising conglomerates will continue to internally subsidize their in-house production arms, which may well provide opportunities for well capitalized independent players.
  • Animation production will be the strong winner out of COVID assuming production companies are able to rapidly bolster their remote working processes.

  Telecommunications:

  • As a result of Covid, high speed broadband services are booming with an  extremely strong demand in developed markets as service providers race to increase broadband capabilities outside major urban centers.
  • On the other hand, one should expect the decline in video services through the set top box to accelerate.
  • Innovation and patent licensing work should remain almost totally unaffected, but delays in new licensing contracts and lower royalty revenues are likely for the next few quarters."

The Future of Airlines

The Future of Airlines

Frank Terner, former CEO of Air France, and an Expert in the airline industry, had the kindness to provide us with his insights on how the Coronavirus has affected the Airline Industry and the potential outcomes for the sector.

 

2020 will mark a milestone in the recent history of our world as we are facing a pandemic on a scale that has not been seen in over a century.

The world is at a standstill, compartmentalized, confined, and with it all modes of transport due to a lack of demand.

Air transportation is hit hard, bringing with it a whole section of the economy: manufacturers, maintainers, ground handlers, airports, tour operators – all types of links in the value chain are affected. Nearly all air transport is at a standstill with almost 90% of airplanes grounded.

 

The question, subject to a lot of debate, is obviously the form of recovery: all the letters of the alphabet goes through it – L – V – U – …, even W. The only certainty is how uncertain the current situation is.

On closer inspection, wouldn’t the recovery take the form of an A followed by an L ?

Air transport experienced a period of strong growth after the crisis of 2008. What if 2019 was a spike? We’d think so. Most analysts and executives are predicting a back to the 2019 level by 2023, if not 2025…

This long interim period is already forcing companies to adapt in a structural way, by reducing their size. Some will fail, others will be absorbed. A succession of major redundancy plans has been announced, as well as declarations of aircraft order postponements or permanent fleet shutdowns.

 

My feeling is that a plausible scenario for the aftermath would see in the early years the large companies contracted, then the appearance of Groups, or conglomerates from consolidations, taking over market shares left vacant.

Several variables will influence these scenarios: the ability to get through the crisis, the customer behavior – therefore the volume of demand, the constraints imposed by the States in counterpart for their support.

 

The question of the relative health of Low Cost compared to Legacy is a hotly debated topic, and with it the relevance of the large HUB model. Who will be the winners?

Low cost companies are entering the crisis with high liquidity and are therefore resilient. But they have made air travel a “commodity”. Their model could be seriously challenged by environmental pressure, which is coming out of the crisis stronger than ever.

The large HUBs have been designed to concentrate small flows in order to route them in a cost-effective way – filling a 400-seat aircraft every day is not that easy. The contraction of demand seems to me revalidating the notion of HUB, or at least of a sustainable «connection» in the medium term.

 

Smaller, single-aisle long-haul aircraft may well play a key role in this future, by fitting efficiently into this landscape on small traffic flows. Unless demand is so low that they become a new standard, including on HUBs? Frankly I don’t believe it…

 


Impact of the Coronavirus Pandemic on the Travel Sector

Impact of the Coronavirus Pandemic on the Travel Sector

Bertrand Mabille, former CEO of Carlson Wagonlit Europe and Expert in the travel sector, had the kindness to provide us with his insights on how the Coronavirus has affected the travel sector and the potential outcomes for the sector.

"The Business Travel Industry is one of the most impacted by the current crisis. The level of activity has been reduced to almost nothing, leaving travel management companies with virtually no revenues in most countries.

Beyond this dramatic short-term effect, which has been mitigated by governmental measures, the COVID crisis will have several mid and long-term effects on the business:

  • The recovery will be slow due to the restrictions imposed by companies on travel and the new sanitary rules in aircrafts and hotels. It will probably take more than a year (and probably much more) before the pre-crisis level of activity will be recovered.
  • There will be an increase of pressure not to travel due to increasing environmental sensitivity and new structural work habits (home working, teleconference).
  • The situation of airlines and hotel companies will be extremely fragile after the crisis which will lead to a strong pressure on distribution costs. Supplier revenues will then be under massive pressure.
  • The industry will accelerate the need for technological investments: on-line tools, direct connect to suppliers (NDC), …

This new situation will lead to a new round of consolidation. There will be a need for additional restructuring and new technological investments which create the necessity to refinance all travel management companies.

Large players like GBT, CWT will probably have access to the necessary liquidity to go through the crisis and eventually survive, which will not be the case for several mid-sized agencies. Large players could then benefit from the consolidation of the market in the long term.

New digital travel companies will also benefit from the crisis, taking advantage of disappearance of many brick-and-mortar travel agencies on the SME market."


How Experts can help your firm to test diversification projects ?

How Experts can help your firm to test diversification projects ?

Given the current environmental issues facing our world today, a global mining and metals company and major player in the Asia Pacific market, has decided to reshape its operational strategy by finding clean alternatives to maximize the value of their clean energy.

This company approached us directly, having heard about our reputation. After the identification of more than 40 potential solutions by their engineers, they wanted the opinion of external Experts in assessing the feasibility of these alternatives.

In only 4 days and after gathering more than 35 profiles, the company booked 10 calls with our Experts. Among them were former General Electric Renewable Energy Engineers and a Member of the Executive Board of a major European Energy Provider and pioneer in sustainable development.

Thanks to our Experts, the company was able to gather all the key information needed to assess and maximize its sustainable alternatives, making it a pioneer in the implementation of such a change in the industry.


4 tips for an Insightful Call

4 Tips for an Insightful Call

Getting the gist of your interviews with Experts is key. A good call can really help you gathering all the practical and in-depth information for your project.

This is why Xperts Council put together a training program on how to get a truly insightful call. After two hours of role-plays and various exercises, you will be able to develop all the cross-curricular skills to make effective briefs and improve the quality of your exchanges with each Expert.

Those who attended this session loved it, why not try it? To give you a taste of this training that we can organize anytime, here are 4 tips.

Preparation
Preparation before a meeting is essential and will allow you to make the most of your time. Don't forget to take care of preliminaries and to set your objectives. Do not hesitate to share them with your Expert at the beginning of your call.

Show an Open Attitude
"Communication by phone is 80% attitude, 20% words."
During the interview, make sure you transmit your interest and engagement, don’t forget, you can hear a smile on a phone! These efforts will be perceived by the Expert, creating motivation and mutual involvement in the discussion.

Choose between Open and Closed questions
Closed questions will allow you to get confirmations especially about the Expert's opinion whereas open questions will provide you with more information, potentially opening the discussion. Do not hesitate to juggle with both styles, as they will give you a broader variety of information.

You need to reformulate not to confront
If you meet any objections from your Expert, keep an open attitude and take it as a good opportunity to bounce back!
Reformulate what has been said and ask for clarifications, this will help you make sure you understood, and get more information on the topic.


Experts for Corporate - Real Estate in Africa

Experts for Corporate - Real Estate in Africa

Our client is a major player and leader for over 25 years in the French real estate market, and they are planning to expand their business through significant international development.

Recently, their CEO contacted us for a specific request. As part of its expansion, they were looking for Development Director Expertise with experience in the implementation of supermarkets and furniture stores in the African market, and more specifically in French speaking Africa.

In less than 5 days, we presented 15 profiles of relevant specialists in Africa and organized more than 7 calls. As an example, the Company was able to interview a member of the CFAO - Compagnie Française de l'Afrique de l'Ouest -, a former Development Director in large distribution groups, as well as the Chief Development Officer of a leading international furniture company.

Our client gathered invaluable insights including on market trends, regulation constraints, competitive landscape which supported the decision to invest in the area.


Due Diligence - Anatec bought by Amundi

The Anatec Case

Founded in 2012, the Anatec start-up offers two specialized management solutions: a platform for monitoring financial products entirely in digital format and robo-advisory technologies allowing management advice to sub-private individuals. The solution is highly recognized by digital insurance players.

In November 2018, an International Consulting firm called us as they had to conduct a market study on Wealth Management Software in Europe. They were looking for Experts on several levels: Technical Experts who could explain the diversity of the offering in the sector, Wealth Managers in Retail Banks, and finally IFAs with a general knowledge of the market.

Within only 3 days, Xperts Council completed the client’s request, proposing different Experts and organising in excess of 12 calls. Among the Professionals interviewed were the COO of a leading Marketplace Intelligence Platform, former MDs and Directors of Private Banks who were able to enlighten our Client on this market.

In January 2019, Crédit Agricole's asset management subsidiary, Amundi, announced the purchase of the 51% of Anatec's shares that it did not already own to become the sole shareholder and thus strengthening its position in the digital sector.


Milgram's "Six degrees of separation" and Xperts Council

In the late 1960s, Stanley Milgram – an American psychologist made famous by his experiments on the obedience to authority – demonstrated that on average any two individuals in the world are separated by five connections. It is commonly known as the “6 degrees of separation” or “small world” theory.

His conclusive experiment took place in the US where a sample of around 160 people were required to send a package to a specific recipient in Boston, using only personal connections to try and achieve this.

What few realise, however, is that only around 30% of the packages actually reached their destination and the broader results also indicated that in some instances only 2 degrees of connection were needed, and others more than 12!

So what does this mean?

This shows that not everyone has access to the same number or relevant connections in order to get to the right individual. It also shows that it can be necessary to seek support or shortcuts in order to generate these relevant connections.

How does this apply to Xperts Council?

Right from the beginning, we decided to gather an outstanding team of consultants who excel in finding the right people quickly. Through human research rather than mechanical database selection, we find professionals who will support our clients accurately and in an efficient timeframe.

Our consultants' mission is to understand each project and its context, presenting this first to our Knowledge Team in order to refine our understanding and subsequent search angles. Together we can then generate the right leads and find the perfect expertise. Our approach means that 80% of the experts we present are not currently working with other Expert Networks.

We are proud to have built a team with a mix of senior and young professionals based on their curiosity, creativity, and tenacity, and who have empathy and great interpersonal skills.

As a result, Xperts Council is able to partner with our clients to truly understand their needs, providing them with potentially game-changing expertise and exceptional service.


M. Beraud on the future of 5G

M. Jacques Beraud is the President of Italtel France, a company specialised in Telecommunication solutions and in the Digital Transformation of enterprises. He has over 20 years of experience in the telecommunications industry. When asked about the arrival of 5G and its impact on the Telecommunications industry, M. Beraud said the following:

"The arrival of 5G will be a major change in the Telco industry, although the first impact will be different for each country as for instance the value of FWA (Fixed Wireless Access) is different in each place.

In France, the first application of 5G is especially valued in the context of B2B where real-time applications are keys, like for the 4.0 industry and IoT or for autonomous vehicles, and in the B2C and gaming industries, where speed is also a priority. There are many other applications for 5G, using Mobile Edge Computing, where the information is processed and distributed locally instead of going all the way to the main servers or Data Centers and coming back.

In terms of infrastructure, 5G is based on a very large IP network that goes from the enterprises to the edge and to the antenna. Thus, it is dependent on a network of cell towers, IP, and fiber optic cables that will need to deal with the demand for this new technology. 5G can be deployed in Standalone or non-standalone, but at the moment, the most convenient way of deploying 5G is by using the 4G core and opting for a gradual deployment. This will mean that the transition 4G to 5G won't be as rough as the change from 3G to 4G, where the whole network had to be revamped before the technology could be upgraded.

Some estimates predict the complete deployment of 5G to start by the end of 2020, early 2021, in the UK and certain other countries, while France will be most certainly later. From 2022-2023 in France, 5G will allow several groups of users to share the same network despite very different usages (“Slicing”), thus allowing strong enhancements of the various verticals."