Category Management is Capgemini's approach to managing procurement categories. It aims to increase efficiency and realize cost savings. Key elements include end-to-end supply chain management, market awareness, technical knowledge, strong supplier relationship management, and understanding consumer needs. Capgemini provides strategic procurement, category support, and an on-demand procurement platform to help clients implement effective category management. Realizing savings and ensuring governance are top priorities in all category management initiatives.

1. Category Management
Marjolein Dijkshoorn
Sydney, October 2012

2. Whereas Capgemini supports clients with the improvement of the entire procurement
strategy, organisation, processes and execution, this document will focus solely on
category management
STRATEGIC
Defines procurements prime objectives to
Procurement align and support the business strategy.
Strategy
Development Business alignment through the
Procurement Board. Participants executive
Governance & Organisation
level.
Development
Category Planning
TACTICAL
Specific strategies and market approach
for Commodity groups covering market
and spend profiling, selection and
Purchase Supplier switching. The commodity strategy will
Demand Sourcing Relationship determine the optimum geographic
Management Management approach.
Alignment through Multi Functional Teams.
Supply Planning & Control Participants functional level (e.g. HR,
marketing, IT)
Provision of Goods & Services OPERATIONAL
The delivery of benefits through a
compliant environment based on
information, procedures and policies in
IT People Knowledge & Information line with the strategy
Managing the Enablers Alignment through compliance.
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3. Category Management is the management of a specific group of commodities with
similar characteristics, with the aim to increase efficiency and realise cost savings
Category Management Definition Category Management Benefits
“the entire science of the procurement subject applied to 1. Savings. Category Managers can leverage expertise and insight
a single genre of expenditure”. into a whole category as a means of driving value from a
particular deal.
In Category Management products or services that have similar 2. Consolidation of spend. When managing by category,
characteristics and are bought from similar supply markets are consolidation opportunities can become apparent as well as well
grouped together and treated as a discrete group or category. as opportunities to outsource.
These categories are then more manageable from a procurement 3. Internal vs External alignment. It links customer requirements
perspective because the items in a category require the same with supply market capabilities.
supplier market intelligence, the same sourcing strategies and 4. Team work. It enables the business requirements definition or
similar supplier relationship management programmes. specification to be developed so that it delivers best value.
Defining your business requirements is a team game in that it
The key elements of Category Management include end-to-end identifies both the user requirements and commercial
management of the supply chain, acute market awareness, sound expectations.
(if not expert) technical knowledge, good SRM and excellent 5. Leverage. It ensures that all relevant spend is included in the
stakeholder relationships. Also, an understanding of actual category so that your leverage is maximised.
6. It reduces risk. Creating categories and putting them under the
consumer needs – at the other end of the supply chain. proper management of experts enables you to spot any trends
or developments that might create a commercial risk and do
something to prevent or mitigate it.
7. Clear Responsibilities and Communication. It helps to build
good communications across the entire value chain. Category
Management gives you the visibility and opportunity to
communicate the right message in the right way to the right
people to get the result you want.
8. Trust. It builds trust and co-working across all of the value chain.
9. Comprehensiveness. It ensures that many supply options are
considered rather than just the obvious one.
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CIPS Research 2011: State of the art of category management

4. Capgemini’s Procurement specialists and Procurement as a Service™ provide a strong
solution to compliment the clients Sourcing organization and Category Management
approach
CAPGEMINI PROCUREMENT
STRATEGIC PROCUREMENT CATEGORY SUPPORT ON-DEMAND PROCUREMENT PLATFORM
Strategic services that leverage Capgemini's Spend analysis, category intelligence, event The leading Sourcing and Category
unique mix of procurement and industry management and supply risk analysis are the Management solutions to improve efficiency in
sector expertise, as well as deep key activities in our category support offering. sourcing process
understanding of client needs. The support function of Procurement as a • Spend Analysis
Service provides services to the clients retained • eSourcing / event management
Acting as an extension of the clients category managers. • Supplier Network
procurement organization, Capgemini will • Contract Management
perform strategic sourcing and category • Savings tracking
management for assigned spend categories. • Project Workflow
Strategic Procurement
Category Contract Supplier Compliance Content
Strategic Sourcing Management Management Relationship Management Management
Management
Category Support
Spend Analysis Category & Market Intelligence Event Factory Supply Risk Analysis
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5. Today, Capgemini BPO manages over $12.5B AUD spend with the majority being indirect
spend categories. Our knowledge in these categories will enable us to bring acceleration
to the clients sourcing process
CAPGEMINI CATEGORY TREE
1 2 3 4 5 6 7 8 9 10 11 12
OFFICE FACILITY REAL ESTATE PROFESSIONAL HUMAN IT & COMMUNI- FINANCIAL MARKETING TRAVEL LOGISTICS MRO PRODUCTION
MANAGEMENT SERVICES RESOURCES CATION SERVICES EQUIPMENT
1.1 2.1 3.1 4.1 5.1 6.1 7.1 8.1 9.1 10.1 11.1 12.1
Office Supplies Cleaning Services Contractors & Management Recruitment Hardware Banking Services Commercial & Conferences & Air Transportation Spare Parts Material Handling
Renovation Consultants Production Print Meetings Equipment
1.2 2.2 3.2 4.2 5.2 6.2 7.2 8.2 9.2 10.2. 11.2 12.2
Furniture Security Rents IT Consultants Training Peripherals Auditing Communication Hotels Road Transportation Hand Tools Production Equipment
Consultants
1.3 2.3 3.3 4.3 5.3 6.3 7.3 8.3 9.3 10.3 11.3 12.3
Office Machines Canteen Property Engineering Employee Benefits Software Insurance Media Rental Cars Rail Transportation Protective Gear & Test & Measurement
Consultants Clothing Equipment
1.4 2.4 3.4 4.4 5.4 6.4 7.4 8.4 9.4 10.4 11.4 12.99
Subscriptions Electricity Development Legal Services Employee Recognition IT Services P- card Services Events & Exhibitions Train Sea Transportation Lab Supplies Other Capital
Consultancies Equipment
1.5 2.5 3.5 4.5 5.5 6.5 7.99 8.5 9.5 10.5 11.5
Literature Water and Waste Brokers Temporary Labor - Fleet Cars Telecom Other Financial Advertising Agencies Travel Management Courier and Small Lubricants
Water Admin Services Package Services
1.6 2.6 3.99 4.6 5.6 6.6 8.6 9.6 10.6 11.6
Coffee & Other HVAC Other Real Estate Temporary Labor – Payroll Services Data Com Market Research Air Warehouse - 3rd Air and Gas
Vending Skilled Party Space
1.7 2.7 4.99 5.99 6.7 8.7 9.7 10.7 11.7
Paper Waste Management Other Professional Other Human Phones Systems Promotional T&E Card Customs Services Chemicals
Services Resources Merchandise
1.99 2.8 6.8 8.8 9.99 10.8 11.8
Other Office Landscaping Services Accessories Sales Services Other Travel Freight Bill Auditing Cutting Tools
Services
2.9 Snow Removal 6.99 8.9 10.9 11.99
Services Other IT & Marketing Consultants Storage Systems Other MRO
Communications
2.8 8.99 10.99
Mailroom Services Other Other Logistics
Marketing
2.99
Other Facility
Mgmt/Maintenance
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6. Strategic Procurement manages spend savings and supplier performance through our
global network of category managers as well as local experts
Service Delivery Model
TRANSACTIONAL
DELIVERY HUBS
• Activities which require close access to
the client, such as stakeholder
management, sourcing wave planning, REGIONAL / GLOBAL OFFSHORE CATEGORY SUPPORT
and complex category sourcing are DELIVERY DELIVERY MARKET
CENTERS INTELLIGENCE
performed locally SPEND ANALYSIS
• Strategic sourcing and category ENGLISH
LANGUAGE
EVENT (RFx)
FACTORY
management activities are performed NEAR-SHORE
STRATEGIC
GLOBAL
onshore / onsite and offshore based on DELIVERY SOURCING
PROJECT SOURCING
category complexity, stakeholder ENGLISH SOURCING LITE
alignment client requirements. Typical LANGUAGE PROJECTS
ratio is 50% onshore / 50% offshore
• Local delivery is supported by our
regional and global category managers
who provides sourcing strategy LOCAL DELIVERY
expertise ( onsite / onshore)
• Category support such as spend analysis CATEGORY SUPPORT
LANGUAGE
and reporting are performed by local CENTRIC
MARKET INTELLIGENCE
SPEND ANALYSIS
procurement specialist or performed in STAKEHOLDER MGMT
ONSIGHT
English from India ON-SHORE
SOURCING & PROJECT
WAVE PLANNING
STRATEGIC SOURCING
SUPPORTS
PROJECT SOURCING
OVER 37
SERVICE MANAGEMENT
LANGUAGES
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7. Capgemini takes a comprehensive view of Category Management
SP1.0 SP2.0 SP3.0 SP4.0
Procurement Strategy Category Category Category
& Planning Planning Development Management
1.1 Assess client environment 2.1 Profile category 3.1 Mobilize 4.1 Manage demand
Continuous improvement
1.2 Perform spend analysis 2.2 Create category strategy 3.2 4.2 Manage supply
initiative
Idea generation & Define, assess initiatives &
1.3 2.3 3.3 Compliance initiative 4.3 Manage savings & compliance
opportunity identification prioritize
1.4 Goal & objective setting 3.4 Strategic sourcing initiative 4.4 Manage stakeholders
3.5 Initiative implementation 4.5 Manage risk
4.6 Manage supplier
4.7 Project based sourcing
• Spend Profiler
• Business Intelligence • eSourcing
• Workflow
Tools
• Spend Profiler • Supplier Positioning • Workflow
• Business Intelligence
• Business Intelligence • Supply Preferencing • Business Intelligence
• SLA and Operational Reporting
• Five Forces • Contract Management
• Contract Management
Workflow and issue resolution infrastructure
Intelligence
• Category Packs • Category packs
• Spend analysis • Cross client processes
• Cross-client best practices • Rfx Templates and scenarios
• Category intelligence packs • Category specific KPI´s
• Supplier listings • Contract templates
• Benchmarking • Benchmarking
• Supply market intelligence • Quarterly analysis
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8. Realizing savings and ensuring client governance in all initiatives
Idea Opportunity Identified Captured Realized
Savings Status
Strategic
Sourcing
Profile Create
Qualify Source And Implement Contract
Assessment Sourcing Sourcing
Suppliers Award And Savings
Category Strategy
Initiative Types
Compliance
Identify & Develop
Stake-holder Monitor
Hypothesis Run Compliance Reports Quantify Implement. Implement
Buy-in Progress
Suppliers Approach
Improvement
Continuous
Quantify & Finalize
Validate Need And Stake-holder Monitor
Identify Need Validate Recommendat Implement
Develop Approach Buy-in Progress
Opportunity ion
A B C D
Council
Tollgates Stakeholder agreement on project Stakeholder sign-off on approach and Stakeholder sign-off on Project evaluation and transition to
details for development project execution implementation plan and savings on-going maintenance
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9. Capgemini‘s Spend Analysis process creates normalized, enriched data to enable
sourcing and supplier optimization analysis
Data Extraction & Data Cleansing &
Analysis & Reporting
Aggregation Classification
• Extract data from source systems • Data cleansing , grouping & • Advanced spend reporting &
• Load data into Spend Profiler classification analysis
• Aggregate and map all data files • Classify transaction data to • Provision of cleansed and
• Data validation checkpoint to hierarchy classified data extract
ensure accuracy and • Conduct mapping workshops to • Final presentation view of Spend
completeness of loaded data review classifications, exceptions, Analysis results
and to ensure business accuracy
Industrialized and automated process supported by Spend solution
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10. For industrialized outsourced categories, Capgemini maintain a library of category
know-how and insight to accelerate benefit delivery and opportunity size
Market Characteristics
Category
Insight
Historic Areas of Opportunity
High Level Solution Overview session. 1st
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October 2009

11. Category Intelligence is managed by a dedicated Knowledge Manager or Procurement
Specialist, and is proactively updated as part of the Sourcing Close process
Category Tree Excerpt
2 6
FACILITY IT &
MANAGEMENT COMMUNICATION
2.1 6.1
Cleaning Services Hardware Category
2.2 6.2
Intelligence
Security Computer Peripherals
Packs
2.3 6.3
Canteen Software
2.4 6.4
Electricity IT Operations
2.5 6.5
Water and Waste Telecom
Water
2.6
Heating
6.6
Data Com
Knowledge Leverage Knowledge Harvesting
2.7 6.7
Waste Management Phones & Accessories Profile Create Implement
Qualify Source And
Sourcing Sourcing Contract
Suppliers Award
2.8 6.8 Category Strategy And Savings
Mailroom Services Switchboard
Hardware Sourcing Initiative
2.99 6.99
Other Facility Other IT &
Mgmt/Maintenance Communications
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12. Category Management and Compliance is used by Capgemini to ensure realized savings
and create sustainable improvements
Exceptions Compliance
Capgemini Category Managers interact with Client Stakeholders to Management Strategy
help: I A
Reporting & Sourcing
• Standardize specification/rationalize items Tracking
H B
Identify
• Measure, manage and improve compliance
Ring
Capture
• Gain earlier involvement in the sourcing and buying process Communicate
Policies
G Fence
C Channel
Planning
Realize
• Build people effectiveness, education programs
• Increase efficiencies F D
Category
Communication
E Channel
Implementation
Content
Management
Compliance Management Framework
3 to 6+ months based on Category
Develop Develop or revise
Identify key Design/ Design & deliver
Define the performance commodity Create
stakeholders Develop training/
sponsorship metrics & procedures & reporting
and any implementation communications
network for the targets policies to process /
impact & communication to key
commodity to drive address tools
on them Strategy/plan stakeholders
behavior compliance
• Category managers drive and manage their specific compliance management framework and approach
based on leading practices
• Extensive communication with business units, suppliers and stakeholders to ensure unique business
requirements are understood and incorporated
• Category specific requirements are taken in to account for each given category
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13. Capgemini will leverage the clients existing technology and supplement, as desired, by
our leading on-demand solutions
TRUE PLATFORM PHILOSOPHY – Procurement technology AND procurement services
ON-DEMAND DELIVERY – IBX Smart Cloud | on-demand or hybrid delivery | ISO-certified
READY TO USE – Preconfigured | digitized assets | procurement-ready supplier community
USER-FRIENDLY – Enhanced multi-channel, call-off, end-user interface
SOURCE TO CONTRACT
SOURCING SUITE SAVINGS TRACKER
CONTRACT MANAGEMENT SUPPLIER PERFORMANCE
SPEND ANALYSIS PROJECT WORKFLOW
Collect Prepare Analyze &
Define Project Negotiate
Information Negotiation Award
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14. Capgemini has broad Category Management experience, globally and in the Australian
market
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15. Appendix
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16. Capgemini Credentials in Strategic Sourcing and Category Management (1/4)
Client Engagement Aim and Approach Overview
• A Global Strategic Sourcing programme looking at all areas of spend on a global basis, i.e..non-production, production, services and
outsourced spend. Capgemini’s Strategic Sourcing methodology is being followed, key stages of which are; capability assessment, in
depth commodity profiling of selected focus areas, sourcing strategy and implementation.
• Rapid Sourcing Assessment; Segmented and analysed indirect spend. Identified overall value proposition and high opportunity areas.
• Strategic Sourcing Commodity Pilots (in progress); Employed Capgemini strategic sourcing methodology for five commodity pilots: office
supplies, travel, temporary labour, small package delivery, computer hardware and cellular phones (~7% of the indirect spend). Includes
commodity profiling, strategy, demand management policy changes, RFPs/analysis, negotiating strategies, contracting and
implementation plans.
• Organization Blueprint; Created a Commodity Sourcing & Procurement vision. Designed CSP organization structure, roles &
responsibilities, key processes, and a CSP policy.
• Purchase-to Pay Future State Solution; Designed future state processes for travel, expense and capital purchases that streamlined the
processes and incorporated the use of enabling e-procurement technologies.
• Scoped the processes and determined the list of suppliers
• Analysed the processes and developed improvement initiatives
• Developed an invitation package to suppliers asking for a partnership relationship based on preferred customers prices and
improvement initiatives
• Analysed responses and developed pricing schedule and improvement initiatives
• Rationalised suppliers, helped negotiate initial savings
• Developed improvement agenda for future savings
• Our involvement commenced with initial assessment of client company purchasing organization, process and technology capabilities as
well as estimating potential savings opportunities across several commodity groups.
• Strategic Sourcing engagement roll-out commenced with identification and implementation of “Quick Wins” opportunities, followed by
traditional Commodity Sourcing comprising of direct material commodity groups totaling approximately $ 50 MM in spend and $ 100
MM in Indirect Spend.
• Significant change management responsibility was entrusted on Capgemini to manage and communicate new sourcing process as well
as train and transfer knowledge to their existing personnel. Capgemini also assisted in transforming the organizational structure as well
as establishing the process to make Procurement as a required core competency for the Client.
• Capgemini provided methodology, leading practice experience and knowledge, project management and coaching to all cross-functional
teams involved. The first wave of the project focused on 4 commodity groups, such as Commodity Chemicals, Specialty Chemicals and
Packaging Materials.
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17. Capgemini Credentials in Strategic Sourcing and Category Management (2/4)
Client Engagement Aim and Approach Overview
• A Sourcing Assessment was conducted across Europe, Asia and the Americas, reviewing spend, opportunities and the current
Procurement capability. This culminated in a Capability Development Plan, which included a business case for the implementation of a
new organisation and supporting infrastructure changes which would be implemented in parallel to several short-term cost reduction
initiatives.
• A New Organisation Design was developed based upon the development of organisational design principles, the key Procurement
processes and the business needs. Fundamental changes include the formation of multi-functional, Sourcing Group Teams which will
operate above site level and on a regional / global basis; establishment of a Procurement Leadership team; closer integration with the
New Product Development process; clear reporting lines to the executive and throughout the Procurement organisation; and senior
executive alignment to key suppliers. This was supported by job profiles, RASI, recruitment processes, detailed resource plans and
costs, and job evaluation (Hay Assessment).
• Programme Mobilisation necessitated the mobilisation of multifunctional Sourcing Group Teams across the globe - 22 sourcing
groups, over 170 full time employees, covering over £1 billion spend. This has been enabled through strong programme management
covering communications, issue management, benefits tracking and formal reporting.
• Programme Implementation involved all the sourcing groups in the development of terms of reference, conducted commodity
profiling, developing sourcing group strategies and implementing initiatives to achieve annual benefits targets. Additional work has also
been completed to maximise and ensure sustainability of benefits.
• Strategic Sourcing Program
• Designed and assisted implementation of program
• Trained resources in all aspects of required sourcing capabilities
• Assisted in delivering cost reductions from negotiation to component standardization to headcount reductions
• Developed sourcing vision leveraging Capgemini ASE workshop
• Developed and implemented commodity specific sourcing strategies
• Assisted with implementation of Component Supplier Management software package
• The objectives of the Strategic Sourcing Scoping engagement were to:-
• identify those categories of indirect spend where a strategic sourcing approach could deliver realisable benefits
• quantify the potential scale of those benefits
• identify the techniques that could be employed to deliver those benefits
• Capgemini were engaged to support the Global Purchasing department of this FTSE 100 Life Sciences company in its search to improve
purchasing effectiveness of indirect spend. The objectives of the Strategic Sourcing Scoping engagement were to:-
• identify those categories of indirect spend where a strategic sourcing approach could deliver realisable benefits
• quantify the potential scale of those benefits
• identify the techniques that could be employed to deliver those benefits
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18. Capgemini Credentials in Strategic Sourcing and Category Management (3/4)
Client Engagement Aim and Approach Overview
• The engagement covered a turnkey eProcurement implementation in 10 months starting with package selection and business case
construction through to the e-Enablement of 12 commodity groups across 40+ sites and encompassing 16,000 employees. The
engagement combined supply chain, change management and package implementation skills to ensure the complete success and
maximum benefits to Royal and SunAlliance.
• Reviewed of 10 eProcurement point to point packages, according to the firms global requirements of purchasing goods and services
resulting in a clear and objective recommendation.
• Construction of a business case with demonstrable bottom line impact.
• Implementation of three commodity groups across 5 business sites within 14 weeks as first stage pilot covering over 2,500 employees.
• Full push/pull integration to SAP R/3 and Lotus Notes.
• Strategic sourcing across all commodity groups to improve commercial arrangements, rationalise the supply base, standardise
requirements and implement leading practice supply management techniques.
• Management of implementation of Ariba across over 40 business sites covering 16,000 employees to ensure on time delivery of
complete system to Royal and SunAlliance.
• e-Enablement of 12 commodity groups, including services by end of engagement.
• First Ariba client in Europe to adopt Ariba Network.
• A High Level Sourcing Assessment was conducted reviewing spend, commodity suitability characteristics, and key business drivers for
change. This culminated in a business case for the project and a shortlist of 6 commodities, including castings and plastic mouldings,
which were then prioritised for implementation
• Programme Mobilisation necessitated the mobilisation of an internal multifunctional work team, including purchasing, engineering, and
administrative staff. The internal team, plus all relevant suppliers, were fully trained on the auction tool, the overall reverse auction
process, and the expectations of all stakeholders.
• Programme Implementation involved the development of terms of reference, dynamic commerce templates, event strategies, post
event analysis, and planning to achieve benefits. Specific deliverables included:
• supplier search and selection
• demand specification
• delivery of training programme
• development and implementation of event strategies
• post auction analysis
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19. Capgemini Credentials in Strategic Sourcing and Category Management (4/4)
Client Engagement Aim and Approach Overview
• Related to this program, the airline wanted to maintain the culture and spirit of their employees in the midst of change.
• An initial 10-week study was performed to identify specific recommendations for improvements.
• Study identified four key areas where improvements would yield significant improvements and cost savings, based on initial process
analysis and leading practices gap analysis.
• Included a comprehensive commodity program and process and organizational improvements.
• The final business cases and improvement portfolio projected savings to be over $8 million in the first year.
• Capgemini used the recommendations from this study to conduct a 9-month implementation program.
• A Strategic Sourcing Analysis looking at all areas of expenditure i.e. Programme-specific and Operating expenditure. Capgemini’s
Strategic Sourcing methodology followed, key stages of which are; capability assessment, in-depth commodity profiling of selected focus
areas, sourcing strategy and implementation.
• Capgemini are provided methodology, leading practice experience, knowledge and coaching to the client team involved.
• The Analysis has focused on 18 commodity groups, such as training provision, telecommunications, travel, print and stationery and IT
equipment.
• Quick win opportunities were identified and over £250,000 secured
• Joint team formed with the client to implement the strategy
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20. Contact information
Susan Beeston Marjolein
Vice President BTC – Business Consulting
Dijkshoorn
Insert susan.beeston@capgemini.com Insert Senior Consultant/ SCM
contact Capgemini contact marjolein.dijkshoorn@capgemini.com
picture 7/77 King Street picture
Sydney, NSW 2000 Capgemini
Australia 7/77 King Street
Sydney, NSW 2000
Australia
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