Ep 38: Procurement transformation at Roche; an interview with Patrick Foelck (Part - 2)

Summary

In this insightful discussion, Patrick Falk, Head of Strategy & Transformation Procurement at Roche, explores the evolving role of procurement in the digital age. He highlights the integration of AI and digital tools, emphasizing how these technologies are reshaping procurement by improving efficiency and decision-making. Patrick also discusses Roche's shift to a customer-centric, flexible model, empowering teams to deliver more than just savings. He offers practical advice for executives embarking on similar transformations, stressing the importance of investing in talent, embracing hybrid technologies, and focusing on value creation rather than just cost reduction.

Takeaways

• 😀 Procurement transformation requires a deep integration of digital tools and AI to create a more strategic, flexible, and value-driven function within organizations.
• 😀 AI can automate many traditional procurement tasks, reducing operational complexity and freeing up resources for more strategic decision-making.
• 😀 AI is not just about automation; it's also about unlocking new capabilities, improving decision-making, and enabling procurement teams to serve as true business partners.
• 😀 Traditional procurement functions face challenges in evolving, as AI and technology could potentially replace some roles and tasks, making it crucial for teams to adapt and upskill.
• 😀 Procurement leaders should encourage their teams to think beyond cost savings and focus on delivering broader business outcomes like revenue growth and strategic value.
• 😀 Embracing hybrid technology solutions, such as AI, chatbots, and robotics, is essential for future-proofing procurement functions without overhauling existing systems.
• 😀 Transforming procurement requires not just investing in technology, but also in developing the capabilities and skills of procurement professionals to support business innovation.
• 😀 The future of procurement will be defined by its ability to act as a trusted advisor to the business, guiding decisions based on data, AI insights, and strategic alignment.
• 😀 Talent management is crucial in procurement transformation, with an emphasis on upskilling professionals to handle more complex, business-critical challenges rather than just transactional work.
• 😀 In order to succeed, procurement leaders should empower their teams to engage with business leaders more proactively and collaborate on solving broader, organizational challenges.

Q & A

What was the primary transformation in Roche's procurement function over the past 1.5 years?

Roche's procurement function shifted from a highly decentralized, category-based structure to a more global and centralized approach. This transformation enabled the company to better collaborate across different business units and streamline procurement processes.

How does Roche view the role of procurement beyond cost-saving activities?

Roche is redefining procurement as a strategic enabler, focusing on delivering broader business value beyond just savings. Procurement is now seen as a partner in decision-making, helping to drive outcomes such as innovation, revenue growth, and solving complex business challenges.

What are some of the challenges Roche faced while transforming its procurement function?

One major challenge was navigating the tension between maintaining a central structure while allowing flexibility at the local level. Another challenge was ensuring that procurement could evolve from a savings-driven function to a more strategic, value-creating role.

How did Roche implement digital and technological solutions in its procurement transformation?

Roche leveraged a hybrid approach, combining core systems with best-of-breed, flexible digital solutions. This allowed the company to scale its procurement processes while maintaining the agility needed to address changing business needs.

What role does AI play in Roche's procurement strategy?

AI is viewed as both a potential threat and an opportunity. While AI has the ability to automate traditional procurement tasks, Roche sees it as a tool to augment human capabilities, enabling procurement teams to be more efficient, flexible, and strategic.

What is the biggest benefit Roche has experienced by incorporating AI and digital tools into procurement?

By incorporating AI and digital tools, Roche has been able to increase procurement efficiency and effectiveness, reduce manual processes, and ultimately shift focus to higher-value tasks that contribute to overall business growth and innovation.

What advice did Patrick Falk give to executives looking to transform their procurement function?

Patrick advised executives to expand the role of procurement beyond cost savings and to recognize it as a key decision-support advisor. Additionally, he stressed the importance of investing in procurement capabilities—not just technology, but also in the people and skills needed to drive transformation.

How has Roche’s approach to talent management supported the procurement transformation?

Roche emphasized upskilling and engaging procurement teams by offering new opportunities for growth and responsibility. The company moved beyond traditional category-specific roles to cultivate a more versatile skill set that aligns with the broader business goals.

Why is flexibility an important component of Roche’s procurement transformation?

Flexibility is crucial because it allows Roche’s procurement function to adapt to rapidly changing business needs. The transformation seeks to create a balance between centralization for efficiency and the flexibility to address localized requirements and solutions.

What did Patrick Falk mean by describing procurement as a ‘consulting firm’ for the business?

By calling procurement a ‘consulting firm,’ Patrick emphasized the shift in procurement’s role from merely sourcing products or services to providing comprehensive, strategic advice that helps the business solve complex problems and make more informed decisions.