EP 025 - Building a Global Procurement Function with Murali S, ex-Head of Procurement at Wipro

Murali Sundararajan, a seasoned procurement leader, shares his extensive experience and insights in the field of procurement. Initially transitioning from an engineering background, Murali faced challenges that emphasized the importance of technical knowledge and strategic thinking in procurement. He highlights the transformation of procurement over the past two decades from a transactional function to a specialized, technology-driven aspect of business that significantly impacts cost management, process efficiency, and overall value addition.

Murali discusses the essential elements of procurement including sourcing, supply chain management, and vendor management, underscoring the need for a robust team led by a skilled head of procurement. Key traits for procurement professionals, as Murali notes, include communication skills, passion, technical expertise, and negotiation capabilities. He outlines annual goals for a procurement team which focus on cost reduction, process enhancement, team development, and aligning with business objectives.

Effective sourcing practices, according to Murali, involve networking, thorough research, and leveraging technology to identify and evaluate potential suppliers. He delves into risk management during vendor selection, addressing geopolitical, financial, and logistical considerations. The procurement process itself, as described by Murali, involves an RFI to gather initial data, followed by RFPs and RFQs to finalize supplier selection, emphasizing the importance of detailed contractual requirements and competitive pricing strategies.

Murali also touches on the significance of involving the procurement team early in the purchase process to optimize value and minimize risks. He discusses advanced topics such as the impact of automation, AI, and RPA on the future of procurement, and offers career advice for aspiring leaders in the field, reflecting on his own professional journey and the dynamic nature of procurement.

Takeaways

• Procurement plays a strategic role in reducing costs, improving processes, and bringing value to the company.
• Sourcing involves identifying the right partners, integrating technology, and reducing costs through automation.
• Supply chain management encompasses logistics, overseeing, and delivery of goods and services.
• Vendor management involves developing and empowering suppliers, promoting sustainability, and reducing costs.
• Hiring an experienced head of procurement is crucial to create a strong procurement team and develop a strategic procurement culture.
• Startups should prioritize hiring a procurement expert early on to avoid future challenges and ensure compliance. Procurement has shifted from a transactional approach to a specialized and technology-driven function.
• When hiring for procurement, consider communication skills, passion, technical expertise, and negotiation skills.
• Yearly goals for a procurement team should include cost reduction, process improvement, team member development, and meeting business unit goals.
• Involving the procurement team early in the purchasing process is crucial for value addition and risk mitigation.
• Best practices for sourcing include networking, research, and using technology to gather information about potential suppliers.
• Risk management in vendor selection involves assessing geopolitical, financial, and delivery risks.
• The RFP process includes an RFI, RFP, and RFQ to select suppliers.
• The RFP should include contractual requirements and pricing proposals.
• Efficient communication and technology can expedite the procurement process. The procurement process involves the use of RFI and RFP, especially for large spends and standard procurement.
• Multi-party coordination is crucial in ensuring the procurement process remains on track and delivers the desired outcomes.
• Getting the right price for products and services requires market data and benchmarks.
• In addition to cost, other elements to consider in procurement include response time, project execution, and analytics.
• The future of procurement lies in automation, AI, and RPA, which can streamline processes and provide valuable insights.
• Aspiring procurement leaders should have passion, energy, integrity, and a willingness to learn and adapt to technology.
• Muralidharan advises spending time understanding technology, being hands-on, and focusing on ROI.
• Muralidharan reflects on his career and suggests that he could have spent more time understanding software technology.
• Muralidharan highlights the importance of being flexible, straightforward, and easy to reach in describing himself.

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Quotes

"Procurement is more than just buying."

"Your nose should be in, your hands off."

"Strategic sourcing is the most difficult and engaging."

“Sourcing involves identifying what is the right partner to source, what technology they are using, how we can use that technology to integrate with us and reduce the use of people.”

“Strategic sourcing requires thinking, deep thinking, integrating with the team members in the technology space, with the business leaders, and then working with the partners.”

"Procurement has changed a lot in the last 20 years. It was more transactional, but now it's more specialized and technology-driven."

“Most of the procurement I see in IT, they are reporting to CFO at the least, if not to the CEO.”

“Head of procurement [role] is more people management, peer management, working with the CEO and the partners to create that culture. He should bring in that culture of innovation, culture of understanding, how to reduce cost, not by just meeting the supplier, but how to reduce cost strategically.” 

“RFX process starts with an RFI, then RFP, and then RFQ.”

“I think the first thing is the passion, energy level, integrity. If these three things are there, and then you have a kind of a, what do you call it, inclination toward technology.”

"When hiring for procurement, communication skills, passion, technical expertise, and negotiation skills are important traits to consider."

"Yearly goals for a procurement team should include cost reduction, process improvement, team member development, and meeting business unit goals."

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Where to find Murali S: