Danfoss: How to Make Your Procurement Future – Proof?

Danfoss demonstrated true leadership in the procurement industry when Joanna Siemiatkowska, Global Project Manager, presented “How to Make Your Procurement Future - Proof?” at Markit Forum Virtual 2021 in front of hundreds of IT procurement experts, globally. What a superb presentation. It is no wonder Danfoss’s ongoing project with Markit was a finalist in the World Procurement Awards.

Without doubt, all the speaker presentations at the Markit Forum were impressive, but based on participant feedback, it seems Danfoss's really hit the mark and impressed everyone who heard it.

Joanna explained how Danfoss is making its indirect procurement nimble today and tomorrow and to be honest, nothing we write here will be as good as watching the presentation yourself.

Joanna reminded us that just 10 years ago IT procurement was very, very different for most companies: Paper catalogs and invoices, time and resource consuming, much freedom with little governance and lots of risks, difficulties in executing savings, random product selection according to users’ individual decisions, and to cap it all, processes were not streamlined. She then proceeded to show how working with Markit contributed to helping Danfoss change indirect procurement.

It was quite humbling to be so appreciated.

Here are some of her key points:

Danfoss implemented Ariba punchout about 6 years ago and Markit was one of first to join the platform and for a long time, the first and only company to offer punchout level 2.0 complexity (now they have 300 supplier catalogues). Markit and Danfoss collaborate in 30 countries, but this number will grow, as Markit grows into more “Danfoss countries”.

The benefits of using catalogues / marketplaces were manifold, but a key area is the time gained in category management and process optimisation - by not spending time on purchasing which is a non-value add area.

Joanna particularly appreciates the Markit marketplace’s “Easy to add-remove items functionality on favourite lists which is very cool.”

Talking more about Ariba, Joanna said that when going to new country it is not just about adding the Ariba platform and catalogues but also the processes so they can add watchers or approvers depending on cost, sensitivity, or location etc. Approval flows can be defined as required.

She then shared a few Ariba-lessons-learned.

Ariba awareness, training and motivation are essential to strong end user usage and satisfaction (good onboarding in other words)
Purchasing, IT and accounting need to work together to deliver a system that works for everyone.
Now it is almost a copy and paste when we add a new country, the first ones were very emotional, and we did not know the implications in advances of many necessary decisions.

In the future Joanna said they are looking to:

Increase automation e.g. The “need by date” could be defaulted to “tomorrow” rather than asking for a date. One click less.
Build even stronger relationships with suppliers who can keep up with their needs - and Ariba developments.
Invest time and money in advanced digital tools.
Implement Ariba in every entity worldwide. In China they will enable 8 companies and 20 plants. Whilst this may seem complex, paradoxically it simplifies procurement. Ariba integration will reduce complexity because there will only be one catalogue. Until then Danfoss run a parallel solution “myshop” for non-Ariba countries.

Asked by Jon Kolasinkski, Country Manager at Markit Poland, “How do you standardise IT products globally?” Joanna replied that, “IT managers can manage the favorite lists in each country, but we need to be flexible so during Covid-19. We had to add more options e.g., more variety of webcam models.”

Asked about Ariba and vendor onboarding culture change and advice, Joanna shared that at Danfoss, pre-Covid-19 they used to gather inexperienced users together for training but now we offer a virtual “live” training and access to a library of 30 sec/1minute videos which are always available to all users.

In other humbling moments Joanna said, “Markit saved us many times. I learned a lot from working with your great integration guys. Many companies have the knowledge, but Markit is one of the few to also show full willingness to help or support so it is really relaxing to cooperate with you. We share 100% satisfaction in our procurement and IT teams about our cooperation with Markit.”

On that note we especially owe a clap for Markit’s unseen and unsung heroes in the development team, the engineers who help our clients succeed!

Watch the Danfoss presentation on YouTube now.

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Read the main Markit Forum Virtual 2021 Report or check the other individual client presentation reports from:

Western Union - 6 Principles for Success -Navigating a Changing World
SEB - Taking a diverse approach to procurement
Revolut - Managing procurement while building a hybrid-work company of the future
Greentube - How user-centric procurement can drive innovation and influence employee satisfaction
Alantra - Solving IT procurement with speed and efficiency

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Danfoss: How to Make Your Procurement Future – Proof?