Ep. 13 - Procurement Business Partnering: Driving Value Beyond Cost at Diebold Nixdorf - with Milind Tailor

What happens when procurement evolves from being transaction-focused to becoming a true business partner? Find out in this episode.

Host Richard McIntosh speaks with Milind Tailor, Global Head, Resale Products & Services Procurement at Diebold Nixdorf, about the transformative journey of procurement business partnering. Milind shares how procurement can go beyond cost-cutting to build trust, foster supplier innovation, and align with business goals to drive revenue and operational excellence.


You'll learn:

1. How Procurement Business Partnering serves as an operating model to align procurement with strategic business goals
2. How to use the Supplier Performance Index as a governance tool to evaluate and enhance supplier relationships
3. Why the Trust Equation is vital for building strong stakeholder and supplier alliances
4. The role of a balanced scorecard in measuring procurement’s impact beyond cost
5. Essential advice for starting and excelling in a procurement career

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Get in touch with Milind Tailor on LinkedIn: https://www.linkedin.com/in/milind-deepak-tailor/

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Details about Diebold Nixdorf:
Website: https://DieboldNixdorf.com
Industry: IT Services and IT Consulting
Company size: 10,001+ employees
Headquarters: North Canton, Ohio
Founded: 1859

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About the host Richard McIntosh:
Richard McIntosh, Partner at H&Z Management Consulting, has spent over 23 years helping procurement leaders succeed. Richard is an avid rugby fan, and a children's rugby coach, with a passion for helping children to become their best selves through sports. He spends his time outside of work with his wife and children.

Get in touch with Richard McIntosh on LinkedIn: https://www.linkedin.com/in/mcintosh-richard/

Transcript

SPEAKER_00 0:02

When we talk about business partnering, for me personally, it is moving beyond simply buy and save model, right? It's about creating actively and not just creating but proactively reactively but proactively creating value. And we can do this only when we start engaging with our internal stakeholders, start understanding what they need and proactively anticipating their demands. And that ensures that we are kind of working hand in hand with them and not just playing a second riddle.

SPEAKER_01 0:33

Welcome to the Procurement Initiative Leaders Podcast, the ultimate resource for top-level procurement professionals looking to stay ahead of the curve and drive meaningful change within their organizations. I'm your host, Richard McIntosh, partner at H ⁇ Z, Europe's leading procurement consultancy. Join me as I sit down with Global Leaders in Procurement to uncover the latest trends, strategies, and insights that are shaping the future of procurement. We tackle crucial topics like leadership, technology, value creation, cost management, supply chain resilience, and many more. Ready to up your game as a leader in procurement? Let's jump into this episode of the Procurement Initiative Leaders podcast with me, Richard McIntosh. So uh today Million Taylor, Global Head of Procurement and Supply Management at De Bold Nixdorf joins us. Um Million, welcome to the show. Thank you, Richard. Pleasure. Great. Um so uh Miliint, um, yeah, tell me about Deebold Nixdorf. What does what's the company do?

SPEAKER_00 1:31

Sure. So Deebold Nixdorf is an American multinational. We are a global leader in financial and retail technology. Uh we specialize in sale, manufacture, and installation of self-service transaction systems such as ATMs, uh, point-of-sale terminals, uh, physical security products, software and related services. Uh so in a very simple way, if I have to put it, we automate, digitize, and transform the way people bank and shop. Uh we all probably touch um one of the one of the two products, either ATMs or a self-checkout or a point of sale terminal made from B-Bold Nick stuff uh in our in our daily lives.

SPEAKER_01 2:09

Yeah, great, great. It's one of those companies that we um yes, we don't we don't know that we know. Right, absolutely. And Million, what's um what what's what's your role of the company?

SPEAKER_00 2:19

What what's the encompass? Absolutely. Uh as a as a global head of resale products and services procurement, I'm responsible for overseeing a procurement ecosystem across 50 plus countries with a managed spend of over $300 million. Uh my role includes managing strategic sourcing, um, strategic uh uh supplier relationships, category management, and more importantly, driving initiatives that value to our business. Uh so the way I see my role is uh not just about buying, but as I say, a buying into the strategic vision and ensuring that procurement delivers or creates value at every level in the organization. Um and that's where I see my major impact in terms of ensuring that procurement function acts as a proactive strategic partner to business by aligning procurement strategies to our company strategy, our company objectives. Great, great, brilliant.

SPEAKER_01 3:14

Thank you, thank you. And that really brings us to what we wanted to talk about today, isn't it? So um, subject to the pod today, business procurement partnering, um, and and then setting up that that organizational, that operating model that that takes us from uh, I guess uh that old traditional supplier focus or category focus to a to a customer focus. Um so yeah, brilliant. Um so next Glory, let's go into that. So can you can you tell us about the the the journey that you've embarked upon? Um I guess what what's the procurement organization looked at at the beginning and and then what what what's the vision?

SPEAKER_00 3:48

Yeah, uh certainly. Uh I I would say the journey began in the procurement dark ages, right? Yeah, I would say, uh, where the role is to negotiate contracts, yeah, get cost reductions, ensure supplies, and off late proper, let's say last few years with all COVID and everything happening, more on risk management.

SPEAKER_01 4:10

Yeah.

SPEAKER_00 4:10

Yes, all these are important, but to me, they are all transactional and more importantly, siloed functions, right, with the aim just to keep the expenses low. Yeah. So I I feel that that is that is not what we as procurement organization um can do or can influence much more than that. So the vision for us was uh or is much broader. Uh, our goal is to turn procurement into a value generating powerhouse, right? And that's that's the way we do want to do this by ensuring that we get deeply embedded in our business as a trusted partner and a value creator. So the goal is to shift from purely cost-driven approach to the one that we prioritize revenue, we prioritize innovation, resilience, and business growth. So that's that's basically the vision for uh for the new procurement organization that we are trying to build at Devotext of.

SPEAKER_01 5:05

Yeah, right, right. And it's and you know that is such a strategic change, isn't it? That that shift from cost to revenue. Um, can you can you bring that to life? Perhaps give us an example of like how how's that work in the business?

SPEAKER_00 5:17

So I'll I'll give you a very simple example. In the past, when uh when when we were looking at any new product or any new service launches, uh procurement will generally get the BOQ or a bill of material or uh or let's say uh what is it that we need to buy? So, okay, so this is what we need to buy, go and and find the best supplier. Now we are at a stage where we get early, uh early involved. We we start from a design phase, we kind of give our inputs uh to the to the business in terms of what's available in the so in the market. So that's where we act as a bridge between the business and the external world, getting all the innovations and ideas of what exists. Uh that goes as an input into the design of the service or the product offering. Uh, and then of course, we play our role as once we finalize on what we want to buy, uh, we kind of do our standard sourcing process. But then the biggest change is we get involved early, we give input in terms of designing, we give input in terms of what what's the art of possible, I call it as. Um, and then of course we go and do our standard procurement stuff of negotiating the prices, negotiating the best terms and and ensuring that those services are delivered in line with the customer requirements.

SPEAKER_01 6:27

Yeah, great, great. And that and that's so important. I mean, we we all understand that theory that early involvement of procurement has the has the biggest impact. And it's a it's a great mechanism to do that. Um great. And and so that operationally, how how does that how does that work? How have you structured the your organization to make make that happen?

SPEAKER_00 6:48

So when we talk about business partnering, for for me personally, it is moving beyond simply buy and save model, right? It's it's about creating actively and not just creating but proactively reactively, but proactively creating value. And we can do this only when we start engaging with our internal stakeholders, start understanding what they need and proactively anticipating their demands. And that ensures that we are kind of working hand in hand with them and not just playing a second riddle. So keeping that as an objective, what we did was we created in our operating model, we created three different roles. Um, one which was towards our customer focus, second, which was focused towards our supplier ecosystem, and the third one, which was the core or the center, which was managing our internal internal team. So the one which is focused towards our customer, we call it as the strategic business partners, and their role is to see the big picture, aligning procurement with the overarching goal of the business, driving revenue, driving revenue generation strategies, uh, leading the procurement innovation. So those are the things that this uh this role looks at it on one end of the spectrum. On the other end of the spectrum, we have strategic supplier partners that's more towards the ecosystem. And I think of them as their job is to turn good supplier relationships into strategic alliances because the kind of role or the products that we buy, we are heavily dependent on an external ecosystem. So it's important that we have really not just strategic relationships, but true partnerships that can that can bring value to the offerings, the product and the service offerings that we give to our customers. And then in the center or in the middle of the operating model is the area procurement partners. So they are more like the hands-on local experts who know the ins and outs of each of the markets. So there is so each of the geography or each of the area have an area procurement partner, then who aligns one-to-one with the with the business head for that geography. So there is there is a clear one-to-one mapping. Uh as a result, they the local team gets someone locally speaking the same language, understanding the local market. And as a result, we are much faster in our response to our internal stakeholders and to our end customers as well.

SPEAKER_01 9:08

Yeah. That's great. I mean, it just they love this principle of actually getting our our procurement people really close to the the stakeholders on on the ground, but also that to the suppliers, you know, can understand that need to draw to draw on the innovation, as you call it, in the in the ecosystem. Um, yeah, fantastic. And I mean it so complete change. Um, you know, we we we often on the show we talk about we talk about costs, we talk about savings. Um we're talking a different language here. So what what what are your team targeted on?

SPEAKER_00 9:43

So of course, uh we still watch cost and margin, goes without saying. Um and and I don't believe that cost saving or cost reduction as a target is will go away from the procurement team anytime soon. It's there to stay, and exactly it's uh it's a hygiene factor, isn't it? Yeah, absolutely. So yeah. We are we are we keep we keep a watch on both these elements, uh, but we are at the same time we are also laser focused on how procurement can support revenue generation, how we can improve cash flow, how we can drive better uh inventory optimization, uh complexity reduction, as well as on sustainability factors. So so the in addition to cost, these are the other things. So I I kind of I would say we would the matrix that we measure, um, I've kind of clubbed into four different blocks. So the first block I would say is the strategic alignment block, wherein we ensure that the KPIs that I have uh are are closely mirroring uh the the the business goals. So as an example within the strategic goals, revenue. Uh the goal for me is also to support my business to drive the revenue. Yes. So you know that's that's a big change, right? You know, from a procurement for a procurement team saying that okay, you have a target to drive 10% revenue, uh it's a it's a big mindset mindset change. But yeah, that's that's what I have as one of our targets. Then we have is what is the procurement enabled revenue. So how many deals, how many projects are the ones where procurement is taking the lead. So we're trying to measure that on um you know from a from a strategic perspective. Then we have something called as operational excellence, which would be me, which would measure our standard in terms of how we how well we respond to our customer requirements, how quickly are we able to turn the deal uh you know into from from end to end from the from the time we receive the customer request to the time we are able to go back to our customer, then we have our no P or no purchase. So that's on the operational excellence side. The third block that we have is what I call it as a value creation, and and and we all know this would mean different things to different people, but for us, uh what we measure from a value creation perspective is uh working capital improvement, which is basically how are we improving our payment terms uh with our suppliers, um lead time, lead time reductions, again, that would help our inventory, uh, you know, the inventory that we carry. Uh and then uh what we also measure is the procurement uh you know led innovation. So what are the new innovative things that we are getting uh you know from the outside world into the company and help that translate into a revenue generating uh you know solution or a value proposition? Uh and then lastly, what what I call it as the the voice of the customer, uh we want we want to start measuring um the stakeholder satisfaction. So we want to kind of do it as a uh and an annual survey, you can call it. We've not done it, but that's that's my goal. I want to start doing this somewhere mid of next year, once we've given uh the existing operating model a chance to settle it down and and everyone to have a feel of it. But yeah, that's something which I want to do it as an annual exercise, as an NPS score or a voice of customer to see and check how well are we partnering with our with our stakeholders. So these are the four major items that we measure as um as a as a procurement organism.

SPEAKER_01 13:00

Yeah, and and and actually as quite a balanced procurement scorecard because that's take taken in all those all those different perspectives. That's great. That's great. Um, and then what are you seeing is the I guess the the overall benefits. So you're seeing that you know, particularly how it how it used to be in those procurement arc ages when it was just savings, you know, how how have you seen that translate into the into the into benefits?

SPEAKER_00 13:23

So to me, I think there's three major benefits that I see. One, uh, we are much more agile, we are much more faster in terms of our ability to respond to our our end customer. Uh so that's that's the one biggest change, right? Uh second, we are more innovative now that we are we are having revenue as a target. Uh, we all are thinking of ways and means to kind of see how we can help drive revenue. So that's that's kind of getting our creative juices flowing as well. Um and thirdly, we are managing our ecosystem much better because now that we are looking at it not as a not as a cost element, but we are looking at it also from a revenue generating element. So effectively, we are thinking more like the business heads or the PL heads, where we are managing the revenue and we are managing the bottom line as well to an extent. So the way we are thinking has changed completely, which in a way helps us to align better with our business objectives and helps us to move our business agenda forward. In a much, much faster and a better way.

SPEAKER_01 14:21

Yes, great, great. I mean that the functions just become, I guess it sounds like it's become more commercial. It's yeah, yeah, not about costs, it it it's about it's about profit. Um, that's um, yeah, really interesting. And then just uh just going back to that kind of that that that structure. So you know, how does how does governance work? You know, you've got, I guess, potentially three different business partners dealing with the same supplier. Have you have you created a um supplier management structure there?

SPEAKER_00 14:49

So from a governance perspective, uh I would say there are two aspects, uh, you know, and that's like the two sides of the same coin. Um the one is on the supplier side, uh, and the second is on the internal side. So if I talk about something on the on the uh on the supplier-facing side, we've implemented uh a supplier performance index which evaluates supplier performance holistically, moving beyond just cost, right? So here we are talking about things like speed, innovation, uh, alignment with our goals. So it's kind of a balanced scorecard which factors in uh some of these other elements of innovation, risk, um, and and alignment with the business objective to ensure that the supplier understands what we are doing and what are the expectations and how and the role that they play in terms of enabling deboling stuff as well. So that's one element. Uh and the second and the second aspect of the governance is of course, as I said, those four um, you know, four blocks of APIs that we measure, uh, which help us to ensure that we are continuously one creating value. And second, more importantly, for me is it it kind of becomes a feedback closed loop that helps us to say, okay, where what are the things that we as procurement need to improve on? So these are the two elements uh of our governance uh which help us to kind of be agile, be responsive, and at the same time continuously improving uh in terms of our service that we offer to our stakeholders.

SPEAKER_01 16:13

Yes, great, great. And does that, I mean, that supplier performance index, that's really, really interesting. You know, you take in those different perspectives. Does that, I mean, that that's quite intensive? Does that does that apply to all suppliers, or do you do you think of it in a segmented world?

SPEAKER_00 16:28

Yes, it was uh when we started doing it, we were like typically a traditional way of looking at is okay, these are my top 10 suppliers. So they are big, big suppliers. But the question then was, are they truly strategic in nature? Or are they are they kind of more BAU stuff, day-to-day stuff, which we need to buy? So we kind of uh came up with with with two two different sides. So one, the ones where we really look at it from a strategic perspective, the ones where the where the services or the products that they offer align with our overall business objectives, um, and in terms of uh what is it that we want to offer in the future going forward. For these kind of suppliers, um, what we see is the what is the total value potential. And and for those suppliers, we are kind of looking at having very deeper partnerships and collaborations. Whereas for the others, it is more towards focus on on cost and efficiency. I think that's that's that's the two lenses. We are looking at some of the large suppliers in terms of how do we drive initiatives to improve our productivity or improve the costs. Um, and then there are some suppliers which we say large in the making, which means they are they are not that big, but yeah, they are they are likely to become big. So we need to manage those relationships and manage those uh uh contracts pretty well. So those are the different ways in which we are segmenting it. But to me, but uh basically the biggest change is those strategic suppliers and how we define what what is strategic. Previously, the strategic definition was high in spend. Yeah, and okay, they are they are important to our business. But now we've added more elements to it to really define what is strategic and how we manage those strategic relationships is different from the way we did it in the past. Absolutely. I that's that that's fascinating.

SPEAKER_01 18:16

Yeah, that's a again a real change from that old just segmenting by by annual spend. But actually that even that thinking on on value compared to cost is is is a real change.

SPEAKER_00 18:28

And and I think what what I also see is that suppliers also reciprocate, which are you know in this and you know, when you clear when you communicate and uh you know talk very clearly and transparently with them in terms of the strategic importance that they have in our ecosystem, uh, they also reciprocate. You know, they are they are more tightly then aligned with our our business goals and and kind of they give us that additional flexibility as well as ability to innovate. You know, it's when you when you discuss these things upfront in the annual business discussions or annual business meetings, the the messages, the the messaging is right, it goes from top to the down, and that that drives a better, uh, a much better collaboration on the ground level as well.

SPEAKER_01 19:07

Absolutely. So you as you've brought those suppliers closer, and then you're you're seeing the benefits of that of that closer, more value-based relationship. Right, great, great. Oh, brilliant. Million, um that as fascinating. I mean, this is it's a big change program, this that that that whole reorganization, but not just a not just an a structural thing, but a my it's a mindset change that you've that you've you've transformed here. So um, I mean, look looking at that, looking back at that, um, you know, what what's the what are the critical success factors for the the program? And and I guess have you seen some pitfalls on the way?

SPEAKER_00 19:44

For sure. I mean, uh, I I would say this is a journey. Um and I think the three the three biggest factors that I see critical in in this kind of a change initiative is starts with trust. Um I think that's that's the foundation uh for any any any such uh change initiative, the trust that yes, we are doing things in the right way and trust that things will work out. Um alignment, uh having real alignment within the team uh in terms of what we are trying to accomplish, and more importantly, buying in from the executive leadership team and buy in from the business that that I'm serving. I think that's that's the critical thing. Uh so that everyone's in uh on the same page. Um and then finally is is communication, you know, communicating it very clearly uh internally as well as with our with our stakeholders in terms of what we are trying to accomplish, why we are trying to accomplish, and more importantly, what is it in it for them, right? Uh uh how how is it that it's going to benefit the the business or the stakeholders? Um having those communications clearly uh going helps helps to make life a bit easier. I wouldn't say it's easy, but yeah, it makes it makes this change initiatives um a bit easier to uh to execute. And of course, in terms of pitfalls, I would say yes, there are there are a few which I would like to call out is first is resistance to change. I think um you know we're comfortable doing stuff the way we've done in the for 5, 10, 15, 20 years. So um there is always a resistance to change. Uh but yeah, we have to uh through through through trust alignment and communication, I would say you are able to alleviate some of it. Uh there will always be some people, naysayers, uh and you need some you need those naysayers to keep you on the on your toes, right? So yeah, so those so those are the ones that are that are the ones will ensure the success. So but yeah, you need to you need to ensure that we have clear communication to kind of manage this uh resistance. And I would say the the biggest the biggest factor that I see is is trust, Richard. Yeah, and and I say trust, uh, and this is something which I keep harping with my team uh you know very frequently is trust is not something like a soft factor, like a vague thing uh we do our best. But to me, I've I I found this. You know, I'm not sure if uh if it's worth sharing here, but I found this trust equation um, you know, if up by the book uh which was called as the trusted advisor. You know, I I kind of read this many years ago, and that uh that has stuck with me. You know, so if you it what it says is the trust equation is trust is equal to credibility plus reliability plus intimacy divide by self-orientation. Trust is not something which is a soft skill, it is something which is which is what we can work on, and these are the four critical elements that we need to work on building trust. You know, all the four critical elements are very critical, uh, be it credibility, which means our subject matter expertise, reliability in terms of how consistently we deliver, uh, intimacy in terms of how close we get and how how closely we are aligned. And then finally, the objectives, you know, where the focus is. Is the focus on our goals or is the focus on the business world? It has to be on the business world, right? So you have this equation, right, and you address all the four elements of the of the trust equation, then it creates absolutely super powerful economics, right? It's not just the the vague concept of trust, but then it translates into powerful economics. So to me, that's that's been the biggest uh learning and you know of this whole exercise is building trust through use of these four elements. And that's something which I would advise everyone uh to for to see how to how to use that equation and and build trust with your stakeholders.

SPEAKER_01 23:27

Absolutely, that's great. I mean, not not just in that business partnering perspective. I mean that that that applies to everything we do in procurement, you know, everything in terms of of our stakeholders, in terms of our suppliers, in terms of the business. Um that's great. Thank you for sharing that. That's um that's that's really insightful. Um so it that's great. That Millian, thanks for sharing that journey and and and in particular that vision. You know, that that's something that's you know, uh for procurement organizations that are on their on their maturity journey, then that's really something um for to to to to think about. Um now we um thank you. We always um finish the show with a little bit of guidance from our uh our leaders in in procurement. So I'll ask you a couple of questions, just the same as everyone. So um yeah, in um what what's the one thing that the procurement people should focus on on more?

SPEAKER_00 24:18

If there's just one thing, uh build that network of strong trusted relationship as much as we focus on cost saving. Because trust and collaboration are the backbone of, as you rightly said, for any procurement organization. So that's one piece which I would recommend that people on. We can buy things cheaper, but they can't buy trust, right? And that's where procurement truly shines as a partner. Brilliant, thank you, thank you.

SPEAKER_01 24:45

And then um advice for for someone new entering our profession, some graduates coming into your business.

SPEAKER_00 24:52

So I would say never settle for being a cost cutter. Challenge, challenge the norms, challenge the status quo, ask questions, keep learning, right? If if if you are willing to do this, then you will find procurement as one of the most impactful and rewarding roles within the company, right? Because we are the role is not just to keep the lights on, but to ensure that we are taking the business forward. So if we embrace procurement as a strategic function, uh, and that would help you to drive value, shape the company's direction, and also make significant impact on the business. So embrace procurement as a strategic function, right? Not as just as a cost cutter. That would be my advice to anyone new in the uh to the function.

SPEAKER_01 25:39

Excellent. And that's a perfect place to finish. Thank you for that. That's great. That's the revision of the future, the future of procurement. That's great. Um, William, thank you very much. It's been an absolute pleasure. Um, just um, I'm sure there'll be people out there that that want to talk about uh about procurement, about the future, but also in terms of uh of business partnering as well. Um so where where can listeners get in touch with you?

SPEAKER_00 26:02

You send out an invite on LinkedIn. Happy to connect and share more details uh through LinkedIn, or I'm happy to share my personal email ID as well, uh, you know, and and share my knowledge, experience with uh anybody who wants to. Great.

SPEAKER_01 26:16

Much appreciated. Um, Million, thank thank you very much. That's that's wonderful. Thank you so much, Ucher. A pleasure. Thank you for joining us on the Procurement Initiative Leaders Podcast. I really hope you enjoyed it. Looking for more procurement insights, tips, and developments from leading procurement professionals? Join our procurement initiative community on LinkedIn. Just open LinkedIn and search for the Procurement Initiative. And be sure to hit that subscribe button to never miss another episode. Thank you for listening.