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TRANSCRIPT
DE
NV
ER FALL
SU MMIT
2014
How Effective Risk Management
Drives Global Supply Chain
Optimization
A Case Study:
JLL
Maureen EhrenbergExecutive Managing Director
Hiperos
Michele FlynnFounder & Vice Chairman
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DE
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SU MMIT
2014
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4
Speakers
Maureen Ehrenberg
Jones Lang LaSalle, Executive Managing Director,
Integrated Facilities Management
Maureen Ehrenberg recently joined JLL to lead its Integrated Facilities Management (IFM) service line in the Americas, and also will lead the firm’s IFM Global Specialty Board as of early 2015. Her focus is on coordinating and optimizing the delivery of global solutions to clients while driving the growth of JLL’s IFM group, its largest service line within Corporate Services. Most recently, she served as Executive Managing Director of Facilities Management at CBRE, and previously Senior Managing Director for Global Corporate Services and Client Strategies. Before that, she was a Principal at Expense Management Solutions and also Executive Vice President and President of Global Client Services at Grubb & Ellis Company.
Michele Flynn
Hiperos, Founder & Vice Chairman
As Vice Chairman, Michele provides leadership and guidance in driving Hiperos’ vision and strategy of third party management that addresses risk and costs while driving value. She is also involved in expanding adoption of Hiperos’ third party management platform through the company’s growing partner eco-system. A recognized industry visionary, Michele is best known for her development of performance based contracting and at risk fee methodologies and practices, both of which have become industry standards today.
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved.
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved.
Agenda
Introductions
Risk Management Today
JLL’s Strategy
Historical Challenges
Implementing the Vision
Things to Consider
5
Hiperos
Leader in Third Party Management software
Purpose built to minimize risk and maximize value
Partner with customers to implement forward-thinking,
best-practice based solutions
Designed for the way you work—departmental and
enterprise-wide scale across all business processes
and stakeholders
Single, lowest total cost SaaS product
Protect contract value, Control Supplier Risk, Optimize
Resources
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 6
JLL
Americas
7 countries
95 offices
EMEA
29 countries
69 offices
Asia Pacific
15 countries
64 offices
2013 fee revenue
$4.1BS.F. under management
3.1BEmployees
52,700Corporate offices
200+LEED APs
1,300+Six Sigma Green or Black Belts
390Suppliers managed
50,000Client spend managed
$26 billion
Platinum 400 Best Big Companies
2006, 2007 and 2008 (U.S.)
2014, 2013, 2012, 2011, 2010, 2009 Global outsourcing 100 list
Only real estate firm listed seven years running
Excellence Award (2008, 2009, 2010, 2013)
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 7
Why Now? – What’s Changed?
>60% of revenue driven by third parties
Huge increase in regulatory pressure, regulations,
agencies and fines
Increasing worldwide domestic enforcement of
bribery and corruption compliance
Pace of business, speed of change ever increasing
Customer/consumer expectations on transparency
Board/shareholder expectations of corporate risk
management
Interconnected - local action leads to global reaction
Due diligence – third party management is a process
not a one time action
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 8
3rd-party 3 - TPM
Business
ProcessesOnboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
3rd-party 2 - TPM
Business
ProcessesOnboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
3rd-party 1 - TPM
Business
ProcessesOnboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
Regulatory
forces
• Increased regulations
• Demonstrate initial
and ongoing due
diligence
• Prove risk controls
vs. status controls
• Third-party impact to
business processes
• Demonstrate
consistency in TPM
approach
• Spreadsheets are no
longer good enough
Business
perspective
• Third parties are
critical to our
business
• Increased exposure
to sub-contractors
• Vendor management
is not a core
competency
• Current regulatory
environment is
incremental burden
• Access to real-time
reports and analytics
• Cost constraints in
the organization
The complexity of TPM is significant considering the average Fortune 1000 company has between 20-40K suppliers, which is
further extended by sub-contractors exposure – all of which must meet risk, compliance, and performance requirements.
Managing Exposure is Challenge
TPM Business
Processes
Onboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
TPM Business
Processes
Onboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
3rd-party N - TPM
Business
ProcessesOnboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
TPM Business
Processes
Onboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
TPM Business
Processes
Onboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
3rd-party N - TPM
Business
ProcessesOnboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
TPM Business
Processes
Onboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
TPM Business
Processes
Onboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
3rd-party N - TPM
Business
ProcessesOnboard
ingComplia
nceTraining
Risk
Mgmt.Perf.
Mgmt.Quality
Enterprise
TPM
Burden
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 9
3PM Business Processes
Information Privacy and Security
OCC 2013-29, CFPB, SEC +
Contract Management
Sub Contractor Compliance
Information Management/Diversity
Risk Assessments
Financial Viability Assessment
Insurance Compliance
Background Checks Compliance
SAS 70 / SSAE 16
ABAC / FCPA Compliance
Business Compliance
Anti-Money Laundering
New Supplier Onboarding Physical Security
Supplier Performance
Ongoing Risk Management
Onboarding Compliance TrainingRisk
Management
Performance
ManagementQuality
3PM – Business Process Coverage
I-9s W9 Tax Payer ID
3PM – Solutions Approach
Top 5 priorities in 3PM customer business process according to 2014 ranking in proprietary Hiperos customer survey.
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 10
JLL Strategy
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 11
Goal: First in Corporate Real Estate Services and Outsourcing Solutions
Suppler Risk/Performance Management• Dun & Bradstreet Supplier Risk Management
• SRM through E1/Ariba
• KPIs and Balanced Scorecards
• Hiperos
JLL Historical Context
Agency vs. Principal Contract Structures
Risk Transfer
Transparency
Regulatory Requirements
Third-Party Oversight
Guarantees
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 12
JLL Compliance Framework
13 © Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved.
Managing Supplier and Third-Party Relationships
Due Diligence
BusinessGovernance
ContractManagement
1 Prohibited entities
2 History review
3 Procurement /
requirements review
4 Vendor Code of Conduct
5 Standard terms
6 Insurance
7 Warranties and Indemnities
8 Payment alignment
9 Legal review
10 Audit plan
JLL Vision
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 14
Onboarding- Supplier registration- Contact finder- Vendor portal- Vendor management support
Compliance- Information security- Code of conduct- Diversity management- COI tracking- Social accountability
Risk Management- Business continuity- Risk scoring- Reputational risk- Contract management- Regulatory risk
Performance Management- Balanced scorecard- Innovation tracking- KPIs- Vendor health assessment
Supplier Master Data Management (MDM)- Spend Management
JLL Opportunities
15 © Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved.
Managing Risk Better Enables Growth in our Business
Productivity
IntelligenceCompliance
Performance
Margins
Transparency
Reputation
Takeaways
Third party management isn’t about compliance – it’s about good
business practices driving good results
The only constant is change – flexibility is key to success
This is bigger than just your suppliers or vendors – its all of the
third parties with whom you interact
Automation enables you to drive consistency, execution and
auditability across the entire portfolio
This isn’t about data – it’s about transforming data into actionable
intelligence
Effective third party management is not an “option” – it is a must –
driven straight from the Board
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 16
Thank You
Maureen EhrenbergJones Lang LaSalle Executive Managing Director, Integrated Facilities [email protected]
Michele FlynnHiperos Founder & Vice [email protected]
© Hiperos. 2014 All rights reserved and © JLL 2014. All rights reserved. 17
DE
NV
ER FALL
SU MMIT
2014
Session #3
A Case Study: How Effective Risk Management Drives
Global Supply Chain Optimization
Speakers:
Maureen EhrenbergJones Lang LaSalle
Michele FlynnHiperos