Supply Excellence — Yahoo! CPO Interview: Ron Carcamo Changes Things Up

Yahoo! CPO Interview: Ron Carcamo Changes Things Up

November 3rd, 2008 · by Justin Fogarty · 1 Comment · best practices, supply management

This quarter’s SupplyWatch report hit the virtual shelves Friday (the condensed print edition will go out to subscribers shortly). In addition to the Core Category Details, this issue includes an interview with Yahoo! CPO Ron Carcamo, a man who was brought into the company 18 months ago to get their spend under control and chart a course towards savings, efficiency and results.

The entire interview is well worth a read, particularly for those focused on managing indirect spend. But for those of you engaged in time management as well as spend management, let me share a few of the key quotes.

Ron had to transform processes and culture, both in the company as a whole and within the procurement organization. His advice for change management in the procurement department:

“It is critical to be transparent with the existing personnel about what the department will be like, what opportunities will exist, and the competencies that will be required. Being upfront provides folks with the opportunity to decide if Procurement is still the right fit for them or not.”

Transparency and candor are a big part of how they ensure that the procurement department retains motivated individuals with long term career goals in the field. Then with their procurement house in order, how did they expand their reach and respect company-wide?

“We first made sure to meet our baseline mission with the organization by providing them timely POs, contracting, and flawless execution on other tactical responsibilities. If you can’t get to that point, you can’t start to talk about the value-add services that you can provide, such as spend management opportunities.”

With some quick wins under their belt, Ron and his team took on travel spend. After rolling out an effective tool, an engaging “travel tip of the day” on the intranet and a video from CFO explaining the virtues for the company, Ron observed that:

“Most people will do the right thing if they are provided with tools and information. It’s your responsibility as the Procurement department to make them aware of the opportunities and challenges.”

Considering the immense size of Yahoo!, getting that kind of buy-in, adoption and results in a scant year and a half is pretty impressive. Change management has it’s unique challenges in any organization, but Ron’s approach - focusing on transparency, talent retention and leveraging success into other opportunities - certainly seems like an approach worth considering.

Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.

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