Deloitte Consulting helps Lenovo with global procurement transformation

Lenovo has successfully completed a major revamp of the technology backbone of its global procurement function. The transformation to SAP Ariba, dubbed one of the most complex to date globally by the software provider, was supported by an international team of management and technology consultants from Deloitte Consulting. 

With revenues of $46 billion, Chinese multinational Lenovo is one of the globe’s leaders in providing innovative consumer, commercial and enterprise technologies. Its portfolio of products and services covers PCs, workstations, servers, storage, smart TVs and a family of mobile products such as smartphones (Lenovo and Motorola brands), tablets and apps.

Like most large organisations, Lenovo ever year sources million in products and services to provide materials for its manufacturing operations and keep its business running. In a bid to optimise its procurement function, as well as realise savings across its cost and supply base, Lenovo’s management team recently decided to launch a massive overhaul programme. 

Following a solution selection process, Lenovo opted to replace its legacy infrastructure, which ran for a large part on an ERP from SAP, with the cloud-based SAP Ariba Procurement Platform, a suite that facilitates the full Source-to-Pay function. A competitive tender subsequently was launched to find the right consulting partner, and after rounds of comparison, Lenovo was impressed by Deloitte’s expertise in digital supply chain consulting service and SAP Ariba implementation, tapping the Big Four as its strategic partner to officially initiate the project. 

The scope of the programme was immense – over 22,000 users from various Lenovo businesses in 73 countries would be affected by the transition. Among the departments that were impacted are Procurement, Administration, Marketing, Supply Chain, Research & Development, Human Resources, Finance, Tax and Legal. 

The project’s complexity, tight schedule and global cooperation needs urged Deloitte to organise a cross-border team in Beijing (where Lenovo is headquartered), including Deloitte China at core and teams from Deloitte US and India.

Following six months of hard work, the first phase of the programme – the upstream project (Sourcing, Contract Management, Supplier Information Management and Supplier Performance Management) successfully went live in 73 countries on 9 January 2017. One month later, the downstream project (Source-to-pay modules) also went live in 7 countries and 2 China-based factories on 13 February 2017.

The new solution has, according to Sophie Zhu, Procurement Director at Lenovo, brought rise to several benefits. SAP Ariba enables Lenovo to streamline and harmonise procurement processes for various regions and commodity catalogues, down the line ensuring better data visbility and integration between procurement processes, supporting improved management of its E2E procurement operation. The cloud-based solution is faster and more user friendly for its stakeholders, improving job efficiency and satisfaction of staff, as well as other stakeholders such as vendor and third party companies.

“We needed a standard way to manage procurement that would allow us to not only manage our costs, but minimise risks, and an integrated system to drive it. Working with SAP Ariba and Deloitte, we proposed new functional requirements and developed a financial management solution that could accommodate our unique needs. And they delivered.”

With the transition to SAP Ariba, Lenovo joins more than 2.5 million companies in 190 countries around the world who are connected to the network, using it to transact over $1 trillion in commerce on an annual basis. “The world has gone digital and procurement has gone with it,” commented Gareth Bowen, Head of SAP Ariba for Greater China. “Organisations like Lenovo that are embracing the trend can power new ways of thinking and operating that beyond savings and efficiencies, create long-term, sustainable advantage for their business.” 

Bowen added that the programme was the the first successful SAP Ariba project in China with a global implementation, and what he describes as one of the “most complicated and difficult Cloud-based Ariba projects” across the world in recent years. 

For Lenovo, the IT implementation marks a first step in a wider strategic sourcing and procurement transformation roadmap. In delivering on the strategy, the company is likely to continue its collaboration with Deloitte, according to Li Wei, a Vice President at Lenovo. “Deloitte’s expertise and dedication are one of the key factors of the project’s success. This lays a solid foundation for our further collaboration in the future.” 

Lai Youyou, a SAP Consulting Partner at Deloitte China, also remarked on the success of the project, “We have been able to help Lenovo drive a more transparent and collaborative negotiation process that has opened the door to savings, efficiencies and innovation.”