P&G’s Dave Ubachs on supplier management and mergers

Dave Ubachs is CIO and shared services manager for UK, Ireland & Scandinavia, which is part of the Global Business Services (GBS) division of Proctor & Gamble.

P&G is the world’s largest consumer goods manufacturer, selling products in 180 countries to 4.4 billion consumers with sales reported to be worth £51bn.

Chances are, you have at least one P&G product in your bathroom or kitchen.

Among other things, GBS is responsible for managing and delivering the strategic outsourcing relationships P&G has with key suppliers, including HP for infrastructure, Infosys for development, BT for networking and mobility provision, Jones Lang LaSalle Associates for property management and IBM for its payroll and expenses systems.

“The principals of outsourcing are how do you do the original deal and how do you structure your partners,” Ubachs explains.

“So P&G goes for a longer term deal. We don’t squeeze the partners. You need to operate very differently when a deal is for the long term. Contracts must be beneficial to both.

“We have a governance structure so that there are many connections with the partner and we both have common measures: some of those measures are measures back on P&G.”

Cutting edge integration The agility of Ubachs and his CIO peers was tested with the 2005 acquisition of Gillette, the razors and shaving goods maker.

Within one year of the deal, which had to be approved by both the European Union and the Federal Trade Commission in the US, the integration was 95 per cent complete.

“The Gilletteintegration was really quiet,” he admits.

He believes one of the reasons for this low noise was the GBS business model that P&G operates.

Because of the size and global nature of P&G, its major partnerships have to be of a similar size, and Ubachs explains that this benefited the Gillette integration as its partners were able to add 700 extra staff to the integration effort within just two weeks.

“The set up means you can move really quickly. The technology at the two companies was not that different,” he recalls.

The latest big IT move at P&G was a major international SAP integration for its order, shipping and billing core processes.

Western Europe and the northern US were the last parts of the P&G family to make the move, due to the size and complexity of their respective operations.

“We are a very big SAP shop,” Ubachs says. A business line within GBS delivered the integration with partners across Europe with many markets going live on the same day.

The global nature of his GBS business means it makes more sense for this organisation to carry out big ticket projects like this across wide regions at once.

“An SAP implementation in France will look much the same as one in the UK, for example,” he says.