Procurement and Contract Management in a European Insurance

Procurement and Contract Management in a European Insurance Company Breakout Session 4 Paul Frishert, Interpolis Verzekeringen date time April 7, 2003 3: 30 - 4: 30 pm NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 1

Menu • Who is Interpolis? • Procurement and Contract Management • International Purchasing and Contract Management • Questions and Answers NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 2

Menu • Who is Interpolis? • Procurement and Contract Management • International Purchasing and Contract Management • Questions and Answers NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 3

Interpolis One of the Netherlands’ largest and most progressive providers of: • insurance • business care services (occupational health and safety and reintegration) • pensions NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 4

Growth of Interpolis in turnover in millions of euros 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 70 80 90 NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders 2000 The Fairmont Dallas, TX 5

Dutch insurance market 2001 premium income in thousands of millions of euros NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 6

Growth of insurance companies percentual in/decrease in premium income in 2001 ING ASR Achmea AEGON Interpolis Delta Lloyd SNS Reaal Allianz AXA Zwitserleven NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 7

Rabobank Group • • • A "Aaa"-rated bank should demonstrate stable profit margins, excellent liquidity and, most importantly, strong and stable earnings even in tough economic times, when asset quality might fall. Triple A rating Largest bank on the domestic market 370 independent local Rabobanks One of the 50 largest banks in the world Affiliated organizations (Interpolis, Robeco Group etc. ) NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 8

What we offer Private persons and companies are offered appropriate solutions for a wide variety of problems or risks by means All-in-one policy of: Business Compact Policy • solid products • personal advice • practical support NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 9

Our clients Can count on: • clarity • fast service • real feeling/empathy NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 10

Our environment • Corporate Social Responsibility • Sustainable Development (People, Planet, Profit) • Sponsoring and support of the local community NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 11

Our employees • • Core competencies Working is growing Interpolis Performance Cycle Interpolis Office Concept NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 12

Impression Office Concept NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 13

Menu • Who is Interpolis? • Procurement and Contract Management • International Purchasing and Contract Management • Questions and Answers NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 14

Procurement and Contract Management in Interpolis • • History procurement History contract management Requirements Engineering Selection and implementation CM tool NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 15

History Procurement in Interpolis • Focus mainly on Facilities Department • Evolution awareness of procurement within Interpolis • Since 1999 Corporate Procurement NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 16

History Contract Management in Interpolis • Scattered and non-valid non-core business contracts • Low contract awareness • No procedures or process • Simple CM application • New insights NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 17

Importance of contracts and Contract Management • Contracts the core for good procurement • General Buying Terms and Conditions • Reduce Maverick Buying • Enable Supplier Management NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 18

Contract Management A way to launch Corporate Procurement NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 19

New Contract Management system Initial task: “Replace the current Contract Management tool for a new more advanced tool. ” NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 20

A new approach • Requirements Engineering • New perception – not the tool, but the process – strategic importance for Interpolis • Developments in the world (USA) NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 21

Requirements Engineering NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 22

Give the right answer: • • 41 10 23 32 NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 23

Do you know what another person wants? NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 24

The way projects often start NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 25

What is Requirements Engineering? A discipline which deals with: – Requirements Development – Requirements Management NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 26

What is Requirements Engineering? A discipline which deals with: – Requirements Development discover, specify, verify, validate and deliver the requirements – Requirements Management NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 27

What is Requirements Engineering? A discipline which deals with: – Requirements Development – Requirements Management determine impact of changed demands on the agreed requirements and specify the new requirement(s) NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 28

When use Requirements Engineering? • • • Decision making processes Software Acquisition Software Development IT Service Management Procurement NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 29

Improving quality Analysis & development coding Acceptance testing production Product improvement Low visibility Low reward High visibility High reward NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 30

More information … • http: //www. systemsguild. com/ • http: //www. hood. co. uk/ NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 31

How did we use Requirements Engineering? • • Developing requirements Contract Management process Selection process Testing NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 32

Selection new tool • One Dutch vendor • Two ERP vendors • 4 vendors from the American continent And the winner was: NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 33

Reasons for choosing Upside. Contract • • Met our Requirements Good pricing Flexible and reliable organization. NET based NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 34

Menu • Who is Interpolis? • Procurement and Contract Management • International Purchasing and Contract Management • Questions and Answers NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 35

Getting what you buy (1) • Increased Risk – Correct specifications / product(s) – Correct number / volume – Standard of quality – Transportation – Performance NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 36

Getting what you buy (2) • Increased Complexity – Communication – Reject / return process – Transportation and delivery issues – Ability to inspect goods – Taxes / duties NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 37

INCOTERMS • • EXW EX WORKS (…named place) • PAID TO FCA FREE CARRIER • (…named place) • FAS FREE ALONGSIDE SHIP (…named port of shipment) • FOB FREE ON BOARD (…named port of shipment) • CFR COST AND FREIGHT (…named port of destination) • CIF COST, INSURANCE AND FREIGHT • CIP CARRIAGE AND INSURANCE (…named port of destination) (…named place of destination) DAF DELIVERED AT FRONTIER (…named place) • DES DELIVERED EX SHIP (…named port of destination) • DEQ DELIVERED EX QUAY (…named port of destination) • DDU DELIVERED DUTY UNPAID (…named place of destination) • DDP DELIVERED DUTY PAID (…named place of destination) CPT CARRIAGE PAID TO (…named place of destination) www. incoterms. org NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 38

INCOTERMS in chart NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 39

Protecting your purchases • Understand applicable laws – Contract terms • Identify, monitor and manage risk – Insurance – Bank Guarantee – Documentary Credit (Letter of Credit) NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 40

Risks NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 41

Documentary Credit • Revocable credit • Irrevocable Credit • Confirmed Irrevocable Credit NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 42

Revocable credit Seller Buyer 1 4 Advising Bank 2 3 NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders Issuing Bank The Fairmont Dallas, TX 43

Irrevocable Credit Seller Buyer 1 3 2 Issuing Bank NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 44

Confirmed Irrevocable Credit 1 Seller Transport Company 10 Buyer 6 2 3 8 7 9 4 Advising or Confirming Bank Issuing Bank 5 NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 45

ICC International Chamber of Commerce http: //www. iccwbo. org/ NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 46

International Support in Tools • • • Handle multiple currencies Handle multiple languages Ability to handle Alternatives Support standard terms and conditions Support for UNSPSC codes NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 47

Menu • Who is Interpolis? • Procurement and Contract Management • International Purchasing and Contract Management • Questions and Answers NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 48

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www. interpolis. com NCMA 3 rd Annual Commercial Contract Management Conference International Contract Management—Better Business by Crossing Borders The Fairmont Dallas, TX 50