2023 APAC Supplier Management Summit - Slides

The State of Flux 2023 Global Supplier Relationship Management Research Report focuses on the importance of building relationships with your suppliers to strengthen your extended enterprise. These are the slides that were used during the Summit in APAC.

Enterprise Purchasing & Vendor Management

Agenda

1. T25 Strategy and what does the Extended Enterprise mean at Telstra? 2. Why the Extended Enterprise is important and the challenges we face? 3. The important role we all play in bringing the Extended Enterprise together, and the benefits this can bring if we get it right?

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Confidential

To build a connected future so everyone can thrive

Our purpose and values

We are changemakers

We are better together

We care

We make it simple

Our strategy: T25

An exceptional customer experience you can count on

Leading network & technology solutions that deliver your future

Sustained growth and value for our shareholders

Our strategic pillars

The place you want to work

Excelling at new ways of working

Accelerating digital leadership

Doing business responsibly

Consumer & Small Business

Our businesses

Enterprise

New Markets

International

Infrastructure

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Telstra Enterprise…  Connecting our

customers with Australia’s most trusted and secure technology and services

The Telstra landscape is highly complex…

~5,000 suppliers Buy From, Sell to, Sell With ~5,000 suppliers ~$17BN influenceable spend p/a Buy From, Sell to, Sell With ~$17BN influenceable spend p/a

  

 T25 cost saving target of ~$500M and Revenue Growth targets  Telstra Ltd made up of several Functional Units  Telstra operate Agile at Scale  Acquisitions and mergers – most recently Versent for $267.5 million  As a publicly listed company we have legislated duties and obligations to the Australian communities.  T25 cost saving target of ~$500M and Revenue Growth targets  Telstra Ltd made up of several Functional Units  Telstra operate Agile at Scale  Acquisitions and mergers – most recently Versent for $267.5 million  As a publicly listed company we have legislated duties and obligations to the Australian communities.

*All information is publicly available

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EPVM | linking Sales and Procurement

Enterprise Purchasing and Vendor Management EPVM

Enabling end-to-end sales support and purchasing across prospect-to- order, order-to-activate, and procure-to-pay processes; and drive TE supplier strategy and performance , through governance, compliance , and operational excellence.

Support the sales process by establishing governance and control frameworks around quotes, sales orders, supplier management and performance to uplift EBITDA. Objective

Transform our servicing model to provide greater cost transparency to support T25 growth targets while creating exceptional customer experiences Purpose

Procurement

Sales

Sales Support and Governance

Strategic Supplier Management

 Prospect to Order  Order to Activate and Procure to Pay  Deal Registration  Renewals  Product Leasing  Quote¹, Sales Order¹ and PO Mgmt  E2E Governance / Assurance.

 Supplier Management  Commercial Management  Supplier Strategy  Governance & QBR  Strategic relationships  Maximise value  Great customer experiences

Productivity Transformation

 Revenue

 Savings

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Summary

1. Prioritise supplier relationships 2. Invest in your people 3. Keep the customer at the centre of your focus

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Building Better Connections SRM @ Transurban State of Flux Supplier Relationship Management Summit – October 2023

A Little Bit About Transurban… As one of the world’s leading toll-road operators, everything we do works to get people where they want to go, as quickly and safely as possible – from designing and building new roads to researching new vehicle and road safety technology. We’re an Australian-owned company and we build and operate toll roads in Melbourne, Sydney and Brisbane, as well as in Greater Washington, United States and Montreal, Canada. We design our roads for the long term, ensuring they’ll deliver real and lasting benefits to cities and their communities. While you’re thinking about getting home on time today, we’re also thinking about how you’ll get home 10 or 20 years from now. We’re also a technology company – we research and develop innovative tolling and transport technology that makes travel easier for everyone. As an industry leader, we set high standards for our performance on social and environmental issues, and we invest in both to create social inclusion and manage our environmental impacts. We’re also a member of our local communities. We build parks and bike paths, create new community facilities, and plant trees for wildlife habitats – helping people connect with each other and their neighbourhoods.

daily trips across our roads

listed company in the ASX

roads under operation

customers

years of experience

total workforce

highest-rated motorway infrastructure company GRESB

direct workforce

Program Development The Business Case for Supplier Relationship Management SRM Program Workstreams

High Level Project Timeline

Business Case

• Understand how we are perceived as a client by suppliers • Benchmark how we rank as a customer of choice • Generate a baseline to identify and address areas for improvement

1. Current State Assessment

Business Case Development

Sept-22 –March-23

Pre-Implementation

• Undertake a review into internal supplier management processes

2. Voice of the Supplier

Framework Finalisation

Establish SRM COE

April-23 –June-23

• Formulate functional requirements for SRM software • Review against various SRM software products

3. Technology Market Scan

Communication Planning

• Review existing segmentation models • Recommendation of new fit for purpose segmentation approach for SRM

4. Review

Segmentation

Phase 1 – Soft implementation

Phase 1 - Soft Implementation

• Demonstrate clear alignment between managing strategic suppliers and the delivery of business objectives • Built based on the findings from the current state assessment and voice of the supplier • Develop an approach for a pilot and the final SRM program including timeline, selection of suitable stakeholders, training / briefing sessions for impacted stakeholders and execution • Formulate stakeholder communication plan • Recommendation for SRM software selection and deployment

5. Value

July-23 –August-23

Proposition and BC

Technology Implementation

Phase 2 – Full implementation

6. Execution Plan including Pilot

Phase 2 – Full Implementation

October-23

Survey Findings & Tech Considerations The Business Case for Supplier Relationship Management

Current State Assessment & Voice of Supplier Findings

Tech Considerations

Some pockets of excellence but TU was inconsistent with how it worked with suppliers

Data Security

Various formats and types of supplier meetings were present

Intuitive

Integration

Engagements are siloed and different across each market

Business processes were structured at a contract level, not a Supplier level

Strong guidance and support for pre-contract processes but little guidance provided once the supplier was onboarded. Relationships were led by individuals – limiting a consistent approach to identify and scale best practice

E2E Lifecycle Mgmt

Insightful Reporting

Automation

Suppliers were kept at an arms length with limited executive accountability.

40% of suppliers reported not discussing strategic direction and risk in meetings

Suppliers reported not receiving information about future planned works and wanted more transparency of pipeline The absence of an end to end technology solution to assist business stakeholders in managing and improving supplier relationships

Central Repository

Modular

Cost

External research coupled with insights from current state assessment Value Proposition

SoF Research

Anchoring back to Problem Statement

89 % SRM Leaders see an Improvement in Supplier-Led innovation

3-6 % Post contract cost savings delivered by SRM Leaders

Managing Risk

Aligning stakeholders with strategy

Trust

Communication

People Technology Process

Delivering Mutual Value

Transparency

Influence

Servicing Stakeholders Sustainably

Collaboration

Commitment

82 % A supplier’s Customer of Choice receives early access to new products in more than 8/10 instances

60 % Increase in access to scarce materials and resources

Enhancing the Stakeholder Experience

Framework elements How Transurban Approaches Supplier Relationship Management

Supplier Segmentation & Value Driver Identification Phase 1 & 2

Phase 1 – Supplier Segmentation

Phase 2 – Value Drivers

Phase 3 - People Engagement Stakeholder Engagement and Responsibilities

Quarterly

Bi annual

to discuss commercial, and performance outcomes to contracted targets and identify themes.

Facilitate an aligned business strategy, risk strategy, innovation and value creation

Heads of Business, Contract Managers

Supplier Relationship Management

Executive Relationship (GM)

Supplier Relationship Mgr (Joanna or Evan)

Contract Governance

Key responsibilities: • Manage supplier service delivery and strategy. • Point of escalation from operational/performance level. • Maintain oversight of contracts and manage obligations. • Work with supplier to facilitate performance improvement and value opportunities

Key responsibilities: • Organise & chair Strategic Governance Meetings . • Provide SRM guidance, tools and techniques • Own the SRM process tools, templates and documentation • Identify SRM process improvements • Consolidate relevant SRM information from the business

Key responsibilities: • Executive accountability for the Supplier Relationship • Participate in Strategic Governance Meetings

Monthly performance management

Other Attendees: Head of Business, Senior Vendor Mgt

Initiative Management

Other Attendees: Operational Managers, SMEs

Monthly

Ad-Hoc Throughout the year

to review, discuss and manage performance outcomes to contracted targets

Driving specific project initiatives with defined outcomes and timelines

Project & Operational Management

Supplier Relationship Mgr (Joanna or Evan)

Initiative Working Group (Appointed by GM)

Contract Manager,

Key responsibilities: • Follow up with initiative working groups, ensure objectives based on agreed strategic themes are on track • Report back status of initiatives to Strategic Governance Meetings .

Key responsibilities: • Execute initiatives endorsed by Executive Relationship owners

Key responsibilities: • Participate in monthly performance reviews • Monitor performance metrics • Performance gap analysis and action plan development • Review risk, and compliance checks

Driving specific project initiatives with defined outcomes and timelines Weekly/As Required

Project Manager (Ad-hoc / Project Specific)

Key responsibilities: • Manage supplier day to day throughout project to ensure services are delivered to agreed Milestones

Other Attendees: Operational Managers, SMEs

In business owner

Support for business

Engagement forums Phase 4 - Operating Model

SRM Meeting Agenda Items 1. Safety Share (5 mins) 2. 1

SRM Cadence 1. Bi-Annual Strategic Governance Meeting  Meeting Intent - value creation, forward pipeline view, align business and risk strategy, discuss innovation, assess health of relationship, escalation point if needed  Attendees – Executive and Relationship Manager level

2 3

Validation of Strategic Themes (5 mins)

3. Strategic Theme 1: Managing Risk (as an example) (20 mins) • Update on current Initiative, confirm continuing endorsement • 4. Strategic Theme 2: Improved Delivery Efficiency (as an example) (20 mins) • Update on current Initiative, confirm continuing endorsement, actions • Introduce, discuss and endorse new initiative, propose working group 5. Strategic Theme 3: Innovation (as an example) (20 mins) • Update on current Initiative, confirm continuing endorsement, actions • Introduce, discuss and endorse new initiative, propose working group 6. Health Check of current relationship (15 min) • What’s working well, not working well • Status of current engagements • Updates Org structure, Corporate Strategy 7. Agree actions, Close Meeting (5 mins ) Introduce, discuss and endorse new initiative, propose working group 4 5 6

Contract Management Cadence

2. Quarterly Governance Review 

Meeting Intent - discuss operational/contractual performance, contract adherence, contractual disputes forecasts, costs, service levels, resourcing etc

Attendees – Contract Manager level



3. Monthly Operational review 

Meeting Intent - discuss operational/contractual performance, contract adherence, contractual disputes forecasts, costs, service levels, resourcing etc

Attendees – Contract Manager level



Lessons Learnt So Far

Discovery Current State & Perceptions

Change Management Training & Communication

Engagement Deeply & Frequently

Technology A non negotiable enabler

Purpose & Intent Ensure clarity

Resources Dedicated

Reflect & Refine Continuous Improvement

Responsibilities Defined Roles

N’th Party Risk Monitoring Through Data & Automation

Justin Laughlin-Hyde Commercial Director, Asia Pacific KY3P S&P Global

October 2023