UK Pensions provider
Our experience...
We were asked to provide additional procurement resource to support the existing procurement department of the Client which involved the following:
- Proposal of ‘Best In Class’ procurement culture across the organisation through the provision of a procurement diagnostic report. Developed a future procurement target operating model, procurement policy and processes, and a full suite of tender documentation and templates;
- Analysis of spend data to identify opportunities for cost savings within the third-party supplier expenditure profile;
- Provided strategic sourcing support for stakeholders on key contracts within the Marketing and Professional Services spend categories which the Client had identified as immediate high priorities for formal tender activities;
- Conducted further strategic sourcing projects within Facilities Management, Human Resources, Marketing, and Professional Services spend category areas following opportunity diagnostic; and
- Provided ad hoc procurement council to support and advise on strategic approaches for senior stakeholders across the organisation.
Our approach…
Our first approach was to investigate, categorise, and prioritise cost saving opportunities through a detailed analysis of the Client’s internal spend data. Once we had cleansed and categorised the data, our category specialists identified potential areas of savings through their knowledge of the market and individual suppliers. The spend analysis and category experience was brought together to produce a comprehensive spend report which contained a prioritised opportunity map for savings benefit realisation.
The initial mobilisation stage for the strategic sourcing projects involved a detailed review of the category spend data, internal process review, external market review and requirement definition. Once the mobilisation stage was completed; sourcing projects were prioritised in line with contract end dates and our consultants engaged with stakeholders from across all parts of the organisation to obtain sign off for the sourcing strategy. Once approved we commenced our market review through formal structured Requests For Proposals. Once the supplier had been selected, we managed the commercial negotiations and supported in finalising contractual terms with legal teams.
Our consultants would identify key stakeholders for each initiative and conduct a detailed requirements discovery exercise and develop individual project plans. Stakeholder engagement was vital throughout the process. As subject matter experts their involvement in the process was key to the success and sign off. Our consultants provided structure and decision support to stakeholders, but it was important that they felt that overall ownership remained within the budget area. By involving them in the process we ensured that they felt ownership of the process and developed a deeper understanding of the marketplace and the sourcing process.
Best practice…
We provided a team of consultants with a deep practical knowledge of procurement, our consultants were quickly able to benchmark existing practices and produce a gap analysis against best practice.
By calibrating to industry best practice procurement principles we developed robust “Best in Class” procurement processes which matched legal and regulatory requirements with the commercial requirements of the organisation.
As an example, the introduction of a seven-stage strategic sourcing cycle resulted in:
- the development of closer working relationships with subject matter experts and business areas to produce tender documents with clearly defined requirements and selection criteria;
- a standard selection process for new suppliers through formal tendering resulted in the selection of suppliers who not only provided the best commercial offer, but clearly meet the defined business requirements. This was demonstrated by high levels of satisfaction across the organisation with the suppliers selected; and
- the introduction of Supplier Relationship Management through the introduction of Service Level Agreements, thereby ensuring that service levels were maintained throughout the life of the contract and that value was not eroded.
Organisational benefits…
One of the main focuses was the delivery of the cost reduction from the Client’s expenditure profile. Our consultants delivered savings in excess of £2M throughout the course of the project.
A highlight of the project was completing a strategic sourcing project within the Professional Services category spend area which delivered an annualised saving in excess of £500,000. This result was achieved with the incumbent supplier via a formal tender process using our “Sourcery Approach” designed to provide a result driven process delivering rapid, real and sustained improvements.
