Procurement Transformation at a European media company
By Simon Brown |
Our client was a media business operating in the areas of TV, newspaper, magazine and learning materials within mainland Europe.
Procurement was largely decentralised and conducted by three separate business units (BUs). There was no single procurement strategy or operating model and the spend was highly fragmented. In addition, there was no CPO or structured category management in place.
Procurement resource was typically limited to managing the traditional print and paper categories. Systems were only in place for some aspects of procurement, and these were only applied in certain parts of the business.
Future Purchasing completed a procurement diagnostic to understand the key issues to be addressed and also to identify potential savings for the business. In order to establish the current situation and identify opportunities for improvement, more than 100 stakeholders and procurement team members were interviewed.
The diagnostic categorised the £1bn procurement spend at a high level and identified that procurement was only managing 45% of it.
Annualised benefits of €41-€61m were identified for delivery over the first two years of programme. Other improvement opportunities were also identified across a range of enablers including strategy and operating model.
A transformation programme was created with a total of 17 workstreams to capture identified savings and drive structural changes, including:
- a new operating model and organisational structures at the Group/BU level, and new approaches to category governance and recruitment
- category strategies in over 20 Wave 1 spend areas including content, marketing and technology
- implementation plans for delivery of benefits in Wave 1 categories plus plans to move on to Wave 2.
We developed a single framework for category management that was flexibly applied to all spend. Cross functional collaboration between colleagues across functions, BUs and geographies was introduced.
We significantly improved the procurement skills of the procurement team through training and the recruitment of highly skilled and dedicated procurement talent. This raised the profile and demonstrated the value of procurement with the executive team.
The detailed spend analysis for all BUs and the applied professionalism and rigour of programme management was key to delivering the transformation programme.
In-year benefits of €20m were delivered in year 1.
Comments from the Chief Financial Officer
“We looked at several major consultancies and chose Future Purchasing because of the excellent quality and customer service levels of the people in the team. The Transformation team built a vision for us that inspired our Executive Management Group, and we embarked on a three-year programme of change. Future Purchasing were ambitious for us, and they strove to accommodate cultural and business unit differences to secure ongoing and sustainable results. The team blended the delivery of programme management frameworks and processes with coaching and mentoring of internal team members with skill, operating at all levels within the organisation. Most importantly I felt Future Purchasing cared deeply about the outcome, as if they were a member of our internal team. This is what I felt sets them apart.”
“FP works with our Global Procurement team to develop our skills and make a great contribution to get our teams to the next level.”
“FP is a trusted partner to our lead team with deep knowledge of procurement techniques, always open to tailor our training needs to the different objectives and different stakeholders groups, from procurement teams to senior business stakeholders.”
“I can highly recommend FP and it’s team of trainers to any procurement organisation who is in need of developing procurement skills.”Procurement Transformation at a European media company
Our supplier management approach combines excellent tools and techniques across the full range of activity, from segmentation, through performance measurement and improvement and through to relationship strategy development.
Excellence in Category Management gives multipliers of value delivery compared to less effective programs. Our approach delivers a high performing team and process which provides sustainable value over years rather than months.
About Simon Brown
30 years procurement experience in line management and
Previous employment: British Aerospace, British Airways, QP Group
Education: MBA, London Business School. BA (Hons) Business Studies.