PROCUREMENT ORGANIZATIONAL UPLIFT FOR TECH SOLUTIONS PROVIDER
A procurement function uplift results in new supply management value and operational cost savings – just in time to meet the increased demand.
Technology solution and services provider with over 100,000 users in their customer community,
Due to recent rapid company acquisition growth the desire for a formalized procurement function. With the influx of new spend and new suppliers, a new procurement organization was to be formed that could effectively manage internal purchase requests, suppliers, and spend.
Rapid growth naturally comes with some growing pains, the impact was evident in a multi-functional team who was now charged with a formal role in procurement. Though a dedicated staff, there were knowledge and experience gaps which needed addressed to meet the needs of increased demand. Lack of formal procurement policy and sourcing processes, combined with limited visibility into 3rd party spend, developed into an environment of supplier risk and lack of visibility to savings opportunities. In addition, despite change management efforts multiple business units were performing supplier contracting activities differently.
The new procurement structure, methodology and processes developed a strong foundation for the client team to build upon. This included leveraging a newly defined operating model, organizational chart and business-partner RACI model, allowing the team to better equipped to lead company-wide procurement. Additionally, Velocity built the team a formal category management strategy and conducted multiple pilot sourcing projects over the course of several months. The exercises uplifted the procurement and sourcing skills of the existing team and of new procurement staff. Within six months, Velocity accelerated the team to reach their savings target goal to reduce addressable spend by 15%, and the client achieved ROI of 17X.
It’s not an easy task to migrate this high volume of contracts, but a keen focus on collaboration and coordination produce speed and accuracy needed to stay within budget and on schedule