Challenges
- No consistent process or centralized controls – outsourced service provider processed whatever was requested
- Lack of visibility and contract intelligence; no single source of truth
- No visibility into spend or vendor types, no vendor tiering
- Executive decision to insource and set-up entire procurement function
- Need to integrate all US branch offices under a single corporate initiative
- Contract risk not efficiently managed
Solution
- Consultant hired to help implement best-in-class approach, processes, tools
- Developed detailed e2e process flow
- Established framework for procurement organization for all functions applying strategic sourcing techniques, vendor scorecards
- Identified and received commitment from business leads and stakeholders
- Implemented technology in conjunction with process development
- Hired, trained staff for enterprise with 80% in India, 20% in US under US-based Director
Benefits
- Drove vendor consolidation from 3000 to 1100 vendors
- 120 Tier-1 contract underwent extensive renegotiation resulting in 20% savings
- Created “golden templates” for SOWs resulting in time savings through standardization
- Created ability to review and negotiate 320-340 procurement contracts per resource per year resulting in fewer resource requirements
RESULTS: TCO savings from first full year of operation was 8%; larger savings in subsequent years after initial investments were paid off
by Nancy Nelson