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

ABOUT THE AUTHOR
Nancy Nelson

Nancy Nelson