Our client was concerned that their company’s third-party spend which excluded their core business offering, was not controlled sufficiently.
Without an internal procurement function, internal budget holder teams were responsible for running ad-hoc procurement activity and the subsequent management of contracts.
They were not fully equipped to ensure that activities were consistently applied and there was a lack of financial discipline and visibility of decision-making.
They wanted to optimise working capital, available spending and reduce unnecessary costs where appropriate but most importantly, by providing some extra capacity for core teams to focus on large strategic activity to grow their business.
They wanted to secure external commercial assistance where it was most required; to assist them in providing additional expertise to support the organisation as it grew. Our client required resource that was agile and flexible which fully supported the core business operation.
Qualitative Approach
Quantum 360 initiated targeted and brief stakeholder interviews to gain an understanding of where the challenges were for budget holder teams, what issues they had when managing the third-party spending, either procuring services or managing contracts, what worked well and where they needed extra support.
It was quickly established that whilst individuals always wanted to do the right thing, they very often found themselves without the basic tools to self-serve for lower-value spending and were lacking in experience, insight and time to fully manage larger, more strategic or longer-term procurement, which could impact operational or general business performance in the future.
Quantitative approach
A review of all third-party spending was completed, highlighting priority corporate category areas of spending together with consolidation opportunities. By reviewing all third-party spending data and being involved in the budget planning stage to develop a pipeline of procurement activity, Quantum 360 quickly identified the size of the opportunity both large value and high-risk activities which would benefit from professional expertise. These were prioritised and together with feedback from Stakeholders, a range of options was developed to manage both costs in key category areas of spend and improve internal capabilities.
Quantum 360 adopted a lean approach, establishing the appropriate tools and guidance with an agile and user-friendly process for budget holders and teams to make better decisions, and improve operational leverage and visibility.
This resulted in average cost savings of 7% across all categories of third-party spending.
Find out more about our Procurement As a Service model here
