Case Study
Purchasing Transformation in Action
A world famous asset management firm based in London asked for our help
to assist in a review a number of contracts in the office services area.
The brief
This comprised the following elements:
- Optimise costs
- Improve quality
- Adopt environmentally friendly solutions
The initial projects were stationery, office print and the print room.
Part 1
Initially, Horizon benchmarked these costs to identify where the opportunities lay. Solutions were then recommended for each cost area and requirements subsequently put out to tender.
The results of these initial requirements were deemed so successful that on their completion, we were then asked to review the client’s entire purchasing expenses and identify other cost saving opportunities.
Part 2
An analysis was then carried out on their accounts payable data over a 12 month period and expenses broken down by supplier, by the number of invoices (it can cost as much as £50 to process an invoice) and by cost centre.
We were then able to launch a supplier expense awareness exercise (the first phase of our Purchasing Transformation methodology) in order that each cost centre could understand their discreet supplier expense base. At the same time a series of projects across business lines was identified which could improve efficiency.
These projects ranged from travel, medical cover, car scheme, temporary and permanent recruitment in the HR area, to mobile phones, IT hardware and software, to marketing, distribution and print. In order to win the support of individual business lines, we discussed the projects with them in some detail, and then worked with them to deliver the savings.
Results
The resultant contractual savings were some £4 million (based on historic volumes) spread across the organisation. Savings were achieved in a
seamless fashion and because of the reinvigorated commitment from suppliers, many quality improvements have been noted.
The ROI for the client was more than twenty times our charges.
An important factor in the Purchasing Transformation was undoubtedly the fact that the Horizon team involved had an average of 20 years experience of working in, and with financial organisations, and understood City culture from day one.
More information
If you would like more information, the client is happy to provide references and talk you through the process, just click here.
