| |
|
-
Major Financial Services Company
-
Internal and external neglect
-
Maverick unauthorized spend
-
Ongoing functionality changes
-
Increased central costs
A major financial services company was purchasing all Information Technology (IT) hardware from a single source supplier that had been nominated by their central IT group two years earlier.
Price structures and specifications had not been revisited since the contract award worth $15m. Contract compliance had never been measured and no ownership or responsibility for management of the supplier relationship existed within the client’s organization.
In the meantime, equipment functionality and pricing had changed significantly, with many models becoming obsolete.
The client’s employees were also allowed to authorize IT expenditures locally, so there was widespread ad hoc purchasing outside of the preferred supplier contract.
The introduction of many IT makes and models to the client’s distributed network meant an increase in central costs, such as help desks and maintenance on multiple users. |
|
|
-
Interim QP Group Category Manager
-
Cross functional team established
-
Technology Road Map established
-
Internal Business Requirements agreed
-
Market place leverage
-
Medium term strategy developed
An interim QP Group category manager reviewed IT hardware spending and purchasing procedures. Among the first actions was to create a cross-functional team to involve Procurement, IT (including support services) and the user community.
Research the marketplace to identify changes and create a technology road map.
Gather business requirements from key user groups, including on- and off-site workers, in order to establish specifications.
Supplier market engagement activated to drive down costs through leverage.
Strategy developed to be effectively implemented and managed. |
|
| |
Based on replenishment plans and business growth projections, an annual benefit of $2.1m was delivered equating to 14%. QP Group delivered other benefits to encourage innovation and continuous improvement: A streamlined help desk is now trouble-shooting and maintaining fewer different models on a single make, instead of multiple models and makes.
-
Due to a guaranteed minimum spend, the supplier was both required and motivated to become more consultative in their approach. The client is now forewarned on market changes and provided advance information on technology trends. Reduction in supplies of 95%
-
Initial savings identified of 12% or £360k
-
Suppliers evaluated for ‘P’ card compliance
-
Common/Core list of items established
- Collaboration between sites and UK companies established
The Procurement team felt more engaged and valued. |
