Operating Model Development & Implementation

Supporting a global payments company in a transition to a new procurement operating model and capability.

To discuss how we can help you with similar challenges please contact Andy Hemsley.

The Problem

  • The client was divested by its parent group and acquired by a global investment house, with a minority stake retained by the original parent and newly independent business.
  • Following the sale of the now independent business, 4C was engaged to help establish a new procurement function and capability, as well as to novate contracts to facilitate continued operation of the new and separate entity.
  • At the same time, the client was looking to reduce expenditure and ensure greater control of spend to approved budgets. The initial absence of category strategies across the organisation starkly illustrated the lack of clarity it had.

The Solution

  • The immediate need was for contract novation to maintain operation of the new entity during and immediately after the separation phase.
  • In response to the wider challenge, the 4C team developed a new operating model for the procurement function, incorporating the provision of organisational structure, capability, functional policy and processes with the associated integrated systems to get the entity off the ground and operational whilst at the same time ensuring it continued to provide value to the business.

The Impact

  • We provided an 18-month interim procurement team support to run the function, building the capacity, policy and process capability during the permanent team recruitment period which also incorporated the procurement and operation of an interim P2P system.
  • Our team completed the novation of key contracts from the old parent to the client, enabling continued operations and establishment of new deals with improved terms once novated deals had expired.
  • Furthermore, this work demonstrated to the regulator that the client had verified its back book of approximately 250,000 merchants.
  • Full separation was delivered followed by sustainable savings of over £7m delivered against a in scope spend of £60m. Category plans were developed for the following year identifying a further £10m on the remaining scope of £140m and effective transition to a permanent team enabled the client to deliver this in house.