Strategic Procurement Function Transformation
Transforming a procurement team at a Russell Group University to change stakeholder perceptions and deliver benefits to support the University’s strategy and financial resilience.
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The Problem
- Initially, 4C was engaged to deliver financial savings on third party spend, however during the project initiation, the function received a ‘no-assurance’ audit identifying several weaknesses which increased the scope beyond one-off savings.
- There was limited procurement function visibility and a need for executive level championing of the function.
- An addition, clear strategy was lacking, with part-complete projects responding to the latest corporate initiative, limited leadership, and unclear governance framework, policy or process.
- The team was not leveraging data to provide insight or spend visibility and there was limited forward planning of procurement projects, priorities or targets. Consequently, the team gained a reputation across the business as transactional, offering little value-add.
- We observed off-system paper-based processes and poor supply chain management.
The Solution
- The 4C team analysed the current position against the vision for a top quartile team, which involved assessment against the University Strategy, conducting detailed spend analysis and gathering feedback from key stakeholders including, academics and suppliers.
- With the new insight and realistic expectations, a clear three-year Strategy and roadmap to achieve the University’s commercial vision was developed.
- The Strategy and roadmap focussed on four key pillars, including value for money and efficiency; responsible and sustainable procurement; leadership, governance and risk management; and communications and engagement.
- Top-level leadership was critical for success, so the 4C team and the CFO took the Strategy to the University Executive Board to secure support and a new Procurement Director role.
- We then filled that Procurement Director role on an interim basis and embedded a team to deliver the roadmap over a three-year engagement.
The Impact
- The three-year savings target was met in Year 1, with cashable savings doubled to £3.2m through a combination of increased control, competition, additional resources and improved reporting.
- Early engagement with stakeholders resulted in a c40% increase in competition of contracts, replacing the default direct award.
- The investment in the team increased its ROI from 3.1 : 1 to 5.4 : 1.
- Over £52.6m of social value was delivered in the largest construction projects.
- The University moved to 100% green energy, demonstrating its commitment to positive environmental impact and long term sustainability focus.
- In the first year, the audit assurance level increased from ‘no assurance’ to ‘adequate.’
- By year three, the function were shortlisted finalists at the 2022 CIPS awards for ‘Procurement Team of the Year.’ This recognised the team’s cultural shift with the Director of Financial Operations stating, “By successfully making ‘doing the right thing’ easy, the team have changed perceptions, so they are now seen as a strategic enabler.”
Published
June 19th 2023