Claritum

Global outsourcing of procurement expected to grow in 2012

Marketing — Fri, 16 Dec 2011 20:11:18 +0000

Procurement outsourcing deals will grow by 20 per cent in 2012 and expand to other areas of the supply chain such as order fulfilment, inventory management and logistics.

This is according to analysts at research firm Everest Group. Writing in its 2012 Market Predictions report, the company said buyers will expand deals across the supply chain against a backdrop of acquisitions among procurement service providers.
The research said contract sizes will also rise, with chief financial officers increasingly driving discussions on procurement outsourcing. This will lead to more outsourcing deals that bundle finance and accounting together with purchasing.
Everest said buyers will take an end-to-end approach concentrating on source-to-contract (S2C) and procure-to-pay (P2P) processes. More acquisitions and partnerships between P2P-focused providers and S2C providers are expected in 2012 to provide complete solutions.
More direct spend categories, such as maintenance and repair, are expected to become part of procurement outsourcing deals.
Everest said the government sector around the world would see more activity in 2012, with the report singling out the UK in line with its current work on procurement optimisation.
The report said that while the procurement market is dominated by Accenture, ICG Commerce and IBM, there is strong competition on the next rung of big contenders because they are experiencing rapid growth.

Find out more: http://www.supplymanagement.com/news/2011/global-outsourcing-of-procurement-expected-to-grow-in-2012/?utm_source=Adestra&utm_medium=email&utm_term=

Procurement set for its own ‘format war’

Marketing — Fri, 16 Dec 2011 20:09:08 +0000

In the 1970s, consumers found themselves caught up in a ‘format war’ – the battle for supremacy between electronic companies to produce the market-leading videotape recording system.
In the end, the market was narrowed to two choices – Betamax or VHS and consumers who had opted for Betamax quickly found the only place for it was the scrapheap.
What has this mini trip through history got to do with services procurement? It’s simple. Procurement professionals and commissioners of complex services are rapidly facing a time when they will reach their own Betamax/VHS moment. Do they continue ad infinitum with the primary contractor-managed services model to buy these services or do they consider another way – the dynamic purchasing system (DPS)?
Let’s look at the evidence. In the services procurement categories, frameworks reduce the supplier base in a four-yearly procurement exercise that restricts ongoing competition and, taken to the extreme, relies on prices and quality levels set three years and 364 days previously. Small businesses find it hard to compete in bureaucratic and time-consuming procurement exercises; equally they often find it difficult to quote four-year fixed prices.
This brings me to another point, one that is extremely topical. Three of the biggest issues on the government agenda are localism, inclusion of SMEs and collaboration. Managed services frameworks may not be fully geared to support any of these agendas. In fact, in the context of procurement of complex services, they’re actually competing agendas.
In direct contrast with this, a DPS doesn’t restrict competition – and widening the competition breeds price reductions and quality increases. Localism can be encouraged and nurtured using a dynamic purchasing system and SMEs – and, indeed, micro businesses – aren’t excluded from competing for contracts. The day-to-day buying process of a DPS drives price and quality in a way that collective buying through a managed services framework doesn’t.
Finally, current government legislation such as the personalisation agenda (Putting Patients First and the 2010 White paper Liberating the NHS which moves to GP Consortia) is also placing far greater emphasis on non-procurement professionals taking on more responsibility for day-to-day purchasing decisions. For those ‘amateur’ buyers, a DPS is the answer.

Find out more: http://blog.supplymanagement.com/2011/12/procurement-set-for-its-own-format-war/

Indirect procurement is ‘a sexy place to be’

Marketing — Tue, 27 Sep 2011 05:35:25 +0000

In a recent article from Supply Management (www.supplymanagement.com):

The challenge of getting indirect procurement right makes it “a sexy place to be” for procurement professionals.

This is the view of Rachael Stormonth, senior vice president at outsourcing analyst NelsonHall, who made her comments during a webinar hosted by procurement outsourcing provider buyingTeam.

The online presentation examined the results of a survey of 120 CFOs and CPOs. Only 47 per cent of those polled expressed high satisfaction with the management of indirect spend in their organisation.

With just 38 per cent of respondents rating the ability of buyers to influence buying behaviour highly, there is an opportunity to make a difference to the business. However, many companies are not taking advantage of this, spending too much time on transactional activities, and lacking the soft skills required to work with other functions.

She said: “The survey shows it’s an open door offered by CFOs who are expecting more from indirect procurement. [But] I hear of bright procurement graduates who are spending their days on low level tasks and are not getting engaged with business units.”

Other challenges highlighted included a lack of mandate because business units have primary responsibility for indirect categories, poor stakeholder engagement skills and lack the flexibility to purchase non-routine or specialised goods and services.

Some 60 per cent of CFOs were dissatisfied with the inability of buyers to influence the attitudes and behaviour of stakeholders.

Both groups of executives want to see greater interaction between indirect purchasers and business units. A way to improve this could be to get involved with projects at an earlier stage. “Indirect procurement must become a ‘trusted adviser’ to business units,” added Stormonth.

Indirect spend reduction can have a direct effect on the bottom line

Marketing — Tue, 27 Sep 2011 05:33:11 +0000

In a recent article from Supply Management (www.supplymanagement.com):

A 5 per cent reduction in indirect spend can translate to 1-3 per cent impact on the bottom line, reports the Everest Group.

The research firm published the findings in its report, Optimizing Indirect Spending, which addresses the importance of maximising savings opportunities from indirect spend.

Indirect procurement spend accounts for nearly 40 per cent of overall spend for a typical organisation. The group’s estimates found even a 5-10 per cent reduction in indirect spend can translate to a 1-3 per cent bottom line impact, which it describes as “significant under any economic context, let alone the tough current climate”.

The report highlights four different strategies for success – internal procurement, partial internally driven procurement, partial externally driven outsourcing or comprehensive outsourcing.

Everest said: “Comprehensive options offer greater value creation potential but are also more challenging to implement than partial options. It is important to look holistically at all the different options and analyse different scenarios before reaching a conclusion – the right first step is a precursor to future success.”

The report said choosing the internal procurement route involved centralising the indirect procurement function across business units and geographies and developing internal shared services.

Partial internally delivered outsourcing could involve internal sourcing, complemented by external staff and consultants. The report stressed the importance of implementing spend analytics, e-sourcing technology or procure-to-pay (P2P) technology, when choosing this route.

Partial externally driven outsourcing could involve outsourcing parts of P2P processes, such as day-to-day purchasing and catalogue management. It could also involve outsourcing parts of sourcing-focused activities such as spend data management, category management and vendor management.

The fourth strategy is a comprehensive outsourcing route where a third party delivers the procurement function for indirect categories.

Accurate data critical to savings

Marketing — Thu, 22 Sep 2011 14:09:38 +0000

Half of procurement managers admit their spend data is poor and they are unable to measure its quality – even though 95 per cent of the information is key to achieving their goals.

Buyers said the unsatisfactory data is a barrier to accurate and reliable purchasing processes and is hampering their ability to make savings, according the Spend Management survey published this week by DataFlux, which surveyed 110 UK procurement managers between June and August.
Although 95 per cent said data quality was crucial to achieving their procurement objectives, 50 per cent felt their data was of low quality or couldn’t measure its standard. “Having high-quality data to make procurement decisions is so fundamentally important that 50 per cent is a worrying figure,” said a DataFlux spokesman.

For the full article go to: http://www.supplymanagement.com/news/2011/poor-quality-data-hinders-procurement-savings-efforts/

Capture every order, globally and in real time

Marketing — Tue, 13 Sep 2011 13:21:35 +0000

Claritum have recently launched an upgrade to its powerful Catalogue capabilities. The Catalogue enables large numbers of users to quickly and easily order a range of products and services including standard and personalised items, print on demand and re-orders. Users can also use the Catalogue to request new customised items, receive prices and place orders.

Claritum’s Catalogue streamlines the processes involved in capturing orders, aggregating spend and automating order processing. The system allows clients to deploy branded catalogues to both internal and external customers but also to personalise the shopping experience to individual users. Dependent on the user permission and product profile, companies now have granular control over every order, globally and in real time.

Order processing can be fully or partially automated including auto-generation of work tickets for internal production or purchase orders for external fulfilment, generation of picking and delivery instructions, with complete audit trail and monitoring of key milestones throughout the process.

The recent upgrade provides more sophisticated content management functionality, increased levels of print personalisation, simpler ordering processes and automation of more of the fulfilment processes.

For more information, including a demo contact sales@claritum.com

Ealing Council ahead of the game when it comes to simplifying government procurement

Marketing — Thu, 16 Dec 2010 19:39:18 +0000

Last week John Collington, the Head of Procurement for the Cabinet Office’s Efficiency and Reform Group (ERG) and Chartered Institute of Purchasing and Supply CEO, David Noble, announced they were joining forces to help improve public sector buying. Their aim is to transform how government buys common goods and services through centralised category management, standardisation of specification, and aggregation of spend, to deliver savings from the baseline of £13 billion, in the region of 25 per cent over four years.

This collaboration follows John Collington’s announcement at London’s Efficiency, Reform & Accountability conference on 24 November, where he informed delegates of his plans to address 9 core spending areas, including office supplies, print management, advertising and media, by September 2011.

This is good news for Claritum, given our experience and success in the public sector, and one of our public sector clients, Ealing Council, is excited to be ahead of the game.

Having used Claritum since 2008 Ealing Council has been able to demonstrate the benefits of Claritum for some time, and the Council is now embarking on deployment of additional functionality, after reaching out to Claritum for ideas of how best to deliver additional cost reduction and value for money.

Claritum proposed a complete solution for Ealing encompassing branded templates, user portal interface, internal print management and costing and charging. This was to be added to the existing Claritum deployment which ensures sourcing and procurement meet corporate requirements and deliver best value on every transaction. A combination of matrix and bid costings covers a wide range of media from photography and design to complicated mailings and distributions. An interface to internal council systems provides semi-automated financial transactions.

The bottom line benefits to Ealing will be further cost savings and process efficiencies. Less tangible but increasingly valuable benefits will be derived from strengthening the Ealing brand and improving the effectiveness of communications media.

Ralph Brandhorst, Senior Production Manager for Ealing Council said, ”we estimate the reduction in direct and indirect costs will be many times the costs of the system improvements as well as providing many non cost benefits. It is an area many public sector organisations are looking at”.

The London Borough of Ealing is the largest in west London, third largest of the London boroughs, with 310,000 residents, 13,365 businesses and a budget of £266 million.

Former Home Office group commercial director John Collington became the most senior procurement figure in the UK government on 1 September when took up his current role. His remit is to spearhead a cross-government approach to procurement and its supply chain to make the best use of its combined purchasing power and get better value for money.

Top Tips for a Successful Spend Analysis Project

Marketing — Thu, 02 Dec 2010 09:48:13 +0000

In our experience of spend analysis projects for complex categories, especially marketing services and print, it can be daunting to know where to start. Follow these top tips from Claritum for a successful outcome with meaningful and actionable information.

Do something! Don’t assume this category is too complex to get the information you need.
Clearly define your objectives before you embark on your project. Decide what business decisions you want to make as a result of your spend analysis, and ensure you develop a framework that will give you the information you need.
Gain senior procurement and marketing buy-in early, as you may need a champion to push through change further down the line.
Engage independent category specific and vendor neutral experts, not generalists or those eager to win your contract.
Segment spend groups at both broader and more detailed levels. You will want to be able to roll up and drill down spend detail by carefully identified categories.
Be wary of invisible costs.

Good luck!

For more tips on conducting a successful spend analysis project download the Claritum White Paper: Spend Analysis for Complex Categories at: http://www.claritum.com/info-centre/white-papers

Claritum CEO to speak at CIPFA Performance Improvement Network Event

Phil Martin — Fri, 29 Oct 2010 11:00:48 +0000

Claritum CEO, James Samuels has been invited to speak at the CIPFA Performance Improvement Network Event “Driving Cost Reductions through Better Procurement”

The workshop is designed to give an insight into delivering savings and efficiencies in the current economic climate, and takes place in Leeds on 4th November 2010.

The event will be attended by Heads of Procurement, Finance Officers and Auditors from local authorities in the North of England.

Event organizer, Mohamed Hans (Performance Advisor at CIPFA) invited Claritum to share their practical experience of delivering savings to The London Borough of Ealing, as well as sharing the challenges, solutions and outcomes across their wider public sector client base.

James Samuels said “with such pressure to deliver savings and efficiencies, its good to see more public sector bodies sharing best practice. Our experience in this sector proves that significant, measurable and sustainable savings and efficiencies can be achieved through implementing better procurement”

How The London Borough of Ealing are planning significant savings and efficiencies

Phil Martin — Tue, 19 Oct 2010 12:48:28 +0000

The London Borough of Ealing is the largest in west London, third largest of the London boroughs, with 310,000 residents, 13,365 businesses and a budget of £266 million.
With increasing pressure to deliver cost reductions and value for money across the organisation, Ealing are looking at improving processes to drive cost savings and efficiencies.
Ralph Brandhorst (senior production manager), in the central Marketing & Communications department is working with Claritum to develop systems and processes that will reduce time/costs associated with designing and producing all documents and any marketing and communications media. Within any organization there exists the hidden cost / time executives spend creating documents and ensuring they meet corporate branding guidelines, which could be reduced and used to make a greater contribution to service objectives.
To address this Claritum are proposing a complete solution for Ealing that encompasses branded templates, user portal interface, internal print management and costing and charging. This can be added to the existing Claritum deployment which ensures sourcing and procurement meet corporate requirements and deliver best value on every transaction. A combination of matrix and bid costings covers a wide range of media from photography and design to complicated mailings and distributions. An interface to internal council systems provides semi-automated financial transactions.
The bottom line benefits to Ealing are cost savings and process efficiencies. Less tangible but increasingly valuable benefits will be derived from strengthening the Ealing brand and improving the effectiveness of communications media.

Ralph Brandhorst said “We estimate the reduction in direct and indirect costs will be many times the costs of the system improvements as well as providing many non cost benefits. It is an area many public sector organisations are looking at”.

Phil Martin, Marketing Manager of Claritum said: “With the pressure on public sector spending we are delighted that Ealing are seeing real tangible efficiencies and savings from using Claritum. Our public sector clients are all reporting similar benefits and provide a best practice template for other local authorities. It is clear that the successes we have seen at our public sector clients provides proof that significant, measurable and sustainable value for money can be achieved from print, marketing and document services. We are seeing an unprecedented level of interest from councils, universities and other non for profits right across the country.”