Business leaders look to procurement for new paths to value every day. In a complex world of evolving resources, technology and business models, cost savings is still important, but it is not the only priority. Any bottom-line impact must also contribute to long-term performance and agility.
For a leading global digital payment platform, the lessons of a smart services procurement strategy show that while the world of spend management is complex, real improvement and lasting impact is within reach. With more than 300 million consumers and merchants in more than 200 markets, the company has achieved more than $10 million in cost improvement. That figure is poised to grow, through an approach that is practical, repeatable and useful for delivering continued performance impact.
Smarter engagement of services providers offered the company a strong opportunity to boost performance and cost-effectiveness following a change in strategy undertaken by the company in 2017.
Executives sought more visibility into the contingent workforce, and they looked to HR and procurement to deliver a clearer view. The resulting strategy brought 600 resources across six countries into a single spend management program, providing visibility into all activity, spend and delivery from a mix of staff augmentation and contractor resources.
The program’s early success led to a progressive, global expansion that included a rapid launch, attainment of a steady state and elevation of strategic impact. Over a period of 18 months, the company’s services procurement strategy grew to cover 15,000+ active assignments in more than 30 countries.
The ability to demonstrate performance with clear, relevant and current data is essential to fully transform from a tactical function to a proactive strategic capability. With the growth of the program since 2019, detailed data and strategic context now support the following key areas of value:
More than $10 million in spend reduction was captured between 2019 and 2020 while maintaining steady output and delivery. Main sources of improvement included:
Intake drafts of contracts to drive down excess costs associated with expense line items
Identification and correction of rates higher than market standards through reclassification efforts
Targeted negotiation during the contract amendment or extension process based on supplier performance gaps against target goals or timelines
With a consistent assessment process, expert support and automated analysis tools, the company can act quickly and confidently in engaging the resources it needs. The program has fast-tracked the review and approval of 12,000+ projects and 20,000+ net new workers for proper onboarding and compliance.
From project approval to the start of work, the engagement
cycle was reduced by nearly 25%, from 19 days to 15 days.
The program has adapted the company’s resource strategy through multiple mergers and acquisitions. A continuous performance and optimization process expands cost- and performance-improvement opportunities through changing business conditions.
Seeing the outsourced services ecosystem. Identifying opportunities for improvement. Taking action. Capturing results and evolving your strategy. These are the priorities that can help you deliver critical wins to advance the strategic influence of your procurement function. For each of these priorities, AGS provides the expertise, insights and partnership to bring your elevated services procurement vision to life.
Through a focused implementation function, AGS brings your services provider network into a single view and engagement process.
From inconsistent rates for similar services, to misalignment
with market rates, and supplier performance and delivery gaps,
correcting hidden problem areas can yield bottom-line impact
across your supplier engagement process.
With a consistent process in place for initiating projects, engaging providers, determining terms and timelines, and establishing goals, you can deliver services with predictable outcomes and maximum impact.
Through continuous program review,
adoption of new practices and growing the services provider
network, AGS provides the expertise to keep your procurement
function on a path of value creation and transformation.
Don’t limit your ability to demonstrate impact.
AGS partners with companies to identify key areas of impact
that can support growth, adoption and executive support. From
cost and speed, to expanded access to resources, capture all
the improvements that matter.