Fact Sheet
- Improved capabilities and processes of the local procurement organisations through intensive training
- New PMO structure to better monitor and continuously integrate the activities of the individual locations
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Training and Enablement in Procurement Consulting addressing Geographically Fractured Spend
Geography presents significant challenges for procurement departments.
Customer location, resource access, local product requirements - all of these factors, and more, cause companies to split their operations geographically. This is particularly true for procurement, where the likes of border controls and logistics costs strengthen the divide between locations. The result: siloed procurement departments, inconsistent approaches, and a fractured spend that remains unaddressed.
A global technical services provider with over 10,000 employees situated across 70 countries engaged us to address their global cost base. But how, with a single procurement consulting team, could we make an impact on such a heterogeneous, fragmented spend? How could we operate effectively in an organisation divided between so many countries, each with its own procurement management and differing category maturities?
The answer was: procurement consulting through training and enablement of the procurement departments.
In this article, we explain how we combined rigorous strategic sourcing training with a new global PMO structure to empower the local procurement departments and help the company achieve over 3.3m in annual cost savings.
A Decentralised Organisation and a Globally Disparate Spend
The client was a multinational technical services provider, offering inspections and certifications to industrial and technical systems. Their operations were spread worldwide, with a presence in over 70 countries.
Each location had its own procurement department handling a spend of 1m-30m EUR. Between the departments, there was no standardisation of procurement processes, few cross-country synergies, and no cultural integration or knowledge-sharing. With little in the way of training, many local procurement operatives made important decisions based on ‘gut feel’.
Compounding the issue was the global management structure, which was heavily top-down. The global or regional procurement executives would meet with country leadership on a country-by-country basis, and country leadership would report to their teams in an onward chain. This exacerbated the operational separation of the countries and reinforced silo working.
In short, the local procurement departments were immature. They carried out transactional buying processes that sought little in the way of savings and operational improvement.
Training and Enablement: Individual Project Approach in Procurement Consulting
In a typical procurement consulting project, the consulting team performs in-depth analysis of a category, develops a procurement strategy, and implements that strategy, often through a rigorous tender process. When working with the spend of over 70 countries, each with an array of spend categories, it is immediately clear that this ‘standard’ approach doesn’t work.
By analysing the spend databases and conducting stakeholder interviews for the 25 largest countries, we identified that the biggest and quickest improvements could be made by training the local teams to run effective procurement processes themselves. Additionally, a new management structure would help improve collaboration and accountability, bringing together the siloed operations of the past.
The project was split into three parts:
- Improve the skills and processes of the local procurement departments through training
- Introduce a new Project Management Office (PMO) to better oversee and integrate the activities of the locations on an ongoing basis
- Comprehensive handover under the core values: Implement, Deliver and Sustain
With a team of consultants writing and delivering the training, the project was completed within the following time horizon:
- Months1-2: Preparation of materials and content
- Months 3-6: On-site training across the locations
- Months 6-12: Introduction of new PMO structure and further coaching support
A Comprehensive Procurement Training Regime
The training had two main objectives: to equip employees with the skills to run effective procurement processes and to embed a more advanced procurement methodology in the local procurement departments.
The training was carried out on-site or through online workshops, depending on the size and spend of the country. It lasted between 3 and 5 days. The training sessions followed the seven-step strategic sourcing process and included the following modules:
How to engage stakeholders, determine approximate timelines, and lay the foundations for the decision-making process.
How to profile a category using spend data, contractual terms, and stakeholder interviews.
What to look for when assessing the external market, including market structures and supplier types. Detail on how to structure and manage an RFI.
How to comprehensively map a product or service’s lifetime and/or collateral costs.
How to select the most appropriate category strategy using the strategic procurement levers. Also included the calculation of savings targets and strategy sign-off.
How to structure an effective RFP and execute its distribution to suppliers.
How to evaluate completed RFPs qualitatively and quantitatively and how to use this information to generate negotiation tactics and materials.
The fundamentals of fact-based negotiation and supplier selection.
How to negotiate and implement contractual terms and agree KPIs.
How to go live with new contracts, sustain the results achieved in the tender process, and structure supplier reviews using the agreed KPIs.
While the training was grounded in procurement theory, it also focused on practical techniques. The delegates were asked to apply the training to their own category or categories. The specifics were discussed with the procurement consulting team in the training session.
One key factor of the training was the involvement of procurement leadership. This allowed leadership to witness their team gaining newly acquired skills, while at the same time enhancing their own abilities to deliver training in the future.
Alongside the training, we introduced detailed ‘Category Toolkits’. These toolkits were created for the larger categories found in multiple countries (for example IT). The toolkits provided all the information and working documents a category manager could need for tendering and managing a specific category.
The toolkits included:
- Category Primers
- RFI/Data Request Templates
- RFP Templates
- Negotiation Pack Templates
- Recommendation Report Templates
- Contract Templates
A New PMO Structure for Procurement Management
To improve the global procurement management structure, we implemented a new procurement PMO that improved inter-country interaction while retaining effective leadership oversight.
This included the following meetings and touchpoints:
- A monthly management update with global & country C-level (top-level) resources. This meeting would be used to share corporate strategy, discuss key issues and risks, and enhance communication and knowledge-sharing between top-level country resources.
- A biweekly inter-country C1-level status update: This meeting would be used to share the procurement status of each country with management. It also had the aim of enhancing inter-country synergies by bringing together the high-level resources across geographies.
- A weekly PMO with C2-level resources: A lower-level PMO call that focussed on individual procurement projects and objectives.
- The C3-level resources would be included only when necessary, e.g. for training or when higher levels required their assistance
The OCM team determined the agenda and set the objectives for the meetings. We also chaired the initial meetings to ensure the structure and purpose were fully understood and implemented. The introduction of new countries to the PMO was staggered to ensure a seamless uptake of the new system.
Benefits of the Procurement Training and Enablement Programme
The Procurement Training and Enablement Programme improved procurement results and enhanced integration while saving resource time. The benefits included:
- Upskilled procurement resources in the local procurement departments, capable of carrying out professionalised procurement processes, delivering higher savings and better operational outcomes.
- An improved and standardised strategic procurement methodology and toolset embedded globally.
- Reduced time investment of senior staff with regard to training.
- Overall reduced time investment for procurement management (from 650 hours to 500 hours in a 12-month period).
The estimated financial savings were 3,3m EUR (6-9%) through improved procurement results. An extra 100-200k EUR of direct staff savings were made through organisational changes, with senior staff now available to work on other initiatives.
Final Thoughts on Training and Enablement in Procurement Consulting
Procurement training and enablement empowers and organises existing procurement resources to deliver the best procurement outcomes – especially in multinational companies with heterogeneous, fragmented spend and procurement departments divided between a high number of locations.
OCM devised and implemented a training and enablement programme for a multinational technical services provider. The initiative designed and rolled out training in over 70 countries and introduced a restructured PMO that offered greater global integration.
As a result of the training and enablement programme, the client was able to make cost savings around the globe.
OCM has a wealth of experience in delivering procurement training and achieving procurement transformation. If you would like to know more about our procurement consulting modules, please don’t hesitate to get in touch.
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Procurement Consulting Modules
Procurement Opportunity Assessment
- Benchmarking & Identification of Opportunities
- Tangible Action Plan for Implementation
External Cost Transformation
- Reduce costs & stop maverick buying
- Procurement Optimisation & Zero-Based Budgeting
Procurement Process Optimisation
- Procurement processes optimisation: fast, cost-efficient, digital
- Trained and invested employees
- Improving compliance
Strategic Sourcing
- Procurement Strategy & Cost Optimisation
- Increase quality & prevent maverick buying
Procurement Strategy Design
- Sustainable max. value contribution through optimal procurement strategy
- Reduce costs, optimise procurement processes
BI Cost Reporting
- Consolidated data sources
- Meaningful live analyses
- Fact-based decision making
Procurement Operating Model
- Maximising the value-add of the procurement organisation
- Optimise, measure, & control procurement processes
Training: Strategic Sourcing & Negotiation
- Buyers trained as specialists
- Putting theory into practice and implementing with support
Interim Procurement Manager
- Rapid response: candidates within 48h
- Matching of requirements and assessment of suitability using procurement experts
- From operational buyer to CPO
Should Cost Analysis
- Should Costing als Methode der Einkaufsoptimierung
- Der Weg zu Should Cost Analyse & Should Cost Modell
Digital Procurement
- Competitive advantages in speed, scope, & significance of information
- Efficiency through automation, data integration, & process simplification
Workforce Management
- Procure-to-pay cost reduction
- Fraud prevention
Supplier Management
- Efficient Cooperation
- Performance-based Supplier Management
Insurance Optimisation
- Cost Optimization
- Bespoke Optimal Insurance Cover
