Challenge
A major Australian healthcare facility faced mounting financial pressures. Procurement was identified as a key enabler of the organization’s financial sustainability strategy, tasked with delivering cost savings, cost avoidance, and greater value for money.
However, when tendering services were brought back in-house, the procurement team had limited capability and capacity. The organization recognized the need for a step-change: to transform procurement into a strategic, structured, and value-driven function.
The scope of the challenge spanned multiple critical categories, including:
- Medical labor and support services
- Medical equipment and consumables
- Indirect services (media, insurance, software, consulting, logistics)
- Hardware and IT infrastructure
The client sought to conduct a comprehensive procurement diagnostic and build a roadmap for transformation.
Approach
A team was created to assess procurement performance across nine dimensions, using a diagnostic designed to provide a holistic view of current maturity, highlight gaps, and recommend actionable improvements.
Key activities included:
- Stakeholder and supplier engagement – conducted structured interviews to capture perspectives on procurement performance, pain points, and opportunities.
- Spend analytics and benchmarking – analyze spend data and benchmarked performance against healthcare industry best practice.
- Organizational review – assessed procurement’s operating model and developed a proposed structure aligned with the CFO’s mandate.
- Category deep-dives – undertook detailed assessments in priority areas including medical labor, indirect services, medical equipment and consumables, and IT infrastructure.
Results
The diagnostic identified several high-impact opportunities and provided a roadmap for change, including:
- Organizational redesign – recommended a new procurement structure, including reporting lines to the CFO, dedicated category and contract management roles, and professional development plans for existing staff. Accepted and implemented.
- Enhanced spend visibility – introduced health industry-specific spend analytics with dashboards providing ongoing visibility of spend under contract, delivered via a proprietary analytics platform.
- Improved control of payments – identified AU$141m of manual payments within the AP system and recommended integrating them into the procurement process for greater visibility and governance. Accepted.
- Savings delivery – developed a three-year implementation roadmap, identifying AU$4.2m in immediate annual savings across categories. Adopted by the new procurement leadership team.
Supporting facts from the diagnostic:
- 2,343 suppliers reviewed
- 122,491 transactions analyzed
- AU$256m in annual spend assessed
- AU$4.2m immediate annual savings identified
Through this diagnostic, the healthcare facility gained a clear view of its procurement maturity and a practical roadmap to transformation.
Based on provided recommendations, the organization is now equipped to:
- Deliver immediate and sustainable savings.
- Enhance visibility and control over third-party spend.
- Strengthen procurement capability through structural reform and professional development.
- Embed procurement as a strategic driver of financial sustainability.
By combining deep healthcare sector insight with structured analysis, the client was able to move from a fragmented, under-resourced procurement function to one positioned for strategic impact, resilience, and value delivery.
This project was delivered by Proxima’s APAC team, under the former brand name, ArcBlue.
