Blueprinting a new Procurement function, fit for now and the future

Landscape

This large insurance group generates annual revenues in excess of $5bn and has an employee base of 10,000 across several distinct brands.

Challenge

The business had recently appointed a new executive with accountability for Procurement, a function that was spread across three operating units; Indirects, Claims, and SRM. Each of the three functions was autonomous, with its own teams, processes, and procedures. While this suggested the potential for cost savings, it also caused challenges for those managing third party regulatory requirements; work which was highly distributed, administrative, and manual.

The incoming executive identified the potential for both efficiencies and a single high performing function. They sought specialist procurement support to understand market trends, possible solutions, and create a business case. Proxima was engaged to carry out the Functional Blueprint concurrently with an Opportunity Assessment of key spend categories.

Our Approach

Over an initial ten week period, we deployed a team of procurement transformation experts, consisting of ex CPOs and subject matter experts. Rather than take a pure textbook approach, we spoke to over 50 stakeholders and mapped the needs of each business unit, creating a set of strategic imperatives for Procurement.

We then worked closely with stakeholders to map out the future vision, using the Proxima Operating Model framework to ensure that we covered off the clients’ key operating design elements including Strategy, Service, Governance, Org Design, Performance, Data, and Culture.

Outcomes and Deliverables

Proxima delivered a Blueprint that was tailored to the specific requirements and objectives of
the organization, clearly mapping how a different approach could better align Procurement with what the organization was seeking to achieve both immediately and in the future.

Working with them enabled us to draw down on skills and capabilities that we didn’t
always possess in house. Proxima had this capacity and capability, but also the ability to
understand and integrate with our business, whilst maintaining a delivery focus.

The Blueprint evidenced challenges and gave practical examples of how they could be solved by creating a new central function that would have pockets of specialization operating on common platforms, processes, and procedures. This would drive both operating efficiencies and performance improvement.

Leadership was able to take the Blueprint to the executive, supported by:

  • A business case outlining timelines, costs, and benefits, also tying in the outcomes of the Opportunity Assessment to accelerate benefits and support funding
  • A clear delivery and resourcing plan, enabling the client to explain the program team, request investment for the build, and understand where they needed support
  • An explanation of how the model would support key procurement challenges such as industrializing SRM, meeting regulatory needs, accelerating benefits, stemming value leakage, and uplifting capability

Because of the Blueprint, the case for change was approved by the executive and each of the three business units, and a new centralized function was to be built. Proxima would use its broad capacity and capability to support the client in creating the new function.

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