Outsourcing Procurement Solutions
CASE STUDY - MANAGED PROCUREMENT

AmLaw 50 - Managed Procurement Solutions

670
Vendors under management
3
Client savings in first 12 months
65
Under Management
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The procurement function was rudimentary, with only a few vendors being centralized and all spend handled directly by departments based on budgeting.

Objectives

Create a centralized flexible procurement function that multiple internal stakeholders embrace, establish best practices, and embed market expertise across a large supplier population to attain cost savings.

Lead supplier diversity initiatives that had laid dormant.

Challenges

  • Decentralized Procurement
  • Lack of process and coordination
  • Lack of supplier governance processes and measures
  • Limited competitive market knowledge
  • Lack on unified savings roadmaps and targets

Outcomes

Solutions

1. Establishing the procurement function at the firm

    • CCM conducted an in-depth analysis of the Firm’s procurement process and identified inefficiencies, redundancies, and opportunities for cost savings.
    • CCM developed a tailored procurement strategy with various options and was ultimately approved by the Firm’s leadership team.

2. ‘Evangelizing’ procurement

    • CCM team socialized and educated the Firm’s key employees on the new procurement processes, including new roles, responsibilities, and procedures.
    • The new guidelines also included best practices for engaging with local and long-standing suppliers to establish a strong network of reliable suppliers.

3. Ongoing Savings Roadmap – Achieving seven-figure savings in the first 12 months

    • The CCM team identified opportunities to reduce costs across the Firm’s supplier population and established a savings roadmap with estimated savings targets.
    • The CCM team renegotiated contracts with existing suppliers, streamlined the procurement process, and added new supplier incentive programs where possible.
    • The CCM team assessed existing procurement technology and designed process improvements, with the CCM team taking the lead in order to attain proper record-keeping of all contracts and purchases.
    • By the end of the first 12 months of the engagement, the firm achieved seven-figure savings. The procurement outsourcing team’s expertise and experience enabled them to identify cost savings opportunities that the in-house team had missed.

4. Creating a process for purchase requests and controls

    • In the second year, the focus shifted towards creating a process for purchase requests and controls to reduce risks.
    • CCM team worked with firm leadership team to develop a process for managing purchase requests, which ensured that all large purchases are reviewed for appropriateness, contractual compliance, and cost.
    • The outsourcing team also implemented controls to prevent unauthorized purchases and ensure compliance with Firm’s procurement policies.

5. Improving contract system compliance

    • The procurement outsourcing team recognized that the Firm’s contract system needed improvement.
    • During the evaluation, it was determined that only 27% of contracts were up to date in the contract management system (covering only 14% of Total Addressable Spend).
    • The outsourcing team also implemented guidelines and appointed a team member to ensure that contracts are updated regularly and tracked appropriately.
    • The CCM team worked with the firm’s legal team to revise contracts to better reflect firm’s procurement policies.Improving contract system compliance.

6. Continuing to improve on diversity and inclusion initiatives

    • CCM team worked with the Firm’s diversity and inclusion team to identify the current supplier diversity status and identify opportunities to promote diversity and inclusion within its procurement process.
    • The team identified opportunities and methods to provide ongoing tracking.
    • Developed a template for uniformly reporting diversity spend for external reporting.

Results

  • Establishing the procurement function as a resource at the firm
  • Added expertise and capabilities that are not available in-house
  • Building internal partnerships
  • Ongoing Savings Roadmap
  • Contract Compliance
  • Increased Supplier Diversity visibility and spending

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