About the client:
A leader in financial information
Business need addressed:
To generate procurement savings of 10% in global indirect spend, improve compliance, and strengthen working capital
Source to pay transformation through strategic sourcing, category management, organization redesign, and procurement optimization
- Standardization and scalability
- Access to technology
- Cost and margin pressure
Faced with inadequate procurement processes, limited spend control, and decentralized operations, a US-headquartered financial information firm embarked on a multi-year global initiative to transform its sourcing and procurement function, and drive savings in its indirect spend.
Business challenge: Reimagining procurement operations to cut global indirect spend
The company’s procurement challenges stretched across its source to pay (S2P) processes, and included the following:
- Low spend visibility and limited spend under management
- Inadequate in-house expertise for indirect categories
- A procurement organization operating in silos with individual business units responsible for spend
- Low contract compliance from non-standard procurement processes and policies
- Limited impact from technology due to poor adoption
By reimagining the source to pay function, the company aimed to eliminate these challenges and reduce total global indirect spend by 10%, improve compliance, and strengthen working capital.
Genpact solution: An enterprise-wide program leveraging process, technology, and analytics
To achieve its goals, the firm needed a true, end-to-end, source to pay solution. The powerful partnership between Genpact and A.T. Kearney, a global management consulting firm, offered the company a compelling proposition by combining Genpact’s excellence in procurement processes and analytics with A.T. Kearney’s category management and strategic sourcing expertise.
With clearly defined roles and responsibilities, the client and service providers launched a global sourcing and procurement transformation program.
Working with A.T. Kearney, Genpact focused on an end-to-end approach that reimagined the company’s S2P process using technology and analytics, aligning it to business outcomes. Genpact optimized the Data-to-Insight-to-Action arc to ensure continuous learning from insights that enhance process, technology, and organizational models (Figure 1).
Following a strategic assessment that leveraged Genpact’s Smart Enterprise Processes (SEPSM) methodology and A.T. Kearney’s supply management capabilities, the team built a program and a detailed transition plan that identified savings of up to $19 million, and focused on three key facets:
- Strong sourcing and category management across all indirect categories
A.T. Kearney and Genpact developed a comprehensive sourcing plan, which addressed 90% of spend in scope. This included developing category strategies, negotiating global contracts, improving demand management, and providing on-demand expertise to key areas, such as travel, IT consulting, market research, and print services.
- Process reengineering for streamlining and standardization
The firm needed to rethink its core procurement processes and policies. This included a revised approach to managing vendor master data, improved contract management, restructured buying channels, and greater e-sourcing and catalog penetration. In addition, by working with suppliers, the company introduced a ‘no purchase order, no pay’ policy, which increased penetration to 94%, and a supplier performance management framework, while optimizing the payables process.
- A tactical buying center to maximize spend under management
By creating a centralized buying team, the company is better equipped to enforce process compliance, track savings and consolidate capabilities. Initially managing $185 million in annual global spend, the intention is to gradually route all spend through the buying center.
Genpact created a center of excellence for analytics and decision support to drive spend and contract visibility, and a procure to pay helpdesk to improve adoption and user support. By redefining procurement operations, the company could enhance contract compliance and capture the full extent of its expected savings.
A detailed change management plan accompanied the transition program. The plan was critical for the successful adoption of new policies, buying channels and processes, and the ability to realize identified savings.
By working with Genpact and A.T. Kearney to transform the source to pay function, the financial information company is set to save 10%, or up to $19 million, in its total global indirect spend, and generate a return on investment of between four and five times over three years.
As the firm works with its service providers to realize the identified savings and improve compliance, its intelligent procurement operations will continue to respond to the enhanced analytics insights, and optimize the company’s source to pay function.
For more information, contact, email@example.com and visit, genpact.com/what-we-do/business-services/indirect-source-to-pay