Designing a procurement target operating model to reduce risk and manage cost

Problem

Our client, a leading international insurance group was looking to accelerate the maturity of its procurement function to increase the value that it could generate. It had no mandate and was focused on transactional procurement and compliance, with limited time spent on strategic procurement.  To deliver its growth ambitions it needed a procurement function that could better manage risk and cost within the supply base.

Solution

A review of the group strategy established where procurement could add the most value which was risk and cost reduction. A set of design principles was agreed and a procurement target operating model was designed where procurement would centrally perform strategic sourcing, category management and oversight of high-risk suppliers. The business would perform low value and risk supplier management under a self service procurement model. A business case was produced and successfully signed off by Group Management Board.

Results

• Detailed maturity assessment, identifying key issues and maturity gaps

• Development of a 5-year procurement maturity roadmap

• Detailed procurement target operating model with different implementation options

• Detailed procurement transformation business case signed off

• Digital roadmap identifying key processes to automate