To achieve a Fortune 500 utility company’s strategic savings targets and capital growth plans, CrossCountry Consulting’s Procurement & Cost Transformation experts led a holistic digital transformation effort of the procurement function and its core processes. Working across procurement, accounts payable, operations, capital projects, and legal departments, the team generated significant cost savings, digital process efficiencies, and operating model enhancements for lasting ROI.
- Coupa implementation
- Procurement operating model transformation
- Source-to-Pay functional design
- Buy channel/spend analysis
- Procurement maturity survey and benchmarking study
- Cost reduction and process improvement roadmap
A Fortune 500 utility company with an aggressive capital growth plan sought to reimagine its delivery model for greater scalability and incremental 1-2% YoY OPEX savings. To achieve its goals, a unique vision for the procurement function was required.
A confluence of factors (including retirements) had led to turnover reaching 40% and employee workloads rising by 30% due to the increased spending. The company’s 20-year-old technology system was not built to handle the pace and agility of the modern enterprise, making it immensely challenging to address recurring procurement issues or achieve the company’s targets. The system was error-prone and highly manual, forcing limited staff resources to be reactive and transactional rather than value-creators.
Progress was only possible through a new approach to procurement.
How We Helped
The procurement transformation experts at CrossCountry Consulting partnered with various client core teams across procurement, accounts payable, operations, capital projects, and legal to address the company’s issues holistically with an eye toward enabling even greater future success.
Over the course of five weeks, a series of diagnostic activities across all procurement operating model dimensions were conducted to uncover root challenges and provide visibility into current-state affairs. This work included:
- Engaging 52 stakeholders.
- Facilitating 10 cross-functional workshops across the Source-to-Pay process.
- Conducting a buy channel analysis, procurement maturity survey, and benchmarking study.
- Performing a spend analysis on $3.3 billion of spend to highlight value-driving opportunities.
incremental cost savings
follow-up savings opportunities
process and organizational efficiencies
The outputs generated included:
- Current-state insights on maturity levels across category sourcing, strategic sourcing, contract management, supplier management, and Procure-to-Pay.
- Future-state functional design of the Source-to-Pay process.
- Quantifiable organizational and process benchmarks to inform the size of the transformation targets across Source-to-Contract and Procure-to-Pay.
With this information, the team coordinated additional workshops and interviews focused on confirming more than 50 priority opportunities consolidated into 10+ key initiatives in a five-year roadmap. The initiatives included the delivery of cost-reduction opportunities, the path to transform digitally, and the implementation of new buy channels and technology.
On an accelerated timeline, the procurement diagnostic led to the identification of:
- $60-80 million in incremental cost savings.
- $75-100 million in follow-up savings opportunities.
- 25-35% process and organizational efficiencies.
The project also resulted in the implementation of Coupa, which was designed to enable the future vision and facilitate the delivery of the savings and efficiency targets via:
- A full-suite Source-to-Pay system implementation, leading with the Sourcing module in the first nine weeks to fast-track savings delivery.
- A second phase consisting of Contracts and Third-Party Risk modules to improve contract compliance and better inform the company of external supplier risks.
- Implementation of a digital Procure-to-Pay capability to increase automation and reduce manual work