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Outsourcing procurement at Universal Music brings commercial flair

Guy Strafford
Jan 5, 2012 8:48:00 AM

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Guy-New

Universal Music and Proxima recently teamed up at ProcureCon to present the rationale for outsourcing procurement and what the experience was like from Universal Music's perspective.

The session (inevitably backed at times by music) delved into why a large, very capable organisation such as Universal Music decided to outsource, what were the key lessons learned during the outsourcing process and how indirect procurement has forever been redefined for Universal Music - from a decentralised, tactical function to a strategic business partner.

The recording of the session is available here

Throughout my discussions during ProcureCon, I heard a variety of insights, foresights, opinions and best practice from a wide range of industry leading organisations. Out of these, there were several recurring views being expressed:

  • Successful procurement teams tend to have a deep relationship, built on trust, with their respective CFOs. Having that kind of relationship serves to open up a range of activities beyond just negotiating with suppliers
  • It is simply not possible for a large organisation to hold in-house all of the market insight, expertise and knowledge it requires to operate at a strategic level
  • Procurement must be ambitious about what it seeks to deliver, and keep being ambitious

Overall there was a common theme resonating throughout the event, which was the need for procurement teams to proactively adopt a broader business perspective and develop a more commercial mind-set.

Senior executives are looking for a true partner in Procurement who will not only deliver bottom-line savings but also challenge inefficient and ineffective buying behaviours to influence top-line growth. For many achieving these two objectives simultaneously presents several challenges which are fundamentally rooted in talent management, the best use of technology and leadership (in terms of having a voice at board level). Increasingly, strategically led procurement teams are seeking external support to enable greater focus and discipline in pursuit of the core business objectives.

If you would like to know more about the presentation or our work at Universal Music please contact me here.

Guy Strafford

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