Benefits for media & entertainment companies from better supply management
With the average media & entertainment business spending twice as much on suppliers than on its own people, we thought we would share some of our industry insights on the benefits of successfully getting your suppliers under control and offer a real life example of this happening at leading video game publisher – Activision Blizzard.
As the global economic recovery gathers pace, more and more businesses are turning their sights from cost reduction to growth. How well an organization’s procurement team supports this shift will materially impact overall business performance.
Any accountant will tell you that more businesses go bust in the recovery from a downturn than in the recession itself. A big reason for this is poor risk management – because managers think they can stop worrying. They can’t.
Business has changed - driven by globalization, technology and changing consumer habits. Executives have had to rapidly adapt their business models, products, and distribution channels in response to these groundswell changes. But the implications of these unstoppable forces don’t stop there. Another impact is that suppliers today are providing an ever-increasing proportion of business activities, many of which used to be delivered by direct employees and internal operations.
Top 5 tips for managing your virtualized/extended enterprise
‘Corporate virtualization’ has taken hold across all large businesses today - the on-going phenomenon of replacing internal functions and labor with suppliers has changed the very fabric of the modern company. It has not been a planned or even conscious decision – but over the last 20 years is has been an unstoppable force.
Why are businesses failing to get the most out of their non-core costs? (pt 3)
Part one and Part two of this three part mini-series have covered several reasons why non-core procurement is more complex, wider reaching and changes faster than most people imagine (compared to core or direct procurement). In this post, the final in the series, we will discuss why businesses need to approach procurement in a completely different way.
Why are businesses failing to get the most out of their non-core costs? (pt 2)
Part one of this three part mini-series discussed how non-core procurement is more complex, wider reaching and changes faster than most people imagine. In this post, we explore three further points, namely the necessary skills, knowledge and perspectives required to effectively manage non-core procurement.
Why are businesses failing to get the most out of their non-core costs? (pt 1)
Businesses are failing to get the most out of the non-core costs. Why? Well, simply put, because procurement is failing. But the issue here is far deeper than simply pointing your finger at the team of people in procurement - in fact, we would argue, the problem lies in five very different areas, which we’ll explore below.
Outsourcing is NOT offshoring – why procurement outsourcing needs an alternative approach
The procurement brand has suffered greatly over recent times, at a time when the business need for it has grown. A history of under-performance, detachment from the real business needs and an unhealthy obsession with savings have all contributed to a widespread reputational problem, that ultimately undermines the credibility of the function.
Chief Executive.net: CEOs - don't prepare the pink slips just yet
Conventional wisdom and common sense suggest that the greatest ongoing expense for most companies is labor. However, Proxima's latest research contradicts this claim. Matthew Eatough aims to dispel the myth that keeping labor costs in line will maintain or even boost profitability.
The alignment of the procurement function to the wider corporate aims: Vodafone's Stephen Day talks with Proxima
Stephen Day, Group Supply Chain Management Director – IT at Vodafone, and Proxima discuss the importance of procurement to the wider business strategy; and the pros and cons of outsourcing, particularly in the area of procurement outsourcing.
3 ways Dutch businesses can get more value from suppliers
Business has already changed - our research is clear that the cost base has been largely externalized in the Dutch AEX25, as it has in the UK FTSE350, the US Fortune 500 and in other markets around the world.
Corporate virtualization - 100 years in the making
2013 marks 100 years since Henry Ford was faced with the dilemma of producing his latest invention, the Model T Ford, on a large scale - in an efficient, low cost way. His answer was to invent the first mass production assembly line. In doing so, Henry Ford revolutionized the world of manufacturing. Over the past 100 years, following this monumental milestone, business has changed beyond recognition.
Today's growth is fueled more by suppliers than internal staff
Today's definition of what a 'company' is varies dramatically from person to person, business to business and country to country. However, we can all agree that a company is no longer made up of just its people, its offices and its factories.
Infographic: Ever wondered about global business’ spend patterns?
Businesses around the world have been on a journey, whether deliberate or not, of cost externalization. A significant portion of any business’s revenues are now being spent outside their own organization. What was once a labor cost, is now a supplier invoice.
Spend Matters UK/Europe: Proxima Report – Corporate Virtualization and the central role of suppliers in business
Peter Smith offers brief summary of Proxima's latest research - calling it an essential material to have in your library – a vital tool to help stakeholder engagement and promotion of the whole procurement raison d’etre!
Even though the business environment today changes with unprecedented speed, perceptions of business continue to be rooted in tradition, more specifically - traditional hierarchy structures and the resultant management practices.
How corporate virtualization has changed the game for Dutch business
Businesses around the world have been on a journey, whether deliberate or not, of cost externalization. What was once a labor cost, is now a supplier invoice. Our latest research into the spend behaviors and patterns of the Dutch AEX25 has found that a significant portion of revenues are now being spent outside their respective organizations. A key and somewhat surprising finding from the research is the extent to which it has occurred.
Faltering growth means proactive supplier engagement is required
Something has to change. Retailers face being subsumed by the economic conditions, drawing on increasingly limited funds for reinvestment back into their businesses. But sustained sector growth seems a small dot on the horizon. There will always be the trend-buckers and those that insulate themselves from the worst of the high street maelstrom, but for everyone else, it is time to think differently about how profits can be boosted from sources closer to home.
How to avoid value-erosion and cost-leakage in Financial Services
Cost management and 'cost-out' is critical for any business. As such, cost as a metric will always be near the top of the agenda for any business assessing the performance of their procurement or sourcing function. However, driving costs out of a business is not a one-off project - it's a continuous, evolving process.
It's not my fault. It wasnt me. Sound familiar? These are common excuses weve used since childhood. And while they may pass in many circumstances of private life, they dont often fly in the corporate world. Pointing the finger usually doesnt protect shareholder value nor avert corporate reputational damage.
Ladbrokes Chief Procurement Officer bets on stakeholder management
Supplier relationships are obviously vital to a sound procurement strategy. But for Clive Rees, Chief Procurement Officer at betting giant Ladbrokes, keeping internal stakeholders close is just as important.
Banks seek agility, transparency and transformation from procurement
Procurement adds value by offering transparency into where and how a business spends it's money. But when it offers "an understanding of what is driving a particular spend pattern where the demand is coming from and how can it be managed effectively," it can really start to deliver both strategic and tactical benefits.
There are some strict rules about the scope and execution of statutory audit. Things undoubtedly got tougher for the profession in the wake of the Enron scandal that brought down its auditor, Andersen. But interestingly, while there are now stricter rules around auditor independence from management and limits on non-audit services an auditor can provide, many of the issues that scarred audit then still linger.
The world of audit is in a state of flux. For a start, the long-standing grumbles about the Big Four (Deloitte, E&Y, KPMG and PwC) dominance in the world of corporate auditing has resulted in debates about regulatory reform domestically and in Europe. Even the Competition Commission is getting in on the act.
"If you always do what you always did, you will always get what you always got" - Albert Einstein. Time and time again organizations launch into programs with the aim of reducing costs from the supplier base. It's a perfectly rational thing to do. Who wouldn't want to get the cost base in a fitter state?
The world is full of buzz words: big data, cloud computing, phablets, wantrepreneur. Some have substance sitting behind them and go on to become mainstream (phablets are coming - mark my words!). Others are created not to describe an innovation, but to describe a new concept that is hard to articulate (just try asking someone to articulate what cloud computing is. It's fun listening to them attempt it).
There are nearly 4,000,000 economic statistics produced in the US every year, according to Nate Silver in his excellent book The Signal and the Noise. Choosing the ones which give the most accurate or best insight is always a challenge.
Following on from a previous post on this topic, the Shareholder Spring should turn its attention away from executive pay, and towards an area that has a far greater opportunity to improve profitability and shareholder returns - third party costs.
We recently hosted a webinar - discussing the findings of our latest research - The £10 billion profit opportunity - and their implications on business today. This post recaps the discussion and poses some thought prompters for what looks to be another turbulent 12 months ahead.
The changing nature of business (pt 9): Creating a cost-conscious culture
While 88% of finance leaders believe that their focus on total cost savings has increased, according to recent research, 71% of them are continuing to see indirect costs growing and labor costs shrinking. And yet headcount reductions remain a top priority for cost reductions
Global myths of procurement outsourcing: Myth 3 - PO damages stakeholder relationships
Successful procurement outsourcing hinges on a provider's ability to successfully engage with stakeholders. You can have the world's best sourcing engine, but it's nothing if it doesnt engage well with the business, and deliver what the business needs.