Procurement Consultancy – For all the machinations, complexities, stresses, and strategies of business, regardless of the model or sector, all have the same goal in mind – boosting profitability. Of course, there are other aims as well; demonstrating a strong corporate social responsibility, leading innovation, creating employment – but these subsidiary ambitions are all dependent on a business enjoying financial success. On being profitable.
Achieving profitability is not easy. Indeed, merely breaking even requires a herculean effort. An effort which proves too much for around half of all UK businesses within their first five years of spend analysis. Businesses must be prepared for disruption.
At Barkers Procurement our team encounter similar challenges across a wide range of clients, geographies and industries.
That’s why we’ve focused our services on the challenges that occur most frequently.
This allows us to leverage experience gained, market knowledge (category management, contract management and supply chain) and intellectual property created, to bring the best results to each and every assignment.
Whilst we’ve dealt with your challenges before, your culture, values and business priorities remain unique.
That’s where our blend of senior procurement and commercial practitioners can bring decades of relevant experience based on standing in shoes just like yours.
When working with Warren I have consistently been impressed by the skills and personal style he brings to complicated procurement and supplier negotiations. I would recommend him as an asset to anyone with complicated renegotiation or procurement requirements.– John Sharkey Head of CIO Business Partners – United Utilities
Endless innovations in technology result in a constantly evolving business environment. Social media and mobile adaptability have already revolutionised business, with one obvious impact being that we all need to change faster than ever before.
The technology that underpins all this change brings ever-increasing variety and complexity to procurement needs and contractual arrangements. The Barkers team provide experienced support and delivery capability to help you navigate through the commercial minefield of an ever-evolving digital technology landscape.
Managing acquisitions successfully is difficult, with studies typically showing that 50% of acquisitions are unsuccessful.
Barkers Procurement Consultancy brings pragmatic experience from a senior team with hands-on experience of selling and buying businesses. We can provide realistic assessments of potential supply chain and procurement efficiencies, as well as the hands-on delivery capability to deliver the efficiencies post-merger.
Nearly all businesses have a ‘profitable revenue growth’ goal, but not many successfully ring-fence procurement cost savings and add these to the pot. Fewer still can leverage strategic supplier relationships to align them to your growth strategy.
At Barkers we help businesses achieve competitive advantage through optimised supply chains, cost transformation programmes and supplier relationship management, to provide a foundation on which you can deliver your growth strategy.
The Marketing and Sales spend category is typically the last area in a business to afford the procurement folk a seat at the table. The language of cost down is not welcome.
However, attaining improved value, allowing budgets to go further, and driving service innovation, are very welcome indeed. At Barkers consulting services, our team understand the value drivers for Marketing and Sales, and how to support them by enabling strategic supplier relationships and flawlessly delivered campaigns.
Conversations about business and industry are so dominated with talk of investment and ‘investment opportunities’, that, despite its potentially enormous implications, divestment becomes something of an afterthought.
As the private sector becomes ever more fragmented, divestment and the opportunities and risks it presents must occupy an equal place in commercial dialogue.
Divestments are complex procedures and require careful consideration of all associated risks and implications. If these are not considered with sufficient scrutiny, they can have significant commercial, legal, and operational impacts.
Often, Procurement professionals are not consulted early, or adequately enough in a Divestment process. However, they are a vital stakeholder in managing and mitigating key risks.
Procurement should always have a seat at the table to help advise on approach, and set strategy.
- Non-compliance – Which can result in breaches of contract and unauthorised uses by the divested entity. Both of which can have harmful financial consequences.
- A recovery of fees during the period of breach.
- No Contractual Coverage – If Divestors licenses don’t apply, then technically there is no contract in place. Entities would therefore be ‘working at risk’ insomuch as there would be no data protection and/or security, liabilities, or IP rights.
- There could be considerable impact to a business if they were suddenly instructed to cease use of applications. This would be especially so if there are no contingency plans in place.
- The ripple effect of this impact could reach customers putting company reputation at risk.
- There would exist considerable costs to a business if unable to use software.
- There are additional costs to enforced penalties for many forms of non-compliance.
- Transfer fees will apply.
- The need for duplicate licensing and the associated costs.
Divesting entities often treat the separation as an exercise which can be undertaken as part of existing tasks and capacities. A Deloitte report found that 75% of executives questioned, cited insufficient resourcing as a major hurdle during divestment activities. (Perspectives on driving divestiture and carve out value, Deloitte, 2013)
Divestment is not a part-time exercise which can be done by someone as part of a wider remit. It needs a dedicated, structured capability to coordinate and drive towards achieving end outcomes. It is key to have a dedicated ‘Divestment Office’, focused on:
- Coordinating strategy, strategic sourcing and standardising approach
- Establishing and managing governance
- Managing communications and stakeholders
- Gathering data and reviewing contracts
- Negotiating with Suppliers and Supplier Management
- Spend Analysis
It is common during a divestment for there to be multiple competing interests, stakeholders, and priorities. Before proceeding with the detail of a divestment, it is imperative to agree the Terms of Reference. This means agreeing the roles of relevant parties, how and what documents/information should be and can be shared, what business communications to utilise, and identifying key dependencies and considerations.
Setting the terms of engagement on these key factors helps to ensure an efficient and coordinated process.
Gaining a clear understanding of assets which are moving to the divested business can save both the divested and retained entities millions in capital (procure to pay). Most suppliers see a company separation as an opportunity to acquire additional revenue. Suppliers often take advantage of entities and their lack of accurate inventory. It is important then to work with your asset management teams to ensure assets are captured accurately thus allowing an accurate transfer to the divested entity, and renegotiation of any contracts.
If you are the entity being divested, it in incumbent upon you to make sure your interests are heard and represented. Often what happens, is that the selling party sets the timelines, priorities, and strategy. This may not always be in the interests of the entity being divested.
The consequence of this is that the divesting entity is then left to pick up the pieces of a divestment which does not align with their own business strategy. This leaves them exposed commercially, legally, and operationally.
Transitional Service Agreements (TSAs) may not always be the cheapest, most effective option. In the majority of divestments, the parties hastily agree Transitional Service Agreements with ill-defined and/or inadequate costs, service levels, scope, and exit plans. In many cases, the transitional services which are provided back into the divested entity are not in line with the entities own business strategy and requirements. The result is a poor service.
A divestment can create an opportunity for the divested entity to make a fresh start. To create an operating model which aligns with their own business strategy. This should also apply to the Divested Entities Procurement & Commercial function too.
The newly created procurement organisation needs to ensure that they are not just ‘cutting and pasting’ the procedures and approaches of the selling organisation. They must use the separation as an opportunity to drive business value, review the separating entities business requirements, identify current procurement organisations capability, put in a plan to rectify any gaps, and meet the business requirements.
In most cases, company separations will mean a period of instability, especially for the entity being divested. Divestments are not ‘business as usual’ (BAU), so review your BAU operating model, and devise a plan to address any gaps during this period of instability.
In some cases, this may mean making some additional investments to bring in additional expertise, or provide additional capacity. This will allow a much quicker move back to a BAU state, and in many instances provide longer term savings and risk mitigation.