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Accenture is advancing towards high performance with a procurement outsourcing solution that has increased Accentures spend under management, reduced risk and produced performance improvements and innovation all while driving bottom-line savings.
Business challenge
Accentures journey to achieve high performance through procurement transformation began in the late 1990s, during a period of rapid global expansion and dramatic business change. Although company revenues were increasing, the cost base was rising at a similar pace. To maximize profitable revenue growth, Accentures procurement organization became a primary focus of a global operational efficiency program. For the typical company, procurement costs can represent between 50 and 75 percent of annual revenues; thus, procurement is frequently among the first functions that senior management targets as they look to reduce costs. Incremental savings in procurement can add up to impressive benefits. The decision to pursue procurement outsourcing was more than just a matter of having the companyitself a pioneering global outsourcing services providerpractice what it preached to its clients. It was also because outsourcing solutions have a unique power to meet the kinds of challenges that Accenture faceddisparate processes that were being employed across a fragmented, global operation. Accentures initial foray into procurement outsourcing delivered significant cost savings. By 2003, however, the company was looking to take its procurement outsourcing arrangement to the next level. In the midst of the global economic downturn at that time, the company sought to achieve additional cost advantages, and to expand the percentage of spend under centralized management. At the same time, Accenture also wanted to develop the deeper synergies of an integrated procurement outsourcing solution that can drive business value even beyond cost reduction. To achieve both these goals, the company turned to Accenture Procurement BPO Services, an Accenture offering that delivers a full suite of source-to-pay outsourcing services. The decision was based on much more than just proximity. Accenture Procurement BPO Services had demonstrated that it had the resources and capabilities to generate both cost savings and business value. With an integrated service model, deep sourcing skills and an industrialized delivery capability, Accenture Procurement BPO Services could provide flexible arrangements, global reach and consistently high service. According to David Boone, Accenture Procurement BPO Services lead executive for the Accenture account, This deal provided Accenture with an attractive combination of capabilities. Of course, we had detailed knowledge of Accentures business and its operational needs. At the same time, this would be an arrangement with the same rigor, and maybe more, of any outsourcing relationship. They would view us as they would any other service provider; we would relate to them as we would with any client.
Success in procurement transformation comes in part from leveraging volumes across the enterprise through centralized coordination.
If procurement is to fulfill its potential for the business, it must transform itself from a support function to a value-generating function.
organization. The pleasing the customer attitude at the heart of an effective service provider is hard for even the best internal organizations to beat. In terms of specific technologies, as Accenture moves forward, it is working to develop more advanced business intelligence capabilities available through Accenture Procurement BPO Services. According to Greg Spray, solution strategy lead of Accentures BPO Services, We are now working to develop new, Web-based desktop tools that will make information available for all procurement managers, enabling them to easily see the current status of the flow of, not just money, but supply chain events. We anticipate the day when we will be living in an environment of true inter-company shared information. As the supply chain/purchasing function becomes more intelligent, it also becomes more of a real-time function. That will be one of the keys to unleashing the true business value of procurement.
At the same time, transforming the retained procurement organization is also critical, regardless of its size. In Accentures case, having marketing capabilities on the retained team has been important to advancing the visibility of procurement within the global company. Having change management expertise on the team has also helped by enabling the organizational changes that have to occur for procurement transformation to be successful.
When it comes to procurement transformation, you can do it yourself if you have the time, resources, skills and ongoing leadership commitment. Or, you can turn to an organization that has already made the investment in time, effort, money and experience in developing advanced procurement capabilities.
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Let us show you how procurement business process outsourcing from Accenture can help you on the journey to high performance in procurement. For more information on Accenture outsourcing services, go to www.accenture.com/outsourcing.
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About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 181,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become highperformance businesses and governments. The company generated net revenues of US$21.58 billion for the fiscal year ended Aug. 31, 2009. Its home page is www.accenture.com.