A&N MEDIA MOST IMPROVED PURCHASING OPERATION: START UP NICK JENKINSON BEST IN PROCUREMENT: 30 TH JANUARY, 2013

Transcription

1 A&N MEDIA MOST IMPROVED PURCHASING OPERATION: START UP BEST IN PROCUREMENT: 30 TH JANUARY, 2013 NICK JENKINSON

2 AGENDA INTRODUCTION AIMS & OBJECTIVES PLANNING & EXECUTION INNOVATION & CREATIVITY BEST PRACTICE ORGANISATIONAL BENEFITS KEY TAKEAWAYS

3 WINNERS MOST IMPROVED PURCHASING OPERATION: START UP

4 INTRODUCTION: WHO ARE A&N MEDIA? B2C DIVISION OF DAILY MAIL & GENERAL TRUST (DMGT) PLC OUR BRANDS CONNECT WITH 46% OF THE UK S ADULT POPULATION

5 INTRODUCTION: MARKET CONDITIONS PERFORMING WELL IN A COMPLEX AND COMPETITIVE MARKET MAIL ONLINE: WORLD S MOST POPULAR ENGLISH-SPEAKING NEWSPAPER WEBSITE JOBSITE: TOP 5 DIGITAL RECRUITMENT BRANDS IN THE WORLD DAILY MAIL/THE MAIL ON SUNDAY: OUTPERFORMING THE MARKET BY 3% METRO & WOWCHER: GROWTH INTO NUMBER 3 & 2 IN THEIR RESPECTIVE MARKETS THE MARKET IS CHANGING AND WE HAVE SOME HUGE CHALLENGES RECESSION: GREATLY IMPACTED ADVERTISING REVENUES (> 35% REDUCTION ) CIRCULATION/DISTRIBUTION: TRADITIONAL MARKET DECLINING (>20% REDUCTION ) MARKET STRUCTURAL CHANGE: A&N ARE WELL PLACED IN DIGITAL MARKET BUT TRANSFORMATION POSITION INTO REVENUE IS DIFFICULT

6 INTRODUCTION: A CATALYST FOR CHANGE UNPRECEDENTED TRADING CONDITIONS REQUIRED UNPRECEDENTED COST CUTTING MEASURES The pre-2010 procurement function : Business units buy : local procurement teams process. The procurement process was transacting, fetching, wrapping and delivering. The Media Sector for many years was regarded as the land of milk and honey : cost wasn t a key focus It was time to introduce some Real Procurement

7 AIMS & OBJECTIVES: CLEAR VISION, CLEAR DIRECTION OUR MISSION STATEMENT To be a professional procurement function recognised as a customer orientated, value add support organisation which acts in the best interest of DMGT, whilst helping customers to exceed their goals REQUIRED A NEW PROCUREMENT TEAM FOCUSED ON: Obtaining cost reductions in the procurement of goods and services Delivering customer focused, transparent & efficient solutions Identifying best practices that can be repeated & standardised Determining the appropriate supplier relationships necessary to support business goals Provide A&N Media with a competitive advantage by reducing the Total Cost of Ownership

8 PLANNING & EXECUTION: THE INTERNAL CHALLENGE We don t micro-manage. We devolve operating decisions as much as possible. Our hands off management style appeals to talented entrepreneurs DMGT, Annual Report 2011 MANDATE HEAVILY DECENTRALISED, CULTURE WITHIN DMGT: AUTONOMY IS HIGHLY REGARDED & CENTRAL INTERVENTION NOT WELCOMED

9 PLANNING & EXECUTION: BUILDING A TEAM Futility is doing the same thing today as you did yesterday and expecting a different result New team was recruited to deliver Procurement Vision but we needed so much more than process followers!

10 PLANNING & EXECUTION: ENGAGING THE BUSINESS TRADITIONAL FUNCTIONAL PROCUREMENT DELIVERABLES WERE HYGIENE FACTORS, THEY STARTED THE CONVERSATION BUT WOULDN T WIN US ANY MEDALS Spend visibility Savings Category management structure Standardised sourcing processes We needed to connect with the business on an emotional level WORKING IN A HEAVILY BRANDED BUSINESS SO ACHIEVING TOGETHER WAS CREATED AS BRAND PROCUREMENT : Desire to be integral part of stakeholders worlds - not external consultants Crystal symbolises how procurement touches every facet of the business Achieving together underpins our business alignment

11 INNOVATION & CREATIVITY: ALIGNING WITH THE BUSINESS Credibility relied on QUICK wins & doing the day job well to drive business value Greater Opportunity Delivery opens doors but Trusted advisor status requires improved alignment and the need to act as a commercial enabler Business Value Functional best practice procurement hygiene factors delivered: Category Management structure implemented Standardised Sourcing process introduced Spend Database implemented: Procurement became the font of all spend related knowledge Salesforce CRM tool modified to create simple SRM tool: create quick contract visibility Consistent delivery of 20%+ savings Hygiene Factors

12 INNOVATION & CREATIVITY: COMMERCIAL ENABLERS KEY FOCUS ON COMMUNICATION, SPEED, AGILITY, ALIGNMENT & INSIGHT Procurement guided me through an agile, swift and flexible process and acted as a true commercial consultant HEAD OF METRO PLAY, A&N MEDIA THE TECHNOLOGY and legal teams were complemented by a procurement team who were able to drive better commercial terms, maintaining our focus on key clauses and areas to negotiate CIO, A&N MEDIA

13 BEST PRACTICE: DRIVERS OF CHANGE KEY FOCUS ON COMMUNICATION, SPEED, AGILITY, ALIGNMENT & INSIGHT COLLABORATION

14 ORGANISATIONAL BENEFITS: QUANTITATIVE RESULTS STILL A LONG WAY TO GO ON THE PROCUREMENT JOURNEY BUT THE DIRECTION OF TRAVEL IS VERY POSITIVE: Hygiene factors delivered and continuously developed Recruitment and development of a highly trained, highly motivated procurement team: continuous development now focused around sales skills and creative thinking 2010/11 savings delivery in excess of 11m & return on investment (ROI) in excess of /12 savings delivery in excess of 16m & return on investment (ROI) in excess of 9.5 Movement from butler to price reducers to drivers of change in only two years Growth into wider DMGT group: Spend Analytics project commenced to identify & deliver global synergies from a DMGT spend of 1bn (A&N Media: 650m) Most importantly, seen as true business partners

15 ORGANISATIONAL BENEFITS: QUALITATIVE FEEDBACK They have gained credibility and the respect of the management teams which given our business model, was critical in delivering the success they have achieved. CEO, A&N Media Over the past 2 years, A&N Media s Procurement team have delivered a wide range of initiatives which have significantly improved our profits. Northcliffe Media, MD Their resilience, stakeholder management and business alignment have been critical success factors and have helped deliver significant value and profit improvements COO, A&N Media Relationship between them and the Finance teams has developed hugely and this has helped to provide much improved transparency and governance thus supporting savings hitting the bottom line. Finance Director, A&N Media

16 KEY TAKEAWAYS Think Business not procurement Drive value, not just savings Enable don t disable Connect emotionally, not just functionally Hygiene Factors: do them well