How do you run a pensions company without some form of procurement control? Sounds like a problem, no?
A maverick spending environment was recently the situation at at Storebrand, a Norwegian life insurance firm. Ellen-Carine Martinez, Supply Chain & Spend Analyst, sat down with Dennis at AribaLIVE 2013 in Berlin to detail how Ariba is saving her company 20% on spend. She also explains how Storebrand managed to get maverick spending under control.
Some four years ago, Ellen says, her company had no procurement system in place. The firm needed to get control over their spend and how they were doing business in terms of purchasing and getting contracts into place.
The solution? In a three-phased approach, Storebrand deployed the sourcing and contracts management module from Ariba. Then, they went out and found all of the existing contracts – in drawers and on shelves in all of the offices of their company – and put everything into the system. The goal was to reduce spend by 10% in a three-year period. That happened. Now, into year four-and-a-half, savings have increased to nearly 20%.
Ellen tells Dennis that they are now creating standardized processes that make things happen with fewer employees and smaller headcounts. They can also focus on other priorities, such as global and social responsibility. As for reining in those maverick spenders, the best result comes when people learn that tighter controls mean they’ll have an advantage when sourcing new contracts.
:46 Lack of procurement control was a problem
1:20 A three-phase install got the ball rolling – all contracts were placed in system
2:16 Four years in, Storebrand has reduced spend by nearly 20%
2:43 Storebrand can now focus on other areas of impact, like sustainability
3:39 “Complete maverick spending” reined in – employees now realize controls help them compete