SITUATION

In the aftermath of the 2008 financial crisis, a business-to-business services corporation was faced with a significant downturn in revenue and a need to reduce their cost structure. Additionally, the company faced strategic challenges that affected longer-term demand for its services, further heightening the need for change. Consequently, the CEO initiated an enterprise transformation with procurement highlighted as one area of focus and a key source of cost savings.

These events created both challenge and opportunity for the procurement function: greater internal demand for strategic sourcing vs. a hiring freeze and impetus to address complex categories that had never been sourced vs. lack of category expertise in areas such as legal, marketing, and employee benefits.

The Chief Procurement Officer needed a game-changing approach to achieve a successful, sustainable outcome.

SOLUTION

Through a rigorous RFP process, the client selected to engage OnDemand to address procurement’s transformation challenges.

The flexibility of OnDemand’s delivery model offered a way to quickly ramp up capacity without adding head count or fixed cost. The client was able to harness OnDemand’s network of resources and wealth of category expertise to achieve savings in traditionally ‘hard to source’ categories (marketing, legal, HR) and to facilitate the change process with internal stakeholders.  OnDemand professionals worked alongside procurement staff in executing assignments while providing hands-on training and knowledge transfer. Additionally, OnDemand resources augmented internal capacity and provided much-needed bandwidth in more traditional categories such as IT and transportation.

RESULTS

OnDemand successfully delivered over $5 million cost savings in nearly a dozen categories, facilitated a change process with internal stakeholders concerning the value of strategic sourcing in critical categories, and also built procurement capability and sustainability for our client. The knowledge transfer and side-by-side training of internal staff that our subject matter experts provided ensured the skills that OnDemand brought to the engagement would remain with the organization once the project was completed.

The work done by our team enabled the client to significantly reduce its cost structure and provided the backbone for a new strategy that governed how the firm managed talent. Ultimately, the engagement of OnDemand was critical for delivering the post crisis transformation program and improving the profitability of our client.