With the gambling industry continuing to evolve with changing legislation and new technologies, Ireland’s Paddy Power Betfair (PPB) has operations across Europe, America and Australia. The firm manages several brands which have evolved along with the industry. When Paddy Power was founded in 1988, it followed a traditional gambling model with shops on high streets.
As well as growth within its business model, the company has expanded its global presence through mergers and acquisitions. In 2010, Paddy Power acquired Sportsbet, one of Australia’s leading bookmakers. In 2015, Paddy Power and UK-based Betfair agreed to merge. Since the merger, the company has sought to increase its global operations further.
Director of Procurement, Jack McMahon, joined Paddy Power – prior to its merger with Betfair – in April 2015. McMahon has over 20 years’ experience in procurement, operations and supply chain. With this he sought to implement standard processes and procedures to support stakeholders within PPB. “Our focus has always been to support the business proactively in engaging with our supply base. Our job is to maximise value and minimise risk,” Jack says. “Our long term plan is to operate on a common platform for systems, process and procedures. Hence, our Global team can have a standard language and get to best practice. This also helps offer opportunities to staff to transfer between Regions and develop within PPB.”
Colum Colbert joined Paddy Power five years ago. He has been working with the procurement team for the past two years. “Within procurement, my own area of Procurement Services is not about sourcing. Procurement Services manage the procedures, policies and the systems – what I would call the ‘infrastructure’ – that enables and supports procurement.” He argues that procurement has traditionally centered around two things: “The first is security of quality supply, such as arranging supply, making sure that the supply chain is uninterrupted and monitoring quality throughout. The second is achieving good value for money within that supply chain. Now that I’ve worked in the industry in PPB for two years, I think these two activities are part of a bigger picture. I think they both fit into a greater overall context of managing supply chain risk. Besides risks around security of quality supply and value for money, there are also legal, tax and IT security risks.”
The Procurement Services Head suggests that since joining the company, he has witnessed greater embedding of its PO system. Provided by Oracle, Colbert notes that the role of this system in the P2P process has become clearer to the wider business overall. The key message of “No PO - No Pay” is gaining traction for an increasing share of the company’s spend. The PO system has created a greater sense of spend governance in the company’s overall P2P systems strategy.
Colbert also observes that over the past two years, operations within his team have become more concerned with achieving and delivering best practice, policies and procedures.
“With a clearer systems strategy in place, we have been introducing various tools that enable us to achieve procurement excellence, what we call ‘Procurement 2.0’. A good example has been our implementation of spend analytics provided by Efficio. We have achieved global spend analytics with spend categorised according to procurement-relevant taxonomy. This facilitates global category management and savings planning,” comments Colbert.
The partnership with Oracle is enabling the firm to transform its process for contract preapproval, or Deal Sheet. This process helps manage legal, tax, IT security and value-add risks in buying. By using the Oracle cloud technology, with the help of developer Namos Solutions, the betting business is transitioning from a manual to a more automated process. Paddy Power Betfair are also implementing Market Dojo’s eRFx tool to streamline tendering. “Efficiency is critical. We don't want to invest in anything that makes life less efficient,” says Colbert. “I hope that this technology and automation development makes it easier and becomes an enabler for people to engage in procurement activity.”
This concept of partnership with suppliers has been key to PPB’s systems strategy to date. “Many suppliers may claim to be ‘partners’ of their customers. However, this may often be a mere cliché or lip-service”, Colbert states. “On our procurement systems journey, our providers truly have been good to us and for us. I have been astounded by their flexibility and customer service ethic”, adds Colbert. “For example, Market Dojo sold us an eRFx licence. They then stayed with us and ‘held our hand’ as we actually launched successful eRFx events. Efficio, our spend analytics providers, have shown great agility in quickly turning around requests for data loading, analysis and reporting. Namos Solutions, builders of our Deal Sheet tool, invested huge efforts in customising Oracle technology to meet our bespoke requirements. The common denominator among these providers was that they didn’t simply sell and then leave us”, Colbert states. He adds “my advice here is clear and simple: choose your suppliers carefully. They can be critical to your success or failure”.
In the coming years, Colbert expects the company to have a more globally integrated procurement function that collectively encompasses systems, processes, policy, and supplier and risk management. “We will globally integrate more of the procurement activity across the existing Paddy Power Betfair entities. There may even be more entities and brands within our business. If Paddy Power Betfair makes further acquisitions, we would of course have to integrate our procurement function with these new companies too,” Colbert concludes.