Nov 9, 2020

Proxima: delivering true value in procurement

Proxima
Procurement
Arm
Technology
William Girling
3 min
Clare Harris, Executive Vice President Operations, describes how Proxima has established itself as a world leader in procurement consultancy services
Clare Harris, Executive Vice President Operations, describes how Proxima has established itself as a world leader in procurement consultancy services...

Clare Harris, Executive Vice President Operations, describes how Proxima has established itself as a world leader in procurement consultancy services.

Over the last 25 years, Proxima has established itself as a world-leading expert on procurement consultancy services, helping a broad spectrum of customers to unlock their supply chain’s full potential, from the largest Fortune 500 entities to bespoke startups. Part of the company for over 15 years, Clare Harris, Executive Vice President Operations, states that her role has two primary responsibilities: 1) solve commercial challenges and 2) take advantage of commercial opportunities. “Ultimately, we work with our clients’ procurement and commercial teams to help drive value from their cost base.” 

As a company, Proxima helps customers optimise what they spend with suppliers and build exceptional procurement functions. “When you think that, on average, about 70% of organisational spend is with suppliers, then you can immediately understand the potential that exists for savings and innovation,” Harris states. However, it isn’t necessarily a purely ‘cost-saving’ exercise; the company specialises in maximising the value of every penny spent. “It’s about understanding what value means to our clients, whether that’s cost, speed, return, risk efficiency, or quality. There are multiple perspectives across our client base.”

Contributing to the company’s enduring success has been a flexible strategy focused on being adaptable to the changing supply chain environment. That evolution, Harris says, has been characterised by increased networking, collaboration and emphasis on procurement itself. “The focus on churning through transactions and processes actually eroded value over time. I think procurement is moving more to the heart of organisations and it’s also becoming increasingly diverse, with many more female leaders today.” 

The benefits of this industry development have been keenly felt by Proxima’s clients. One in particular, Arm, shares a close working dynamic with it: “Proxima has been able to bring both commercial expertise and category knowledge, while also injecting capability at a time when Arm’s existing procurement team were quite stretched,” Harris explains. Establishing a “two-way feedback” loop, the collaborators have been able to react swiftly to challenges and coordinate decisively, “We work together at pace and deliver value quickly.” Using different time zones to its advantage, Proxima’s UK team can hand over to the US team and vice versa, creating a continuous cycle of problem-solving capability.

This kind of partnership will prove vital in the post-COVID-19 world, where traditional operational patterns no longer hold true and an innovative mindset is crucial. As other companies strive to build an operating model for procurement that matches today’s challenges, Harris believes that Proxima’s breadth of expertise will become even more valuable. “When we first locked down, there was a feeling that businesses would, to some extent, ‘batten down the hatches’ and just focus on cost. However, I think a lot of them are now asking, ‘How can we transform ourselves to make decisions quicker?’, and that theme will continue into 2021.” Proxima’s aim, then, will be to guide that development and continue its ongoing mission of delivering real value to its customers.

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May 13, 2021

EY and Harvard Law discuss barriers in Contract Management

supplychain
Procurement
EY
ContractManagement
4 min
EY and Harvard Law School Center discuss Legal Profession survey findings and inefficient contract management procedures among respondent organisations

Contract management is a crucial discussion for procurement professionals as negotiations require a more specific outcome. However, some organisations are experiencing significant barriers to developing their contracting processes. Ernst & Young and Harvard Law School Center have discussed survey results in relation to the current state of contracting and explain where the issues arise.

The Legal Profession survey (part of the 2021 EY Law Survey) highlights the perspectives of 1,000 professionals from across the globe in law, procurement, business development and commercial contracting.

Out of all the major companies surveyed, over half of them say they are experiencing significantly reduced revenue and are missing out on important opportunities due to poorly managed contracting processes. 

Some of the key findings from the survey:

  • 92% of organisations in the survey said they plan to transform their contract handling procedures.
  • 98% of respondents said they face critical barriers in the process of developing contract management.
  • 38% of organisations said they have tried and failed already to implement a better contract management procedure. 
  • 57% said they had experienced less positive revenue due to inefficient contracting systems.
  • 50% of respondents said they had missed profitable business opportunities.

Kate Barton, Global Vice Chair, EY, has expressed her opinion on the survey, “Revenue growth is a fundamental goal for any commercial organisation and effective contracting processes play a crucial role in making that possible. Contracting teams around the world know the value they can bring, and they are making real efforts to transform, but the survey brings into sharp focus a whole range of obstacles that they must navigate if they are to make the improvements they are aiming for.”

What will organisations need to address to develop their contracting methods? 

Cost-Reduction

Many organisations are under pressure to reduce costs, specifically contracting professionals. This is something that nearly all of the survey respondents will be looking to do in the next two years, while a third of larger organisations aim to scale this to a 30% reduction in contracting costs.

Decision-Making Issues

There is a certain lack of clarity among organisations as to who is responsible for contract management. It is unclear to most how the contracting process should be managed; perhaps this could be because it involves an agreement between various stakeholders. Around 59% of legal departments believe they have the leading role, while a similar number of contracting staff also share this view. 39% of business developments professionals believe they are to hold the decision-making power.

Utilisation of Technology

There seems to be a lack of capability among organisations to analyse and manage contracts. According to the survey, around 70% of organisations have a technology strategy in place to manage contracts; the majority still lack the necessary data to utilise it to full capacity. This is likely caused by insufficient knowledge for implementation that is likely a direct result of a skills shortage, which 34% of organisations have reported as an issue that limits them.

Insufficient Contracting Processes 

A lack of a defined contract drafting process will significantly limit how effective the contract will be. Global Legal Managed Services Leader at Ernst & Young, John Knox, explains, “the importance of getting contracting right cannot be underestimated.” 

Around 49% of survey respondents say they don’t follow a defined procedure, and 78% say they do not have a system for monitoring contractual obligations. 

Knox says, “with the right transformation efforts focused around people, process and technology, contracting can actually become a business enabler and differentiator. The survey shows that one way in which organisations aim to tackle these challenges is through working with subject matter leaders and external providers.” 

Meanwhile, David B. Wilkins, Lester Kissel Professor of Law, Vice Dean for Global Initiatives on the Legal Profession, and Faculty Director of the Center on the Legal Profession, Harvard Law School, says, “Contracts are at the core of every business. They determine how growth happens and how risks are managed. It is therefore absolutely crucial that organisations have effective systems and processes to manage every aspect of the contracting process, from negotiation and execution to termination or renewal, as well as an accurate understanding of the obligations, benefits, and risks across the entire spectrum of their contracts.
For more procurement insights, check out Procurement magazine.

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