Retailer increases supplier funding revenue and increases contract governance
We hear these stories all the time from retailers and their procurement teams. Multiple buying managers doing multiple deals across multiple product sets and SKUs. Very little documentation or governance. No standardised processes for supplier engagement and funding negotiation. Lack of a clear audit trail. And huge amounts of lost margin as a result.
This particular customer, a leading online and high street health and beauty retailer, with revenue more than £700m in 2018, was in this unfortunate position.
To make sure what we built was fit for purpose, our solution design team worked with both finance and commercial stakeholders to understand current processes. We developed with them a ‘wish-list’ for a technology solution that would achieve a number of objectives they needed:
- Simplify and standardise the negotiation approach
- Maximise the opportunities for supplier funding
- Digitise data at source to reduce manual admin resource
- Getting things right 1st time and in one place
A bespoke online portal was built for our customer, which enabled buyers to log every step of the negotiation and deals process with suppliers. Finance have a link to forecast future revenues and a robust audit trail of agreements. Time and date stamped version control. Governance and compliance achieved. All in one place.
Building-out the solution from existing business processes meant actual process change was kept to a minimum. The less disruption the better! That said, the impact of our Deal Management portal was dramatic and continues to demonstrate ROI and drive continual benefit, as more suppliers are added to the solution.
So, in summary, our customer has increased supplier funding revenues significantly, and the process ensures every £ negotiated is documented and invoiced for. And while the buyers and suppliers can simply see the positive impacts on cost and margin, the portal has also reduced deal admin time by over half.